/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070508.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, May 8, 2007, Vol. 11, No. 108 Headlines AAMES MORTGAGE: Moody's Junks Rating on Class B Certificates ACE SECURITIES: Moody's Downgrades Ratings on Four Certificates ALLEGHENY ENERGY: Successful Operations Cue S&P to Lift Ratings ALLIED HOLDINGS: Court Doesn't Favor Earlier Shareholders' Meeting ALLIED HOLDINGS: Wants to Assume and Assign Wilmington Lease AMR CORPORATION: Pays $285 Mil. Balance of Sr. Sec. Revolving Loan ARCAP 2003-1: Fitch Lifts Rating on $24 Mil. Class K Notes to BB ARCAP 2004-1: Fitch Lifts Rating on $20.5MM Class K Notes to BB- ARMOR HOLDINGS: Selling Assets to BAE Systems for $4.1 Bil. Cash ASC INC: To Sell Convertible & Design Units to Hancock Park ASSOCIATED BRANDS: Unitholders OK Sale of Subsidiaries to TorQuest BALLY TOTAL: Acting Chief Executive Officer Barry Elson to Resign BATTLE CREEK: A.M. Best Says Financial Strength Rating is Good BEAR STEARNS: Moody's Holds Low-B Ratings on Six 2002-TOP6 Certs. BENEATH THE TREES: Case Summary & 15 Largest Unsecured Creditors BODISEN BIOTECH: Kabani & Company Inc. Raises Going Concern Doubt BON-TON STORES: Fitch Upgrades Issuer Default Rating to B from B- BOMBARDIER CAPITAL: S&P Puts D Rating on 1998-C Class M-2 Certs. BOWATER INCORPORATED: Posts $35 Mil. Net Loss in First Qtr. 2007 BRIGGS & STRATTON: Closing Plants Due to Drop in 1st Qtr Earnings BRODER BROS: Earns $300,000 in Fourth Quarter Ended December 30 CANTRONIC SYSTEMS: Sells Shares to Settle Debt w/ Caltech CLEAR CHANNEL: Units Ink Asset Purchase Deal with GoodRadio.TV CHOCTAW RESORT: Debt Repayment Prompts S&P to Upgrade Ratings COINSTAR INC: Reduced Leverage Cues S&P to Lift Debt Rating to BB CONTINUUM CARE: Auction for 11 Nursing Facilities Set on May 30 CREST G-STAR: Fitch Lifts Rating on $15.5MM Class D Notes to BB+ CSAB MORTGAGE: Fitch Rates $2.1 Mil. Class DB5 Certificates at BB DAIMLERCHRYSLER: Magna is Chrysler's Serious Bidder, Paper Says DANA CORP: Wants Section 1113/1114 Ruling Deferred Until May 31 DANA CORP: Wants Open-Ended Deadline to Remove Court Actions DELPHI CORP: Section 1113/1114 Conference Set for May 23 DELPHI CORP: Court Moves Lease-Decision Period Until September 30 DICK BRUHN: Case Summary & 20 Largest Unsecured Creditors DILLARD'S INC: Debt Reduction Cues Moody's to Lift Rating to Ba3 EASTMAN KODAK: Closes Unit Sale to Onex Corp. for $2.5 Billion EMI GROUP: Confirms Approach of Potential Bidders ENERGY PARTNERS: Completes Cash Tender Offer of 8-3/4% Sr. Notes FENDER MUSICAL: S&P Holds B+ Rating and Revises Outlook to Stable FIRST UNION: S&P Affirms B Rating on Class G Series 1999-C1 Certs. FIRST UNION-LEHMAN: S&P Lifts Rating on Class J Certificates to B- FORD MOTOR: Plans to Open Banking Unit in Russia, Aksakov Says FREMONT HOME: Fitch Takes Various Actions on Four Securitizations G-STAR 2002-2: Fitch Holds BB+ Rating on $11.5 Mil. Class D Notes GLOBAL POWER: Consulting Pacts w/ Past Execs Get 6 Mos. Extension GLOBAL POWER: Court Moves Exclusive Plan Filing Period to May 17 GRAPHIC PACKAGING: Moody's Rates Proposed $1.06 Bil. Loan at Ba2 GRAPHIC PACKAGING: S&P Rates Proposed $300MM Credit Facility at B+ GS MORTGAGE: Fitch Takes Various Rating Actions on 4 Transactions HOUSTON EXPLORATION: Launches $175 Mil. of 7% Sr. Notes Offering HOVNANIAN ENTERPRISES: Reports Preliminary Results for Second Qtr J.P. MORGAN: Moody's Cuts Ratings on Six 2005-LDP2 Certificates KIK CUSTOM: S&P Junks Rating on Planned $240 Million Bank Facility KONINKLIJKE AHOLD: Sells U.S. Unit to Consortium for $7.1 Billion LEINER HEALTH: S&P Retains Negative Watch on B- Credit Rating LOCKLAND C-STORE: Case Summary & 20 Largest Unsecured Creditors MCCLATCHY CO: Cash Flow Pressure Cues Moody's Negative Outlook MCCOMMAS LFG: Case Summary & 22 Largest Unsecured Creditors MISSION CRITICAL: Case Summary & 20 Largest Unsecured Creditors MORGAN STANLEY: Moody's Holds Low-B Ratings on Six Cert. Classes MORGAN STANLEY: S&P Places 'B+' Rated $3MM Notes Under Neg. Watch MOUNTAIN VIEW: S&P Rates $14 Million Class E Notes at BB NAVISTAR INT'L: Fitch Retains Negative Watch on BB- Ratings NELLSON NUTRACEUTICAL: Court Okays Johnson as Compensation Advisor NELLSON NUTRACEUTICAL: Taps Alvarez & Marsal as Financial Advisor NORTHROP GRUMMAN: Debt Reduction Cues Moody's to Review Ratings NORTHWEST AIRLINES: Applies Listing on New York Stock Exchange NUTRO PRODUCTS: Inks Pact Selling Pet Food Operations to Mars OMNOVA SOLUTIONS: Fitch Affirms and Withdraws Low-B Ratings OXFORD INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors PEOPLE'S CHOICE: PC Asset Wins Residual Interests Auction PEOPLE'S CHOICE: Equity One Wins Auction for Lot 1 Assets PORTRAIT CORP: Plan Confirmation Hearing Scheduled for May 21 PRICELINE.COM INC: Paying $80 Million to Settle 2000 Class Action QUEST DIAGNOSTICS: Earns $105.9 Million in Quarter Ended March 31 RADNOR HOLDINGS: Files Disclosure Statement in Delaware RADNOR HOLDINGS: U.S. Trustee's Ch. 7 Conversion Plea Put On Hold SAFENET INC: Acquisitive Growth Strategy Cues S&P's B Rating SHAW GROUP: Secures $700 Mil. EPC Contract from American Electric SINCLAIR BROADCAST: S&P Rates Proposed $300MM Senior Notes at B SOLECTRON CORP: Fitch Affirms Low-B Ratings with Stable Outlook SPECIALTY RESTAURANT: Texas Court Moves Chap. 11 Case to Tennessee STRUCTURED ASSET: S&P Cuts Rating on 2003-BC12 Class B Certs. to B TENFOLD CORP: Posts $932,000 Net Loss for 1st Qtr. Ended March 31 TRIBUNE CO: Commences Repurchase of 126 Mil. Common Stock Shares WACHOVIA BANK: Moody's Holds Low-B Ratings on Six 2005-C17 Certs. WACHOVIA BANK: Moody's Holds Low-B Ratings on Six 2005-C18 Certs. WACHOVIA BANK: Moody's Holds Low-B Ratings on 7 2004-C14 Certs. WESCO HOLDINGS: High Debt Leverage Cues S&P's B+ Credit Rating * Hunton & Williams Names Brian Buroker Head of IP Practice * Large Companies with Insolvent Balance Sheets ********* AAMES MORTGAGE: Moody's Junks Rating on Class B Certificates ------------------------------------------------------------ Moody's Investors Service has downgraded two tranches from one Aames Mortgage deal issued in 2003. The transaction consists of first and second lien, adjustable and fixed-rate subprime mortgage loans. The loans were originated by Aames Capital Corporation and are serviced by Wilshire Credit Corporation. The subordinate certificates are being downgraded based on the fact that existing credit enhancement levels may be low given the current projected losses on the underlying pool. Although the deal is performing within Moody's original loss expectations, credit enhancement has declined due to stepped-down enhancement levels combined with high back-ended losses. Overcollateralization is currently below its 50 bp floor and future losses could cause further erosion of the overcollateralization and put pressure on the most subordinate tranches. The complete rating actions are: Issuer: Aames Mortgage Trust 2003-1 * Cl. B, Downgraded to Caa3 from Ba1 * Cl. M-6, Downgraded to B2 from Baa3 ACE SECURITIES: Moody's Downgrades Ratings on Four Certificates --------------------------------------------------------------- Moody's Investors Service has downgraded certain certificates from one Ace Securities Home Equity Loan Trust deal, issued in 2004. The transaction consists of subprime first-lien adjustable and fixed-rate loans. The four subordinate certificates from the 2004-HE1 transaction have been downgraded because existing credit enhancement levels are low given the current projected losses on the underlying pools. The pool of mortgages has seen an increase in losses in recent months with severities rising. The transaction has zero overcollateralization and the Class B tranche has taken approximately $3,400,000 in write-downs as of the 4/25/07 reporting date. Complete rating actions are: Issuer: ACE Securities Corp. Home Equity Loan Trust Downgrades: * Series 2004-HE1; Class M-4, downgraded to Baa3 from Baa1; * Series 2004-HE1; Class M-5, downgraded to B1 from Baa3; * Series 2004-HE1; Class M-6, downgraded to Caa2 from Ba2; * Series 2004-HE1; Class B, downgraded to C from Caa2. ALLEGHENY ENERGY: Successful Operations Cue S&P to Lift Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on diversified energy company Allegheny Energy Inc., its utility subsidiaries, Monongahela Power Co., West Penn Power Co., and Potomac Edison Co., and its unregulated generation company, Allegheny Energy Supply Co. LLC, to 'BBB-' from 'BB+'. The outlook is stable. The rating action affects nearly $3.3 billion of debt, excluding securitized debt. The upgrade reflects the company's successful operations and maintenance cost reductions and significant credit metric improvement. The ratings on Allegheny reflect the business profiles of its low risk regulated subsidiaries that generate stable cash flow, a phased transition, through higher capped prices, to markets in Pennsylvania, Maryland and Virginia over the next three years, valuable coal-based assets that will benefit from market based generation, improving operational performance, and transmission development projects that will likely receive strong regulatory support. Standard & Poor's also raised its business profile score on the company to '6' from '7'. The company has resolved the previously lingering effects of business strategies that were poorly executed, and the business score now reflects the company's combination of a relatively stable regulated utility business and more volatile unregulated generation. The stable outlook on Allegheny Energy and its subsidiaries reflects continuing strong operating performance and expectations for some improvement in the financial risk profile. Commenting on the company's upgraded ratings, Paul J. Evanson, chairman, president and chief executive officer of Allegheny Energy, said in a press statement that "Returning to investment grade status is a major milestone, underscoring how far we have come since 2003, when the company was near bankruptcy. I am deeply grateful to our dedicated employees, whose contributions are so important to our success." Based in Greensburg, Pennsylvania, Allegheny Energy, Inc., (NYSE:AYE) -- http://www.alleghenyenergy.com/-- is an investor- owned utility consisting of two major businesses. Allegheny Energy Supply owns and operates electric generating facilities, and Allegheny Power delivers low-cost, reliable electric service to customers in Pennsylvania, West Virginia, Maryland and Virginia. ALLIED HOLDINGS: Court Doesn't Favor Earlier Shareholders' Meeting ------------------------------------------------------------------ The Honorable Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia denied the ad hoc committee of equity security holders' request to compel Allied Holdings, Inc., to convene its annual shareholders' meetings for the purpose of electing directors, to the extent that AHI will not be complying with the related Securities and Exchange Commission regulations. Although it is a "well-settled rule" that the right to compel a shareholders' meeting for the purpose of electing a new board continues during reorganization meetings, the ad hoc committee of equity security holders and the Debtors disagree whether the audited financials are required prior to an annual shareholders meeting. The parties agree that SEC regulations require that a corporation that solicits proxies from shareholders must send an annual report with each proxy statement. SEC regulations also require that the annual report must include, inter alia, audited financial statements for each of the three most recent fiscal years. AHI contends that it cannot hold its 2007 annual meeting to elect directors at an earlier date because: * SEC regulations require that shareholders be provided with the prior year's audited financial statements at least 20 calendar days before the annual meeting; and * it does not expect its accountants to complete the audit of its 2006 financial statements until April 2007. On the other hand, the Ad Hoc Equity Committee argues that case- law clearly establishes that Allied can hold an annual shareholders' meeting prior to the completion of its financial statements if the Court orders. The Ad Hoc Equity Committee's reliance of Newscastle Ptnrs., L.P., v. Vesta Ins. Group, Inc., 887 A.2d 975, 981 (Del.Ch.2005), for the proposition that a registered company can convene annual shareholders' meetings without first disseminating a proxy statement or an information statement is misplaced with respect to the Debtors' case at this time, Judge Mullins states. Unlike in Newscastle Partners, Judge Mullins says, the Court has not issued an order directing the Debtors to hold their annual meeting. Further, the Debtors have scheduled a shareholders' meeting for May 17, 2007. In addition, Judge Mullins notes that there is no: (a) ad hoc exemption sought from the SEC to the "Regulation 14C rules," which require that the information statement provided to each shareholder is to be accompanied or preceded by an annual report containing, inter alia, audited financial statements; and (b) concern that the shareholders meetings are indefinitely delayed at this time. 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. (Allied Holdings Bankruptcy News, Issue No. 47; 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 confirmation of the Co-Sponsored Plan tomorrow, Wednesday, May 9, 2007. ALLIED HOLDINGS: Wants to Assume and Assign Wilmington Lease ------------------------------------------------------------ Allied Holdings, Inc.'s debtor-affiliate Axis Group, Inc., seeks authority from the U.S. Bankruptcy Court for the Northern District of Georgia to assume its lease agreement with Hunt Enterprises, Inc., for the premises located at 1500 Lomita Boulevard, in Wilmington City, California, and assign the lease to California Cartage Company. The Lease has a five-year term, commencing on April 15, 2004, and expiring on April 14, 2009. Upon its execution, Axis paid a security deposit of $108,576 to Hunt. The base rent under the Lease includes $108,576 per month in addition to annual increases. Axis has used the Premises to store vehicles for one of its customers. The customer no longer has a need for storage in the vicinity. Accordingly, Axis intends to assign the Lease to California Cartage in exchange for financial consideration. The salient terms of the proposed assignment agreement are: (a) California Cartage will pay the Base Rent directly to Hunt according to the terms of the Lease; (b) California Cartage will pay Axis an assignment fee of approximately $26,136 per month, which will total $627,264 based on the two years remaining on the term of the Lease; (c) California Cartage will replace the Security Deposit; and (d) California Cartage will pay a brokerage commission of 5% of the sum of the total Assignment Fee and Base Rent for the remainder of the term of the Lease. The commission will be split evenly between: * CB Richard Ellis, the broker for Axis, and * Cushman & Wakefield, California Cartage's broker. Alisa H. Aczel, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, tells the Court that by contemporaneously assuming and assigning the Lease, the Debtors are able to increase the value of their estates by approximately $627,264. The terms of the assignment are thus fair and favorable to the Debtors. Axis maintains that no "cure amount" is owed for the Lease. 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. (Allied Holdings Bankruptcy News, Issue No. 47; 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 confirmation of the Co-Sponsored Plan tomorrow, Wednesday, May 9, 2007. AMR CORPORATION: Pays $285 Mil. Balance of Sr. Sec. Revolving Loan ------------------------------------------------------------------ AMR Corporation provided an update on actions taken in the first quarter of 2007 as part of its ongoing efforts to strengthen its balance sheet and build a stronger financial foundation. The company's subsidiary, American Airlines, has paid in full the $285 million principal balance of its senior secured revolving credit facility, which had been fully drawn since its establishment in December 2004. AMR's $444 million term loan facility remains outstanding. The company said that the revolving credit facility may be redrawn, subject to certain conditions, and repaid from time to time depending on various factors, such as economic and industry conditions and the company's financial condition. American Eagle Airlines Inc., its wholly owned subsidiary, has prepaid $79 million in principal amount of aircraft debt. The prepayment, which occurred in February, is incremental to AMR's $1.3 billion in scheduled principal payments in 2007. AMR anticipates ending the first quarter of 2007 with $5.8 billion in cash and short-term investments, including a restricted balance of nearly $500 million, compared to a cash and short-term investment balance of $4.8 billion, including a restricted balance of $510 million, in the first quarter of 2006. AMR also said that it expects to complete by mid-April the refinancing of $350 million in municipal bonds that originally were issued in 1990 to help fund the development of American's Alliance Maintenance and Engineering Base in Fort Worth, Texas. The closing of the transaction is subject to certain government approvals. The refinanced bonds, to be issued by AllianceAirport Authority Inc., will have a blended interest rate of 5.46%, down from a rate of 7.5% in the current bonds, and a final maturity of Dec. 1, 2029. AMR estimates that by paying down the revolving credit facility balance, prepaying the aircraft debt and refinancing the maintenance facility bonds, as described above, it will eliminate $15 million of its annual net interest expense. "The company believes that these actions illustrate its continued progress in strengthening its balance sheet, which is an important component of the company's Turnaround Plan that has helped to position the company for long-term success," Thomas W. Horton, executive vice president of finance and planning and chief financial officer of AMR said. "While there is more work to do, the company is building a stronger company by reducing debt and increasing liquidity while continuing to find ways to grow revenue and reduce costs." AMR's balance sheet improvement include: * more than $1.1 billion, raised through three equity issuances in the past 17 months, including the sale of 13 million new shares in January that raised $500 million; * reduced total debt, which includes the principal amount of airport facility tax-exempt bonds and the present value of aircraft operating lease obligations, to $18.4 billion at the end of the fourth quarter of 2006, compared to $20.1 billion a year earlier, the company expects to end the first quarter of 2007 with total debt of $17.6 billion; * reduced net debt, which is defined as total debt less unrestricted cash and short-term investments, from $16.3 billion at the end of 2005 to $13.6 billion at the end of 2006, the Company expects to end the first quarter of 2007 with net debt of $12.3 billion. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc., -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on April 12, 2007, Standard & Poor's Ratings Services affirmed its ratings on AMR Corp. (B/Positive/B-2) and subsidiary American Airlines Inc. (B/Positive/--). The rating outlook is revised to positive from stable. ARCAP 2003-1: Fitch Lifts Rating on $24 Mil. Class K Notes to BB ---------------------------------------------------------------- Fitch has upgraded eight classes and affirmed two classes of the notes issued by ARCap 2003-1 Resecuritization, Inc. These rating actions are effective immediately: -- $54,800,000 class A notes affirmed at 'AAA'; -- $36,000,000 class B notes affirmed at 'AAA'; -- $20,500,000 class C notes upgraded to 'AAA' from 'AA'; -- $15,400,000 class D notes upgraded to 'AA+' from 'AA-'; -- $36,100,000 class E notes upgraded to 'AA' from 'A+'; -- $13,000,000 class F notes upgraded to 'A' from 'BBB+'; -- $45,000,000 class G notes upgraded to 'A' from 'BBB+'; -- $9,000,000 class H notes upgraded to 'A-' from 'BBB'; -- $28,000,000 class J notes upgraded to 'BBB' from 'BB+'; -- $24,000,000 class K notes upgraded to 'BB' from 'B+'. ARCap 2003-1 is a collateralized debt obligation, which closed August 27, 2003. ARCap 2003-1 is supported by a static pool of commercial mortgage-backed securities. The collateral was selected and is administered by Centerline REIT Inc. (formerly known as ARCap REIT Inc.), rated 'CAM1' by Fitch for structured finance collateral management. The upgrades are driven primarily by the improved credit quality and seasoning of the portfolio. Since Fitch's last review, 39.97% of the portfolio was upgraded an average of 1.34 notches, with no downgrades experienced. The weighted-average rating factor has improved, but remains in the 'BB-/B+' category. The collateral has a remaining weighted-average life of 6.15 years. All overcollateralization and interest coverage tests have remained stable since issuance. There are no defaulted assets in the portfolio. The CMBS assets in the collateral pool range from the 1999 vintage to the 2003 vintage with none being first loss classes. Due to defeasance and amortization, Fitch believes these CMBS vintages are a positive factor in this transaction. The ratings of the class A and B notes address the likelihood that investors will receive timely payments of interest, as per the governing documents, as well as the aggregate principal amount by the stated maturity date. The ratings of the class C, D, E, F, G, H, J and K notes address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the aggregate principal amount by the stated maturity date. ARCAP 2004-1: Fitch Lifts Rating on $20.5MM Class K Notes to BB- ---------------------------------------------------------------- Fitch has upgraded eight and affirmed two classes of the notes issued by ARCap 2004-1 Resecuritization, Inc. These rating actions are effective immediately: -- $57,100,000 class A notes affirmed at 'AAA'; -- $30,600,000 class B notes affirmed at 'AAA'; -- $26,500,000 class C notes upgraded to 'AAA' from 'AA'; -- $8,500,000 class D notes upgraded to 'AA+' from 'AA-'; -- $30,700,000 class E notes upgraded to 'AA' from 'A+'; -- $13,600,000 class F notes upgraded to 'A' from 'BBB+'; -- $36,000,000 class G notes upgraded to 'A-' from 'BBB+'; -- $13,000,000 class H notes upgraded to 'BBB+' from 'BBB'; -- $31,500,000 class J notes upgraded to 'BBB-' from 'BB+'; -- $20,500,000 class K notes upgraded to 'BB-' from 'B+'. ARCap 2004-1 is a collateralized debt obligation which closed on April 29, 2004. ARCap 2004-1 is supported by a static pool of commercial mortgage-backed securities. The collateral was selected and is administered by Centerline REIT Inc. (formerly known as ARCap REIT Inc.), rated 'CAM1' by Fitch for structured finance collateral management. The upgrades are driven primarily by the improved credit quality of the portfolio and the seasoning of the collateral. Since Fitch's last review, 30.45% of the portfolio has been upgraded by a weighted average of 1.49 notches and there has been no negative migration. The weighted-average rating factor (WARF) has improved since last review but remains in the 'BB-/B+' category. The weighted-average life has decreased to 8.79 from 9.49. The overcollateralization and interest coverage tests have remained stable since issuance. There are no defaulted assets in the portfolio. The CMBS assets in the collateral pool ranges from the 1999 vintage to the 2004 vintage with none being first loss classes. Due to defeasance and amortization, Fitch believes these CMBS vintages are a positive factor in this transaction. The rating of the class A and B notes addresses the likelihood that investors will receive full and timely payments of interest and ultimate repayment of principal by the stated maturity date. The ratings of the class C, D, E, F, G, H, J and K notes address the likelihood that investors will receive ultimate payment of scheduled and compensated interest and ultimate repayment of principal by the stated maturity date. ARMOR HOLDINGS: Selling Assets to BAE Systems for $4.1 Bil. Cash ---------------------------------------------------------------- Armor Holdings, Inc. entered into a definitive merger agreement to be acquired by BAE Systems, Inc., a wholly owned subsidiary of BAE Systems plc, for $4.1 billion, or a price per common share of $88 through a one-step merger. The transaction is subject to approval of Armor Holdings, Inc. shareholders and to customary closing conditions, including compliance with The Hart-Scott-Rodino Antitrust Improvements Act of 1976 and approval under the Exon-Florio National Security Test for Foreign Investment. The transaction is expected to close in the third quarter. "We are exceptionally pleased to join forces with BAE Systems plc, a global leader in the defense industry," Warren B. Kanders, Chairman and Chief Executive Officer of Armor Holdings, Inc. said. "We would like to thank our shareholders for the constant support they have shown our company through numerous transactions and business initiatives that have enabled us to deliver superior investment returns. Importantly, we would also like to thank our management team and our Board of Directors for their dedication and stewardship over the years." "We are excited to move this business to the next phase of its development," Robert R. Schiller, President of Armor Holdings, Inc., commented. "We have no doubt that BAE Systems will place the needs of our customer and those of the men and women in uniform who depend on our products at the center of their ongoing effort. We owe a special thanks and a deep debt of gratitude to each of our over 8,000 employees around the world. Their tireless commitment to excellence and innovation has and will continue to make this organization strong for many years into the future." Armor Holdings was advised by Goldman, Sachs & Co., Inc. and Merrill Lynch & Co., Inc., as financial advisors and Kane Kessler, P.C., as legal counsel. Headquartered in Jacksonville, Florida, Armor Holdings, Inc. (NYSE: AH)-- http://www.armorholdings.com/-- manufactures and distributes security products and vehicle armor systems for the law enforcement, military, homeland security, and commercial markets. * * * Armor Holdings, Inc.'s 8-1/4% Senior Subordinated Notes due 2013 carry Moody's Investors Service's B1 rating and Standard & Poor's B+ rating. ASC INC: To Sell Convertible & Design Units to Hancock Park ----------------------------------------------------------- ASC Incorporated disclosed that Hancock Park Associates, a private-equity firm based in Los Angeles, agreed to purchase the automotive "open air" roof-systems unit and the automotive design-services unit of ASC from its owner, American Specialty Cars Holdings LLC. Terms of the transaction were not disclosed. As a condition of the asset-purchase agreement, the sale of the two ASC units is to be conducted under the provisions of Chapter 11, Section 363, of the U.S. Bankruptcy Code. Accordingly, ASC has filed a voluntary petition for reorganization under Chapter 11 with the U.S. Bankruptcy Court for the Eastern District of Michigan. American Specialty Cars Holdings believes that a sale in this fashion will ensure an orderly, strategic sale of ASC's viable open-air and design units and the liquidation and dissolution of ASC's other, non-productive assets. As part of the filing, ASC has arranged for debtor-in-possession financing from Comerica Bank, which will be used by ASC to fund normal business operations. The company said the steps it is taking will help ensure continuity of supply to its customers, and that it has planned appropriately for these actions and is operating as normal. Headquartered in Southgate, Michigan, ASC Incorporated -- http://www.ascglobal.com/-- supplies highly engineered roof systems and of design services for automakers. The company filed for Chapter 11 protection on May 2, 2007 (Bankr. E.D. Mich. Case No. 07-48680). Gary H. Cunningham, Esq., and Sean M. Walsh, Esq., at Giarmarco, Mullins & Horton, P.C., represent the Debtor. When the Debtor filed for protection from its creditors it estimated assets and debts between $1 million and $100 million. ASSOCIATED BRANDS: Unitholders OK Sale of Subsidiaries to TorQuest ------------------------------------------------------------------ Unitholders of Associated Brands Income Fund, at a special meeting of Unitholders held on March 4, 2007, approved the proposed sale of the Fund's operating subsidiaries to a wholly owned subsidiary of a fund managed by an affiliate of TorQuest Partners Inc. At the meeting, unitholders approved amendments to both of the amended and restated declarations of trust of the Fund and its wholly owned subsidiary, Associated Brands Operating Trust to provide for the redemption of units of the Fund and ABOT and for the termination of the Fund and ABOT. The proceeds of the sale will be paid to unitholders by way of the redemption of the outstanding Fund units at a cash redemption price between $0.80 and $0.82 per unit. In connection with the sale transaction, TorQuest agreed to fund up to $1,925,000 of the Fund's transaction expenses. If the Fund's transaction expenses do not exceed this amount, the redemption price per unit will be $0.82. If the Fund's transaction expenses exceed $1,925,000, any excess expenses (to a maximum amount equal to $0.02 multiplied by the number of Fund units outstanding at closing) will be paid by the Fund from the proceeds of the sale, with a corresponding reduction in the per unit redemption price of up to $0.02 per unit. Management of the Fund estimates that the Fund's transaction expenses will be approximately $1,925,000. The sale transaction, which is subject to closing conditions, is expected to be completed on or about May 8, 2007. The redemption of the Fund's units is expected to occur on or about May 10, 2007. The transaction and related arrangements received the approval of more than 66-2/3% of the votes cast by or on behalf of all unitholders at the meeting, as well as the approval of the majority of votes cast by or on behalf of "minority" unitholders for purposes of Ontario Securities Commission Rule 61-501 and Regulation Q-27 of the Autorite des marches financiers du Quebec. Headquartered in Toronto, Ontario, Associated Brands Income Fund (TSX: ABF.UN) -- http://www.associatedbrands.com/-- through its operating subsidiaries, manufactures and supplies private-label dry-blend food products and household products in North America. * * * As reported in the Troubled Company Reporter on April 25, 2007, 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 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. BALLY TOTAL: Acting Chief Executive Officer Barry Elson to Resign ----------------------------------------------------------------- Bally Total Fitness Holding Corporation disclosed that Barry R. Elson will step down as acting Chief Executive Officer effective May 31, 2007. He will facilitate a transition of his responsibilities by providing the company consulting services over the following 90 days and by continuing to serve as a Director. The company, which has an active search ongoing for a permanent CEO, said that Don R. Kornstein will assume the new role of Chief Restructuring Officer, continue to serve as interim Chairman of the Board and facilitate the transition relating to Mr. Elson stepping down as CEO. "On behalf of the Board of Directors, senior field and corporate management and the entire Bally staff, I wish to acknowledge Barry's outstanding contributions to Bally Total Fitness as acting CEO," Mr. Kornstein stated. "Barry's strong commitment, leadership and focus on operational improvements are resulting in significant changes across the company and we appreciate his efforts and look forward to his future contributions. By building on Barry's accomplishments and working with our creditors, we look forward to establishing a strong and stable financial foundation and implementing a new vision for Bally Total Fitness." "Over the past nine months, we have been aggressively pursuing literally dozens of initiatives to enhance the Bally Total Fitness member experience," Mr. Elson added. "As a result of comprehensive marketing research studies, the Company is significantly better positioned to more effectively target its marketing and retention efforts. We now have for the first time a much richer understanding of our members' needs and what we have to do to retain more of our existing members and who to target as our better prospects. Bally Total Fitness has a strong brand franchise and customer base and both of these factors will be leveraged in moving the company forward." Mr. Kornstein was elected to the Bally Board of Directors in January 2006 and was named interim Chairman in August 2006. He is founder and managing member of Alpine Advisors LLC, a strategic, financial and management consulting firm serving a broad range of companies. Prior to founding Alpine Advisors, Mr. Kornstein served as Chief Executive Officer, President and Director of Jackpot Enterprises Inc., a New York Stock Exchange-listed company. Mr. Kornstein was also a Senior Managing Director in the investment banking department of Bear, Stearns & Co. Inc. for 17 years. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (NYSE: BFT) -- http://www.Ballyfitness.com/-- is a commercial operator of fitness centers in the U.S., with nearly 390 facilities and 30 franchises and joint ventures located in 29 states, Mexico, Canada, Korea, China and the Caribbean. Bally also sells Bally-branded apparel, nutritional products, fitness- related merchandise and its licensed portable exercise equipment is sold in more than 10,000 retail outlets. * * * As reported in the Troubled Company Reporter on April 19, 2007, Moody's Investors Service downgraded all the credit ratings of Bally Total Fitness Holding Corporation after its failure to make the April 16, 2007 interest payment on $300 million principal amount of senior subordinated notes. BATTLE CREEK: A.M. Best Says Financial Strength Rating is Good -------------------------------------------------------------- A.M. Best Co. has upgraded the financial strength rating to B+ (Good) from B (Fair) and assigned an issuer credit rating of "bbb- " to Battle Creek Mutual Insurance Company (Battle Creek, NE). The outlook for both ratings is stable. These rating actions reflect Battle Creek Mutual's improved capital position driven by its conservative investment portfolio and improved underwriting leverage. The ratings also recognize the corrective actions management has taken to boost overall profitability, including strict enforcement of underwriting standards and rate revisions. These actions, along with favorable market conditions, resulted in improved operating performance. Partially offsetting these positive rating factors are Battle Creek Mutual's historically volatile operating results, modestly elevated leverage and dependence on reinsurance. As a single state writer in Nebraska, Battle Creek Mutual's operating results continue to be exposed to frequent and severe weather-related events. However, a comprehensive reinsurance program is maintained to address the exposure to high severity events. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. BEAR STEARNS: Moody's Holds Low-B Ratings on Six 2002-TOP6 Certs. ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes and affirmed the ratings of 12 classes of Bear Stearns Commercial Mortgage Securities Trust 2002-TOP6, Commercial Mortgage Pass- Through Certificates, Series 2002-TOP6 as: * Class A-1, $166,264,588, Fixed, affirmed at Aaa * Class A-2, $647,947,000, Fixed, affirmed at Aaa * Class X-1, Notional, affirmed at Aaa * Class X-2, Notional, affirmed at Aaa * Class B, $30,739,000, Fixed, upgraded to Aaa from Aa1 * Class C, $30,739,000, Fixed, upgraded to Aa3 from A2 * Class D, $12,575,000, Fixed, upgraded to A2 from A3 * Class E, $25,150,000, WAC, affirmed at Baa2 * Class F, $9,780,000, WAC, affirmed at Baa3 * Class G, $12,575,000, Fixed, affirmed at Ba1 * Class H, $9,780,000, Fixed, affirmed at Ba2 * Class J, $8,383,000, Fixed, affirmed at Ba3 * Class K, $5,588,000, Fixed, affirmed at B1 * Class L, $5,588,000, Fixed, affirmed at B2 * Class M, $2,794,000, Fixed, affirmed at B3 As of the April 16, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 12.4% to $979 million from $1.12 billion at securitization. The Certificates are collateralized by 135 mortgage loans, ranging in size from less than 1.0% to 7.2% of the pool, with the top 10 loans representing 42.1% of the pool. The pool includes five shadow rated loans, representing 21.1% of the pool. Ten loans, representing 7.1% of the pool, have defeased and are collateralized by U.S. Government securities. The pool has not realized any losses since securitization and currently there are no loans in special servicing. Ten loans, representing 10.4% 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 87.7% and 75.6%, respectively, of the pool. Moody's weighted average loan to value ratio for the conduit component is 72.7%, compared to 73.8% at Moody's last review in November 2005 and compared to 76.6% at securitization. Moody's is upgrading Classes B, C, and D due to increased subordination levels, stable overall pool performance and defeasance. The largest shadow rated loan is the Regent Court Loan ($70.1 million - 7.2%), which is secured by a 567,000 square foot Class A office building located in Dearborn, Michigan. The property is 100.0% leased to the Ford Motor Company (Moody's senior unsecured rating Caa1; negative outlook) through December 2016. The loan is coterminous with the lease and is fully amortizing. Although the property's occupancy and financial performance have been stable, Ford's credit rating has declined since securitization. The loan has amortized by approximately 17.9% since securitization. Moody's current shadow rating is Baa3, compared to Baa2 at last review. The second largest shadow rated loan is the Coliseum Centre Loan ($68.5 million - 7.0%), which is secured by six Class A suburban office buildings totaling 974,000 square feet. The buildings are situated in an office park located approximately five miles from downtown Charlotte, North Carolina. As of September 2006, the portfolio was 71.0% occupied, compared to 78.0% as of November 2005 and 94.0% at securitization. Leases for an additional 10.0% of GLA expire by the end of 2008. The loan is on the master servicer's watchlist due to the decline in occupancy. Moody's current shadow rating is below investment grade, the same as at last review. The third largest shadow rated loan is the Best Buy Portfolio Loan ($26.2 million - 2.7%), which is secured by a portfolio of 12 retail properties totaling 481,000 square feet and located in seven states. All of the properties are 100.0% occupied by Best Buy under a master lease through April 2018. The loan has amortized by approximately 7.9% since securitization. Moody's current shadow rating is Baa1, compared to Baa3 at last review. The fourth largest shadow rated loan is the Broadcom Corporation Loan ($22.7 million - 2.3%), which is secured by a 200,000 square foot Class B office/R&D building located in San Jose, California. The property is 100.0% leased to Broadcom Corporation through May 2010. Moody's current shadow rating is Baa2, the same as at last review. The fifth largest shadow rated loan is the Overton Park Plaza Loan ($18.3 million - 1.9%), which is secured by a 351,000 square foot retail center located in Fort Worth, Texas. Moody's current shadow rating is Baa1, the same as at last review. The top three conduit loans represent 15.2% of the outstanding pool balance. The largest conduit loan is the Bank One Center Loan ($61.3 million - 6.3%), which is secured by a 1.0 million square foot Class A office building located in the New Orleans, Louisiana. The property is located in an area of New Orleans that did not experience significant flooding, but the property sustained damage from high winds and rain. All the repairs have been completed. As of April 2007 the property was 95.0% leased and 89.8% occupied, compared to 87.4% leased and 66.0% occupied at last review. Moody's LTV is 99.5%, compared to in excess of 100.0% at last review. The second largest conduit loan is the Capital City Mall Loan ($51.5 million - 5.3%), which is secured by the borrower's interest in a 608,000 square foot regional mall located in suburban Harrisburg, Pennsylvania. The property is anchored by J.C. Penney, Sears, and Hecht's, which is not part of the collateral. As of September 2006, the in-line shops were 95.0% occupied, compared to 99% at last review. Moody's LTV is 71.0%, compared to 73.8% at last review. The third largest conduit loan is the Fair City Mall Loan ($35.0 million - 3.6%), which is secured by a 392,100 square foot community shopping center located in Fairfax, Virginia. Moody's LTV is 70.8%, compared to 73.2% at last review. BENEATH THE TREES: Case Summary & 15 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Beneath The Trees, L.L.C. 1935 Lincoln Road Leland, NC 28451 Bankruptcy Case No.: 07-01664 Type of Business: The Debtor provides skilled nursing care facilities. Chapter 11 Petition Date: May 4, 2007 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H. Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Community Care Pharmacy $22,018 Attention: Managing Agent P.O. Box 335 Shallotte, NC 28459 Landover Corp. of Morganto $21,000 Attention: Managing Agent P.O. Box 1726 Morganton, NC 28680 NC Senior Citizens Fed $5,000 Attention: Managing Agent P.O. Drawer 1455 Henderson, NC 28459 Karen Clark $2,400 Cape Fear Paving $2,076 J&D Sprinkler Co., Inc. $1,296 A.S.I. $768 A Place for Mom $332 S.O.S., Inc. $300 Hanover Fire & Safety, Inc. $300 All Kinds of Stuff $225 Forms & Supply, Inc. $131 MedOx Healthcare $107 The Door Doctor $70 R.S.L. Management Services unknown BODISEN BIOTECH: Kabani & Company Inc. Raises Going Concern Doubt ----------------------------------------------------------------- Kabani & Company Inc., in Los Angeles, expressed substantial doubt about Bodisen Biotech Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to certain lawsuits filed by investors against the company and the company being subject to potential claims from certain investors who have a right to receive the company's shares. The company reported net income of $13.7 million on net revenue of $43.6 million for the year ended Dec. 31, 2006, compared with net income of $7.4 million on net revenue of $31 million for the year ended Dec. 31, 2006. The company attributed the growth in revenue to the increase in the company's customer base, which it believes resulted from continued efforts to aggressively market its products. The company incurred operating expenses of approximately $3.5 million for the year ended Dec. 31, 2006, an increase of 45.0%, compared to $2.4 million for the year ended Dec. 31, 2005. The increase in operating expenses is related to increased legal fees as well as increased sales and marketing costs. At Dec. 31, 2006, the company's balance sheet showed $69.2 million in total assets, $1.4 million in total liabilities, and $67.8 million in total stockholders' equity. 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?1e93 Litigation As disclosed by the company, in late 2006, various shareholders of the company filed eight purported class actions in the U.S. District Court for the Southern District of New York against the company and certain of its officers and directors, among others, asserting claims under the federal securities laws. The complaints contain general and non-specific allegations about prior financial disclosures and internal controls and a prior, now-terminated relationship with a financial advisor. The company relates that the court has consolidated each of the actions into a single proceeding and as of Dec. 31, 2006, only plaintiffs in two of the actions have served summons and complaint on the company. The company believes it has meritorious defenses to each of the actions and intend to defend them vigorously. About Bodisen Biotech Headquartered in Shaanxi province, China, Bodisen Biotech Inc. (Other OTC: BBCZ.PK) -- http://www.bodisen.com/-- manufactures liquid and organic compound fertilizers, pesticides, insecticides and agricultural raw materials certified by the Petroleum Chemical Industry Administrative office of China, Shaanxi provincial government and Chinese government. BON-TON STORES: Fitch Upgrades Issuer Default Rating to B from B- ----------------------------------------------------------------- Fitch Ratings has upgraded its ratings on The Bon-Ton Stores, Inc. as: The Bon-Ton Stores, Inc. -- Issuer Default Rating to 'B' from 'B-'. The Bon-Ton Department Stores, Inc. -- Senior Secured Credit Facility to 'BB/RR1' from 'B+/RR2'; -- Senior Unsecured Notes to 'CCC+/RR6' from 'CCC/RR6'. Bonstores Realty One and Two, LLC -- Mortgage Loan Facility to 'BB/RR1' from 'B+/RR2'. Approximately $1.2 billion of debt was outstanding as of Feb. 3, 2007. The Rating Outlook is Stable. The upgrade of the IDR reflects BONT's successful integration of Saks Incorporated's Northern Department Store Group and an improving financial profile. BONT completed the acquisition of the NDSG on March 6, 2006, and the integration has gone according to plan, with BONT achieving $14 million of synergies in 2006 toward an expected run rate of $33 million. BONT unified the two chains' merchandise assortments by phasing the NDSG's private brands and certain national brands into the Bon-Ton stores. The company also unified the two chains' promotional calendars, which resulted in a less aggressive promotional posture at the Bon-Ton stores. These changes led to a 2.7% comparable store sales decline at the Bon-Ton stores (excluding NDSG) in 2006. However, comparable store sales at the acquired NDSG stores were up 4.4% in the fourth quarter of 2006, and on a combined company basis, fourth quarter comps were up 0.5%. The addition of the more profitable NDSG stores also aided the consolidated operating (EBIT) margin, which increased to 5% in 2006 from 3.8% in 2005. BONT financed the NDSG acquisition entirely with debt, which pushed adjusted debt/EBITDAR from 3.5 times (x) at year-end 2005 to 5.2x at year-end 2006. Looking ahead, the company plans to direct free cash flow to debt reduction, which should help to push leverage below 5x in 2007. The issue ratings shown above are derived from the IDR and the relevant recovery rating. The $1 billion senior secured credit facility is rated 'BB/RR1', indicating outstanding (90%-100%) recovery prospects in a distressed scenario. The facility is secured by a first lien on substantially all of the assets of the borrowing entities and guarantors, except for certain mortgaged real property. The facility provides more than enough capacity to handle seasonal inventory swings of around $250 million. The $260 million mortgage loan facility is also rated 'BB/RR1', indicating outstanding (90%-100%) recovery prospects in a distressed scenario. The facility is secured by mortgages on 23 stores and one distribution center, and these properties are owned by bankruptcy-remote special purpose entities. The $510 million of senior unsecured notes are rated 'CCC+/RR6', and are considered to have poor (0%-10%) recovery prospects in a distressed scenario. BOMBARDIER CAPITAL: S&P Puts D Rating on 1998-C Class M-2 Certs. ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on various classes of Bombardier Capital Mortgage Securitization Corp.'s senior/subordinated pass-through certificates from series 1998-C and 1999-A. The lowered ratings reflect the continued poor performance of the underlying pools of manufactured housing loans that support the certificates, as well as the resulting decrease in credit enhancement available to cover future losses within both transactions. Current loss projections for both deals significantly exceed initial expectations as well as expectations expressed in earlier reviews by Standard & Poor's. With a pool factor of 34.52%, series 1998-C displays a cumulative net loss rate of 34.16%. Similarly, series 1999-A, with a pool factor of 35.53%, displays a cumulative net loss rate of 34.27%. In the fourth quarter of 2001, Bombardier announced that it was exiting the manufactured housing loan origination business. In March 2006, Green Tree Servicing LLC was assigned as the successor servicer following the resignation of Bombardier Capital Inc. The downgrade of class M-2 in series 1998-C to 'D' reflects the nonpayment of full and timely interest, as well as the increased likelihood that investors in the class M-2 notes will not receive ultimate repayment of their original principal investments. Standard & Poor's believes that interest shortfalls to this class will remain prevalent in the future given the adverse performance trends and the location of the class M-2 write-down interest at the bottom of the transaction's payment priorities. Ratings Lowered Bombardier Capital Mortgage Securitization Corp. Senior/subordinated pass-through certificates series 1998-C Rating ------ Class To From ----- -- ---- M-1 CCC- CCC+ M-2 D CCC Bombardier Capital Mortgage Securitization Corp. Senior/subordinated pass-through certificates series 1999-A Rating ------ Class To From ----- -- ---- A-2 B B+ A-3 B B+ A-4 B B+ A-5 B B+ M-1 CCC- CCC+ BOWATER INCORPORATED: Posts $35 Mil. Net Loss in First Qtr. 2007 ---------------------------------------------------------------- Bowater Incorporated reported a net loss for the first quarter of 2007 of $35.4 million on sales of $771.6 million. These results compare with a net loss of $18.8 million on sales of $893.2 million for the first quarter of 2006. "The continued decline in newsprint consumption and seasonally slow coated paper demand, along with weak lumber markets, led to price declines during the quarter," said David J. Paterson, chairman, president and chief executive officer. "We also experienced considerable cost pressures as a result of the rapid increase in the cost of recycled fiber and the impact of production curtailments. We have seen some improvement in the second quarter with better demand for several of our paper grades and softening in the cost of recycled fiber." First quarter 2007 special items, net of tax, consisted of a $35.9 million gain related to asset sales, a $12.3 million charge related to tax adjustments, a $3.4 million loss relating to foreign currency changes, and a $7 million charge for severance and merger-related costs. Excluding these special items, the net loss for the quarter would have been $48.6 million, as compared with first quarter 2006 net loss before special items of $19.1 million. During the first quarter, given weak demand for paper grades partially due to seasonal reasons, the company curtailed significant newsprint and specialty paper production. The manufacturing cost impact of these curtailments for the quarter is about $15 million and reduced production overall by about 68,000 metric tons. "The deterioration in domestic newsprint demand underscores the strategic rationale for our proposed merger with Abitibi- Consolidated, which is to significantly improve efficiencies by reducing costs and increasing productivity," continued Mr. Paterson. "I am pleased with the progress we have made thus far and look forward to closing this transaction in the third quarter." As of March 31, 2007, the company posted total assets of about $4.6 billion, total liabilities of about $3.7 billion, and minority interest of about $69.7 million, resulting in a total stockholders' equity of about $796 million. Segment Detail For the first quarter, newsprint had an operating loss of $4.1 million, a decrease of $15.4 million from the fourth quarter. The company's average transaction price decreased $22 per metric ton, compared to the fourth quarter. Average operating costs increased by $8 per metric ton primarily due to lower production volumes and higher recycled fiber costs. For the first quarter, specialty papers had an operating loss of $8.7 million. The company's average transaction price decreased $21 per short ton during the quarter, while average operating costs improved by $24 per short ton mainly due to higher production volumes and greater efficiencies. Compared to the fourth quarter of 2006, operating earnings for market pulp decreased slightly to $18.7 million in the first quarter. The average market pulp transaction price for the company increased $14 per metric ton. Average operating costs increased $9 per metric ton compared to the fourth quarter, as a result of an annual kraft mill outage at one of the company's sites. For the first quarter, lumber had an operating loss of $13.6 million. The average lumber transaction price for the company decreased $7 per thousand board feet. The company also experienced a lumber inventory charge of about $4 million due to lower prices. Operating earnings for the quarter were $8.6 million, a decrease of $7.2 million from the fourth quarter. The company's average transaction price for coated papers decreased $35 per short ton in the quarter compared to the fourth quarter of 2006. About Bowater Headquartered in Greenville, South Carolina, Bowater Inc. (NYSE: BOW) -- http://www.bowater.com/-- produces coated and specialty papers and newsprint, as well as sells bleached market pulp and lumber products. Bowater employs about 7,400 people and has 12 pulp and paper mills in the U.S., Canada and South Korea. In North America, it also operates a converting facility and owns 10 sawmills. It owns or leases about 815,700 acres of timberlands owned or leased in the U.S. and Canada and 28 million acres of timber cutting rights in Canada. Bowater operates six recycling plants and is one of the world's largest consumers of recycled newspapers and magazines. * * * As reported in the Troubled Company Reporter on March 27, 2007, Moody's Investors Service downgraded Bowater Incorporated's long- term debt ratings by one notch with the company's corporate family rating downgraded to B2 from B1, and its senior unsecured notes downgraded to B3 from B2. BRIGGS & STRATTON: Closing Plants Due to Drop in 1st Qtr Earnings ----------------------------------------------------------------- Briggs & Stratton Corp. is streamlining its operations to include lay-offs and plant closures due to the drop in earnings for the quarter ended March 31, according to various sources. The Wisconsin-based company intends to lay-off 41 workers from its Milwaukee Engine Division in June and to close down its Simplicity Manufacturing Inc. plant in Port Washington, which will affect 500 workers. Last month, the company disclosed that 480 employees of its plant in Rolla, Missouri would be displaced by the end of the year when the plant closes and moves its production to China and to a company plant in Poplar Buff, Missouri. The company's sales declined due to a low demand of lawn, garden equipment and portable generators, plus high retail inventories and a loss of market share in Europe, The Business Journal of Milwaukee reports. Headquartered in Wauwatosa, Wisconsin, Briggs & Stratton Corp. (NYSE: BGG) -- http://briggsandstratton.com/-- manufactures small, air-cooled engines for lawn and garden and other outdoor power equipment. The company also produces generators and pressure washers in the United States. * * * As reported in the Troubled Company Reporter on Jan. 25, 2007, Standard and Poor's Rating Services lowered its corporate credit and senior unsecured ratings for Briggs & Stratton Corp. to BB+ from BBB-. Outlook is stable. BRODER BROS: Earns $300,000 in Fourth Quarter Ended December 30 --------------------------------------------------------------- Broder Bros., Co. reported that its fourth quarter ended Dec. 30, 2006 net sales were $240.9 million, as compared with $263 million for the fourth quarter 2005. Income from operations for the fourth quarter 2006 was $9.3 million, as compared with $13.3 million for the fourth quarter 2005. Fourth quarter 2006 net income was $300,000, as compared with $2.3 million for the fourth quarter 2005. The company's Broder division generated fourth quarter 2006 net sales of $98 million, as compared with $103 million in the fourth quarter 2005. The Alpha division generated fourth quarter 2006 revenue of $112.3 million, as compared with $126.4 million in the fourth quarter 2005. The NES division generated net sales of $30.6 million in the fourth quarter 2006, as compared with $33.6 million in the fourth quarter 2005. Fourth quarter 2006 gross profit was $49.5 million, as compared with $50.9 million for the fourth quarter 2005. Unit volumes decreased during the fourth quarter 2006 compared to the fourth quarter 2005. Commodity trade brand product units declined on lower volume and higher margin products as the company continued to sell fewer low margin white tee shirts. Insufficient private label inventory levels in key styles during the second and third quarters of 2006 contributed to volume declines during the fourth quarter 2006 relative to the prior period. Sufficient inventory in private label brand products was on hand by the end of December 2006. Volume declined for exclusives brand products during the fourth quarter 2006, as compared with the fourth quarter 2005 resulting from the termination of one vendor relationship at the end of 2005. Full Year 2006 Results For fiscal 2006, net sales were $959.3 million, as compared with $978.4 million for fiscal 2005. Income from operations for fiscal 2006 was $26.6 million, as compared with $32.2 million for the prior year. Net loss for 2006 was $7.7 million, as compared with net loss of $2.9 million for 2005. The Broder division generated fiscal 2006 net sales of $375 million, as compared with $376.4 million in fiscal 2005. The Alpha division generated net sales of $460.6 million during fiscal 2006, as compared with net sales of $473.5 million in fiscal 2005 and the NES division generated net sales of $123.7 million in fiscal 2006, as compared with net sales of $128.5 million in 2005. The company's balance sheet as of Dec. 30, 2006, reflected total assets valued at $580.2 million and total liabilities of $514.6 million, resulting in a total stockholders' equity of $65.6 million. Accumulated deficit in 2006 was $56.1 million, as compared with $48.4 million in 2005. Cash held as of Dec. 30, 2006, was $4.3 million, up from $3.3 million a year earlier. A full-text copy of the company's 2006 annual report is available for free at http://ResearchArchives.com/t/s?1e92 Acquisition of Amtex Imports On Sept. 28, 2006, the company acquired substantially all of the assets of Amtex Imports Inc., a single location distributor based in Northlake, Illinois with about $40 million in annual revenues. The Amtex acquisition facilitated the company's entry into the Chicago market. The company's operating results reflected herein include the results of Amtex from the date of acquisition and are reported in Broder division results. About Broder Bros. Headquartered in Trevose, Pennsylvania, Broder Bros., Co. -- http://www.broderbrosco.com/-- owns and operates three brands in the imprintable sportswear industry: "Broder," "Alpha," and "NES." The company offers industry product styles including those manufactured by Gildan, Hanes, Jerzees, Fruit of the Loom, and Anvil, as well as exclusive brands like Adidas Golf, Champion and Columbia Sportswear. The company also develops proprietary brands including Devon & Jones, Chestnut Hill, Authentic Pigment, Harriton, HYP, Desert Wash, Great Republic and Harvard Square. The company operated 17 distribution centers at December 2006 and operated 12 distribution centers at March 30, 2007. * * * As reported in the Troubled Company Reporter on April 5, 2007, Standard & Poor's Ratings Services revised its outlook on printable sportswear distributor Broder Bros Co. to negative from stable. At the same time, Standard & Poor's affirmed its 'B' long-term corporate credit and 'CCC+' unsecured debt ratings on the company. "The outlook revision reflects the company's weaker-than-expected operating results and credit protection measures for the fiscal year ended December 2006," said Standard & Poor's credit analyst Susan Ding. Credit measures have deteriorated as a result of higher debt levels. CANTRONIC SYSTEMS: Sells Shares to Settle Debt w/ Caltech --------------------------------------------------------- Cantronic Systems Inc. intends to proceed with a shares-for-debt transaction with the California Institute of Technology, subject to regulatory approval. In the transaction, Cantronic will issue 538,053 of its common shares at a deemed price of $0.14 to Caltech to settle outstanding debt of $75,865. The common shares issued will be subject to a four-month hold period from the date of closing. The Debt Settlement Shares will be held in escrow pursuant to a pooling agreement, the terms of which are to include that the trustee under the Pooling Agreement will hold the share certificates for release as to one-quarter of the Debt Settlement Shares every three months starting on the date which falls three months from the date of the Pooling Agreement. The issuance of the Debt Settlement Shares will not result in a change of control. Based in Vancouver, British Columbia, Cantronic Systems Inc. (TSX VENTURE: CTS) -- http://www.cantronics.com/-- manufactures instruments with infrared night vision technology, specializing in passive and active infrared cameras, infrared illuminators, low light infrared sensitive CCD cameras and long-range night vision surveillance systems for demanding homeland security applications. Cantronic, through its U.S. subsidiary QWIP Technologies, Inc., holds a worldwide exclusive license from the California Institute of Technology to produce and sell infrared detectors and sensors based on Caltech's Quantum Well Infrared Photodetector technology. Going Concern Doubt In the going concern paragraphs of Cantronic Systems' financial statements for the nine months ended Oct. 31, 2006, the company showed that it has incurred a net loss of $820,879 at Oct. 31, 2006. The company also speculated that it might not have sufficient working capital for the next twelve months. These factors, the company said, raised substantial doubt about its ability to continue as a going concern. In order to mitigate these factors, the company said it is still in the process of trying to identifying sources for additional financing to fund working capital requirements and the ongoing development of the company's business. CLEAR CHANNEL: Units Ink Asset Purchase Deal with GoodRadio.TV -------------------------------------------------------------- Clear Channel Communications Inc.'s subsidiaries have entered into an assets purchase agreement with GoodRadio.TV LLC for the sale of 187 radio stations, along with the stations' FCC licenses, real property and station contracts. The subsidiaries are Clear Channel Broadcasting Inc., Clear Channel Broadcasting Licenses Inc., CC Licenses LLC, Capstar Radio Operating Company, Capstar TX Limited Partnership, AMFM Radio Licenses LLC, Citicasters Co., Citicasters Licenses LP and Jacor Broadcasting Corporation. GoodRadio.TV will pay approximately $452 million in cash and will assume certain liabilities, including existing business contracts and licenses with the U.S. Federal Communications Commission. Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a global media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on April 23, 2007, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Clear Channel Communications Inc. to 'B+' from 'BB+'. The ratings remain on CreditWatch with negative implications, where they were placed on Oct. 26, 2006, following the company's announcement that it was exploring strategic alternatives to enhance shareholder value. CHOCTAW RESORT: Debt Repayment Prompts S&P to Upgrade Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the Choctaw Resort Development Enterprise. The corporate credit rating was raised to 'BB+' from 'BB', and the rating outlook is stable. Total debt outstanding at Dec. 31, 2006, approximated $252 million. "The rating upgrade reflects the CRDE's strong expected credit measures due to recent debt repayment, despite year-over-year operating performance currently being materially affected by the reopening of Gulf Coast gaming capacity," said Standard & Poor's credit analyst Michael Scerbo. "In addition, the higher rating reflects our expectation that the CRDE will continue to maintain a strong financial profile for the rating and that any potential pursuit of new development projects would be accomplished in a manner consistent with the 'BB+' rating." The 'BB+' rating on the CRDE reflects a narrow business dependent on a single property comprising two adjacent casino facilities, the long-term uncertainty surrounding the depth of the market, and the current decline in year-over-year operating earnings that is occurring as the Gulf Coast gaming market reopens some capacity. Still, the CRDE benefit from limited competition in its surrounding market and continues to possess a very good financial profile for the rating. The CRDE was created to operate the Pearl River Resort for the Mississippi Band of Choctaw Indians. The Mississippi Band of Choctaw Indians is the only federally recognized Native American tribe in Mississippi. The tribe's compact with the State of Mississippi was entered into in 1992 and contains no expiration date or revenue sharing agreement. It permits the tribe to operate both land-based and Class III gaming, including slot machines and table games. Due to Hurricane Katrina, the CRDE's operation significantly benefited from the lack of capacity on the Gulf Coast and experienced a material increase in customer traffic and gaming volumes. As a result, earnings increased materially in fiscal 2006, and margins improved by more than 400 basis points. However, over the past few quarters, as gaming capacity has returned to the Gulf Coast, the CRDE has experienced much lower customer counts despite increased marketing costs in an attempt to retain customer traffic. Still, while the CRDE does not publicly disclose its financial statements, its overall financial profile is good for the 'BB+' rating and provides some cushion for either weaker-than-expected operating results or increased debt levels associated with the pursuit of growth opportunities. COINSTAR INC: Reduced Leverage Cues S&P to Lift Debt Rating to BB ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings, including the corporate credit rating, on Bellevue-Washington-based Coinstar Inc. to 'BB' from 'BB-'. The outlook is stable. The upgrade is supported by continued improvement in financial metrics for Coinstar, including leverage that was reduced to 1.9x in 2006 and strengthening of other credit protection measures. The ratings on Coinstar reflect a business characterized by significant customer concentration, short term(short-term contracts or term contracts that are short?) contracts, and higher operating risks with the growing entertainment services and e- payment business segments. Positive considerations include the company's industry-leading position in automated coin-counting machines, very satisfactory credit measures, and strong free cash flow generation. "We expect Coinstar to continue its good operating performance while successfully integrating recent acquisitions," said Standard & Poor's credit analyst Jackie E. Oberoi, "but the weakening of operating results caused by the loss of a significant retail partner, pricing pressures, or a more aggressive growth strategy could lead to a negative outlook." CONTINUUM CARE: Auction for 11 Nursing Facilities Set on May 30 --------------------------------------------------------------- Continuum Care Corporation will put up for auction 11 of its assisted living/skilled nursing facilities in Maryland, Tennessee and North Carolina on May 30, 2007. "Nine of the properties are operational. Ideally, these will be sold as ongoing business concerns, either together or individually, along with the two closed locations," says Soneet Kapila, the Chapter 11 Trustee of the Debtor's estates. The Ocala, Florida office of Tranzon Driggers will receive the sealed bids -- due by 2:00 p.m. E.D.T., on Wednesday, May 30, 2007 -- and manage the auction in tandem with the northern Virginia office of Tranzon Fox. Both are member companies of Tranzon, LLC, a nationwide group of accelerated marketing and auction companies. "The aging population in combination with recent restrictions on issuance of new facility licenses makes these facilities especially valuable expansion opportunities for growing companies in the assisted living and skilled nursing arena," says Stephen Karbelk, regional president of Tranzon Fox. Various Facility Renovations According to Mr. Karbelk, all but one of the Continuum Care properties are assisted living residences. The sole rehabilitation/skilled nursing center is the 130-bed facility in Sykesville, Maryland. More than a half-million in renovations were invested in Continuum Care at Sykesville within the past year. Last year, the facility earned the highest rating for a facility of its size in the state in a Maryland Health Care Commission Nursing Home Family Satisfaction Survey. North Carolina assisted living homes owned by Continuum Care are located in Elizabeth City, Wallace, Lillington and Garland. Three are operational; two are closed. The largest is Harbour's Edge, a 130-bed adult care home ideally situated in the historic southern town of Elizabeth City in the midst of a medical office park. Wallace Gardens, licensed for 64 beds, sits about 30 miles from Wilmington in Wallace, North Carolina. It has undergone renovations, as has Pinecrest Gardens, a 60- bed licensed facility in mint condition with a separate special-care secured unit. Pinecrest, in Lillington, North Carolina, adjoins Knollwood Gardens, another 40-bed adult care home that currently is closed, as is Thompson Care Center, in Garland, North Carolina. In Tennessee, all of the assisted living centers have undergone extensive renovations, and many have the outward appearance of stately southern residences. Johnson City, Tennessee has two adult care homes -- I and II -- located side-by-side and licensed for 26 and 32 beds. Continuum Courtyards of Knoxville I and II, licensed for 28 and 32 beds, are beautifully maintained in a quiet residential section of Knoxville, Tennessee close to local shopping. Knoxville I has a secured unit for its special care residents and underwent remodeling in 2003, and Knoxville II offers more independent living. "All the properties have their own different intrinsic values," says Kapila. "We're not married to selling them as a block, but will entertain proposals that provide the best solutions and maximum value for the estate." About Continuum Care Based in West Palm Beach, Florida, Continuum Care Corporation is a non-profit group that operates skilled nursing care facilities in Florida, Tennessee, North Carolina, and Maryland. The Debtor filed for Chapter 11 protection on Oct. 8, 2004 (Bankr. S.D. Fla. Case No. 04-34652). Craig I. Kelley, Esq. has represented the Debtor in its restructuring efforts. CREST G-STAR: Fitch Lifts Rating on $15.5MM Class D Notes to BB+ ---------------------------------------------------------------- Fitch upgraded two classes and affirmed four classes of notes issued by Crest G-Star 2001-1, LP. These rating actions are effective immediately: -- $233,061,331 class A notes affirmed at 'AAA'; -- $60,000,000 class B-1 notes affirmed at 'AA+'; -- $15,000,000 class B-2 notes affirmed at 'AA+'; -- $20,000,000 class C notes affirmed at 'A+'; -- $15,500,000 class D notes upgraded to 'BB+' from 'BB'; -- $30,377,165 limited partnership interest certificates (principal only) upgraded to 'B+' from 'B'. Crest G-Star is a collateralized debt obligation, which closed Sept. 6, 2001, supported by a static pool of commercial mortgage- backed securities (CMBS: 44.9%), senior unsecured real estate investment trust securities (REITs: 51.4%), and commercial real estate loans (CREL: 3.7%). Capmark Investments LP (CDO asset manager rating of 'CAM1' for commercial real estate assets by Fitch) selected the initial collateral. The affirmations and upgrades are driven primarily by the stable credit quality of the portfolio, the de-leveraging of the liabilities, and the seasoning of the collateral since Fitch's last rating action. Since Fitch's last rating action, 27.71% of the portfolio has been upgraded an average of 1.48 notches and approximately 4.43% of the portfolio has been downgraded an average of 1 notch. The weighted average rating factor has remained relatively stable since the last review as result of the amortizations of the higher rated assets. The class A notes have paid down by 15.6%, increasing the credit enhancement to all classes of notes. All overcollateralization and interest coverage tests are passing well above their respective thresholds as of the March 2007 trustee report and show slight improvement since the last review. There are currently no defaulted assets in the portfolio. The CMBS assets in the collateral pool range from the 1995 vintage through the 2001 vintage. Due to defeasance and amortization, Fitch believes that these CMBS vintages are a positive factor in this transaction. The rating of the class A notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the class B-1, B-2, C, and D notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the Limited Partnership Interest Certificates addresses the likelihood that investors will receive the ultimate stated balance of principal by the legal final maturity date. Fitch will continue to monitor and review this transaction for future rating adjustments. CSAB MORTGAGE: Fitch Rates $2.1 Mil. Class DB5 Certificates at BB ----------------------------------------------------------------- CSAB mortgage pass-through certificates, series 2007-1 Groups 2-4, is rated by Fitch Ratings as: -- $220.62 million classes 2-A-1 to 2-A-6, 3-A-1 to 3-A-30, 4-A-1 to 4-A-9, D-P, D-X, AR, and AR-L (senior certificates) 'AAA'; -- $8.313 million class DB1 and DB1X 'AA+'; -- $6.328 million class DB2 'AA'; -- $4.218 million class DB3 'A'; -- $3.35 million class DB4 'BBB'; -- $2.109 million class DB5 'BB'; -- $1.737 million class DB6 'B'. The 'AAA' rating on the senior certificates reflect the 11.10% subordination provided by the 3.35% class DB1, 2.55% class DB2, 1.70% class DB3, 1.35% class DB4, 0.85% class DB5, 0.70% class DB6, and 0.60% class DB7 (not rated by Fitch). Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the master servicing capabilities of Wells Fargo Bank, N.A. (Master Servicer), which is rated 'RMS1' by Fitch. The mortgage loans consist of 1047 fixed-rate mortgage loans with an aggregate principal balance of $248,167,548 as of the cut-off date, April 1, 2007. The mortgage pool has a weighted average loan-to-value ratio (LTV) of 74.91% with a weighted average mortgage rate of 7.153%. Cash-out refinance loans account for 30.11% and second homes 3.00%. The average loan balance is $237,027 and the loans are primarily concentrated in California (19.22%), Florida (14.07%), and New York (8.08%). U.S. Bank National Association will serve as trustee. Credit Suisse First Boston Mortgage Securities Corp., a special purpose corporation, deposited the loans in the trust which issued the certificates. DAIMLERCHRYSLER: Magna is Chrysler's Serious Bidder, Paper Says --------------------------------------------------------------- Canadian auto parts supplier Magna International Inc. is currently the "only party seriously interested in Chrysler," Reuters quoted German newspaper Automobilwoche's report on Saturday, citing a source familiar with the negotiations. The TCR-Europe reported on May 2 that Magna leads the race for DaimlerChrysler AG's Chrysler Group and could grab a much larger stake in the ailing unit, potentially taking a direct minority ownership stake of between 25% and 50%. According to the Reuters report, investment bankers are intentionally leaking talks with private equity firms Cerberus and Blackstone but these are being held "only for tactical reasons." Daimler is expected to make a decision this month, with a sale to Magna slated to conclude in two months, Reuters states, citing Automobilwoche as its source. The German paper reported that Daimler would initially continue to hold a stake in the loss- making unit. The paper also wrote that insiders say Magna will probably sell Chrysler again once the restructuring is successfully concluded, Reuters notes. 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. DANA CORP: Wants Section 1113/1114 Ruling Deferred Until May 31 --------------------------------------------------------------- Dana Corp. and its debtor-affiliates, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and the United Steelworkers delivered to the United States Bankruptcy Court a joint letter asking Judge Burton Lifland to defer ruling on their Section 1113/1114 disputes until May 31, 2007. Judge Lifland previously said that he would rule on the labor disputes by the end of April. The Debtors and the Unions stated in the joint letter that the extension is needed "in light of ongoing discussions" between them. On the other hand, Judge Lifland approved the settlement between the Debtors and the International Association of Machinists and Aerospace Workers Union, wherein the Debtors agreed to allocate $2,250,000 to resolve all IAMAW claims. Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors' exclusive period to file a plan expires on Sept. 3, 2007. They have until Nov. 2, 2007, to solicit acceptances of that plan. DANA CORP: Wants Open-Ended Deadline to Remove Court Actions ------------------------------------------------------------ Dana Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to further extend the time by which they may file notices of removal with respect to any actions to federal court under Section 1452 of the Judicial Procedure Code and Rule 9027 of the Federal Rules of Bankruptcy Procedure until the date a plan of reorganization is confirmed. The Debtors seek that the Removal Period Extension be without prejudice to: (a) any position they may take regarding whether Section 362 of the Bankruptcy Code applies to stay any Actions; and (b) their right to seek further extensions of time to remove all Actions. The Debtors continue to require more time to decide whether the possible removal of any of the Actions would promote their interests in the context of their overall restructuring process, Corinne Ball, Esq., at Jones Day, in New York, tells the Court. Ms. Ball relates that the Debtors are currently focused on a host of key reorganization and business activities, including developing a reorganization plan. Developing a reorganization plan would entail attending to numerous and significant tasks like completing the divestitures of certain businesses and assets, securing the profit improvements from the various "Restructuring Initiatives," refining the Debtors' business plan, completing their proceedings under Sections 1113 and 1114 of the Bankruptcy Code, and determining the proper capital structure of the Reorganized Debtors. The Debtors are also reviewing and analyzing more than 15,000 claims filed against them, Ms. Ball adds. The Debtors aim to efficiently and timely resolve all the disputed claims. Ms. Ball contends that the outcome of the claim review and analysis bears directly on the Debtors' decision whether to remove the Actions. Moreover, the Debtors must oversee and implement the day-to-day operation of their businesses as debtors-in-possession. Given the current distress in the U.S. automotive industry, this task cannot be underestimated, Ms. Ball asserts. Because of the reasons stated, the Debtors have not yet reached the point where they can make final decisions relating to the potential removal of the Actions, Ms. Ball says. About Dana Corp. Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors' exclusive period to file a plan expires on Sept. 3, 2007. They have until Nov. 2, 2007, to solicit acceptances of that plan. DELPHI CORP: Section 1113/1114 Conference Set for May 23 -------------------------------------------------------- The Hon. Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York directed Delphi Corp. and its debtor-affiliates, certain parties, and the Official Committee of Equity Security Holders to hold a conference concerning the 1113/1114 Motion and related matters at 2:00 p.m., Prevailing Eastern Time, on May 23, 2007. The parties include: * UAW * IUE-CWA * USW * IBEW Local 663 * IAMAW District 10 * IUOE * Appaloosa Management L.P. * Wexford Capital LLC * Wilmington Trust Company * General Motors Corporation * Official Committee Of Unsecured Creditors The Court will conduct an in-person, in-camera chambers conference pursuant to Section 105(d)(1) of the Bankruptcy Code with the Parties at 3:00 p.m., Prevailing Eastern Time, on May 31, 2007, so that it may be apprised of the status of the Debtors' framework agreements with, among others, Appaloosa Management L.P., and the parties' negotiations regarding the consensual resolution of the 1113/1114 Motions. Judge Drain extended the date by which he will rule on the 1113/1114 Motions to May 31, 2007, with the consent of the Debtors and the Respondents and to the extent required by statute. If the Debtors file a disclosure statement on or prior to May 31, 2007, the ruling dates on the 1113/1114 Motions will be further extended to July 31, 2007, Judge Drain ruled. Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. The Debtors' exclusive plan-filing period expires on July 31, 2007. (Delphi Corporation Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). DELPHI CORP: Court Moves Lease-Decision Period Until September 30 ----------------------------------------------------------------- The Hon. Robert Drain of the United States Bankruptcy Court for the Southern District of New York further extended the date by which Delphi Corp. and its debtor-affiliates must assume or reject unexpired non-residential real property leases through and including the earlier of: (a) September 30, 2007; or (b) the date on which a plan of reorganization in the Debtors' Chapter 11 cases is confirmed. The Debtors are lessors or lessees with respect to approximately 80 Real Property Leases, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, notes. The Debtors, according to Mr. Butler, are in the process of implementing their transformation plan. To facilitate their transformation plan, the Debtors recently entered into the Equity Purchase Commitment Agreement and the Plan Framework Support Agreement with, among others, Appaloosa Management L.P., Harbinger Capital Partners Master Fund I, Ltd., and Cerberus Capital Management, L.P., which provide a platform for the resolution of transformation issues and the formulation of a consensual plan of reorganization. Until the outcome of the Framework Agreements is known, the Debtors cannot determine which Real Property Leases should be assumed and which should be rejected, Mr. Butler asserts. The September 30, 2007 deadline coincides with the Debtors' current deadline to solicit acceptances of a plan of reorganization. Mr. Butler notes that the Debtors sought the September 30, 2007 solicitation extension because of the possibility that: -- emergence from reorganization might be delayed because of the size and complexity of their cases; -- the actions required to be taken under the Framework Agreements might not be completed by the end of the second quarter of 2007; and -- the transactions contemplated by the Framework Agreements might not be consummated. "These same factors can delay the Debtors' ability to acquire all information necessary to decide whether to assume or reject a lease," Mr. Butler avers. Thus, the Debtors require more time to complete their evaluation of the Real Property Leases. If the current Lease Decision Deadline is not extended, the Debtors may be compelled, prematurely, to assume substantial, long-term liabilities under the Real Property Leases or forfeit benefits associated with some Leases to the detriment of the Debtors' ability to operate and preserve the going-concern value of their business, Mr. Butler points out. The non-debtor parties under the Real Property Leases will not be prejudiced by an extension because the Debtors are making payments under the Leases as they come due, Mr. Butler assures the Court. ORIX Responds ORIX Warren, LLC, and Delphi Automotive Systems, LLC, are parties to a certain lease for non-residential real property located at 4551 Research Parkway, Warren, Ohio. ORIX relates that it does not object to the extension requested by the Debtors. ORIX, however, reserves its right to (i) object to any future request for an extension of time to assume or reject the Lease, and (ii) file a motion to shorten the Extension Period. About Delphi Corporation Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. The Debtors' exclusive plan-filing period expires on July 31, 2007. (Delphi Corporation Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). DICK BRUHN: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Dick Bruhn, Inc. dba Dick Bruhn A. Mans Store dba M'Lady Bruhn dba Selix Formal Wear dba Butlers Uniforms c/o Uecker & Associates 100 Pine Street, Suite 475 San Francisco, CA 94111 Bankruptcy Case No.: 07-51338 Type of Business: The Debtor sells miscellaneous apparel and accessories. Chapter 11 Petition Date: May 4, 2007 Court: Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Sally A. Morello, Esq. 510 Waverly Street Palo Alto, CA 94301 Tel: (650) 322-3300 Total Assets: $7,046,481 Total Debts: $11,306,604 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kearney Trust noteholder $302,530 617 Park Street Salinas, CA 93901 After Six, Inc. $201,808 P.O. Box 100405 Atlanta, GA 30384-0405 see attachment accrued $226,580 valuation Rianda Living Trust noteholder $175,902 Barton Family Trust noteholder $156,763 Sancho Manzano noteholder $145,613 Joshua Arios noteholder $145,574 Rober Wayman noteholder $142,113 Jeffer Guerra noteholder $138,509 Pankaj Patel noteholder $130,534 Michael L. Phlegar noteholder $126,924 Proctor Family Trust noteholder $125,343 William Kroeger noteholder $123,952 Claudia Higgins noteholder $120,423 Elbeco, Inc. noteholder $123,211 Barbara Clarkson Living Trust noteholder $106,089 Janet S. Ames noteholder $104,689 Second Chance Body Armor $97,871 Alvin W. Roberts, Sr. Family noteholder $96,348 Cinde L. Bryant noteholder $92,366 DILLARD'S INC: Debt Reduction Cues Moody's to Lift Rating to Ba3 ---------------------------------------------------------------- Moody's raised the corporate family rating of Dillard's to Ba3 from B1 with a stable outlook. Moody's also raised the rating on Dillard's senior unsecured notes to B1 fromB2, and raised the rating on Dillard's Capital Trust I preferred stock to B2 from B3. The upgrade reflects the improvement in credit metrics due to the significant reduction in Dillard's debt, the company's strong liquidity, and its solid portfolio of unencumbered real estate assets These ratings are upgraded: * Corporate family rating to Ba3 from B1 * Unsecured senior notes to B1 from B2, LGD4(67.25%) * Dillard's Capital Trust I to B2 from B3, LGD6 (94.73%) * Probability of default rating to Ba3 from B1 Dillard's significant reduction in debt, the company's strong liquidity, and its continuing solid portfolio of valuable real estate assets, has led to the upgrade in the corporate family rating to Ba3 from B1. Dillard's is expected to generate positive free cash flow while continuing to reduce debt over the intermediate term. The negative comparable store sales trend has begun to show signs of stabilization. Dillard's corporate family rating continues to be constrained by the company's pressured regional competitive position within the challenged department store industry. The rating is also constrained by the volatile margin performance over the last several years as it has sought to respond to competition. The rating is also constrained below the level suggested by the company's credit metrics by Moody's concerns regarding corporate governance, including the limited independence of the board of directors from the controlling family and weak accountability of senior management. The stable outlook reflects the recent signs of increasing margins, which while still volatile, are generally at a higher level, as well as Moody's expectation that the company will maintain strong liquidity and further reduce its debt levels over the next twelve to eighteen months. Dillard's, Inc. (Dillard's) is a regional department store chain, headquartered in Little Rock, Arkansas. It operates 328 department stores in 29 U.S. states located primarily in the southeast, southwest, and mid-west. Revenues for fiscal year ended February 3, 2007 were approximately $7.8 billion. EASTMAN KODAK: Closes Unit Sale to Onex Corp. for $2.5 Billion -------------------------------------------------------------- Eastman Kodak Company has completed the sale of its Health Group to an affiliate of Onex Corporation, for up to $2.55 billion. The acquired business is continuing under the name Carestream Health, Inc. Eastman Kodak has received $2.35 billion in cash, and will receive up to $200 million in additional future payments if Onex achieves certain returns with respect to its investment. Primarily because of tax-loss considerations, Eastman Kodak expects to retain the vast majority of the initial $2.35 billion cash proceeds. As previously indicated, the company plans to use a portion of the proceeds to fully repay its approximately $1.15 billion of secured term debt. Approximately 8,100 employees associated with the Health Group have transferred to Carestream Health. The business is a worldwide leader in information technology, molecular imaging systems, medical and dental imaging, including digital x-ray capture, medical printers, and x-ray film. "We are now studying options for the cash that will remain after we pay off the secured term debt," Antonio M. Perez, Chairman and Chief Executive Officer, said. "Through this rigorous process with our Board of Directors, we are focusing on financially attractive ways to drive profitable growth and enhance shareholder returns." About Onex Corporation Onex Corporation (TSX: OCX) is a Toronto based investment firm. It was founded in 1983 by Gerry Schwartz. Today it is a public traded company but Schwartz has 67.6% of the voting control and continues to serve as Chairman and CEO. Its head office is on the 49th floor of BCE Place in Toronto, with a branch office in New York City. About Eastman Kodak Company Headquartered in Rochester, New York, Eastman Kodak Company -- http://www.kodak.com/-- is a worldwide vendor of imaging products and services. The company has operations in India, Australia, China, Hong Kong, Japan, Korea, Malasia, New Zealand, Philippines, Singapore, Taiwan and Thailand. * * * In February 2007, Moody's Investors Service placed Eastman Kodak Company's B1 Corporate Family Rating on review for a possible downgrade. Moody's review was prompted by the company's sale of the Kodak Health Group as well as the fundamental operating performance of the company. Moody's commented that if the sale of KHG was not pending, Moody's would expect to confirm the company's B1 rating with a negative outlook. In January 2007, Standard & Poor's Ratings Services placed its ratings on Eastman Kodak Co. (B+/Watch Neg/--) on CreditWatch with negative implications. The Rochester, New York-based imaging company had $3.5 billion in debt as of June 30, 2006. EMI GROUP: Confirms Approach of Potential Bidders ------------------------------------------------- EMI Group PLC confirmed May 4, that it received a number of preliminary indications of interest to acquire the company. According to Wall Street Journal reporters, Daniel Thomas and Jessica Hodgson, although EMI didn't identify the potential bidders, recent reports have suggested that U.S. private-equity firm One Equity has approached it on a takeover that would value the company at about GBP3 billion. EMI also faces takeover interest from two other U.S. private equity firms, Fortress and Cerberus, Reuters reports, citing the Financial Times as its source. According to the report, all three private equity firms has sent letters expressing interest in buying EMI, and that the music group would open its books to all three bidders which are expected to make presentations to the board next week. The FT also said that EMI gave the three groups until May 23 -- the time of its annual results -- to make fully financed, formal offers. EMI shares went up 18.75 pence to 246.25 pence on the London Stock Exchange on May 4. EMI stated that there could be no certainty that any offer will ultimately be made. On March 2, EMI rejected Warner Music Group's GBP2.1 billion non- binding takeover bid, saying that the price of 260 pence per share in cash for EMI is inadequate. About EMI Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries and with licensees in a further 20. The group has operations in Brazil, China, and Hungary. The group employs over 6,600 people. Revenues in 2005 were near EUR2 billion and operating profit generated was over EUR225 million. At March 31, 2006, EMI Group's consolidated balance sheet revealed GBP1.817 billion in total assets, GBP2.544 billion in total liabilities and GBP726.6 million in shareholders' deficit. The company issued two profit warnings since January 2007. * * * In March 2007, Standard & Poor's Ratings Services placed its ratings on Warner Music Group Corp., including the 'BB-' corporate credit rating, on CreditWatch with negative implications, following the company's statement that it is exploring a possible merger agreement with EMI Group PLC (BB- /Watch Neg/B), which EMI management has confirmed. In January 2007, Moody's Investors Service downgraded EMI Group Plc's Corporate Family and senior debt ratings to Ba3 from Ba2. All ratings remain under review for possible further downgrade. ENERGY PARTNERS: Completes Cash Tender Offer of 8-3/4% Sr. Notes ---------------------------------------------------------------- Energy Partners Ltd. completed its previously announced cash tender offer to purchase any and all of its outstanding 8-3/4% Senior Notes due 2010 and related consent solicitation to amend the indenture pursuant to which the Notes were issued. The offer expired at 5:00 p.m., New York City time, on May 3, 2007, with $145,499,000 in aggregate principal amount of Notes tendered and accepted for purchase under the terms of the Offer, or approximately 97% of the Notes outstanding. Banc of America Securities LLC served as the exclusive dealer manager and solicitation agent in connection with the offer. 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 March 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. FENDER MUSICAL: S&P Holds B+ Rating and Revises Outlook to Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the 'B+' corporate credit rating on Scottsdale, Arizona-based Fender Musical Instruments Corp. and revised the outlook to stable from negative. At the same time, Standard & Poor's assigned a 'B+' rating, the same as the corporate credit rating, to the company's $200 million senior secured term loan facility, with a recovery rating of '3', indicating that lenders could expect meaningful (50%-80%) recovery of principal in the event of a payment default. The company will also procure a new $100 million asset-based revolving credit facility. The revised outlook is based on Fender achieving its May 2006 bank model for fiscal 2006 and maintaining appropriate credit protection measures and liquidity. "We believe the company's improved infrastructure, which has contributed to significantly improved inventory management, will help the company maintain operating stability over the intermediate term," said Standard & Poor's credit analyst Kenneth Shea. "The new bank facility will also result in lower interest expense, enhancing the company's liquidity and credit measures." The ratings are based on Fender's high debt leverage and narrow business focus, and the discretionary nature of its products. These factors are somewhat mitigated by the company's strong market share and global brand names in the guitar-and amplifier- segment, including Fender, Squier, Gretsch, and Guild. FIRST UNION: S&P Affirms B Rating on Class G Series 1999-C1 Certs. ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on classes D, E, and F of First Union Commercial Mortgage Trust's commercial mortgage pass-through certificates FUNB series 1999-C1. Concurrently, the ratings on classes A-2, B, C, G, and IO-1 from the same transaction were affirmed. The upgrades and affirmations reflect credit enhancement levels that adequately support the raised and affirmed ratings. Classes D and E benefited from the defeasance of $360 million (42%) of the pool's collateral As of the April 17, 2007, remittance report, the collateral pool consisted of 209 loans with an aggregate balance of $855.8 million, down from 238 loans with a balance of $1.17 billion at issuance. The master servicer, Wachovia Bank N.A., provided primarily year-end 2005, year-end 2006, and interim-2006 financial statements for 99% of the pool. Based on this information and excluding defeased and credit tenant lease loans ($78 million, 9%), Standard & Poor's calculated a weighted average debt service coverage (DSC) of 1.53x for the pool. Three loans ($7.3 million, 1%) are with the special servicer, and one of these loans is 90-plus-days delinquent. To date, the trust has reported 16 losses totaling $13.4 million. The top 10 loans secured by real estate have an aggregate outstanding balance of $158.2 million (18.5%). The weighted average DSC for the top 10 loans was 1.43x for year-end 2006. Four of the top 10 loans are on the watchlist and are discussed further below. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans, and all were characterized as "good." Two of the three loans with the special servicer, LNR Partners Inc., are secured by lodging properties. Fairfield Inn ($3.2 million) is secured by a 115-room limited-service hotel built in 1997 in Chester, Virginia, approximately 10 miles south of Richmond. The loan was transferred to the special servicer in October 2006 following the receipt of a notice of default under the franchise agreement. The special servicer released funds from the escrow account to fund the cost associated with repairs on the property. The loan is current. Best Western Inn at Chimney Hill ($2.1 million) is current and is secured by a 98-room limited-service hotel built in 1981 in College Station, Texas. The loan was transferred to the special servicer in September 2006 because the franchise agreement was terminated. The borrower and Best Western held mediation in December. The borrower is evaluating all of his options, including a sale and/or a flag change. Salem Pine Apartments ($2.2 million) is secured by a 140-unit multifamily complex in Angleton, Texas, approximately 30 miles south of Houston. The property was built in 1977 and renovated in 1998. The loan is 90-plus-days delinquent. The loan was transferred to the special servicer in May 2005 because of payment default. The forbearance agreement expired on April 30, 2007. The borrower is in the process of selling the property and has requested a payoff statement. Wachovia reported a watchlist of 36 loans with an aggregate outstanding balance of $130.2 million (15.2%). Two of the top 10 loans on the watchlist are secured by an office building and a health care facility, respectively. Prince George's Metro Center ($21.8 million, 3%) is the second-largest loan and is secured by a 374,061-sq.-ft. office building in Hyattsville, Maryland, northeast of downtown Washington, D.C. The loan was placed on the watchlist because the largest tenant (40% of gross leasable area) vacated the property. As of Sept. 30, 2006, DSC and occupancy were 0.92x and 58%, respectively. The fourth-largest loan, New Brighton Manor ($15.1 million), is secured by a 300-bed skilled nursing facility in Staten Island, New York. The loan was placed on the watchlist due to low DSC (0.35x at year-end 2006) resulting from substantial increases in expenses. The borrower has sufficient funds to cover debt service payment shortfalls. Reported year-end 2006 occupancy was 83%. The remaining two of the four top 10 loans on the watchlist are secured by lodging properties. The fifth-largest loan, the DOM Cross Set portfolio ($14.6 million, 2%), is secured by five lodging properties situated in various locations in Virginia. The loan was placed on the watchlist because all of the properties have low DSC levels attributable to low occupancy resulting from increased competition. The combined year-end DSC was 0.95x. The Holiday Inn loan ($8.5 million, 1%) is one of the two cross- collateralized and cross-defaulted loans that compose the sixth- largest exposure, The Gateway Cross Loan ($14.5 million, 2%). A 192-room full-service hotel built in 1964 and renovated in 1995 in Bethlehem, Pennsylvania, secures the Holiday Inn loan. The loan was placed on the watchlist due to a low DSC of 0.99x at year-end 2005 resulting from low occupancy in a weak market. The year-end 2006 DSC for the other loan, Bethlehem Hampton Inn & Suites, was 1.29x. Standard & Poor's stressed various loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised First Union Commercial Mortgage Trust Commercial mortgage pass-through certificates FUNB series 1999-C1 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ D AAA A 15.46% E AA+ BBB+ 13.42% F BBB BB+ 7.29% Ratings Affirmed First Union Commercial Mortgage Trust Commercial mortgage pass-through certificates FUNB series 1999-C1 Class Rating Credit Enhancement ----- ------ ---------------- A-2 AAA 37.25% B AAA 30.44% C AAA 23.29% G B 2.86% IO-1 AAA N/A *N/A - Not applicable. FIRST UNION-LEHMAN: S&P Lifts Rating on Class J Certificates to B- ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on five classes of commercial mortgage pass-through certificates from First Union-Lehman Bros. Commercial Mortgage Trust's series 1997-C2. Concurrently, the ratings on four other classes from the same transaction were affirmed. The upgrades of classes E, F, G, and H reflect increased credit support due to principal paydowns of the transaction. Classes E and F also benefited from the defeasance of $183.3 million (22%) of the pool's collateral. The affirmed 'AAA' ratings and raised rating on class J reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the April 18, 2007, remittance report, the collateral pool consisted of 206 loans with an aggregate balance of $848.7 million, down from 422 loans with a balance of $2.2 billion at issuance. The master servicer, Wachovia Bank N.A., provided year-end 2005 and interim and year-end 2006 financial statements for 91% of the pool. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.55x for the pool. The DSC figures exclude the defeased collateral and credit tenant lease loans totaling $112.2 million (13%). There are four loans ($38.8 million, 5%) with the special servicer, including one that is 60-plus-days delinquent and one that is 90-plus-days delinquent. A $2.0 million appraisal reduction amount is in effect for one of the loans. To date, the trust has reported 19 losses totaling $51.1 million. The top 10 loans secured by real estate have an aggregate outstanding balance of $75.7 million (19%). The weighted average DSC for the top 10 loans is 1.48x. The DSC figure excludes the second-largest loan, which is with the special servicer and is discussed below. Two of the top 10 loans are on Wachovia's watchlist and are discussed further below. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans, and all were characterized as "good." There are four loan exposures with the special servicer. The largest loan exposure with the special servicer and second-largest loan in the pool ($34 million, 4%) consists of two cross- collateralized and cross-defaulted loans (Cypress Palms & Sabal Palms loan and Royal Palms loan) secured by three health care properties in Key Largo, Florida. The total loan exposure was returned to the master servicer on April 24, 2007, after the borrower's request to reduce its liability insurance limits and insure itself through a captive insurance company were acceptable. As of year-end 2006, the respective DSCs for Cypress Palms, Sabal Palms, and Royal Palms were 0.80x, 1.54x, and 1.29x, respectively. Best Western Crabtree has a total exposure of $3.4 million and is 90-plus-days delinquent. An 88-room hotel built in 1984, in Raleigh, North Carolina, secures this loan. The loan was transferred to the special servicer in March 2004 due to imminent default. A $1.9 million ARA is in effect. A property sale is scheduled to close by the end of May. Holbrook Plaza Shopping Center has a total exposure of $1.3 million and is 60-plus-days delinquent. The loan is secured by an 80,631-retail center, built in 1979 in Holbrook, Arizona. The loan was transferred to the special servicer in November 2004 due to imminent default, after the two largest tenants vacated the property. The borrower is in the process of executing a lease with a well-known franchise. Towering Pines is current and has a loan exposure of $640,339. A 30-unit apartment complex built in 1994 in Albany, Georgia, secures the loan. The loan was assumed and will be returned to the master servicer after three timely payments have been made. Wachovia reported a watchlist of 54 loans with an aggregate outstanding balance of $174.9 million (21%). The largest loan on the watchlist and seventh-largest loan in the pool, Campus Club ($17.8 million, 2%), is secured by a 252-unit student housing property built in 1996 in Gainesville, Florida. The loan is on the watchlist due to a low DSC. The year-end DSC was 0.94x and occupancy was 89%. Competition from new student housing with better amenities is attributable to the decline in occupancy and resulting low DSC. Noland Fashion Square ($15.5 million, 2.0%) is secured by a 306,000-sq.-ft. retail center built in 1986, in Independence, Missouri, 20 miles outside of Kansas City. As of year-end 2006, the DSC was 0.81x and occupancy was 88%. The decline in occupancy and low DSC is attributable to competition from new properties in the subject market area. Standard & Poor's stressed the loans on the watchlist, along with the other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised First Union-Lehman Bros. Commercial Mortgage Trust Commercial mortgage pass-through certificates series 1997-C2 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ E AAA AA- 22.54% F A BBB- 14.75% G BBB+ BB 8.91% H BB+ BB- 6.96% J B- CCC+ 1.77% Ratings Affirmed First Union-Lehman Bros. Commercial Mortgage Trust Commercial mortgage pass-through certificates series 1997-C2 Class Rating Credit enhancement ----- ------ ---------------- A-3 AAA 66.68% B AAA 53.69% C AAA 40.71% D AAA 26.43% *N/A - Not applicable. FORD MOTOR: Plans to Open Banking Unit in Russia, Aksakov Says -------------------------------------------------------------- A financial department of Ford Motor Company is mulling over plans to open a subsidiary bank in Russia, said Anatoly Aksakov, deputy chairman of the State Duma Committee for Credit Organizations and Financial Markets, RIA Novosti relates. According to the report, the Russian parliament member said he learned about the company's plan during a meeting with Ford representatives within the framework of the U.S.-Russia Business Council in Washington. Ford Russia President Henrik Nenzen earlier said the company intends to open seven new plants in Russia and reach annual production capacity of over one million cars after 2010. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4'. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3-billion of senior convertible notes due 2036. FREMONT HOME: Fitch Takes Various Actions on Four Securitizations ----------------------------------------------------------------- Fitch Ratings has taken rating action on these Fremont Home Loan Trust residential mortgage-backed certificates: Series 2003-3 --Class M-1 upgraded to 'AA+' from 'AA'; -- Class M-2 upgraded to 'AA-' from 'A'; -- Class M-3 upgraded to 'A+' from 'A-'; -- Class M-4 upgraded to 'A' from 'BBB+'; -- Class M-5 affirmed at 'BBB'. Series 2003-B -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB' -- Class M-6, rated 'BBB-', placed on Rating Watch Negative. Series 2006-B Pool 1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A' -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB+'; -- Class M-9, rated 'BBB', placed on Rating Watch Negative; -- Class M-10, rated 'BBB-', placed on Rating Watch Negative; -- Class M-11, rated 'BB+', placed on Rating Watch Negative. Series 2006-B Pool 2 -- Class SL-A affirmed at 'AAA'; -- Class SL-M1 affirmed at 'AA+'; -- Class SL-M2 affirmed at 'AA+'; -- Class SL-M3, rated 'AA', placed on Rating Watch Negative; -- Class SL-M4, rated 'AA-', placed on Rating Watch Negative; -- Class SL-M5 downgraded to 'BBB-' from 'A+' and placed on 'Rating Watch Negative'; -- Class SL-M6 downgraded to 'BB-' from 'A' and placed on Rating Watch Negative; -- Class SL-M7 downgraded to 'B' from 'A-' and placed on Rating Watch Negative; -- Class SL-M8 downgraded to 'C' from 'BBB+' and assigned a distressed recovery rating of 'DR6'; -- Class SL-M9 downgraded to 'C' from 'BBB+' and assigned DR rating of 'DR6'; -- Class SL-B1 downgraded to 'C' from 'BBB' and assigned DR rating of 'DR6'. The affirmations, affecting approximately $1.1 billion of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. The upgrades, affecting approximately $39.3 million of the outstanding certificates, reflect an improvement in the relationship between CE and expected loss. The downgrades, affecting approximately $39.3 million of the outstanding certificates, reflect deterioration in the relationship between CE and expected loss. The Rating Watch Negative status affects approximately $65.3 million of the outstanding certificates. The collateral of series 2003-3 and series 2003-B consists of first lien, fixed-rate and adjustable-rate, subprime mortgage loans. The certificates are supported by two collateral groups, the first consisting of loans with principal balances that conform to Fannie Mae and Freddie Mac guidelines, and the second consisting of loans with principal balances that may or may not conform to Fannie Mae and Freddie Mac guidelines. The collateral of series 2006-B pool 1 consists of first lien or second lien, fixed-rate and adjustable-rate, subprime mortgage loans. The collateral of series 2006-B pool 2 consists of second lien, fixed- rate, subprime mortgage loans. All of the loans were originated by Fremont Investment & Loan or acquired in accordance with its underwriting criteria. The loans underlying series 2003-3 are serviced by Litton Loan Servicing, LP (rated 'RPS1' by Fitch). The loans underlying series 2003-B, series 2006-B pool 1, and series 2006-B pool 2 are serviced by Fremont Investment & Loan (rated 'RPS4' and placed on Rating Watch Negative by Fitch) and master serviced by Wells Fargo Home Mortgage, Inc. (rated 'RPS1' by Fitch). Series 2006-B pool 1, classes M-9 through M-11 are placed on Rating Watch Negative because of current trends in the relationship between serious delinquency and CE. This transaction has 9.1% of the current collateral balance in foreclosure and real estate owned. In addition, the 60+ DQ (including loans in bankruptcy, FC, and REO) is 15.1% of the current collateral balance, which is relatively high compared to the subprime industry average. Monthly losses have exceeded excess spread for the last three months causing the overcollateralization (OC) to deteriorate below the $20.1 million target to $18.9 million. The OC provides 2.2% in credit enhancement to class M-11. In addition, the annualized excess spread currently available to absorb losses is approximately 2%. Series 2006-B pool 2 was structured to have growing OC; however, the OC did not reach the initial target of $23.9 million. Monthly losses have exceeded excess spread for the last three months and completely eroded the OC as of the April 2007 distribution date. Based on the performance to date, Fitch expects class B-1 to continue incurring principal write-downs. As of the April 2007 distribution date, series 2003-3 has a pool factor (i.e., current mortgage loans outstanding as a percentage of the initial pool) of 10% and is seasoned 43 months. Series 2003-B has a pool factor of 11% and is seasoned 41 months. Series 2006-B pool 1 has a pool factor of 85% and is seasoned 8 months. Series 2006-B pool 2 has a pool factor of 82% and is also seasoned 8 months. Fitch will continue to closely monitor the above transactions. G-STAR 2002-2: Fitch Holds BB+ Rating on $11.5 Mil. Class D Notes ----------------------------------------------------------------- Fitch affirms eight classes of notes issued by G-Star 2002-2, Ltd. These affirmations are the result of Fitch's review process and are effective immediately: -- $92,462,430 class A-1MMa notes at 'AAA/F1+'; -- $77,052,025 class A-1MMb notes at 'AAA/F1+'; -- $78,593,065 class A-2 notes at 'AAA'; -- $17,721,966 class A-3 notes at 'AAA'; -- $14,000,000 class BFL notes at 'AA'; -- $15,000,000 class BFX notes at 'AA'; -- $10,704,999 class C notes at 'A-'; -- $11,500,000 class D notes at 'BB+'. G-Star 2002-2 is a collateralized debt obligation (CDO) that closed Nov. 20, 2002. G-Star is supported by a static pool of commercial mortgage-backed securities (57.3%), senior unsecured real estate investment trust securities (34.1%), CDOs (5.4%), and residential mortgage-backed securities (3.1%). G-Star 2002-2 is managed by Capmark Investments LP (CDO asset manager rating of 'CAM1' for commercial real estate assets by Fitch). The affirmations are driven primarily by the stable overcollateralization ratios, improved credit quality of the portfolio and the de-leveraging of the liabilities. Since Fitch's last rating action, 29.1% of the portfolio has been upgraded an average of 2.6 notches and 3.0% has been downgraded an average of one notch. The current weighted average rating factor is stable at 9.0 ('BBB-'/'BB+'). According to the most recent trustee report dated April 18, 2007 all overcollateralization and interest coverage ratios have remained stable and continue to pass their covenants. There are no defaulted assets in the portfolio. Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. The rating on the class A notes addresses the timely payment of interest and principal, while the rating on the classes B and C notes addresses the ultimate payment of interest and principal. The rating of the class D notes addresses the likelihood that investors will receive their stated balance of principal by the legal final maturity date. Fitch will continue to monitor and review this transaction for future rating adjustments. GLOBAL POWER: Consulting Pacts w/ Past Execs Get 6 Mos. Extension ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved Global Power Equipment Group Inc. and its debtor-affiliates' request for extension of their consulting agreements, as modified, with their former executives -- Larry Edwards and James P. Wilson -- for an additional 6 months commencing on April 15, 2007. Last month, the Court entered a bridge order extending the Consulting Agreements until May 2, 2007. The Official Committee of Unsecured Creditors consented to both extensions. In their request, the Debtors told the Court that they need Messrs. Edward's and Wilson's services particularly in relation to the continuing transition in senior management of the Debtors. Although their full-time services are no longer required, the Debtors explained that the consulting agreements provide the Debtors with the flexibility to continue to take advantage of Messrs. Edward's and Wilson's significant experience and expertise in a manner that will provide significant benefits to the Debtors' estates while minimizing costs. Effective Nov. 21, 2006, Mr. Edwards resigned from his officer position as president and chief executive officer of the Debtors. He continues to serve as a non-executive member of Global Power's Board of Directors. Also effective Nov. 21, 2006, Mr. Wilson resigned from his officer position as vice president of finance and chief financial officer of Global Power. Mr. Wilson joined the company in 1986. Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. GLOBAL POWER: Court Moves Exclusive Plan Filing Period to May 17 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered a second bridge order extending Global Power Equipment Group Inc. and its debtor-affiliates' exclusive periods to: a) file a plan until a hearing set for May 17, 2007; and b) solicit acceptances of that plan until July 17, 2007. The Court's first bridge order, issued last month, extended the Debtors' exclusive period to file a plan until May 2, 2007. In their motion, the Debtors requested an August 24, 2007 extension of their exclusive period to file a plan. The Debtors told the Court that they have continued to make substantial progress in addressing major issues facing their estates, including: a) stabilizing each of the Debtors' major business segments and developing new business opportunities; b) addressing issues regarding the wind down of Deltak LLC and Deltak Construction Services Inc.'s heat recovery steam generation business segment; c) reaching additional accommodation agreements with key customers; and d) developing a five-year business plan, which was recently presented to the Debtors' Official Committee of Unsecured Creditors. Notwithstanding the substantial progress to date, the Debtors explained that a significant amount of work remains to be done before they will be able to propose a plan consistent with their fiduciary duties to maximize value, including, inter alia, the refinement and testing of their business plan, evaluation and reconciliation of claims filed against them, and an analysis of their intercompany assets and liabilities. Moreover, the Debtors said they continue to meet with the Committee on a regular basis, and in anticipation of preparing a chapter 11 plan of reorganization, are now preparing a plan term sheet, which they intend to share with the Committee in the near future. Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. GRAPHIC PACKAGING: Moody's Rates Proposed $1.06 Bil. Loan at Ba2 ---------------------------------------------------------------- Moody's assigned Ba2 ratings to Graphic Packaging International's proposed $1.06 billion seven year senior secured term loan B and its proposed $300 million six year senior secured revolving credit facility. The proceeds of the term loan B facility will be used to refinance the term loan C under the existing credit agreement. The refinancing enables Graphic to extend maturities, remove financial maintenance covenants from the term loan only, and to benefit from lower borrowing costs. All other ratings were affirmed by Moody's. Subsequent to the outlook change to negative from stable in October of 2005, Graphic has generated operating results that have been better than expected in 2006 and early 2007. Energy costs have begun to moderate, additional mill closures have been announced in the paperboard sector, prices for CUK (coated unbleached kraft) and CRB (coated recycled board) have increased, cost savings have been executed, and certain renegotiated contracts in the beverage sector have economically benefited the company. Even with this progress, however, Moody's believes that flat-to-slightly negative demand levels within the consumer packaging paper industry could affect recent price increases and the company's ability to materially improve margins on a sustainable basis. Thus, the company's actual debt reduction over the intermediate period may not support the existing ratings. Moody's continues to maintain a negative outlook on the ratings based on these concerns. Graphic's B1 corporate family rating reflects the company's leading position in folding consumer cartons and coated unbleached kraft paperboard, extensive customer relationships, continued focus on cost improvements, margin stability, and adequate liquidity. However, the ratings also incorporate Graphic's high leverage, weak credit metrics, and elevated input costs. Graphic Packaging International, Inc., located in Marietta, Georgia, is a provider of paperboard packaging solutions. GRAPHIC PACKAGING: S&P Rates Proposed $300MM Credit Facility at B+ ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned ratings to Graphic Packaging International Inc.'s proposed $300 million first-lien revolving credit facility and $1.055 billion first-lien term loan B, based on preliminary terms and conditions. The facility and term loan B are rated 'B+' with a '2' recovery rating, indicating that lenders can expect substantial recovery of principal in the event of a payment default. The proceeds will be used to refinance the company's existing $325 million revolving credit facility due 2009 and the $1.256 billion ($1.055 billion remaining) term loan C due 2010. At the same time, Standard & Poor's affirmed all of its ratings, including its 'B+' corporate credit rating, on Graphic Packaging. The outlook is negative. "The affirmation reflects our expectations that pricing and volumes could enable the company to improve its financial profile and achieve metrics appropriate for the rating," said Standard & Poor's credit analyst John Kennedy. "However, the heavy debt burden and continued earnings pressure from high input costs could prevent sufficient improvement in these metrics, which are weak for the rating." Graphic Packaging's debt, including capitalized operating leases and tax-effected underfunded pension and postretirement obligations, was approximately $2.15 billion at March 31, 2007. The ratings on Marietta, Georgia-based Graphic Packaging reflect its very aggressive capital structure, compressed operating margins, limited product diversity, oversupplied and highly competitive paperboard and packaging markets, and the risk of substitution from competing substrates. The ratings also reflect the company's relatively stable revenue base and value-added product mix. Graphic Packaging manufactures paperboard and folding cartons used in beverage and consumer products packaging, as well as packaging machines that are leased to beverage manufacturers. Products include coated unbleached kraft and coated recycled paperboard, most of which is used internally to produce beverage carriers or folding cartons for food, household goods, and other consumer products. GS MORTGAGE: Fitch Takes Various Rating Actions on 4 Transactions ----------------------------------------------------------------- Fitch Ratings has taken rating action on these GS Mortgage Securities Corp. residential mortgage pass-through certificates: Series 2005-S1 -- Class M-2 affirmed at 'A'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 downgraded to 'BB-' from 'BBB-'. Series 2005-S2 -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'A'; -- Class M-4 is rated 'A-' and placed on Rating Watch Negative; -- Class B-1 is rated 'BBB+' and placed on Rating Watch Negative; -- Class B-2 downgraded to 'BB' from 'BBB'; -- Class B-3 downgraded to 'BB-' from 'BBB-'. Series 2006-S1 -- Classes A-1, A-2A, & A-2B affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 is rated 'A+' and placed on Rating Watch Negative; -- Class M-3 is rated 'A' and placed on Rating Watch Negative; -- Class M-4 downgraded to 'BBB-' from 'A-' and placed on Rating Watch Negative; -- Class M-5 downgraded to 'BB' from 'BBB+' and placed on Rating Watch Negative; -- Class M-6 downgraded to 'BB-' from 'BBB' and placed on Rating Watch Negative; -- Class B-1 downgraded to 'C' from 'BBB-' and assigned a distressed recovery rating of 'DR6'; -- Class B-2 downgraded to 'C' from 'BB+' and assigned a DR of 'DR6'. Series 2006-S2 -- Classes A-1A, A-1B, A-2, & A-3 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'AA-'; -- Class M-3 is rated 'A' and placed on Rating Watch Negative; -- Class M-4 is rated 'A-' and placed on Rating Watch Negative; -- Class M-5 downgraded to 'BB+' from 'BBB+' and placed on Rating Watch Negative; -- Class M-6 downgraded to 'BB' from 'BBB' and placed on Rating Watch Negative; -- Class M-7 downgraded to 'C' from 'BBB-' and assigned a DR of 'DR6'; -- Class B-1 downgraded to 'C' from 'BB+' and assigned a DR of 'DR6'; -- Class B-2 downgraded to 'C' from 'BB' and assigned a DR of 'DR6'. The affirmations affect approximately $680 million of the outstanding certificates. The downgrades affect approximately $134 million of the outstanding certificates. The Rating Watch Negative status affects approximately $170 million of the outstanding certificates. Fitch previously took negative rating action on series 2005-S2, class B-3, and series 2006-S1, class B-2 in October 2006 by placing the classes on Rating Watch Negative. The collateral of the above transactions consists of closed-end, fixed-rate loans secured by second liens on residential properties. The loans underlying series 2005-S1 were originated or acquired by New Century Mortgage Corp. and are serviced by Wilshire Credit Corp (rated 'RPS1' by Fitch). The loans underlying series 2005-S2 and series 2006-S1 were originated or acquired by and are master serviced by Long Beach Mortgage Company. The loans are subserviced by Washington Mutual Bank (rated 'RPS2+' by Fitch). The loans underlying series 2006-S2 were originated or acquired by New Century Mortgage Corp. and are serviced by Ocwen Loan Servicing (rated 'RPS2' by Fitch). Series 2005-S1 was structured to have growing overcollateralization. Because of the faster-than-expected prepayments and earlier-than-expected collateral losses, the OC did not reach the initial target amount of $14 million. In October 2006, class A paid off and as a result, the target OC stepped-down. Since January 2007, the transaction has failed the delinquency trigger and has sequentially paid principal to the outstanding classes. Fitch expects the delinquency trigger to fail for the short term. Because the transaction is failing trigger, the more senior bonds are protected against diminishing credit enhancement as the more subordinate bonds are not receiving principal. In addition, monthly losses have exceeded excess spread in five of the last six months causing the OC to deteriorate. Class B-3 is downgraded as a result of deterioration in the relationship between credit enhancement and expected future loss. Series 2005-S2 was structured to have growing OC. Because of the faster-than-expected prepayments and earlier-than-expected collateral losses, the OC did not reach the initial target amount of $23 million. In August 2006, class A paid off and as a result, the Target OC stepped-down. Since then, the transaction has continued to pass the triggers and has paid principal to the subordinate bonds. Fitch expects the triggers to continue passing for the short term, allowing a reduction in the credit enhancement for all classes. Negative rating action is taken on classes M-4 through B-3 as a result of deterioration in the relationship between credit enhancement and expected future loss. Series 2006-S1 was structured to have growing OC; however, the OC did not reach the initial target amount of $40.1 million. The Target OC has not stepped-down. Monthly losses have exceeded excess spread for the last eight months causing the OC to deteriorate from $25.1 million to $2.8 million. Based on the performance to date, Fitch expects the OC to be completely depleted within the next few months. The deteriorating OC increases the credit risk of the subordinate bonds, which is indicated by the negative rating action. Series 2006-S2 was structured to have growing OC; however, the OC did not reach the initial target amount of $45.6 million. The Target OC has not stepped-down. Monthly losses have exceeded excess spread in three of the last four months causing the OC to deteriorate from $31.3 million to $7.8 million. Based on the performance to date, Fitch expects the OC to be completely depleted within the next few months. The deteriorating OC increases the credit risk of the subordinate bonds, which is indicated by the negative rating action. As of the April 2007 distribution date, series 2005-S1 has a pool factor (i.e. current mortgage loans outstanding as a percentage of the initial pool) of 14% and is seasoned 24 months. Series 2005- S2 has a pool factor of 14% and is seasoned 23 months. Series 2006-S1 has a pool factor of 64% and is seasoned 15 months. Series 2006-S2 has a pool factor of 69% and is seasoned 13 months. Fitch will continue to closely monitor the transactions. HOUSTON EXPLORATION: Launches $175 Mil. of 7% Sr. Notes Offering ---------------------------------------------------------------- The Houston Exploration Company is commencing a cash tender offer for all of its outstanding $175,000,000 aggregate principal amount of 7% Senior Subordinated Notes due 2013, on the terms and subject to the conditions set forth in Houston Exploration's Offer to Purchase and Consent Solicitation Statement dated May 2, 2007. The company is also soliciting consents for proposed amendments to the indenture under which the Notes were issued that would eliminate most of the restrictive covenants and events of default contained in the indenture. The proposed amendments will be set forth in a first supplemental indenture and are described in more detail in the Offer to Purchase. The first supplemental indenture will not be executed unless and until Houston Exploration has received consents from holders of a majority of the outstanding principal amount of the Notes, and the amendments will not become operative unless and until Houston Exploration has accepted the Notes for purchase pursuant to the Offer to Purchase. Consummation of the Offer is subject to the satisfaction or waiver of a number of conditions set forth in the Offer to Purchase, including the satisfaction or waiver of all conditions to completion of Houston Exploration's pending merger with Forest Oil Corporation and execution of the first supplemental indenture. The Offer will expire at 5:00 p.m., Eastern time on June 5, 2007, unless extended or terminated by Houston Exploration. The consent solicitation will expire at 5:00 p.m., Eastern time on May 21, 2007, unless extended. The consideration to be paid by Houston Exploration for each $1,000 principal amount of Notes tendered prior to the Expiration Time and accepted for payment pursuant to the Offer is $1,010, plus accrued and unpaid interest up to, but not including, the date of payment for such Notes. In addition, a consent payment in the amount of $2.50 per $1,000 principal amount of Notes will be paid to those holders who consent to the proposed amendments prior to the Consent Deadline. Holders who consent to the proposed amendments will be required to tender their Notes. As a result, the total consideration to be paid by Houston Exploration to those holders who deliver valid consents will be $1,012.50 per $1,000 principal amount of Notes, plus accrued and unpaid interest. Such payment will be made promptly following both the Expiration Time and the satisfaction or waiver of the conditions to closing of the Offer. Notes tendered and related consents may be withdrawn prior to the execution of the first supplemental indenture providing for the proposed amendments but not afterwards, except in limited circumstances where withdrawal rights are required by law. About The Houston Exploration Company Headquartered in Houston, The Houston Exploration Company (NYSE: THX) -- http://www.houstonexploration.com/-- is an independent natural gas and crude oil producer engaged in the development, exploitation, exploration and acquisition of natural gas and crude oil properties. The company's operations are focused in South Texas, the Arkoma Basin, East Texas, and the Rocky Mountains. * * * As reported in the Troubled Company Reporter on Jan. 10, 2007, Moody's Investors Service affirmed The Houston Exploration Company's 'Ba3' corporate family rating. HOVNANIAN ENTERPRISES: Reports Preliminary Results for Second Qtr ----------------------------------------------------------------- Hovnanian Enterprises disclosed preliminary operating results for the second quarter ended April 30, 2007. The company says it delivered 3,196 homes during its second quarter, a decrease of 30% from the same quarter a year ago, excluding 275 homes in unconsolidated joint ventures. The company expects to incur approximately $15 million to $20 million of pretax charges related to land impairment and write-offs of predevelopment costs and land deposits in the second quarter. According to the company, its net contracts for the quarter were 3,116, a decrease of 21% from last year's second quarter, excluding 202 net contracts for unconsolidated joint ventures. Cancellations for the second quarter were 32% of gross contracts, a decrease from a rate of 36% reported in the first quarter of 2007. Excluding the company's operations in Fort Myers-Cape Coral, which continued to experience exceptionally high cancellations, net contracts in the second quarter decreased 17% and the cancellation rate was 30%. The company explains that the contract results reflect a continued challenging operating environment in most of the company's markets as a result of which consolidated net contracts in March and April declined approximately 30% from the prior year, as compared to a 3% year-over-year increase in February. The company expects to finalize and release results for the second quarter ended April 30, 2007, after the close of the New York Stock Exchange on Thursday, May 31, 2007. The company will webcast its second quarter earnings conference call at 11:00 a.m. ET on Friday, June 1, 2007. In conjunction with its earnings release, the company expects to update its 2007 guidance to reflect the charges and operating results for the first half of the year and its expectations for the remaining quarters of the year. About Hovnanian Enterprises Headquartered in Red Bank, New Jersey, Hovnanian Enterprises Inc. (NYSE: HOV) was founded in 1959 by Kevork S. Hovnanian, its chairman. The company is a homebuilder with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia. * * * As reported in the Troubled Company Reporter on April 11, 2007, Fitch Ratings affirmed its BB+ Issuer Default Rating on Hovnanian Enterprises Inc. J.P. MORGAN: Moody's Cuts Ratings on Six 2005-LDP2 Certificates --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of six classes and affirmed the ratings of 21 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass- Through Certificates, Series 2005-LDP2 as: * Class A-1, $58,756,893, affirmed at Aaa * Class A-2, $257,128,000, affirmed at Aaa * Class A-3, $367,428,000, affirmed at Aaa * Class A-3A, $122,717,000, affirmed at Aaa * Class A-4, $561,321,000, affirmed at Aaa * Class A-SB, $123,438,000, affirmed at Aaa * Class A-1A, $550,421,209, affirmed at Aaa * Class A-M, $247,946,000, affirmed at Aaa * Class A-MFL, $50,000,000, affirmed at Aaa * Class A-J, $216,011,000, affirmed at Aaa * Class X-1, Notional, affirmed at Aaa * Class X-2, Notional, affirmed at Aaa * Class B, $18,621,000, affirmed at Aa1 * Class C, $40,968,000, affirmed at Aa2 * Class D, $26,070,000, affirmed at Aa3 * Class E, $26,070,000, affirmed at A1 * Class F, $29,795,000, affirmed at A2 * Class G, $26,070,000, affirmed at A3 * Class H, $44,692,000, affirmed at Baa1 * Class J, $29,795,000, affirmed at Baa2 * Class K, $37,243,000, affirmed at Baa3 * Class L, $11,173,000, downgraded to Ba2 from Ba1 * Class M, $14,897,000, downgraded to Ba3 from Ba2 * Class N, $11,173,000, downgraded to B1 from Ba3 * Class O, $7,449,000, downgraded to B2 from B1 * Class P, $7,449,000, downgraded to B3 from B2 * Class Q, $11,173,000, downgraded to Caa2 from B3 As of the April 16, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 1.8% to $2.93 billion from $2.98 billion at securitization. The certificates are collateralized by 294 loans, ranging in size from less than 1.0% to 4.3% of the pool, with the top 10 loans representing 25.7% of the pool. The pool includes three investment grade shadow rated loans, representing 6.0% of the pool. One loan has been liquidated from the pool since securitization, resulting in a $7.8 million realized loss. Currently one loan, representing less than 1.0% of the pool, is in special servicing. Moody's is not estimating a loss from this specially serviced loan. Forty-six loans, representing 20.5% 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 95.0% and 25.0%, respectively, of the pool. Moody's weighted average loan to value ratio for the conduit component is 99.0%, compared to 96.3% at securitization. Moody's is downgrading Classes L, M, N, O, P and Q due to realized losses and LTV dispersion. Based on Moody's analysis, approximately 47.9% of the pool has a Moody's LTV in excess of 100.0%, compared to 38.5% at securitization. The largest shadow rated loan is the Gateway Plaza I & II Loan ($98.8 million - 3.4%), which is secured by a 629,000 square foot retail center located in Salt Lake City, Utah. The center was 99.0% occupied as of December 2006, compared to 92.0% at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The second largest shadow rated loan is the Russ Building Loan ($60.0 million - 2.0%), which is secured by a 509,000 square foot Class B office building located in San Francisco, California. The property was 95.9% leased as of February 2007, compared to 87.4% at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The third largest shadow rated loan is the Four Peaks Loan ($17.0 million - 0.6%), which is secured by a 141, 000 square foot retail center located approximately 30 miles from Phoenix in Fountain Hills, Arizona. The property was 99.0% occupied as of September 2006, compared to 86.8% at securitization. Despite improved occupancy, the property is operating below original projections due to decreased rental revenues. Moody's current shadow rating is Ba1, compared to Baa3 at securitization. The top three conduit loans represent 10.4% of the pool. The largest conduit loan is the City Place Corporate Center Loan ($125.0 million -- 4.3%), which is secured by a portfolio consisting of five office buildings (789,000 square feet), a mixed use property (50,000 square feet) and a retail building (28,000 square feet). All of the properties are located in Creve Coeur, Missouri. Moody's LTV is 103.7%, the same as at securitization. The second largest conduit loan is the Shops at Canal Place Loan ($90.0 million -- 3.1%), which is secured by a 215,000 square foot retail center located in New Orleans, Louisiana. The property was severely damaged by fire and looting immediately following Hurricane Katrina and was closed until February 2006. The property was 83.0% occupied as of October 2006, compared to 99.0% at securitization. Although the loan has remained current, cash flow has been impacted by the decline in occupancy and the servicer's reported debt service coverage is less than 1.0x. In addition, the property's future prospects are uncertain given the major disruption to New Orleans's tourism and convention business. Moody's LTV is significantly in excess of 100.0%, compared to 100.4% at securitization. The third largest conduit loan is the Hutchinson Metro Center Loan ($90.0 million -- 3.1%), which is secured by a 424,000 square foot office building located in the Bronx, New York. The property was 89.0% occupied as of December 2006, compared to 79.3% at securitization. Despite the improved occupancy, the property is operating below original projections due to decreased rental revenue and increased operating costs. Moody's LTV is in excess of 100.0%, compared to 99.7% at securitization. KIK CUSTOM: S&P Junks Rating on Planned $240 Million Bank Facility ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' long-term corporate credit rating to Concord, Ontario-based consumer products company KIK Custom Products Inc. At the same time, Standard & Poor's assigned its 'B-' senior secured bank loan rating, with a recovery rating of '2', to the company's planned $455 million first-lien bank facility. The '2' recovery rating indicates an expectation of substantial (80%-100%) recovery of principal in the event of a payment default. S&P also assigned a 'CCC' senior secured bank loan rating, with a recovery rating of '5', to KIK's planned $240 million second-lien bank facility. The '5' recovery rating indicates an expectation of negligible (0%-25%) recovery of principal in the event of a payment default. The outlook is stable. "The ratings on KIK reflect its highly leveraged pro forma capital structure, aggressive acquisition strategy, customer concentration, and its participation in the mature and highly competitive North American personal care and household products industries," said Standard & Poor's credit analyst Lori Harris. "The company has grown through acquisitions over the past couple of years, with the integration of the businesses still to be completed," Ms. Harris added. These risks are mitigated somewhat by KIK's position as the largest contract manufacturer of consumer products and second-largest manufacturer of bleach in North America. The assignment of the corporate credit rating follows Standard & Poor's analysis of private equity sponsor Caxton-Iseman Capital Inc.'s proposed acquisition of KCP Income Fund, which operates through its principal subsidiary, KIK, for about US$710 million. Caxton-Iseman, through KCP Investment Holding LP, will make a $160 million equity investment (80% preferred securities and 20% common equity) in the company. The preferred securities will have an annual dividend of 10%; however, they are expected to be noncash pay and to have no stated maturity. The remaining purchase price will be financed with debt, with a portion of the bank proceeds to be held in escrow to fund future acquisitions by KIK. Closing is subject to certain approvals. The outlook is stable. S&P expect KIK's operating performance to be stable in the medium term driven by its good market positions in contract manufacturing and the private-label bleach segment. The outlook could be revised to positive if the company is able to reduce debt leverage to the mid-5x area and demonstrate a financial policy consistent with a higher rating. A negative outlook would be considered if the company's liquidity positioned weakened or if it were unable to reduce leverage as planned. KONINKLIJKE AHOLD: Sells U.S. Unit to Consortium for $7.1 Billion ----------------------------------------------------------------- Koninklijke Ahold N.V. reached a definitive agreement on the sale of U.S. Foodservice to a consortium of Clayton, Dubilier & Rice Fund VII, L.P. and Kohlberg Kravis Roberts & Co L.P. for a purchase price of $7.1 billion. Closing of the transaction is expected in the second half of 2007 subject to the fulfillment of customary conditions, including anti-trust clearance and approval by Ahold's shareholders. Both the Supervisory Board and Corporate Executive Board of Ahold are recommending that shareholders approve the sale. Shareholder approval will be sought at an Extraordinary General Meeting to be held on June 19, 2007. "I am extremely pleased to be able to announce that we have reached this important milestone for U.S. Foodservice, for Ahold and for our shareholders," Anders Moberg, Ahold President & CEO, said. "We have focused on restructuring U.S. Foodservice, strengthening its capabilities and restoring profitability. The agreement we have been able to reach with CD&R and KKR is the result of the hard work and dedication of everyone at U.S. Foodservice." Headquartered in Amsterdam, Koninklijke Ahold N.V. -- http://www.ahold.com/-- retails food through supermarkets, hypermarkets and discount stores in North and South America, Europe. It has operations in Argentina. The company's chain stores include Stop & Shop, Giant, TOPS, Albert Heijn and Bompreco. Ahold also supplies food to restaurants, hotels, healthcare institutions, government facilities, universities, stadiums, and caterers. * * * As reported on Dec. 22, 2006, Standard & Poor's Ratings Services revised its outlook on the Dutch food retailer and food service distributor Koninklijke Ahold N.V. to positive from stable. At the same time, the 'BB+/B' long- and short-term corporate credit ratings were affirmed. Moody's Investors Service and Standard and Poor's has assigned low-B ratings to the company's 5.625% senior notes due 2007. Also, the company's 5.875% senior unsubordinated notes due 2008 and 6.375% senior unsubordinated notes due 2007 carry Moody's, S&P's and Fitch's low-B ratings. LEINER HEALTH: S&P Retains Negative Watch on B- Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that the ratings on Leiner Health Products Inc., including the 'B-' corporate credit rating, remain on CreditWatch with negative implications. Ratings were originally placed on CreditWatch on March 23, 2007, following the company's announcement that it had voluntarily suspended the production and distribution of all over-the-counter products manufactured, packaged, or tested at its facilities in the U.S. because of U.S. Food and Drug Administration observations about product quality and deficiencies upon inspection of one facility. Subsequently, on April 25, 2007, the company announced that Dr. Reddy's Laboratories Ltd. and Inc. were terminating supply agreements related to certain Leiner OTC products. "We are concerned about Leiner's ability to timely replace this supply agreement, and its ability to produce and resume OTC product shipments," said Standard & Poor's credit analyst Bea Chiem. Inability to remedy these issues could have a material negative financial impact on the company's OTC business because of lost sales and the potential for retail customers to switch to other suppliers. Weaker-than-expected financial performance could lead to insufficient covenant cushion as levels are expected to tighten beginning in fiscal 2008. "We will continue to closely monitor developments as they occur and will assess the impact of this supplier loss and product distribution suspension on future operating performance," said Ms. Chiem. "We will consider Leiner's ability to find a replacement supplier for Dr. Reddy's, to restore production and distribution of OTC products, and to meet financial covenants and maintain adequate liquidity, in resolving the CreditWatch listing." LOCKLAND C-STORE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Lockland C-Store, L.L.C. P.O. Box 15702 Cincinnati, OH 45215-0702 Bankruptcy Case No.: 07-12028 Chapter 11 Petition Date: May 4, 2007 Court: Southern District of Ohio (Cincinnati) Judge: J. Vincent Aug Jr. Debtor's Counsel: Charles M. Meyer, Esq. Santen & Hughes 600 Vine Street, Suite 2700 Cincinnati, OH 45202 Tel: (513) 852-5986 Fax: (513) 721-0109 Total Assets: $944,980 Total Debts: $1,630,819 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ KeyBank, NA bank loan; value $1,063,047 580 Walnut Street of security: Cincinnati, OH 45202 $816,450 Bishop Oil Co., formerly trade debt $137,200 Skurrow Brothers Oil Co. 6033 State Route 48 Maineville, OH 45039 B.L. Spille Construction, Inc. construction $43,471 P.O. Box 5320 debt Cincinnati, OH 45201-5320 Hamilton County Treasurer real estate $28,880 taxes U.S.A.-Internal Revenue taxes; value of $22,268 Service security: $816,450; value of senior lien: $1,077,047 Lykins Oil Company trade debt; value $14,000 of security: $816,450; value of senior lien: $1,063,047 Harrigan Refrigeration & Air trade debt $8,000 Conditioning, Inc. Ohio Department of Taxation sales taxes $4,378 Mid-Valley Supply Co. trade debt $4,059 Commercial Parts & Service, trade debt $1,999 Inc. Ohio Bureau of Employment unemployment $1,619 Services premium Paulin & Goldman, C.P.A. accounting $1,500 services Jamal A. Fakhreddine employee $1,260 services Shayna D. Saylor employee $972 services Carpenter Sign Service trade debt $900 Kentucky Revenue Cabiner withholding $876 taxes Dustin Evans employment $856 services Valley Refrigeration Service, trade debt $729 Inc. Shawn L. Saylor employee $388 services Rumpke waste hauling $146 services MCCLATCHY CO: Cash Flow Pressure Cues Moody's Negative Outlook -------------------------------------------------------------- Moody's Investors Service affirmed The McClatchy Company's Ba1 Corporate Family rating and changed the rating outlook to negative from stable. The outlook change reflects Moody's concern that continued pressure on cash flow from declining advertising revenues will challenge McClatchy's ability to reduce leverage to the levels Moody's anticipated in the Ba1 rating at the time of the Knight Ridder acquisition. McClathy's debt-to-EBITDA (estimated 4.6x LTM 3/31/07 incorporating Moody's standard adjustments, the $201 million tax refund expected in 2008 related to the Star Tribune sale, and the anticipated net proceeds from the Miami land sale) has declined only slightly from a pro forma 4.7x level (incorporating the divestiture of the Knight Ridder properties and expected synergies) at the time of the Knight Ridder transaction. This is due largely to the competitive and cyclical pressures on advertising revenues and is notwithstanding the incremental debt reduction resulting from sales of the Star Tribune and the partial interest in CareerBuilder. Moody's is concerned that, given revenue losses, McClatchy's aggressive cost management may not be sufficient to reduce leverage to the 3.5 -- 4.0x debt-to-EBITDA and 11-15x debt-to-free cash flow ranges anticipated for 2008 in the Ba1 CFR. Moody's upgraded the ratings on McClatchy's senior unsecured revolver and term loan to Baa3 from Ba1 and downgraded McClatchy's senior unsecured note ratings to Ba2 from Ba1. The rating changes result from the application of Moody's loss-given default methodology to the revised guarantee structure for McClatchy's debt. The company is required under its credit agreement to guarantee the revolver and term loan within 10 days if ratings on the facilities from both Moody's and Standard & Poor's are speculative-grade. This condition was met upon Standard & Poor's April 27, 2007 downgrade of the company. The guaranteed bank facilities now have a higher priority claim than the existing senior unsecured notes, which remain unguaranteed due to the absence of a guarantee trigger in the 1986 and 1997 indentures. Moody's does not believe the upgrade of the bank facility ratings to Baa3 will release the guarantees as such a release is triggered only if (1) ratings on the facilities from both Moody's and Standard & Poor's are investment-grade for at least one year; and (2) McClatchy does not have other debt guaranteed by subsidiaries. Moody's took the following rating actions: Downgrades: Issuer: McClatchy Company (The) * Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2, LGD5 -82 from Ba1, LGD4-55 Upgrades: Issuer: McClatchy Company (The) * Senior Unsecured Bank Credit Facility, Upgraded to Baa3, LGD2-27 from Ba1, LGD4-55 Outlook Actions: Issuer: McClatchy Company (The) * Outlook, Changed To Negative From Stable The McClatchy Company, headquartered in Sacramento, California, is the third largest newspaper company in the U.S., with 31 daily newspapers and approximately 50 non-dailies. McClatchy also owns McClatchy Interactive, Real Cities and equity investments in CareerBuilder, Classified Ventures, and other newspaper and online properties. MCCOMMAS LFG: Case Summary & 22 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: McCommas L.F.G. Processing Partners, L.P. 2828 Routh Street, Suite 500 Dallas, TX 75201 Bankruptcy Case No.: 07-32219 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- McCommas Landfill Partners, L.P. 07-32222 Type of Business: Doing business as McCommas L.F.G. Processing Facility, the Debtor is engaged in landfill gas processing. Chapter 11 Petition Date: May 7, 2007 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtors' Counsel: Mark Joseph Elmore, Esq. Haynes & Boone, L.L.P. 901 Main Street, Suite 3100 Dallas, TX 75202-3789 Tel: (214) 651-5265 Fax: (214) 200-0905 Total Assets Total Debts ------------ ----------- McCommas LFG Processing $13,409,088 $26,945,586 Partners, LP McCommas Landfill Partners, LP $38,365 $58,943 A. McCommas LFG Processing Partners, LP's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ M.M.R. Group, Inc. litigation $13,218,897 M.M.R. Power Solutions, Inc. J. Taylor Cheek 15961 Airline Highway Baton Rouge, LA 70814 Diamond McCarthy, L.L.P. legal $140,000 1201 Elm Street, 34th Floor Dallas, TX 75270 Dresser Rand Company damage claim $68,000 P.O. Box 751067 Charlotte, NC 28275-5067 1200 West Sam Houston Parkway North Houston, TX 77043 Champion Energy Services electric service $64,122 McCommas Landfill landfill gas $38,000 Partners, L.P. purchase Bryan Urban consulting fee $14,000 Dresser Roots maintenance, parts, $13,000 supplies Lynn, Tillotson & Pinker, legal $11,000 L.L.P. Atmos Energy natural gas $2,915 purchase Atmos Pipeline-Texas metering gas $2,764 sales City of Dallas Utilities water service $2,720 C.N.H. Capital equipment $1,199 rental E.F.O. Employees, Inc. accounting $1,000 services A.T.&T. phone service $620 Oakson Properties, Inc. $553 G&K Services uniform supply $500 Praxair Distribution, Inc. maintenance, parts $195 supplies E.F.O. Genpar, Inc. reimburse $36 miscellaneous payables Zee Medical, Inc. first aid $24 supplies B. McCommas Landfill Partners, LP's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ S.C.S. Field Services, Inc. wellfield $37,616 3809 South 2nd Street, management Suite C-400 Austin, TX 78704 City of Dallas rent $20,000 3112 Canton Street Dallas, TX 75226 Equipment Support Services trade debt $1,327 2019 Airport Freeway Euless, TX 76040 MISSION CRITICAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Mission Critical Enterprises, Inc. 1007 Orange Street, Suite 610 Wilmington, DE 19801 Bankruptcy Case No.: 07-10598 Type of Business: The Debtor is a full-service design and consulting company, integrating architecture, interior design, engineering, construction and information technology services for a diverse group of clients. See http://www.mce.bz/ Chapter 11 Petition Date: May 4, 2007 Court: District of Delaware (Delaware) Judge: Mary F. Walrath Debtor's Counsel: Donna L. Harris, Esq. Cross & Simon, L.L.C. 913 North Market Street, 11th Floor Wilmington, DE 19801 Tel: (302) 777-4200 Fax: (302) 777-4224 Estimated Assets: $1 Million to $100 Million Estimated Debts: Unstated Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aperture Technologies, Inc. trade $219,052 9 Riverbend Drive South P.O. Box 4906 Stamford, CT 06907-0906 Fax: (203) 357-0800 Tangent Cable Systems, Inc. trade $55,131 3700 Washington Avenue Wilmington, DE 19808 Fax: (302) 994-4105 D.V.L., Inc. trade $22,446 115 Sinclair road Bristol, PA 19007 Fax: (215) 785-1530 Douron Corporate Furniture trade $21,760 B.P.G. Office Partners VIII, lease $21,722 L.L.C. Dell Financial Services lease $16,142 Richard E. Hartman, Jr. trade $15,000 Boomerrang trade $10,900 Internal Revenue Service penalties $10,075 Monster, Inc. trade $7,995 Dell Marketing, L.P. trade $5,015 Coventry Health Care of insurance $4,341 DE, Inc. premiums Zurich North America insurance $2,589 premiums Cavalier Telephone utility $2,266 Marriot ExecuStay-Greater trade $2,100 Wilmington Key Equipment Finance lease $1,744 Payment Processing Zebra Marketing Corp. trade $1,491 Barnhall & Hitchens trade $1,328 Armor Graphics, Inc. trade $1,310 The Service Source trade $1,058 MORGAN STANLEY: Moody's Holds Low-B Ratings on Six Cert. Classes ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 19 classes of Morgan Stanley Capital I Inc., Commercial Mortgage-Backed Securities Pass-through Certificates, Series 2005-RR6 as: - Class A-1, $86,402,387, Fixed, affirmed at Aaa - Class A-2FX, $85,500,000, Fixed, affirmed at Aaa - Class A-2FL, $80,000,000, Fixed, affirmed at Aaa - Class A-3FX, $110,551,000, Fixed, affirmed at Aaa - Class A-3FL, $60,000,000, Fixed, affirmed at Aaa - Class A-J, $50,061,000, Fixed, affirmed at Aaa - Class X, Notional, affirmed at Aaa - Class B, $27,498,000, Fixed, affirmed at Aa2 - Class C, $14,102,000, Fixed, affirmed at A2 - Class D, $2,115,000, Fixed, affirmed at A3 - Class E, $8,461,000, Fixed, affirmed at Baa1 - Class F, $4,231,000, Fixed, affirmed at Baa2 - Class G, $6,346,000, Fixed, affirmed at Baa3 - Class H, $7,050,000, Fixed, affirmed at Ba1 - Class J, $2,821,000, Fixed, affirmed at Ba2 - Class K, $2,820,000, Fixed, affirmed at Ba3 - Class L, $1,410,000, Fixed, affirmed at B1 - Class M, $2,116,000, Fixed, affirmed at B2 - Class N, $1,410,000, Fixed, affirmed at B3 As of the April 24, 2007 distribution date, the transaction's aggregate bond balance has decreased to $561.9 million from $564.1 million at securitization as a result of realized losses in the underlying CMBS classes and paydowns. The Certificates are collateralized by 84 classes from 55 CMBS transactions. Moody's reviewed the ratings or shadow ratings of all the collateral supporting the Certificates. Since securitization one CMBS class has realized a loss (MSC 1999-LIFE1; Class N; $3.2 million original balance). Moody's has upgraded 26 CMBS classes from 18 CMBS pools. Moody's upgraded the shadow ratings of six CMBS classes from six pools and downgraded 10 from seven pools. Moody's uses a weighted average rating factor as an overall indicator of the credit quality of a CDO transaction. A decrease in the WARF indicates an overall improvement in credit quality. Based on Moody's analysis, the WARF has improved from 1,195 at securitization to 1,109 currently. The distribution of ratings (actual and shadow ratings) is as follows: Aaa (17.5% compared to 0.0% at securitization), Aa1-Aa3 (6.6% compared to 12.5% at securitization), A1-A3 (13.7% compared to 8.5% at securitization), Baa1-Baa3 (24.3% compared to 40.3% at securitization); Ba1-Ba3 (18.6% compared to 17.5% at securitization); B1-B3 (14.0% compared to 16.5% at securitization) and Caa1-NR (5.3% compared to 4.7% at securitization). The CMBS certificates are from pools securitized between 1996 and 2005. The largest vintage exposures are 1997 (21.2%), 1998 (20.2%), 2001 (15.9%) and 2000 (15.8%). The five largest CMBS exposures are ASC 1997-D5 (12.5%), PNCMA 2000-C2 (4.4%), ASC 1996- D2 (3.6%), and MSC 1999-LIFE1 (2.9%). MORGAN STANLEY: S&P Places 'B+' Rated $3MM Notes Under Neg. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' rating on the $3 million class A-3 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 on CreditWatch with negative implications. The rating action reflects the May 2, 2007, placement of the rating on the referenced obligations issued by Cablevision Systems Corp. on CreditWatch with negative implications. Morgan Stanley ACES SPC's $46 million secured fixed-rate notes series 2006-8 is a swap-dependent synthetic transaction that is weak-linked to the lower of (i) the ratings on the respective reference obligations for each class; (ii) the long-term rating on Morgan Stanley ('A+'), as guarantor of the interest rate swap and credit default swap and the par put agreement; and (iii) the credit quality of the underlying securities, BA Master Credit Card Trust II's class A certificates from series 2001-B due 2013 ('AAA'). MOUNTAIN VIEW: S&P Rates $14 Million Class E Notes at BB -------------------------------------------------------- Standard & Poor's Ratings Services assigned its ratings to Mountain View CLO III Ltd./Mountain View CLO III Corp.'s $468.7 million floating-rate notes due April 2021. The rating is based on: -- The expected commensurate level of credit support in the form of subordination to be provided by the notes junior to the respective classes, the subordinated notes, and overcollateralization; -- The cash flow structure, which was subjected to various stresses requested by Standard & Poor's; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. Ratings Assigned Mountain View CLO III Ltd./Mountain View CLO III Corp. Class Rating Amount ----- ------ ------ A-1 AAA $299,700,000 A-2 AAA $75,000,000 B AA $25,000,000 C A $31,000,000 D BBB $24,000,000 E BB $14,000,000 Senior loan NR $6,170,000 Subordinated notes NR $39,300,000 *N.R. - Not rated. NAVISTAR INT'L: Fitch Retains Negative Watch on BB- Ratings ----------------------------------------------------------- After meeting with the management team, the ratings for both Navistar International Corp. (NAV) and Navistar Financial Corp. remain on Rating Watch Negative by Fitch Ratings as: Navistar International Corp. -- Issuer Default Rating 'BB-'; -- Senior unsecured bank facility 'BB-'. Navistar Financial Corp. -- Issuer Default Rating 'BB-'; -- Senior unsecured bank lines 'BB-'. The ratings cover approximately $2.5 billion in debt. Resolution of the Rating Watch status is contingent on the filing of audited financial statements and the outcome of an ongoing SEC investigation. Further unexpected filing delays could lead to a withdrawal of the ratings. Material restatements of financial position or worse-than-expected results could lead to a review of the ratings for a downgrade. In 2006, NAV changed auditors, extending the timetable for the resolution of the restatements. Fitch expects that NAV will give a status update on the timing and financial impact of any restatements prior to the release of full audited financial statements. NAV's ratings reflect the company's extended delays in filing audited financial statements, the scale and uncertainty of any adjustments that may be required to the historical financials from fiscal years 2002 through 2004 and for the first nine months of FY 2005, and the potential for limited access to external capital until financial statements are up to date. The ratings also incorporate concerns regarding the pricing and warranty dispute with Ford, which could lead to the potential loss of future business; the possibility of a labor disruption related to NAV's master contract with the UAW, which ends Oct. 1, 2007 and covers two engine plants (Melrose Park, IL and Indianapolis, IN) and one assembly plant (Springfield, OH); and NAV's underfunded pension. The ratings are supported by NAV's U.S. and Canada market share leadership in Class 6-8 trucks and school buses, competitive engine portfolio, strong distribution network, and potential military business growth. NAV is currently competing for military contracts for the Mine Resistant Ambush Protected (MRAP) vehicles and Joint Light Tactical Vehicle (JLTV) programs. NAV's $1.5 billion of credit facilities consist of a $1.1 billion term loan and a $400 million synthetic revolving credit facility. NAV drew $1.33 billion from these facilities on Jan. 19, 2007. According to un-audited financials NAV had $312 million in manufacturing cash, cash equivalents and marketable securities at the end of their first quarter (Jan. 31, 2007). NAV indicated that it expects to have between $800 million to $1 billion of manufacturing cash by the end of the fiscal year, capital expenditures for 2007 should be between $250 million-$300 million, and cash flow from operations will be stronger than in 2004, when it was $315 million. Fitch estimates that free cash flow in 2007 could be negative due to the heavy-duty truck downturn, continued competitive pricing pressures and high commodity costs, but liquidity remains adequate to finance modest negative cash flow prior to an anticipated rebound in end-demand. Fitch believes that NAV's operating profile remains sound. NAV's truck shipments decreased 1%, or 302 units, in their first quarter 2007, and their engine shipments were off 15.5%, or 19,048 units primarily due to decreased shipments of Ford V8s. Volumes will continue to decline for the remainder of 2007 because of last years pre-buy, but are expected to rebound in 2008. NAV's underfunded pension position will continue to be a meaningful claim on cash flow over the intermediate term. Higher required contributions in later years could coincide with a cyclical decline in operating cash flows, potentially limiting Navistar's capacity to produce free cash flow. NELLSON NUTRACEUTICAL: Court Okays Johnson as Compensation Advisor ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave Nellson Nutraceutical Inc. permission to employ Johnson Associates Inc. as its compensation advisor. As reported in the Troubled Company Reporter on April 19, 2007, the firm is expected to: a. perform an analysis of the Debtor's 2006 OCP; b. provide expert testimony, at one or more depositions and hearing related to these chapter 11 cases, regarding the Debtor's ordinary course bonus motion; and c. advise other services as determined necessary by the Debtor. The firm's compensation rates are: Professional Designation Hourly Rate ------------ ----------------- ----------- Jeff Visithpanich Principal $300 Alan Johnson Managing Director $575 Staff and Associates $155 - $375 Mr. Visithpanich assured the Court the firm does not hold any interest adverse and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Visitpanich can be reached at: Jeff Visithpanich Principal Johnson Associates Inc. 19 West 4th Street #511 New York, NY 10036 Headquartered in Irwindale, California, Nellson Nutraceutical Inc. formulates, makes and sells bars and powders for the nutrition supplement industry. The Debtor filed for chapter 11 protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtor in its restructuring efforts. Lawyers at Young, Conaway, Stargatt & Taylor, LLP, represent an informal committee of which General Electric Capital Corporation and Barclays Bank PLC are members. In its Schedules of Assets and Liabilities filed with the Court, Nellson Nutraceutical reports $312,334,898 in total assets and $345,227,725 in total liabilities when it filed for bankruptcy. NELLSON NUTRACEUTICAL: Taps Alvarez & Marsal as Financial Advisor ----------------------------------------------------------------- Nellson Neutraceutical Inc. asks the U.S. Bankruptcy Court for the District of Delaware for authority to employ Alvarez & Marsal Securities LLC as its financial advisor, nunc pro tunc to April 30, 2007. If the Debtor pursues a sale transaction, A&M will: i. if necessary, assist in preparing an offering memorandum, with any amendments and supplements thereto, for distribution and presentation to prospective purchasers; ii. assist in soliciting interest in a transaction among prospective purchasers; iii. assist in evaluating proposals received from prospective purchasers; iv. if necessary, assist in preparing due diligence materials or presentations to prospective purchasers; v. advise the Debtor as to the structure of the Sale Transaction, including the valuation of any non-cash consideration; vi. assist in negotiating the financial terms and structure of a Sale Transaction; and vii. provide other financial advisory service and investment banking services reasonably necessary to accomplish the foregoing and consummate a Sale Transaction. The Debtor will pay A&M fees equal to $100,000 per month for a minimum of four months, plus transaction success fees equal to 1% of the aggregate gross consideration of any and all sale transactions. In addition, A&M will be reimbursed for reasonable out-of-pocket expenses incurred in connection with the firm's assignment. The Debtor assures the Court that A&M does not hold or represent any interest adverse to its estate, its creditors or other parties-in-interest. The firm can be reached at: James D. Decker Managing Director Alvarez & Marsal Securities, LLC 3399 Peachtree Road, NE Atlanta, Georgia 30326 Tel: (212) 759-4433 http://www.alvarezandmarsal.com/ About Nellson Nutraceutical Headquartered in Irwindale, California, Nellson Nutraceutical Inc. formulates, makes and sells bars and powders for the nutrition supplement industry. The Debtor filed for chapter 11 protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtor in its restructuring efforts. Lawyers at Young, Conaway, Stargatt & Taylor, LLP, represent an informal committee of which General Electric Capital Corporation and Barclays Bank PLC are members. In its Schedules of Assets and Liabilities filed with the Court, Nellson Nutraceutical reports $312,334,898 in total assets and $345,227,725 in total liabilities when it filed for bankruptcy. NORTHROP GRUMMAN: Debt Reduction Cues Moody's to Review Ratings --------------------------------------------------------------- Moody's Investors Service placed the debt ratings of Northrop Grumman Corporation and its guaranteed subsidiaries under review for possible upgrade. The review was prompted by the continued improvement in the company's financial results and cash flow generation which, combined with a substantial reduction in debt, has led to improvements in debt protection metrics. Moody's review will focus on assessing the magnitude and the sustainability of Northrop Grumman's operating and financial improvement, including the opportunity for future revenue growth and stability. Potential shifts in defense spending will be reviewed to assess the impact that may be expected on programs and spending categories most closely associated with Northrop Grumman. Also, consideration will be given to the company's balance of revenues between research and development and the production of major mission platforms and operational and financial flexibility should a major change in defense spending occur. In addition, Moody's will assess its expectation of priorities in deploying expected free cash flow between various alternatives including organic growth, acquisitions, and share repurchases and dividend policies and their impact on the company's liquidity profile. On Review for Possible Upgrade: Issuer: Litton Industries, Inc. * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Baa2 Issuer: Mississippi Business Finance Corporation * Senior Unsecured Revenue Bonds, Placed on Review for Possible Upgrade, currently Baa2 Issuer: Northrop Grumman Corporation * Multiple Seniority Shelf, Placed on Review for Possible Upgrade, currently (P)Ba1 * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Baa2 Issuer: Northrop Grumman Space & Mission Systems Corp * Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Baa2 Outlook Actions: Issuer: Litton Industries, Inc. * Outlook, Changed To Rating Under Review From Positive Issuer: Northrop Grumman Corporation * Outlook, Changed To Rating Under Review From Positive Issuer: Northrop Grumman Space & Mission Systems Corp * Outlook, Changed To Rating Under Review From Positive Northrop Grumman Corporation, with headquarters in Los Angeles, California, is a major defense and information technology company. NORTHWEST AIRLINES: Applies Listing on New York Stock Exchange -------------------------------------------------------------- Northwest Airlines Corporation has filed an application with the New York Stock Exchange to list its new common stock after the airline emerges from Chapter 11 bankruptcy protection in June. Subject to the approval of Northwest's listing application and the completion of the airline's restructuring, Northwest expects that its newly issued common stock will begin trading on the NYSE in June under the ticker symbol "NWA". "The planned listing of Northwest stock on the NYSE is another important milestone in the airline's final preparations to exit bankruptcy in the coming weeks," said Doug Steenland, president and chief executive officer of Northwest Airlines. "Recently, we achieved several other key milestones including the naming of our new board of directors and the start of solicitation of creditor approval for our Plan of Reorganization." "We are pleased to welcome Northwest Airlines, one of the world's leading airline carriers, to the New York Stock Exchange," said NYSE Euronext chief executive officer, John A. Thain. "We look forward to a long, productive relationship with the company and its shareholders, and to providing Northwest Airlines with unsurpassed levels of market quality, visibility and services." Neal Cohen, executive vice president and chief financial officer, added, "It is appropriate that we will trade in the market as NWA which is the well-known and recognized symbol for Northwest Airlines which our customers see on our aircraft, at the airport and at our award-winning web site, nwa.com." Northwest added that upon the effective date of its Plan of Reorganization, the outstanding common stock, currently traded under the ticker symbol NWACQ.PK, and preferred stock of the company will be cancelled for no consideration and therefore the company's stockholders will no longer have any interest as stockholders in the company by virtue of their ownership of the company's common or preferred stock prior to emergence from bankruptcy. 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 an 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. NUTRO PRODUCTS: Inks Pact Selling Pet Food Operations to Mars ------------------------------------------------------------- Nutro Products Inc. has signed a definitive agreement with Mars Incorporated, pursuant to Mars' acquisition of the global pet food operations. Bain Capital Partners LLC, a global private investment firm, has advised the closing of the purchase of Nutro from funds, subject to normal regulatory approvals and is expected to complete within a few months. Terms of the deal were not disclosed. The transaction will bring together two of the most recognized names in the petcare industry. Nutro will operate as a stand- alone organization within the Mars family of companies and will maintain its commitment to the pet specialty channel. "This acquisition will enhance the company's business by providing Mars with Nutro's high quality brands," Bob Gamgort, North American president for Mars, said. "These brands are known for quality ingredients, unsurpassed nutrition and high consumer loyalty. Nutro's product portfolio, exceptional sales force, operational excellence, and strong focus on customer service will be an outstanding addition to Mars' business," said Gamgort. "Together with the current management team, Nutro will continue to operate the business from its headquarters in City of Industry, California, Nutro president and CEO David Kravis, said. "The company is proud of its relationship with Nutro pet parents, and of the long-standing, mutually supportive relationships, the company has developed with its specialty pet store partners. The company looks forward to building on those strengths and the company's continued commitment to them with the support of Mars," Kravis said. Goldman, Sachs & Co. is serving as financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as counsel to Mars, Incorporated. JP Morgan Chase is serving as financial advisor, and Ropes & Gray LLP is acting as counsel to Nutro Products. About Nutro Products Inc. Headquartered in City of Industry, California, Nutro Products Inc. -- http://www.nutroproducts.com/-- is a manufacturer of premium pet food. * * * As reported in the Troubled Company Reporter on May 7, 2007, Moody's Investors Service changed its review for possible downgrade of the ratings of Nutro Products Inc., including the corporate family rating of B2, to a review for possible upgrade. The change in direction of the review after the disclosure that Mars Incorporated will acquire the global pet food operations of Nutro, subject to regulatory approvals. OMNOVA SOLUTIONS: Fitch Affirms and Withdraws Low-B Ratings ----------------------------------------------------------- Fitch Ratings has affirmed and simultaneously withdrawn the following ratings for Omnova Solutions Inc.: -- Issuer Default Rating 'B+'; -- Senior secured revolver 'BB+/RR1'; -- Senior secured notes 'B+/RR4'. All of the debt ratings for this issuer are withdrawn. Fitch will no longer provide rating coverage of Omnova. OXFORD INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Oxford Industries, Inc. 6868 118th Avenue North Largo, FL 33773 Bankruptcy Case No.: 07-03683 Type of Business: The Debtor is fully facilitated precision metal fabricator/job shop. See http://www.oxfordindustriesinc.com/ Chapter 11 Petition Date: May 4, 2007 Court: Middle District of Florida (Tampa) Judge: Michael G. Williamson Debtor's Counsel: Don M. Stichter, Esq. Stichter, Riedel, Blain & Prosser 110 East Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $414,173 Spec Proc Br MC 5720 P&I I 400 West Bay Street, Suite 35045, Bankruptcy Section Jacksonville, FL 32202-4437 Plate Shapes, Inc. $135,644 P.O. Box 291211 Tampa, FL 33687 Cole Industrial & Techn. $81,403 1510 North 31st Street Tampa, FL 33605 Pinellas County Tax Collector $57,562 Stewart Stainless Supply $42,216 Tampa Bay Steel Corp. $33,279 Humana Hithins Florida $26,833 Corrosion & High Temp Met. $23,339 Tad Metals, Inc., S.E. $16,600 Alro Metals Service Center $14,929 E.S.S.I. $14,503 Florida Department of Revenue $10,384 Card Services $10,171 John Hancock $9,712 Cintas Corporation $7,787 Airgas South $7,344 Progress Energy Florida $6,964 Matthews Benefit Group $6,814 Trumpf, Inc. $5,880 Rolled Alloys, Inc. $5,742 PEOPLE'S CHOICE: PC Asset Wins Residual Interests Auction --------------------------------------------------------- People's Choice Financial Corp. and its debtor-affiliates conducted an auction of certain assets, including residual interests in certain securitized trusts and books and records pertaining to the residual interests, on April 17 and 18, 2007. At the conclusion of the auction, the Debtors, in consultation with the Official Committee of Unsecured Creditors, determined that PC Asset Acquisition Inc. is the highest and best bidder on the assets. A list of the assets is available for free at: http://ResearchArchives.com/t/s?1e8f A sale hearing was held on April 19 to consider approval of the sales of assets to PC Asset free and clear of all liens, claims, interests, and encumbrances. The asset purchase agreement dated April 18, 2007, by and between, or its designees, and the Debtors, provides, among others: -- PC Asset will pay $21,000,000 to the Debtors for the Assets. PC Asset will deposit $1,050,000 with the Debtors in immediately available funds, to be held, retained or returned by the Debtors subject to the terms and conditions of the bidding procedures or, if there is a closing, the deposit and all interest accrued will be credited and applied toward payment of the purchase price. The balance of the Purchase Price will be paid on the closing date; -- the closing date is on April 25, the fifth day after entry of the approval order; -- on the closing date, the Debtors will deliver to PC Asset, an assignment of interest pursuant to which the Debtors assign the residual interests to PC Asset, and any other documents, funds or other things contemplated to be delivered by the Debtors; and -- on the closing date, PC Asset will deliver the balance of the purchase price, and appropriate evidence of all necessary corporate action by PC Asset in connection with the contemplated transactions. The Hon. Robert Kwan of the U.S. Bankruptcy Court for the Central District of California determined that the APA was negotiated, proposed, and entered into by the Debtors and the PC Asset in accordance with the sale procedures order without collusion, in good faith, and from arm's length bargaining positions. The Court approved the APA in its entirety and authorizes the Debtors to enter into the APA. The absence of any particular provisions of the APA will not diminish or impair the effectiveness of the provision. The Court authorized the Debtors to consummate the sale. The Assets will be transferred to PC Asset free and clear of all interests of any kind or nature, with all the interests to attach to the proceeds of the sale in the order of their priority, with the same validity, force and effect that they now have against the Assets, subject to any claims and defenses the Debtors and their estates, as applicable, may possess. All owner trustees, securities administrators, certificate registrars, certificate paying agents, and other parties under all applicable trusts and trust agreements, including Wilmington Trust Company, as owner trustee for the 2005-1 Trust, and Wells Fargo Bank, N.A., as securities administrator, certificate registrar and certificate paying agent for the 2005-1 Trust, are directed to cause the Assets to be transferred to PC Asset in accordance with the sale order and the APA. PC Asset will have no liability or responsibility for any liability or other obligation of the Debtors arising under or related to the Assets. About People's Choice Headquartered in Irvine, California, People's Choice Financial Corp. -- http://www.pchl.com/-- is a residential mortgage banking company, through its subsidiaries, originates, sells, securitizes and services primarily single-family, non-prime, residential mortgage loans. The company and two of its affiliates, People's Choice Home Loan, Inc., and People's Choice Funding, Inc., filed for chapter 11 protection on March 20, 2007 (Bankr. C.D. Calif. Lead Case No. 07-10765). J. Rudy Freeman, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, represents the Debtors. At March 31, 2006, the Debtors' financial conditions showed total assets of $4,711,747,000 and total debts of $4,368,966,000. (People's Choice Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). The Debtors' exclusive period to file a chapter 11 plan expires on July 18, 2007. PEOPLE'S CHOICE: Equity One Wins Auction for Lot 1 Assets --------------------------------------------------------- People's Choice Financial Corp. and its debtor-affiliates auctioned off certain assets and executory contracts, consisting the Lot 1 Assets on April 17 and 18, 2007. The Hon. Robert Kwan of the U.S. Bankruptcy Court for the Central District of California approved Equity One Inc.'s successful bid for certain of the Debtors' subservicing rights and other assets as the highest, best, and otherwise financially superior bid in accordance with the sale procedure order. A list of the servicing agreements Equity One has elected to include within the purchased assets is available for free at: http://ResearchArchives.com/t/s?1e90 Bear Stearns & Co. and EMC Mortgage Corporation, Inc., and their affiliates, and Wells Fargo Bank, N.A., and its affiliates are granted a reservation of their respective rights to object to the entry of an order allowing for the assumption by the Debtors and assignment to Equity One of certain subservicing agreements between the Debtors and Bear/EMC or Wells, which have been designated as Lot 1 Assets. An evidentiary hearing and briefing will be held on issues related to whether the Debtors may assume and subsequently assign to Equity One the Lot 1 Assets pursuant to, and solely to the extent required by, Section 365 of the Bankruptcy Code. The deadlines for filing of opening trial briefs and reply briefs were set on May 7, 2007, and May 9, 2007, respectively. The sale hearing with respect to the Lot 1 Asset is continued to May 10, 2007. The asset purchase agreement entered into by People's Choice Home Loan, Inc., People's Choice Funding, Inc., and Equity One provides that, among others: -- the purchase price is $14,059,081; -- Equity One will deposit with the sellers $702,954 in immediately available, good funds, to be held, retained or returned by the Sellers subject to the terms and conditions of the bidding procedures; -- at any closing, the Deposit and all interest accrued will be credited and applied toward payment of the purchase price; -- on the closing date, Equity One will pay and deliver to Sellers, in good funds, the balance of the purchase price; and -- Equity One will, effective as of the closing date, be assigned the servicing rights and will assume all liabilities and obligations of the Sellers accruing under the servicing agreements on and after the closing date; provided that Equity One will pay all cure amounts owing under any of the servicing agreements. The closing of the transactions will take place at the offices of Pachulski Stang Ziehl Young Jones & Weintraub LLP, at 10100 Santa Monica Boulevard, Suite 1100, in Los Angeles, California. The closing will be held one day after entry of the order approving the sale. About People's Choice Headquartered in Irvine, California, People's Choice Financial Corp. -- http://www.pchl.com/-- is a residential mortgage banking company, through its subsidiaries, originates, sells, securitizes and services primarily single-family, non-prime, residential mortgage loans. The company and two of its affiliates, People's Choice Home Loan, Inc., and People's Choice Funding, Inc., filed for chapter 11 protection on March 20, 2007 (Bankr. C.D. Calif. Lead Case No. 07-10765). J. Rudy Freeman, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, represents the Debtors. At March 31, 2006, the Debtors' financial conditions showed total assets of $4,711,747,000 and total debts of $4,368,966,000. (People's Choice Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). The Debtors' exclusive period to file a chapter 11 plan expires on July 18, 2007. PORTRAIT CORP: Plan Confirmation Hearing Scheduled for May 21 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York in White Plains will convene a hearing on May 21, 2007, at 2:30 p.m., in Courtroom 520, to consider confirmation on Portrait Corporation of America Inc. at its debtor-affiliates' Amended Chapter 11 Plan of Reorganization. Treatment of Claims The Plan, as published in the Troubled Company Reporter on Feb. 8, 2007, provides that holders of Allowed Administrative Expense Claims will be paid in full and in cash. On the Plan's effective date, the DIP obligations will be deemed allowed and paid indefeasibly in full in accordance with the terms of the DIP Agreement and DIP Order. Upon full payment of all DIP Obligations, all liens and security interests granted to secure those obligations will be terminated. Provided, however, that the particular provisions of the DIP Agreement that are specified to survive will survive. Existing letters of credit issued pursuant to the DIP Agreement will be cancelled and replaced with new letters of credit to be issued pursuant to the Exit Facility. Holders of Allowed Priority Tax Claim will receive cash on the later of the plan effective date or the date the claim became allowed, or equal annual cash payments together with interest to be determined by the Bankruptcy Court. Holders of Class A Allowed Priority Non-Tax Claims will also be paid in full in cash. At the sole option of the Debtors, holders of Class B Allowed Other Secured Claims will: (a) receive payment in full in cash plus post-commencement date interest; (b) have a reinstated claim; (c) receive the collateral securing their claim; or (d) receive a treatment that renders the claim unimpaired pursuant to Section 1124 of the Bankruptcy Code. Holders of Class C Allowed Second Lien Notes Claims will receive, in full satisfaction of their claim, their pro rata share of 100% of Reorganized Portrait Corp of America common stock. Holders of Class D Allowed Senior Notes and Other Unsecured Claims will receive their pro rata distribution of new warrants. Holders of Class E Allowed Convenience Class Claims will receive 1% of their allowed claim as payment. Holders of Class F Allowed Goldman Note Claims, Class G Allowed Old Preferred Equity Interests, Class H Allowed Old Common Equity Interests, and Class I Allowed Old Common Subsidiary Equity Interests will not receive anything under the plan. Goldman Note Claims refer to: -- the 13.75% Senior Subordinated Notes due 2010, issued to GS Mezzanine Partners II L.P. and GS Mezzanine Partners II Offshore L.P. These notes were guaranteed by Portrait Corporation of America Inc., American Studios Inc., PCA National LLC, PCA National of Texas LP, PCA Photo Corporation of Canada Inc., Photo Corporation of America Inc., and PCA Finance Corp; and -- the 16.5% Senior Subordinated Notes due 2010, issued to GS Mezzanine Partners II L.P. and GS Mezzanine Partners II Offshore L.P. About Portrait Corp. Portrait Corporation of America Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany, and the United Kingdom. The company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP represents the Official Committee of Unsecured Creditors. Peter J. Solomon Company serves as financial advisor for the Committee. At June 30, 2006, the Debtor had total assets of $153,205,000 and liabilities of $372,124,000. PRICELINE.COM INC: Paying $80 Million to Settle 2000 Class Action ----------------------------------------------------------------- Priceline.com Incorporated has agreed to settle the securities class action litigation filed against the company in 2000. Under the terms of the settlement agreement, the class will receive $80 million in return for a release, with prejudice, of all claims against the company and the individual defendants that are related to the purchase of the company's securities by class members during the class period. The company's insurance carriers will fund $30 million of the settlement. In connection with the settlement, the company expects to incur a net charge of approximately $55 million in the 1st quarter of 2007, representing the settlement amount and estimated legal expenses relating to the settlement The company also said that in March and April, it had received definitive notice from the Internal Revenue Service that the company's previously disclosed refund request for excise taxes paid on merchant airline tickets had been approved for payment. As a result, the company expects to record approximately $18.7 million of income in the first quarter of 2007 related to the March notice and approximately $3 million of income in the second quarter of 2007 related to the April notice associated with the tax refund, including estimated accrued interest. About Priceline.com Inc Priceline.com Inc. (Nasdaq: PCLN) operates priceline.com, a leading U.S. online travel service for value-conscious leisure travelers, and Priceline Europe, a leading European online hotel reservation service. In the U.S., priceline.com offers customers a variety of ways to save on their airline tickets, hotel rooms, rental cars, vacation packages and cruises. Priceline Europe operates one of Europe's fastest growing hotel reservation services, operates in 40 countries in 12 languages and offers its customers in Europe and the U.S. access to approximately 25,000 participating European hotels. Priceline.com also operates these travel websites: Travelweb.com, Lowestfare.com, RentalCars.com and BreezeNet.com. Priceline.com also has a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee. Priceline.com licenses its business model to independent licensees, including priceline mortgage and certain international licensees. * * * As reported in the Troubled Company Reporter on Apr. 11, 2007, Standard & Poor's Ratings Services placed its ratings, including the 'B' corporate credit rating, on Priceline.com Inc. on CreditWatch with positive implications. The Troubled Company Reporter also reported on Oct. 2, 2006, that Standard & Poor's Ratings Services assigned its 'B' rating to Priceline.com. Inc.'s $150 million convertible senior notes due 2013. Additionally, S&P affirmed the corporate credit rating on the company at 'B'. The outlook is Stable. QUEST DIAGNOSTICS: Earns $105.9 Million in Quarter Ended March 31 ----------------------------------------------------------------- Quest Diagnostics Incorporated reported net income of $105.9 million for the first quarter ended March 31, 2007, compared with net income of $144.6 million for the same period ended March 31, 2006. Income from continuing operations was $107.5 million, compared to $154.6 million in the first quarter of 2006. First quarter revenues were $1.53 billion, a decrease of 1.7% below the prior-year level of $1.55 billion. The decrease in income from continuing operations was principally associated with the company's change in contract status with UnitedHealthcare Group Inc., which reduced revenues by an estimated $75 million and operating income by an estimated $55 million. On Oct. 3, 2006, the company announced that it would no longer provide laboratory services to UnitedHealthcare Group Inc. beginning Jan. 1, 2007, following the failure to come to terms on the reduction of total costs for laboratory services. Results for the three months ended March 31, 2007, include pre-tax charges of $11 million, associated with workforce reductions in response to reduced volume levels, and a pre-tax charge of $4 million, related to in-process research and development expense associated with the POCT Holding AB acquisition on Jan. 31, 2007. In addition, results for the three months ended March 31, 2007, were unfavorably impacted by severe storms in the central part of the United States, which reduced revenues by approximately $13 million for the quarter and operating income by approximately $10 million. Results for the three months ended March 31, 2006, include pre-tax charges of $27 million, primarily associated with integration activities and a pre-tax gain of $16 million associated with the sale of an investment. "The change in status with UnitedHealthcare had a significant impact during the quarter; however, doctors within the UnitedHealthcare network exercised choice and continued to send us their discretionary business and some of their UnitedHealthcare work," said Surya N. Mohapatra, Ph.D., chairman and chief executive officer. "We believe this is due to our superior service levels and the efforts of our sales force. In the first quarter, we experienced slower growth than we had anticipated because we have, for the past two quarters, dedicated significant attention and resources to retaining business. We have now shifted our focus to growing our business and are gaining momentum. Our new agreement with Aetna and the announced acquisition of AmeriPath will further accelerate growth." At March 31, 2007, the company's balance sheet showed $6.19 billion in total assets, $3.16 billion in total liabilities, and $3.03 billion in total stockholders' equity. The company's balance sheet at March 31, 2007, also showed strained liquidity with $1.25 billion in total current assets available to pay $1.57 billion in total current liabilities. 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?1e8b Acquisition of POCT Holding AB On Jan. 31, 2007, the company acquired POCT Holding AB, a Sweden- based company specializing in near patient testing, in an all-cash transaction valued at approximately $450 million, including $113 million of assumed debt. About Quest Diagnostics Headquartered in Lyndhurst, N.J., Quest Diagnostics Inc. (NYSE: DGX) -- http://www.questdiagnostics.com/-- diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. * * * Standard & Poor's Ratings Services revised its outlook on Quest Diagnostics Inc. to negative from stable, in light of Quest's agreement to purchase AmeriPath Inc. (B+/Negative/--) for about $2.0 billion cash. RADNOR HOLDINGS: Files Disclosure Statement in Delaware ------------------------------------------------------- Radnor Holdings Corporation and its debtor-affiliates filed with the United States Bankruptcy Court for the District of Delaware a Joint Disclosure Statement explaining their Chapter 11 Plan of Liquidation. Overview of the Plan The Plan provides for the orderly liquidation of substantially all of the Debtors' operating assets. The Debtors tell the Court that it agreed to sell all of their assets to TR Acquisition Co. Inc., an affiliate of Tennenbaum Capital Partners LLC, to maximize value to the Debtors' estate and to provide a vehicle to explore any and all restructuring alternatives. The Debtors said that the Plan also provides the holders with the best recovery possible. Treatment of Claims Under the Plan, DIP Facility, Administrative, and Priority Tax Claims will be paid in full. Holders of Assumed Liabilities and Non-Tax Priority Claims will also be paid in full, in cash equal to the unpaid portion of the face amount of each holder's claim. Each holder of Other Secured Claims will receive, either: a. cash equal to the value of the claim; b. the return of the holders' collateral securing their claims; or c. other treatment as agreed by the Debtor and the holder. Holders of Secured Lender Claims will receive all recoveries on causes of action and all other assets of the Debtors. Holders of General Unsecured Claims will receive a pro rata share of the initial distribution amount. All Intercompany, Subordinated, and Old Equity Interest Claims will not receive or retain any property from the Debtors under the Plan. A full-text copy of the Joint Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070507042032 About Radnor Holdings Headquartered in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serve the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RADNOR HOLDINGS: U.S. Trustee's Ch. 7 Conversion Plea Put On Hold ----------------------------------------------------------------- Pursuant to a stipulation between Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, and Radnor Holdings Corporation and its debtor-affiliates, the U.S. Trustee's motion to convert the Debtors' Chapter 11 cases to Chapter 7 liquidation proceedings are held in abeyance following the Debtors' filing of their plan of reorganization on April 30, 2007. The stipulation, as approved by the U.S. Bankruptcy Court for the District of Delaware, provides that the U.S. Trustee will consent to her conversion motion being put on hold until such time as the Court denies confirmation the Debtors' plan of reorganization. If the Court denies confirmation of the plan, the Court will set a hearing on the conversion motion on the next scheduled omnibus hearing date, which is 14 days after the date of denial of confirmation. Reasons to Convert to Chapter 7 Ms. Stapleton argued that the Court should convert the Debtors' cases to Chapter 7 because there is a continuing loss to or diminution of the estate, there is no reasonable likelihood of rehabilitation or reorganization, and that the Debtors have failed to file the necessary and required operating reports. The Debtors have signaled their intention of completing a wind- down and piecemeal liquidation. In the absence of operating revenues to support these costs, which the Debtors do not have, the wind-down and piecemeal liquidation process is causing a continuing loss to the Debtor's estate, Ms. Stapleton reiterated. The Debtors have not shown that the benefit to be gained from remaining in chapter 11 justifies the attendant administrative expenses. Ms. Stapleton reminded the Court that the Debtors had sold substantially all of their assets. The Debtors claim to still possess certain assets to be liquidated, consisting of cash and causes of action. In spite of this, the Debtors are trying to hire liquidation professionals at a significant cost to administer the remaining assets, when a Chapter 7 trustee could suffice in handling these tasks, Ms. Stapleton contended. "What seems readily apparent, however, is that the Debtors' resources are thin and any significant cost outlays will make these cases administratively insolvent," argued Ms. Stapleton. About Radnor Holdings Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Case No. 06-10894). Gregg M. Galardi, Esq., and Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serve the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. SAFENET INC: Acquisitive Growth Strategy Cues S&P's B Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Belcamp, Maryland-based SafeNet, Inc., a provider of hardware and software information security products and services. The outlook is negative. At the same time, S&P assigned its 'B' bank loan rating and '2' recovery rating to the company's proposed $275 million first priority senior secured bank facility, which will consist of a $250 million term loan due 2014 and a $25 million revolving credit facility due 2013, indicating that lenders can expect substantial (80%-100%) recovery of principal in the event of payment default. S&P assigned its 'CCC+' bank loan rating, with a recovery rating of '4' to the proposed $125 million second priority term loan due 2015, indicating that lenders can expect a marginal (25%-50%) recovery of principal in the event of a payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds from the first- and second-lien term loans, totaling $375 million, along with $240 million of equity from sponsors will be used to fund the purchase of SafeNet. "The ratings on SafeNet reflect the company's acquisitive growth strategy, high leverage and current non-compliance with SEC filing regulations," said Standard & Poor's credit analyst David Tsui. These factors are partly offset by SafeNet's diversified product portfolio, and strong customer and partner relationships. SHAW GROUP: Secures $700 Mil. EPC Contract from American Electric ----------------------------------------------------------------- The Shaw Group Inc. has been awarded an engineering, procurement and construction contract by Southwestern Electric Power Company, a unit of American Electric Power, to build a new 600 MW electric generating plant in Hempstead County, Arkansas. SWEPCO is seeking the necessary regulatory approvals to build the plant from various Arkansas, Texas and Louisiana authorities. The John W. Turk, Jr. - Unit 1 facility will use an ultra-supercritical advanced pulverized clean coal combustion technology. By increasing steam pressure and temperatures, the facility will require less fuel per megawatt hour, resulting in increased efficiency and reduced emissions. The new plant is scheduled to be completed in mid-2011 at a total cost of approximately $1.3 billion. Shaw's EPC contract is valued at approximately $700 million. "We are very pleased to have been selected by AEP to design, engineer and construct this highly efficient, environmentally sound facility," J.M. Bernhard, Jr., Chairman, President and Chief Executive Officer of Shaw, said. "We are proud to combine Shaw's leadership in fossil power with our expertise in high alloy piping materials which are designed to withstand the high steam temperatures and pressures at the new facility. AEP is a leader in the use of this technology and we look forward to successfully delivering this generating plant to this valued client." About American Electric Power Headquartered in Columbus, Ohio, American Electric Power -- http://www.aep.com/-- delivers electricity to more than 5 million customers in 11 states in the U.S. AEP owns nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns an electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east and north Texas). Southwestern Electric Power Company -- http://swepco.com/-- serves over 464,000 customers in three states: 112,000 in western Arkansas, 176,000 in Northwest Louisiana, and 176,000 in East and North Texas. About Shaw Group Based in Baton Rouge, Louisiana, The Shaw Group Inc. (NYSE: SGR) -- http://www.shawgrp.com/-- provides services to the environmental, infrastructure and homeland security markets, including consulting, engineering, construction, remediation and facilities management services to governmental and commercial customers. It is also a vertically integrated provider of engineering, procurement, pipe fabrication, construction and maintenance services to the power and process industries. The company segregates its business activities into four operating segments: Environmental & Infrastructure; Energy & Chemicals; Maintenance, and Fabrication, Manufacturing & Distribution. In January 2005, the company sold substantially all of the assets of its Shaw Power Technologies, Inc. and Shaw Power Technologies International, Ltd. units to Siemens Power Transmission and Distribution Inc., a unit of Siemens AG. The company has operations in Chile, China, Malaysia, the United Kingdom and, Venezuela, among others. * * * Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on The Shaw Group Inc. and removed it from CreditWatch, where it was placed with negative implications in October 2006. S&P said the outlook is stable. In addition, 'BB' senior secured debt rating was affirmed after the $100 million increase to the company's revolving credit facility. SINCLAIR BROADCAST: S&P Rates Proposed $300MM Senior Notes at B --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B' rating to the $300 million convertible senior notes due 2027 proposed by Sinclair Broadcast Group Inc. (BB-/Negative/--). At the same time, S&P lowered the senior unsecured rating on company's shelf registration to 'B' from 'B+', based on the structural subordination of senior unsecured debt to priority obligations at the operating company, Sinclair Television Group Inc. The company will use proceeds of the notes to finance the partial redemption of the operating subsidiary's 8% senior subordinated notes due 2012. On a consolidated basis, Sinclair, a TV station operator, had total debt of about $1.3 billion as of March 31, 2007. "The ratings on Sinclair reflect the company's financial risk from debt-financed TV station acquisitions, its low conversion of EBITDA to discretionary cash flow compared with peers, its portfolio of generally lower ranked stations, and TV advertising's mature revenue growth prospects," said Standard & Poor's credit analyst Deborah Kinzer. These factors are partially offset by the company's large TV audience reach, TV broadcasting's typically good margin and discretionary cash flow potential, and resilient station asset values. The negative outlook recognizes that Sinclair's leverage metrics remain high for the rating category. Reducing leverage by using cash flow to lower debt in both election and nonelection years and improving discretionary cash flow will be important considerations toward revising the outlook to stable. Ratings List Sinclair Broadcast Group Inc. Corporate Credit Rating BB-/Negative/-- Subordinated B New Rating Sinclair Broadcast Group Inc. $300 Mil Conv Sr Notes Due 2027 B SOLECTRON CORP: Fitch Affirms Low-B Ratings with Stable Outlook --------------------------------------------------------------- Fitch Ratings has affirmed Solectron Corporation's ratings as: -- Issuer Default Rating at 'BB-'; -- Senior secured bank facility at 'BB+'; -- Senior unsecured debt at 'BB-'; -- Subordinated debt at 'B+'. Fitch's actions affect approximately $600 million in debt securities. The Rating Outlook is Stable. The ratings and outlook reflect Fitch's expectations that: Solectron's operating performance will remain stable with modest revenue growth; the company will be challenged to materially improve operating margins in the current market environment; Solectron will maintain a conservative balance sheet with debt-to- EBITDA of approximately 2 times (x); and the electronics manufacturing services (EMS) industry will continue to face substantial and occasionally intensely competitive pricing pressures, as vendors struggle with excess capacity, and uneven end-market demand. The ratings are supported by the company's: conservative capital structure, evidenced by one of the lowest debt-to- EBITDA ratios of any top-tier EMS provider; solid liquidity position; long-term trends supporting additional penetration of the outsourcing model; and Fitch's expectations that the larger and better capitalized tier 1 EMS providers will benefit from OEM (original equipment manufacturer) supplier consolidation over time. Ratings concerns center on competition from faster growing original design manufacturers and vertically integrated competitors, particularly in high-volume/low-mix end-markets with more attractive growth rates; the thin operating margins and low return on invested capital associated with the EMS industry despite providers' ongoing efforts to expand higher margin service offerings; and significant exposure to slower growing and more volatile traditional end-markets. Fitch believes that a significant and sustained improvement in profitability driven by a stabilization of the competitive landscape within the EMS industry could lead to positive ratings actions. Conversely, Fitch believes that increased balance sheet leverage and/or acquisition activity and the operational risk inherent in such a strategy could lead to negative ratings action. As of March 2, 2007, liquidity was sufficient and supported by approximately $1.1 billion of unrestricted cash and cash equivalents and an undrawn $350 million senior secured revolving credit facility expiring August 2009. Total debt as of March 2, 2007, was approximately $641 million and consisted primarily of $450 million 0.5% convertible senior notes due 2034 and $150 million 8% senior subordinated notes due 2016. SPECIALTY RESTAURANT: Texas Court Moves Chap. 11 Case to Tennessee ------------------------------------------------------------------ The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas transferred the chapter 11 case of Specialty Restaurant Group LLC from Dallas to Nashville, Tenn., Bill Rochelle of Bloomberg News reports. According to the report, the change in venue was requested by the Debtor's Official Committee of Unsecured Creditors. In its request, the source says, the Committee informed the Court that Specialty Restaurants belonged near its home base in Marysville, Tennessee. Based in Maryville, Tennessee, Specialty Restaurant Group LLC -- http://www.srg.us/-- operates primarily through three unique, well-positioned restaurant concepts, The American Cafe, Silver Spoon Cafe and Silver Spoon/American Cafe. It presently owns and operates seven American Cafe's in Mobile, Alabama; Fort Myers, Florida; Jacksonville, Florida; Chattanooga, Tennessee; Germantown, Tennessee; Alexandria, Virginia; and Herndon, Virginia; two Silver Spoon Cafe's in Bonita Springs, Florida and Naples, Florida; and two Silver Spoon/American Cafe's in Atlanta, Georgia; and Knoxville, Tennessee. The company filed for chapter 11 protection on Feb. 14, 2007 (Bankr. N.D. Tex. Case No. 07-30779). Gregory Michael Wilkes, Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP, represent the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. STRUCTURED ASSET: S&P Cuts Rating on 2003-BC12 Class B Certs. to B ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on the class B certificates from Structured Asset Investment Loan Trust 2003- BC12 to 'B' from 'BB+'. The rating remains on CreditWatch, where it was placed with negative implications Dec. 12, 2006. Concurrently, the ratings on eight classes of certificates from five SAIL transactions (including series 2003-BC12) were lowered and placed on CreditWatch with negative implications. In addition, the ratings on 17 classes from various SAIL series were placed on CreditWatch with negative implications. At the same time, the ratings on 13 classes from nine SAIL series remain on CreditWatch negative. Lastly, the ratings on the remaining classes from various SAIL deals were affirmed. The downgrades and negative CreditWatch placements reflect adverse collateral performance that has caused realized losses to generally exceed monthly excess interest cash flow. This trend has compromised overcollateralization to at least 40% below its target for four of the five downgraded transactions. As of the April 2007 remittance report, cumulative realized losses were as follows (series: percent, amount): -- 2003-BC8: 1.02%, $11,036,330; -- 2003-BC9: 1.07%, $11,610,647; -- 2003-BC12:1.09%, $11,584,341; -- 2004-4: 0.92%, $16,832,801; and -- 2005-HE2: 1.18% $9,896,194. In addition, all five series with lowered ratings have sizeable loan amounts that are severely delinquent (90-plus day, foreclosure, and REO), which strongly suggests that the unfavorable performance trends are likely to continue. The severe delinquencies relative to O/C are as follows: -- 2003-BC8: 16.90%; $24,581,121 versus $3,071,418 O/C; -- 2003-BC9: 18.78%; $24,960,145 versus $2,764,532 O/C; -- 2003-BC12: 16.19%; $24,365,830 versus $2,666,695 O/C; -- 2004-4: 18.07%; $50,079,500 versus $5,012,285 O/C; and -- 2005-HE2: 13.14%; $61,866,506 versus $1,634,224 O/C. The remaining CreditWatch placements reflect the high severely delinquent loan balances relative to the available credit support provided by excess interest cash flow and O/C. Standard & Poor's will continue to closely monitor the performance of the certificates with ratings on CreditWatch. If monthly losses continue to compromise O/C, S&P will take additional negative rating actions. Conversely, if pool performance improves and credit support is not further eroded, S&P will affirm the ratings and remove them from CreditWatch. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings, despite the performance trend. The collateral consists of subprime, fixed- or adjustable-rate, first- or second-lien mortgage loans, secured by one-to four- family residential properties. Rating Lowered and Remaining on Creditwatch Negative Structured Asset Investment Loan Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-BC12 B B/Watch Neg BB+/Watch Neg Ratings Lowered and Placed on Creditwatch Negative Structured Asset Investment Loan Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-BC8 M5 BB/Watch Neg BBB 2003-BC8 B BB-/Watch Neg BBB- 2003-BC9 M5 BB/Watch Neg BBB 2003-BC9 B BB-/Watch Neg BBB- 2003-BC12 M5 BB/Watch Neg BBB 2003-BC12 M6 BB-/Watch Neg BBB- 2004-4 B B/Watch Neg BB+ 2005-HE2 B3 B/Watch Neg BB Ratings Placed on Creditwatch Negative Structured Asset Investment Loan Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-BC12 M4 BBB+/Watch Neg BBB+ 2004-3 B BB+/Watch Neg BB+ 2004-5 B BBB-/Watch Neg BBB- 2004-6 B BBB-/Watch Neg BBB- 2004-7 B BBB-/Watch Neg BBB- 2004-8 B2 BBB-/Watch Neg BBB- 2004-11 B BB/Watch Neg BB 2004-BNC2 M7 BBB+/Watch Neg BBB+ 2005-1 B BB/Watch Neg BB 2005-4 M11 BBB-/Watch Neg BBB- 2005-7 B2 BB+/Watch Neg BB+ 2005-10 B3 BB+/Watch Neg BB+ 2005-HE2 B2 BB/Watch Neg BB 2006-3 B2 BB/Watch Neg BB 2006-4 B2 BB/Watch Neg BB 2006-BNC1 B1 BB+/Watch Neg BB+ 2006-BNC2 B1 BB+/Watch Neg BB+ Ratings Remaining on Creditwatch Negative Structured Asset Investment Loan Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2005-8 B BB+/Watch Neg 2005-9 B2 BB/Watch Neg 2005-11 B1 BB+/Watch Neg 2005-11 B2 BB/Watch Neg 2005-HE1 B3 BB+/Watch Neg 2005-HE3 B1 BBB-/Watch Neg 2005-HE3 B2 BB+/Watch Neg 2006-1 B1 BB/Watch Neg 2006-1 B2 B/Watch Neg 2006-2 B1 BB+/Watch Neg 2006-2 B2 B/Watch Neg 2006-BNC1 B2 B/Watch Neg 2006-BNC2 B2 BB/Watch Neg Ratings Affirmed Structured Asset Investment Loan Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2003-BC1 A1, A2 AAA 2003-BC1 M1 AA 2003-BC1 M2 A 2003-BC1 M3 BBB+ 2003-BC2 A1, A2, A3 AAA 2003-BC2 M1 AA 2003-BC2 M2 A 2003-BC2 M3 BBB+ 2003-BC2 B BBB- 2003-BC3 1-A2, 2-A2 AAA 2003-BC3 M1 AA 2003-BC3 M2 A 2003-BC3 M3 A- 2003-BC3 M5 BBB 2003-BC3 B BBB- 2003-BC4 M1 AA+ 2003-BC4 M2 A 2003-BC4 M3 A- 2003-BC4 M4 BBB 2003-BC5 M1 AA+ 2003-BC5 M2-A, M2-B A 2003-BC5 M3 A- 2003-BC5 M4 BBB+ 2003-BC5 B BBB- 2003-BC6 M1 AA 2003-BC6 M2 A 2003-BC6 M3 A- 2003-BC6 M-4 BBB+ 2003-BC6 B BBB- 2003-BC7 1-A2, 3-A2 AAA 2003-BC7 M1 AA 2003-BC7 M2 A 2003-BC7 M3 A- 2003-BC7 M4 BBB+ 2003-BC7 M5 BBB 2003-BC8 2-A, 3-A2, 3-A3 AAA 2003-BC8 M1 AA 2003-BC8 M2 A 2003-BC8 M3 A- 2003-BC8 M4 BBB+ 2003-BC9 2-A, 3-A2, 3-A3 AAA 2003-BC9 M1 AA 2003-BC9 M2 A 2003-BC9 M3 A- 2003-BC9 M4 BBB+ 2003-BC10 1-A2, A4 AAA 2003-BC10 M1 AA 2003-BC10 M2 A 2003-BC10 M3 A- 2003-BC10 M4 BBB+ 2003-BC10 M5 BBB 2003-BC10 B BBB- 2003-BC11 A3 AAA 2003-BC11 M1 AA 2003-BC11 M2 A 2003-BC11 M3 A- 2003-BC11 M4 BBB+ 2003-BC11 M5 BBB 2003-BC11 B BBB- 2003-BC12 1-A, 2-A, 3-A AAA 2003-BC12 M1 AA 2003-BC12 M2 A 2003-BC12 M3 A- 2003-BC13 1-A1, 1-A3, 2-A1, 2-A3, 3-A AAA 2003-BC13 M1 AA 2003-BC13 M2 A 2003-BC13 M3 A- 2003-BC13 M4 BBB+ 2003-BC13 M5 BBB 2003-BC13 M6 BBB- 2003-BC13 B BB+ 2004-1 1A3 AAA 2004-1 M1 AA 2004-1 M2 A 2004-1 M3 A- 2004-1 M4 BBB+ 2004-1 M5 BBB 2004-1 M6 BBB- 2004-1 B BB+ 2004-2 A4 AAA 2004-2 M1 AA 2004-2 M2 A 2004-2 M3 A- 2004-2 M4 BBB+ 2004-2 M5 BBB 2004-2 M6 BBB- 2004-2 B BB+ 2004-3 A3 AAA 2004-3 M1 AA 2004-3 M2 A 2004-3 M3 A- 2004-3 M4 BBB+ 2004-3 M5 BBB 2004-3 M6 BBB- 2004-4 A-SIO, A4 AAA 2004-4 M1 AA 2004-4 M2 AA- 2004-4 M3 AA- 2004-4 M4 A+ 2004-4 M5 A 2004-4 M6 BBB+ 2004-4 M7 BBB- 2004-5 A-SIO AAA 2004-5 M2 AA+ 2004-5 M3 AA 2004-5 M4 AA- 2004-5 M5 A 2004-5 M6 A- 2004-5 M7 BBB+ 2004-5 M8 BBB 2004-6 A3, A-SIO AAA 2004-6 M1 AA 2004-6 M2 A 2004-6 M3 A- 2004-6 M4 BBB+ 2004-6 M5 BBB 2004-6 M6 BBB- 2004-7 A1, A2, A3, A4, A6, A7, A8 AAA 2004-7 M1 AA+ 2004-7 M2 AA 2004-7 M3 AA- 2004-7 M4 A 2004-7 M5 A- 2004-7 M6 BBB+ 2004-7 M7 BBB 2004-8 A1, A2, A4, A6, A8, A9 AAA 2004-8 M1 AA+ 2004-8 M2, M3, M4 AA 2004-8 M5 A 2004-8 M6 A- 2004-8 M7 BBB+ 2004-8 M8 BBB 2004-8 M9, B1 BBB- 2004-9 A2, A5, A7 AAA 2004-9 M1 AA+ 2004-9 M2 AA 2004-9 M3 A+ 2004-9 M4 A 2004-9 M5 A- 2004-9 M6 BBB+ 2004-9 M7 BBB 2004-9 B1, B2 BBB- 2004-10 A2, A4, A6, A7 AAA 2004-10 A9, A10, A11 AAA 2004-10 M1 AA+ 2004-10 M2 AA 2004-10 M3 AA- 2004-10 M4 A+ 2004-10 M5 A 2004-10 M6 A- 2004-10 M7 BBB+ 2004-11 A4 AAA 2004-11 M1 AA+ 2004-11 M2 AA 2004-11 M3 AA- 2004-11 M4 A+ 2004-11 M5 A 2004-11 M6 A- 2004-11 M7 BBB+ 2004-11 M8 BBB 2004-11 M9 BBB- 2004-BNC1 A2, A4, A5, A-SIO AAA 2004-BNC1 M1 AA 2004-BNC1 M2 AA- 2004-BNC1 M3 A+ 2004-BNC1 M4 A 2004-BNC1 M5 A- 2004-BNC1 M6 BBB+ 2004-BNC1 M7 BBB 2004-BNC1 B1 BB 2004-BNC2 A2, A5, A6 AAA 2004-BNC2 M1 AA+ 2004-BNC2 M2 AA 2004-BNC2 M3 AA- 2004-BNC2 M4 A+ 2004-BNC2 M5 A 2004-BNC2 M6 A- 2005-1 A1, A2, A4, A5, A7, A8 AAA 2005-1 M1 AA+ 2005-1 M2 AA 2005-1 M3 AA- 2005-1 M4 A+ 2005-1 M5 A 2005-1 M6 A- 2005-1 M7 BBB+ 2005-1 M8 BBB 2005-1 M9 BBB- 2005-2 A1, A3, A4, A5, A6 AAA 2005-2 M1 AA+ 2005-2 M2 AA 2005-2 M3 AA- 2005-2 M4 A+ 2005-2 M5 A 2005-2 M6 A- 2005-2 M7 BBB+ 2005-2 M8 BBB 2005-2 M9 BBB- 2005-2 B BB 2005-3 A1, A3, A4, A5, A6, A7, A8, A9 AAA 2005-3 M1 AA+ 2005-3 M2 AA 2005-3 M3 AA- 2005-3 M4 A+ 2005-3 M5 A 2005-3 M6 A- 2005-3 M7 BBB+ 2005-3 M8 BBB 2005-3 M9 BBB- 2005-3 B BB 2005-4 A2, A3, A4, A5 AAA 2005-4 M1 AA+ 2005-4 M2, M3 AA 2005-4 M4 AA- 2005-4 M5 A+ 2005-4 M6 A 2005-4 M7 A- 2005-4 M8 BBB+ 2005-4 M9, M10 BBB 2005-5 A1, A3, A4, A5, A7, A8, A9 AAA 2005-5 M1 AA+ 2005-5 M2 AA 2005-5 M3 AA- 2005-5 M4 A+ 2005-5 M5 A 2005-5 M6 A- 2005-5 M7 BBB+ 2005-5 M8 BBB 2005-5 M9, B BBB- 2005-6 A1, A2, A3, A4, A5, A6, A7, A8, A9 AAA 2005-6 M1 AA+ 2005-6 M2 AA 2005-6 M3 AA- 2005-6 M4 A+ 2005-6 M5 A 2005-6 M6 A- 2005-6 M7 BBB 2005-6 M8, M9, M10-A, M10-F BBB- 2005-7 A1, A2, A3, A4, A5 AAA 2005-7 M1 AA+ 2005-7 M2 AA 2005-7 M3 AA- 2005-7 M4 A+ 2005-7 M5 A 2005-7 M6 A- 2005-7 M7 BBB+ 2005-7 M8 BBB 2005-7 M9, B1 BBB- 2005-8 A1, A2, A3, A4 AAA 2005-8 M1 AA+ 2005-8 M2 AA 2005-8 M3 AA- 2005-8 M4 A+ 2005-8 M5 A 2005-8 M6 A- 2005-8 M7 BBB+ 2005-8 M8 BBB 2005-8 M9 BBB- 2005-9 A1, A2, A3, A4, A5, A6 AAA 2005-9 M1 AA+ 2005-9 M2 AA 2005-9 M3 AA- 2005-9 M4 A+ 2005-9 M5 A 2005-9 M6 A- 2005-9 M7 BBB+ 2005-9 M8 BBB 2005-9 M9, B1 BBB- 2005-10 A1, A2, A3, A4, A5, A6 AAA 2005-10 M1 AA+ 2005-10 M2 AA 2005-10 M3 AA- 2005-10 M4 A+ 2005-10 M5 A 2005-10 M6 A- 2005-10 M7 BBB+ 2005-10 M8 BBB 2005-10 M9, B1, B2 BBB- 2005-11 A1, A2, A3, A4, A5, A6, A7 AAA 2005-11 M1 AA 2005-11 M2 AA- 2005-11 M3 A+ 2005-11 M4 A 2005-11 M5 A- 2005-11 M6 BBB+ 2005-11 M7 BBB 2005-11 M8 BBB- 2005-HE1 A2, A4, A5, A6, A7, A8 AAA 2005-HE1 M1 AA+ 2005-HE1 M2 AA 2005-HE1 M3 AA- 2005-HE1 M4 A+ 2005-HE1 M5 A 2005-HE1 M6 A- 2005-HE1 M7 BBB+ 2005-HE1 M8, M9 BBB 2005-HE1 B1, B2 BBB- 2005-HE2 A1, A2, A3 AAA 2005-HE2 M1 AA+ 2005-HE2 M2 AA 2005-HE2 M3 AA- 2005-HE2 M4 A+ 2005-HE2 M5 A 2005-HE2 M6 A- 2005-HE2 M7 BBB+ 2005-HE2 M8, M9 BBB 2005-HE2 M10 BBB- 2005-HE2 B1 BB+ 2005-HE3 A1, A2, A3, A4, A5 AAA 2005-HE3 M1 AA+ 2005-HE3 M2 AA 2005-HE3 M3 AA- 2005-HE3 M4 A+ 2005-HE3 M5 A 2005-HE3 M6, M7 A- 2005-HE3 M8 BBB+ 2005-HE3 M9, M10, M11 BBB 2006-1 A1, A2, A3, A4 AAA 2006-1 M1 AA+ 2006-1 M2, M3 AA 2006-1 M4 AA- 2006-1 M5 A+ 2006-1 M6 A 2006-1 M7 A- 2006-1 M8 BBB+ 2006-1 M9 BBB 2006-2 A1, A2, A3, A4, AAA 2006-2 M1 AA 2006-2 M2 AA- 2006-2 M3 A+ 2006-2 M4 A 2006-2 M5 A- 2006-2 M6 BBB+ 2006-2 M7 BBB 2006-2 M8 BBB- 2006-3 A1, A2, A3, A4, A5, A6 AAA 2006-3 M1 AA+ 2006-3 M2 AA 2006-3 M3 AA- 2006-3 M4 A+ 2006-3 M5 A 2006-3 M6 A- 2006-3 M7 BBB+ 2006-3 M8 BBB 2006-3 M9 BBB- 2006-3 B1 BB+ 2006-4 A1, A2, A3, A4, A5 AAA 2006-4 M1 AA 2006-4 M2 AA- 2006-4 M3 A+ 2006-4 M4 A 2006-4 M5 A- 2006-4 M6 BBB+ 2006-4 M7 BBB 2006-4 M8 BBB- 2006-4 B1 BB+ 2006-BNC1 A1, A2, A3, A4, A5 AAA 2006-BNC1 M1 AA 2006-BNC1 M2 AA- 2006-BNC1 M3 A+ 2006-BNC1 M4 A 2006-BNC1 M5 A- 2006-BNC1 M6 BBB+ 2006-BNC1 M7 BBB 2006-BNC1 M8 BBB- 2006-BNC2 A1, A2, A3, A4, A5, A6 AAA 2006-BNC2 M1 AA 2006-BNC2 M2 AA- 2006-BNC2 M3 A+ 2006-BNC2 M4 A 2006-BNC2 M5 A- 2006-BNC2 M6 BBB+ 2006-BNC2 M7 BBB 2006-BNC2 M8 BBB- 2006-BNC3 A1, A2, A3, A4 AAA 2006-BNC3 M1 AA 2006-BNC3 M2 AA- 2006-BNC3 M3 A+ 2006-BNC3 M4 A 2006-BNC3 M5 A- 2006-BNC3 M6 BBB+ 2006-BNC3 M7 BBB 2006-BNC3 M8 BBB- 2006-BNC3 B1 BB+ 2006-BNC3 B2 BB TENFOLD CORP: Posts $932,000 Net Loss for 1st Qtr. Ended March 31 ----------------------------------------------------------------- TenFold Corp. filed its financial statements for the three months ended March 31, 2007, with the Securities and Exchange Commission on May 3, 2007. The company reported a $932,000 net loss on $1,823,000 of revenues for the three months ended March 31, 2007, compared with a $1,924 net loss on $599,000 revenues in the comparable period of 2006. At March 31, 2006, the company's balance sheet showed $3,959,000 in total assets and $2,359,000 in total liabilities resulting in a stockholders' equity of $1,600. The company says it has not been able to generate positive cash flow from operations for the four years ended Dec. 31, 2006, or the three months ended March 31, 2007. Its net cash used in operating activities was $464,000 for the three months ended March 31, 2007, and $4.4 million for the year ended Dec. 31, 2006. Additionally, the company says it has experienced difficulty closing substantial new sales, and it is unclear when or if it can expect to predictably close material sales to new or existing customers, and to achieve and sustain positive cash flow from operations. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1e8c Going Concern Doubt Tanner LC in Salt Lake City, Utah, expressed substantial doubt about Tenfold Corp.'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 firm cited that the company has used significant balances of its cash in operating activities and at present levels of cash consumption will not have sufficient resources to meet operating needs. About TenFold Corp. TenFold Corp (OTC BB: TENF) -- http://www.tenfold.com/ -- licenses its patented technology for applications and services development, EnterpriseTenFold SOA, to organizations that face the daunting task of replacing obsolete applications or building complex SOA-compliant applications systems. EnterpriseTenFold SOA technology lets a small team of business people and IT professionals design, build, deploy, maintain, and upgrade new or replacement applications with extraordinary speed, superior applications quality and power features. TRIBUNE CO: Commences Repurchase of 126 Mil. Common Stock Shares ---------------------------------------------------------------- On April 25, 2007, Tribune Company has commenced its reported tender offer to repurchase up to 126 million shares of its common stock for $34 per share, returning approximately $4.3 billion of capital to shareholders. In the tender offer, shareholders will have the opportunity to tender some or all of their shares at a price of $34 per share in cash. The tender offer is being made pursuant to the previously disclosed merger agreement among Tribune, the Tribune Employee Stock Ownership Plan, the ESOP's merger subsidiary and an affiliate of Sam Zell. The tender offer commenced [Wednes]day and will expire on May 24, 2007, unless extended. The repurchase of up to 126 million shares of common stock through the tender offer represents over 50% of Tribune's outstanding common shares with a total value of approximately $4.3 billion. The stock repurchases will be funded through bank debt and a $250 million investment from Sam Zell. The Zell investment was consummated on April 23, 2007. "This tender offer will return significant capital to Tribune shareholders, including employees who currently own about 23 million shares of stock," said Dennis FitzSimons, Tribune chairman, president and chief executive officer. "With Sam Zell's initial investment completed, and the tender offer launched, the first stage of our transaction that will result in Tribune Company going private is underway." If more than 126 million shares are tendered, the company will purchase all shares tendered in the tender offer on a pro rata basis, except for "odd lots", which will not be prorated. If fewer shares are properly tendered, the company will purchase all shares that are properly tendered and not withdrawn. All shares acquired in the tender offer will be acquired at the same price of $34 per share. Shareholders whose shares are purchased in the offer will be paid the purchase price in cash, without interest, promptly after the expiration of the offer period. The Chandler Trusts, which collectively hold approximately 20% of Tribune's outstanding shares of common stock, have agreed to tender all shares of Tribune common stock held by them at the expiration of the offer. The ESOP and Zell will not tender any of the shares of Tribune common stock held by them in the offer. Merrill Lynch & Co., Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Banc of America Securities LLC will serve as Co-Dealer Managers for the tender offer. Innisfree M&A Incorporated will serve as Information Agent and Computershare Trust Company, N.A. will serve as the Depositary. The Offer to Purchase, Letter of Transmittal and related documents will be mailed to shareholders of record and will also be made available for distribution to beneficial owners of Tribune common stock. About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is one of the country's top media companies, operating businesses in publishing, interactive and broadcasting. It reaches more than 80 percent of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, NY), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. * * * As reported in the Troubled Company Reporter on April 25, 2007, 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. WACHOVIA BANK: Moody's Holds Low-B Ratings on Six 2005-C17 Certs. ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 22 classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass- Through Certificates, Series 2005-C17 as: - Class A-1, $87,090,328, affirmed at Aaa - Class A-1A, $372,595,763, affirmed at Aaa - Class A-2, $288,753,000, affirmed at Aaa - Class A-3, $82,046,000, affirmed at Aaa - Class A-4, $1,079,352,000, affirmed at Aaa - Class A-J, $187,242,000, affirmed at Aaa - Class A-PB, $224,353,000, affirmed at Aaa - Class X-C, Notional, affirmed at Aaa - Class X-P, Notional, affirmed at Aaa - Class B, $74,897,000, affirmed at Aa2 - Class C, $23,830,000, affirmed at Aa3 - Class D, $47,661,000, affirmed at A2 - Class E, $27,235,000, affirmed at A3 - Class F, $27,235,000, affirmed at Baa1 - Class G, $30,639,000, affirmed at Baa2 - Class H, $37,448,000, affirmed at Baa3 - Class J, $6,808,000, affirmed at Ba1 - Class K, $10,213,000, affirmed at Ba2 - Class L, $13,617,000, affirmed at Ba3 - Class M, $6,808,000, affirmed at B1 - Class N, $6,808,000, affirmed at B2 - Class O, $6,808,000, affirmed at B3 As of the April 17, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 1.6% to $2.68 billion from $2.72 billion at securitization. The certificates are collateralized by 226 loans, the same as at securitization. The loans range in size from less than 1.0% to 8.0% of the pool, with the top 10 loans representing 34.9% of the pool. The pool includes five investment grade shadow rated loans, representing 15.7% of the pool. The pool has not realized any losses since securitization and currently there are no loans in special servicing. Twenty-five loans, representing 11.9% 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 93.5% and 74.2%, respectively, of the pool. Moody's weighted average loan to value ratio for the conduit component is 99.8%, compared to 99.0% at securitization, resulting in the affirmation of all classes. The largest shadow rated loan is the One & Two International Place Loan ($215.5 million -- 8.0%), which represents a 50.0% participation interest in a first mortgage loan secured by two Class A office towers located Boston, Massachusetts. The two buildings total 1.9 million square feet and were 100.0% occupied as of December 2006, compared to 90.0% at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The second largest shadow rated loan is the Theraldson Pool I-B Loan ($74.9 million -- 2.8%), which is secured by 13 limited service hotels totaling 1,436 guestrooms. The hotels are located in six states and operate under five different hotel flags. Performance has improved due to higher revenues and loan amortization. The loan has amortized by approximately 6.2% since securitization. Moody's current shadow rating is A1, compared to A2 at securitization. The third largest shadow rated loan is the Theraldson Pool I-A Loan ($54.3 million -- 2.0%), which is secured by 25 limited service hotels. The hotels total 1,436 guestrooms, are located in 12 states and operate under six different hotel flags. Performance has improved due to higher revenues and loan amortization. The loan has amortized by approximately 6.2% since securitization. Moody's current shadow rating is A3, compared to Baa1 at securitization. The fourth largest shadow rated loan is the Great Wolf Resorts Pool Loan ($47.9 million -- 1.8%), which is secured by two full service hotels located in Traverse City, Michigan and Kansas City, Kansas. The hotels total 562 guestrooms. Performance has declined due to decreased revenues and increased expenses. RevPAR and occupancy for calendar year 2006 were $137.88 and 65.0%, respectively, compared to $140.68 and 67.0% at securitization. Moody's current shadow rating is A1, compared to Aa3 at securitization. The fifth largest shadow rated loan is the 200 Varick Street Loan ($27.0 million -- 1.0%), which is secured by a 400,000 square office building located in New York City. Moody's current shadow rating is Aa2, compared to Aa3 at securitization. The top three conduit loans represent 14.9% of the pool. The largest conduit loan is the Digital Realty Trust Portfolio Loan ($150.2 million -- 5.6%), which is secured by six office buildings totaling 1.4 million square feet and located in five states. The portfolio was 95.0% occupied as of December 2006, compared to 93.6% at securitization. Moody's LTV is 88.0%, compared to 92.8% at securitization. The second largest conduit loan is the 450 West 33rd Street Loan ($132.5 million -- 4.9%), which represents a 50.0% participation interest in a 1.7 million square foot Class B office building located in New York City. The property was 90.0% occupied as of December 2006, compared to 84.5% at securitization. Moody's LTV is 96.1%, the same as at securitization. The third largest conduit loan is the Olympia Portfolio Loan ($83.1 million -- 3.1%), which is secured by a portfolio of 22 retail properties and two office properties totaling 409,000 square feet. The properties are located in Florida and Georgia and are 100.0% leased, the same as at securitization. Twenty of the properties, representing 88.3% of the allocated loan balance, are anchored by Walgreens. Moody's LTV is 94.6%, compared to 96.8% at securitization. WACHOVIA BANK: Moody's Holds Low-B Ratings on Six 2005-C18 Certs. ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 23 classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass- Through Certificates, Series 2005-C18 as: * Class A-1, $36,026,055, affirmed at Aaa * Class A-1-A, $70,049,202, affirmed at Aaa * Class A-2, $22,149,000, affirmed at Aaa * Class A-3, $174,126,000, affirmed at Aaa * Class A-PB, $81,472,000, affirmed at Aaa * Class A-4, $476,015,000, affirmed at Aaa * Class A-J-1, $140,537,000, affirmed at Aaa * Class A-J-2, $89,592,000, affirmed at Aaa * Class X-P, Notional, affirmed at Aaa * Class X-C, Notional, affirmed at Aaa * Class B, $31,621,000 affirmed at Aa2 * Class C, $12,297,000, affirmed at Aa3 * Class D, $28,107,000, affirmed at A2 * Class E, $14,054,000, affirmed at A3 * Class F, $19,324,000, affirmed at Baa1 * Class G, $12,297,000, affirmed at Baa2 * Class H, $24,594,000, affirmed at Baa3 * Class J, $5,270,000, affirmed at Ba1 * Class K, $7,027,000, affirmed at Ba2 * Class L, $5,270,000, affirmed at Ba3 * Class M, $3,514,000, affirmed at B1 * Class N, $3,513,000, affirmed at B2 * Class O, $5,270,000, affirmed at B3 As of the April 17, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 1.7% to $1.38 billion from $1.40 billion at securitization. The Certificates are collateralized by 71 loans, ranging in size from less than 1.0% to 15.6% of the pool, with the top 10 loans representing 58.2% of the pool. The pool includes three investment grade shadow rated loans, representing 18.7% of the pool. The pool has not realized any losses since securitization and currently there are no loans in special servicing. Nine loans, representing 9.0% 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 100.0% and 92.1%, respectively, of the pool. Moody's weighted average loan to value ratio for the conduit component is 104.0%, compared to 102.7% at securitization, resulting in an affirmation of all classes. The largest shadow rated loan is the One & Two International Place Loan ($215.5 million - 15.6%), which represents a 50.0% participation interest in a first mortgage loan secured by two Class A office towers located in Boston, Massachusetts. The two buildings total 1.9 million square feet and were 100.0% occupied as of December 2006, compared to 90.0% at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The second largest shadow rated loan is the 2700 Broadway Loan ($27.5 million - 2.0%), which is secured by a 25,000 square foot condominium interest in the retail portion of a mixed use building located in New York City. The condo unit is 100.0% leased to Columbia University. Moody's current shadow rating is A2, the same as at securitization. The third largest shadow rated loan is the Topanga and Victory Loan ($16.0 million - 1.2%), which is secured by two flex office buildings located in Los Angeles, California. The buildings were 98.0% occupied as of December 2006, compared to 93.0% at securitization. Despite the increase in occupancy, performance has declined due to increased expenses. Moody's current shadow rating is Ba1, compared to Baa3 at securitization. The top three conduit loans represent 26.1% of the pool. The largest conduit loan is the 450 West 33rd Street Loan ($132.5 million - 9.6%), which represents a 50.0% participation interest in a 1.7 million square foot Class B office building located in New York City. The property was 90.0% occupied as of December 2006, compared to 84.5% at securitization. Moody's LTV is 96.1%, the same as at securitization. The second largest conduit loan is the Kadima Medical Office Loan ($127.5 million - 9.2%), which is secured by 17 medical office buildings totaling 797,000 square feet. The properties are located in eight states with the largest concentration in Florida (9 properties). The portfolio was 97.0% leased as of December 2007, the same as at securitization. Despite the stable occupancy, performance has declined due to increased expenses. Moody's LTV is 117.2%, compared to 109.9% at securitization. The third largest conduit loan is the Park Place II Loan ($100.0 million - 7.2%), which is secured by a 275,000 square foot mixed use office and retail property located in Irvine, California. The property was 100.0% occupied as of December 2006, compared to 89.0% at securitization. The loan is on the master servicer's watchlist due to concerns regarding the financial condition of the largest tenant, New Century Financial Corporation, which occupies 29.0% of the premises. Moody's LTV is 108.5%, compared to 114.5% at securitization. WACHOVIA BANK: Moody's Holds Low-B Ratings on 7 2004-C14 Certs. --------------------------------------------------------------- Moody's Investors Service upgraded the rating of one class and affirmed the ratings of 21 classes of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2004-C14 as: * Class A-1, $20,107,178, affirmed at Aaa * Class A-1A, $286,948,370, affirmed at Aaa * Class A-2, $226,423,000, affirmed at Aaa * Class A-3, $80,236,000, affirmed at Aaa * Class A-4, $305,906,000, affirmed at Aaa * Class X-P, Notional, affirmed at Aaa * Class X-C, Notional, affirmed at Aaa * Class B, $28,797,000, affirmed at Aa2 * Class C, $13,712,000, affirmed at Aa3 * Class D, $17,826,000, affirmed at A2 * Class E, $10,970,000, affirmed at A3 * Class F, $12,341,000, affirmed at Baa1 * Class G, $12,341,000, affirmed at Baa2 * Class H, $15,084,000, affirmed at Baa3 * Class J, $2,742,000, affirmed at Ba1 * Class K, $4,113,000, affirmed at Ba2 * Class L, $6,856,000, affirmed at Ba3 * Class M, $2,742,000, affirmed at B1 * Class N, $2,742,000, affirmed at B2 * Class O, $2,742,000, affirmed at B3 * Class MAD, $13,555,555, upgraded to Aaa from Baa2 * Class PP, $38,4321,685, affirmed at Ba1 As of the April 17, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 2.6% to $1.12 billion from $1.15 billion at securitization. The Certificates are collateralized by 83 loans, the same as at securitization. The loans range in size from less than 1.0% to 12.9% of the pool, with the top 10 loans representing 56.3% of the pool. The pool includes two investment grade shadow rated loans, representing 16.8% of the pool. Four loans, representing 10.0% of the pool, have defeased and are secured by U.S. Government securities. The largest defeased loan is the 11 Madison Avenue Loan ($82.0 million -- 7.3%), which was shadow rated investment grade at securitization. The pool has not realized any losses since securitization and currently there are no loans in special servicing. Six loans, representing approximately 5.0% 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 99.6% and 96.8%, respectively, of the pool. Moody's weighted average loan to value ratio for the conduit component is 94.2%, compared to 99.7% at Moody's last full review in February 2006 and compared to 95.1% at securitization. Moody's is affirming the ratings of all the pooled classes as well as the non-pooled Class PP. Moody's is upgrading Class MAD, which is secured by a B Note on 11 Madison Avenue, due to defeasance. The largest shadow rated loan is the Park Place Mall Loan ($144.1 million -- 12.9%), which is secured by a 1.0 million square foot regional mall located in Tucson, Arizona. The mall is anchored by Sears, Dillard's and Macy's. Property performance has been stable since securitization. The property is also encumbered by a $38.4 million B Note which serves as the collateral for non-pooled Class PP. Moody's current shadow ratings of the A and B notes are Baa3 and Ba1, the same as at last review. The second shadow rated loan is the Independence Plaza Loan ($44.0 million -- 3.9%), which is secured by a 562,000 square foot office property located in downtown Denver, Colorado. The property was 95.0% occupied as of December 2006, essentially the same as at last review. Moody's current shadow rating is Baa2, the same as at last review. The top three conduit exposures represent 19.5% of the pool. The largest conduit exposure is the BJB Portfolio ($107.1 million -- 9.5%), which consists of 10 cross-collateralized loans secured by 10 multifamily properties located in Chicago, Illinois. The portfolio totals 964 units in properties that range in size from six to 190 units. Moody's LTV is 99.6%, compared to 99.1% at last review. The second largest conduit loan is the 444 North Michigan Avenue Loan ($71.5 million - 6.4%), which is secured by a 511,000 square foot office property located in Chicago, Illinois. As of December 2006 the property was 80.4% occupied, essentially the same as at last review. Performance has declined since last review due to increased expenses. Moody's LTV is in excess of 100.0%, similar to last review. The third largest conduit loan is the FBI Field Office Loan ($40.8 million - 3.8%), which is secured by a 156,000 square foot Class A office property located approximately seven miles northwest of Baltimore in Woodlawn, Maryland. The property is 100.0% occupied by the FBI through July 2014. Moody's LTV is 89.4%, compared to 91.9% at last review. WESCO HOLDINGS: High Debt Leverage Cues S&P's B+ Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Wesco Holdings Inc. The outlook is stable. At the same time, S&P withdrew its 'B+' corporate credit rating on Wesco Aircraft Hardware Corp., a wholly owned subsidiary of Wesco Holdings. In addition, S&P affirmed its 'B+' bank loan and '2' recovery ratings on Wesco Aircraft's $75 million senior secured revolving credit facility and $450 million first-lien term facility. Also affirmed is the 'B-' bank loan and '5' recovery ratings on the $150 million second-lien term facility. Wesco Aircraft is the borrower under the senior secured credit facilities. "The rating on Valencia, California-based Wesco Holdings reflects high debt leverage, weak cash flow protection measures, modest scale of operations [annual sales around $400 million], and risks associated with cyclical demand for commercial aircraft, the company's largest end market," said Standard & Poor's credit analyst Roman Szuper. "This outweighs the firm's position as a leading distributor of small aerospace components and good profit margins." The rating also incorporates expectations that Wesco will employ its free cash flow to reduce its high debt level. The Carlyle Group, one of the world's largest private equity firms, acquired a majority interest in Wesco in late 2006, with the balance held by current management. As a result of the transaction, the company's financial profile is highly leveraged, with debt to EBITDA at 4.5x-5x expected in the near term. Internal cash flow generation will likely be limited by working capital requirements to support growth of the business. Thus, only a gradual, albeit steady, debt reduction is anticipated, which should improve key credit protection measures to levels appropriate for the rating. The commercial aircraft manufacturing industry is Wesco's largest end market, accounting for about two-thirds of sales. This sector continued its recovery in 2007, reversing a severe downturn after the Sept. 11, 2001, attacks and other shocks to the aviation system. Increasing jetliner deliveries and strong orders have improved the company's business. Long-term growth prospects are generally favorable, supported by an expected global economic growth and the need to replace older planes. Wesco's stability is enhanced by sales to the military sector and a broad customer base. Wesco is the leading distributor (15%-20% market share) of high- volume, low-cost (generally priced below $250 per unit) aerospace parts, such as fasteners, rivets, nuts, bolts, screws, and clamps. These, known as "C class" components, comprise about 90% of the firm's sales. The company also provides supply chain management services, including just-in-time. A generally favorable market environment, efficient operations, and a commitment to debt reduction should gradually strengthen the company's financial profile to a level appropriate for the rating. An outlook revision to either positive or negative is not likely, at least in the near term. * Hunton & Williams Names Brian Buroker Head of IP Practice ----------------------------------------------------------- Hunton & Williams LLP has named Brian M. Buroker, Esq. as head of its intellectual property practice. Mr. Buroker focuses his practice on ecommerce, telecommunications, business method and software patent litigation, as well as reexamination, licensing, prosecution and counseling. A former patent examiner in the software arts, he has litigated several closely watched cases for the intellectual property community such as MercExchange v. eBay et al., in which he serves as counsel for patent holder MercExchange. "Brian has a long been the 'go-to' IP lawyer for many of our most significant clients," said Wally Martinez, Esq., the firm's managing partner. "He has earned the respect of not only his clients but also his colleagues throughout the firm. We look forward to the talent and energy that he will bring to his leadership of the IP group." "Having worked with Brian on several cases, I know that his stature as both a litigator and seasoned counsel to his clients is unparalleled and he will bring that dedication to his new role," added Frank E. Emory Jr., head of the firm's litigation department which includes IP among its many practice areas. Mr. Buroker holds a J.D. magna cum laude from Georgetown University and a B.S. cum laude in both electrical and computer engineering from North Carolina State University. About Hunton & Williams Hunton & Williams LLP -- http://www.hunton.com/-- provides legal services to corporations, financial institutions, governments and individuals, as well as to a broad array of other entities. Since its establishment more than a century ago, Hunton & Williams has grown to more than 975 attorneys serving clients in 100 countries from 19 offices around the world. While the firm's practice has a strong industry focus on energy, financial services, and life sciences, its experience extends to more than 100 separate practice areas, including bankruptcy and creditors rights, commercial litigation, corporate transactions and securities law, intellectual property, international and government relations, regulatory law, products liability, and privacy and information management. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Abraxas Petro ABP (22) 117 (4) AFC Enterprises AFCE (31) 163 7 Alaska Comm Sys ALSK (29) 551 19 Alliance Imaging AIQ (6) 677 49 Apex Silver Mine SIL (103) 1,270 394 Bare Escentuals BARE (229) 156 66 Blount International BLT (98) 448 135 CableVision System CVC (5,290) 9,845 (763) Calpine Corp CPNLQ (6,887) 18,590 (2,890) Carrols Restaurant TAST (26) 453 (31) Cell Therapeutic CTICD (102) 102 30 Centennial Comm CYCL (1,090) 1,393 92 Charter Comm-A CHTR (6,345) 15,177 (1,015) Choice Hotels CHH (70) 305 (55) Cincinnati Bell CBB (792) 2,014 29 Compass Minerals CMP (46) 691 157 Corel Corp. CRE (21) 271 42 Crown Holdings I CCK (225) 6,582 310 Crown Media HL CRWN (479) 768 48 CV Therapeutics CVTX (90) 356 263 Dayton Superior DSUP (106) 312 79 Delta Air Li-Old DALRQ (13,676) 19,811 (384) Deluxe Corp DLX (40) 1,223 (402) Denny's Corporation DENN (221) 444 (67) Depomed Inc. DEPO (27) 53 26 Domino's Pizza DPZ (561) 421 39 Dun & Bradstreet DNB (397) 1,360 (161) Echostar Comm DISH (219) 9,769 1,008 Embarq Corp EQ (331) 8,983 (409) Emeritus Corp. ESC (119) 703 (42) Empire Resorts I NYNY (10) 71 12 Encysive Pharmaceutical ENCY (122) 87 41 Enzon Pharmaceutical ENZN (55) 369 180 Epix Pharmaceutical EPIX (32) 125 75 Extendicare Real EXE-U (24) 1,315 (112) Foamex Intl FMXI (396) 565 24 Ford Motor Co F (3,773) 290,217 (2,171) Gencorp Inc. GY (65) 1,037 31 General Motors GM (3,202) 185,198 (5,059) Graftech International GTI (85) 772 241 HCA Inc HCA (10,157) 23,643 2,328 Healthsouth Corp. HLS (1,526) 3,360 (381) I2 Technologies ITWO (15) 185 28 ICOS Corp ICOS (18) 285 112 IDEARC Inc IAR (8,755) 1,508 171 IMAX Corp IMAX (33) 243 84 IMAX Corp IMX (33) 243 84 Immunomedics Inc IMMU (25) 45 15 Incyte Corp. INCY (104) 325 261 Indevus Pharma IDEV (133) 91 51 Intermune Inc ITMN (55) 249 218 Interstate Bakeries IBCIQ (293) 1,147 (423) Investools Inc. SWIM (64) 132 (65) Ista Pharmaceuticals ISTA (15) 48 18 Koppers Holdings KOP (70) 671 177 Life Sciences LSR (25) 205 23 Lodgenet Entertainment LNET (54) 274 8 Maxxam Inc MXM (212) 1,010 28 McMoran Exploration MMR (47) 446 (31) Mediacom Comm MCCC (110) 3,620 (269) Mervelo Maddux P MMPI (45) 508 N.A. Molecular Insight MIPI (14) 13 1 National Cinemed NCMI (575) 308 (1) Navisite Inc. NAVI (2) 101 (9) Neurochem Inc NRM (11) 83 43 New River Pharma NRPH (110) 152 (19) New World Restaurant NWRG (75) 133 (8) Nexstar Broadcasting NXST (73) 725 22 NPS Pharm Inc. NPSP (193) 225 145 ON Semiconductor ONNN (138) 1,441 309 Paetec Holding PAET (288) 237 22 Protection One PONN (80) 444 (5) Qwest Communication Q (1,534) 20,701 (1,440) Radnet Inc. RDNT (79) 131 2 Ram energy Resources RAME (28) 162 3 Regal Entertainment RGC (20) 2,469 (315) Riviera Holdings RIV (28) 221 13 Rural Cellular RCCC (587) 1,362 183 Rural/Metro Corp. RURL (90) 293 44 Savvis Inc. SVVS (14) 640 145 Sealy Corp. ZZ (154) 1,021 61 Sipex Corp SIPX (8) 60 12 St. John Knits Inc. SJKI (52) 213 80 Station Casinos STN (187) 3,717 (50) Stelco Inc STE (83) 2,788 656 Sun-Times Media SVN (360) 900 (364) Switch & Data FA SDXC (20) 152 (8) Syntroleum Corp. SYNM (14) 44 29 Town Sports Int. CLUB (18) 436 (58) Unisys Corp. UIS (5) 3,913 317 Weight Watchers WTW (1,053) 1,019 (82) Western Union WU (172) 5,354 979 Westmoreland Coal WLB (121) 761 (67) Worldspace Inc. WRSP (1,603) 569 140 WR Grace & Co. GRA (467) 3,631 912 XM Satellite XMSR (445) 1943 (76) Xoma Ltd. XOMA (38) 91 43 YTB International YTBL (2) 29 (13) ********* 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. 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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, John Paul C. Canonigo, 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 ***