/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070515.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 15, 2007, Vol. 11, No. 114 Headlines 1031 TAX GROUP: Files for Chapter 11 Protection in New York 1031 TAX GROUP: Case Summary & 21 Largest Unsecured Creditors 1301-1307 NORTH CLYBORN: Voluntary Chapter 11 Case Summary 178 KNEELAND: Case Summary & Three Largest Unsecured Creditors ABENGOA BIOENERGY: S&P Cuts Rating on $90 Million Facility to B- AEROFLEX INC: Moody's Puts B2 Corporate Family Rating AJ PROPERTIES: Case Summary & 20 Largest Unsecured Creditors ALLIED HOLDINGS: Wants to Restructure $315-Mil. Goldman Sachs Loan AMERIRESOURCE TECH: De Joya Griffith Raises Concern Doubt AQUILA INC: Posts $24.3 Million Net Loss in Quarter Ended March 31 ASBURY AUTOMOTIVE: Net Income Lowers to $433,000 in 1st Qtr 2007 BELL MIRCROPRODUCTS: Revenues Up to $1 Billion in First Qtr. 2007 BILL GILES: Case Summary & 20 Largest Unsecured Creditors BNC MORTGAGE: Moody's Puts Low-B Ratings to Class B Certificates CARDTRONICS INC: March 31 Balance Sheet Upside-Down by $42.2 Mil. CITADEL BROADCASTING: Earns $6.7 Million in Quarter Ended March 31 CITADEL BROADCASTING: S&P Puts Corporate Credit Rating at B COMPUDYE INC: Case Summary & 20 Largest Unsecured Creditors COX ENT: Discovery Channel Deal Cues S&P's Positive Outlook CWABS ASSET-BACKED: Moody's Rates Class B Certificates at Ba1 DAIMLERCHRYSLER: Cerberus Takes Over Majority Interest in Chrysler DUKE FUNDING: Fitch Affirms BB+ Rating on $32 Million Notes EPICOR SOFTWARE: Completes Offering with $230MM Total Notes Issued FAIRFAX FINANCIAL: S&P Rates Proposed $464.2MM Senior Notes at BB GEOKINETICS INC: Prices Public Offering of 4.5 Mil. Common Stock GTP ACQUISITION: Moody's Rates $129.9 Million Notes at Low-B HANCOCK FABRICS: Equity Panel Organizational Meeting Set on May 22 HANOVER COMPRESSOR: Calls For Redemption of $8MM Convertible Notes HEALTH MANAGEMENT: Earns $65 Million in Quarter Ended March 31 INNUITY INC: Posts $1.6 Million Net Loss in Quarter Ended March 31 INTERACT HOLDINGS: Gruber & Company Raises Concern Doubt ION MEDIA: W. Lawrence Patrick to Resign from Board of Directors ISP CHEMCO: Shareholder Cash Distribution Cues S&P to Cut Ratings JAMES RIVER: Increasing Leverage Prompts S&P to Junk Credit Rating JARDEN CORPORATION: Earns $1.4 Million in First Quarter 2007 JER CRE: Moody's Puts Low-B Ratings to Class F & G Obligations JOAN FABRICS: Proposes Bidding Procedures for Sale of Assets KNOLL INC: First Quarter 2007 Net Income Increases to $14.8 Mil. LEGENDS GAMING: Weak Performance Prompts S&P's Stable Outlook MAGNA ENTERTAINMENT: Unit Completes Credit Refinancing MASTR ASSET: Moody's Puts Low-B Ratings on Two Cert. Classes MORGAN STANLEY: Moody's Lifts Ratings on Class H Certificates MUELLER WATER: Plans Offering of $350 Million of Senior Notes MUELLER WATER: Earns $17.9 Million in Quarter Ended March 31 MUELLER WATER: S&P Rates Proposed $1.1 Billion Facilities at BB NEOMEDIA TECH: Posts $11.5 Million Net Loss in Qtr Ended March 31 NEW CENTURY: Wants to Hire Manatt Phelps as Securitization Counsel NEW CENTURY: Taps Sheppard Mulling as Special Litigation Counsel NEW CENTURY: Gets Court Okay to Hire Lazard as Financial Advisor PEOPLE'S CHOICE: RFC Selling 1,029 Res'l. Mortgage Loans on May 22 PETROL OIL: Weaver & Martin Raises Going Concern Doubt POLYPORE INC: Earns $6.2 Million in Quarter Ended March 31 POLYPORE INC: S&P Rates Proposed $470MM Credit Facilities at B+ PRO-BUILD: S&P Places All Ratings Under Negative CreditWatch REDDY ICE: Incurs $10.2 Million Net Loss in First Quarter 2007 RELIANCE INSURANCE: Supplemental Claims Resolution Procedures OK'd REMINGTON ARMS: S&P Removes Watch and Lifts Credit Rating to B- RFSC SERIES 2004-RP1: Moody's Cuts Two Tranches to Low-B RITE AID: Fitch Rates Proposed $1.22 Billion Notes at CCC+ ROSEDALE CLO: S&P Rates $12.5 Million Class E Notes at BB ROTECH HEALTHCARE: Posts $21.8 Mil. Net Loss in Qtr Ended March 31 SHARP HOLDINGS: Loan Add-On Prompts S&P to Revise Rating to B- SHIFT NETWORKS: Obtains CCAA Protection in Alberta SINCLAIR BROADCAST: Affiliate to Redeem $300 Million of 2012 Notes SINCLAIR BROADCAST: Closes $300MM Convertible Sr. Notes Offering SMARTIRE SYSTEMS: Declares Changes in Board & Leadership Structure STARBOUND RE: S&P Rates Proposed $66.5 Million Bank Loan at BB STRATUS SERVICES: Posts $85,982 Net Loss in Quarter Ended March 31 TALCOTT NOTCH: S&P Puts Class A-4 Notes' Rating under Pos. Watch TOUSA INC: Posts $66 Million Net Loss in Quarter Ended March 31 UNIGENE LABORATORIES: Restructures $15.7 Million Credit Balance UNION PLANTERS: Fitch Affirms BB Ratings on Class B5 Certificates UNIVERSAL HOSPITAL: March 31 Balance Sheet Upside-Down by $89.3MM UNIVERSAL HOSPITAL: UHS Merger Plans to Offer $230MM Senior Notes UNIVERSAL HOSPITAL: S&P Holds B+ Rating and Removes Negative Watch UNIVISION COMMUNICATIONS: Fitch Cuts Issuer Default Rating to B VALHI INC: Earns $26.1 Million 2007 First Quarter VALHI INC: Rhode Island Litigation Cues S&P to Cut Rating to B+ WARNER MUSIC: To Cut 400 Jobs to Realign Workforce WEST CORP: March 31 Balance Sheet Upside-Down by $2.1 Billion WEST CORP: S&P Holds B+ Rating on $135 Million Loan Add-On WEST PENN: Fitch Lifts Rating on $735 Million Revenue Bonds to BB WESTAR ENERGY: Prices Public Offering of 2047 Mortgage Bonds WORLDGATE COMM: Posts $4.6 Million Net Loss in Qtr Ended March 31 * Fried Frank Adds John Sorkin as Partner in New York * Hunton & Williams Names Two Attorneys as Washington Counsel * King & Spalding Adds Two Senior Counsel in Houston Office * Large Companies with Insolvent Balance Sheets ********* 1031 TAX GROUP: Files for Chapter 11 Protection in New York ----------------------------------------------------------- The 1031 Tax Group, LLC and 16 its affiliates filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of New York in order to obtain necessary time to reorganize their affairs. The Debtors cited liquidity issues in the decision to file, including the actions taken by several financial institutions in blocking access to 1031 Tax Group's funds. The Debtors estimate on a balance sheet basis that their assets exceed their obligations to customers and others. Prior to the filing, the owner of 1031 Tax Group, Edward H. Okun, personally signed a guaranty for repayment of notes owed to the Debtors by entities controlled by him. Mr. Okun has agreed in principal to collateralize his personal guarantee with a collateral package in order to facilitate repayment of creditors' claims. The Debtors anticipate that the proposed collateral package will be agreed to and documented within a short period of time. Paul Traub, Esq. and Norman N. Kinel, Esq., co-chairs of Dreier LLP's Bankruptcy & Corporate Reorganization Department, represent the Debtors in their restructuring efforts. In addition, the Debtors have named James M. Lukenda of Huron Consulting Group as Chief Restructuring Officer. The Huron team led by Mr. Lukenda replaces five 1031 TG executives who recently left the company. "Huron is moving forward with the full support of The 1031 Tax Group to address the companies' business and liquidity issues in an orderly way," stated Mr. Lukenda. 1031 Tax Group, LLC is a "roll-up" of several qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. 1031 TAX GROUP: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: The 1031 Tax Group, L.L.C. 10800 Midlothian Turnpike 300 Richmond, VA 23235 Bankruptcy Case No.: 07-11448 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Security 1031 Services, L.L.C. 07-11447 1031 Advance 132, L.L.C. 07-11449 1031 Advance, Inc. 07-11450 1031 TG Oak Harbor, L.L.C. 07-11451 Atlantic Exchange Company, Inc. 07-11452 Atlantic Exchange Company, L.L.C. 07-11453 Exchange Management, L.L.C. 07-11454 Investment Exchange Group, L.L.C. 07-11455 National Exchange Accommodators, L.L.C. 07-11456 National Exchange Services Q.I., Ltd. 07-11457 National Intermediary, Ltd. 07-11458 NRC 1031, L.L.C. 07-11459 Real Estate Exchange Services, Inc. 07-11460 Rutherford Investment, L.L.C. 07-11461 Shamrock Holdings Group, L.L.C. 07-11462 Type of Business: The Debtor is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. See http://www.ixg1031.com/ Chapter 11 Petition Date: May 14, 2007 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtors' Counsel: Norman N. Kinel, Esq. Dreier L.L.P. 499 Park Avenue New York, NY 10022 Tel: (212) 328-6100 Fax: (212) 328-3801 Estimated Assets: Over $100 Million Estimated Debts: Over $100 Million Debtors' Consolidated List of 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dr. and Mrs. Bordoni trade debt $10,645,330 478 Sequoia Way Los Altos, CA 94024 Capitol Aggregates, Ltd. trade debt $8,115,800 c/o Gaydos, J. P.O. Box 33240 San Antonio, TX 78265 Newton Bayard Limited trade debt $4,358,266 Partnership 75 Second Avenue Needham, MA 02494 Siox Realty Corp. trade debt $3,945,904 212-07 33rd Road Bayside, NY 11361 William Newton trade debt $3,362,955 405 Country Lane San Antonio, TX 78209 Red Bird Ranch, Ltd.; trade debt $3,354,494 Reeves Hollimon c/o Hollimon, R. 300 Austin Highway, Suite 200 San Antonio, TX 78209 409 Sherman Way, L.L.C. trade debt $3,325,778 c/o Ms. Candace Graham 1 Applewood Lane Portolo Valley, CA 94028 L.J. Ambassador, Ltd. trade debt $3,175,439 c/o Mr. Andy Hull P.O. Box 6051 San Antonio, TX 78209 L.J. 904 West Avenue, Ltd., trade debt $3,052,463 L.J. Castle Hill Ventures, Ltd. and L.J. Villa Marquis, Ltd. c/o Hull, Andy P.O. Box 6051 San Antonia, TX 78209 Joyce Green trade debt $2,842,424 86 Beach Lane Westhampton Beach, NY 11979 Mr. and Mrs. DonKonics trade debt $2,817,123 926 Deer Creek Road Martinez, CA 94553 N.P. 1300, L.L.C. trade debt $2,481,027 76 South Orange Avenue South Orange, NJ 07079 Vista Enclave, Ltd. trade debt $2,365,496 1117 Eldridge Parkway Houston, TX 77077 Huber, G./CellTex trade debt $2,139,316 c/o Huber, Greg 2230 Pipestone Drive San Antonio, TX 78232 Quirk Infiniti, Inc. trade debt $2,077,438 442 Quincy Avenue Braintree, MA 02184 Charles & Maria Sourmaidas trade debt $1,970,200 P.O. Box 351 Adamsville, RI 02801 James Collins trade debt $1,919,653 5602 Grape Street Houston, TX 77096 Ward Enterprises, L.L.C. trade debt $1,900,029 c/o Peter Gosch 32 Dawn Heath Drive Littleton, CO 80127 Cody Dutton, Trustee trade debt $1,772,384 Cody Dutton Testamentary Trust 1499 South Main Street Boeme, TX 78006 Myane, G. trade debt $1,649,822 c/o Myane, Geoffrey P.O. Box 1876 Uvalde, TX 78820 Garson trade debt $1,647,545 c/o Nona A. Garson 51 Bisell Road Lebanon, NJ 08833 1301-1307 NORTH CLYBORN: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: 1301-1307 North Clyborn, L.L.C. 405 North Wabash, Suite 3504 Chicago, IL 60611 Bankruptcy Case No.: 07-08728 Chapter 11 Petition Date: May 13, 2007 Court: Northern District of Illinois (Chicago) Judge: Jack B. Schmetterer Debtor's Counsel: Paul M. Bach, Esq. 1955 Shermer Road, Suite 150 Northbrook, IL 60062 Tel: (847) 564-0808 Fax: (847) 564-0985 Total Assets: $2,600,600 Total Debts: $2,022,000 The Debtor did not submit a list of its largest unsecured creditors. 178 KNEELAND: Case Summary & Three Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 178 Kneeland Street Realty, L.L.C. 229 Berekley Street Boston, MA 02116 Bankruptcy Case No.: 07-12959 Type of Business: The Debtor owns real estate. Chapter 11 Petition Date: May 11, 2007 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Stewart F. Grossman, Esq. Looney & Grossman, L.L.P. 101 Arch Street Boston, MA 02110 Tel: (617) 951-2800 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's XX Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Pheonix Mortgage $362,784 c/o Madoff & Khoury, L.L.P. Pine Brooks Office Park Foxboro, MA 02035 Jon Burke $350,000 Steven Ross, Esq. 376 Boylston Street Boston, MA 02116 City of Boston $7,000 P.O. Box 1626 Boston, MA 02105 ABENGOA BIOENERGY: S&P Cuts Rating on $90 Million Facility to B- ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Abengoa Bioenergy of Nebraska LLC's $90 million senior secured credit facility to 'B-' from 'B'. The rating remains on CreditWatch. At the same time, Standard & Poor's revised the CreditWatch implications to developing from negative. ABNE is constructing and will operate an 88-million gallon-per- year dry-mill ethanol plant in Ravenna, Neb. "The downgrade is a result of longer delays in the construction of the facility and, subsequently, increasing concerns regarding ABNE's ability to service its debt prior to construction completion," said Standard & Poor's credit analyst Arthur Simonson. The CreditWatch implications were revised to developing to reflect the uncertainty surrounding the rating if or when the project achieves substantial completion and can start producing cash flow. The CreditWatch listing will be resolved upon substantial completion of the plant. AEROFLEX INC: Moody's Puts B2 Corporate Family Rating ----------------------------------------------------- Moody's Investors Service assigned first-time long-term ratings to Aeroflex Inc. (corporate family rating of B2) and a stable ratings outlook. A newly formed entity, Acquisition Co., will acquire all of the outstanding shares of Aeroflex, a publicly traded microelectronics and test and measurement provider that will continue as the surviving company. Net proceeds from the $475 million first lien term loan and $245 million second lien term loan together with the $60 million first priority revolver (undrawn at closing) will be used to finance Aeroflex's $1.2 billion buyout (including fees and expenses) in a highly leveraged transaction. The buyout, which is subject to shareholder approval, also consists of a $423 million cash equity investment from private equity sponsors, General Atlantic LLC and Francisco Partners. The B2 corporate family rating (CFR) reflects the company's: (i) very high financial leverage and weak credit protection measures following the leveraged buyout; (ii) limited asset protection from a very small base of pro forma tangible assets; (iii) potentially increasing competition longer-term from larger and well capitalized companies; (iv) exposure to aerospace and defense electronics end markets, which could experience changes in procurement policies or the types of products sourced by the government; and (v) money losing radar unit and break even synthetic test business. The rating takes into account Moody's Basket D hybrid security treatment for the $390 million of sponsor preferred equity in which 25% of the preferred stock is treated as debt-like and 75% is treated as equity-like. As such, Moody's adjustments incorporate the concomitant increase in debt, equity and interest expense on Aeroflex's balance sheet and income statement. The rating also considers Aeroflex's leading market position as the primary or sole source provider in niche markets, strong intellectual property portfolio with proprietary technology, highly visible and diversified revenue base with no defense platform exposures, relatively stable competitive landscape, mission-critical nature of its products with high switching costs resulting in stable gross margins approaching 50% and consistent operating profitability and positive free cash flow generation. The B2 CFR also considers Moody's expectation that Aeroflex's operating performance will benefit from a broadening of applications from existing technologies, the secular outsourcing trend from primary contractors and increasing dollar content as the company moves up the value chain in the satellite and medical platforms. Although Aeroflex is expected to be free cash flow positive over the near term, Moody's does not expect the company to substantially repay debt over the next 12 months. Hence, the stable outlook reflects the company's prospects for modest improvement in financial leverage and interest coverage metrics. This is anticipated to be driven by Aeroflex's strong market position, relatively stable operating cash flows even during recessionary episodes and attractive industry dynamics, offset by the money losing radar business and potentially increasing competition. The following first time ratings were assigned: * Corporate Family Rating -- B2 * Probability of Default Rating -- B2 * $60 Million Senior Secured First Priority Revolver due 2013 -- Ba3 (LGD3, 32%) * $375 Million Senior Secured First Priority Term Loan (US Tranche) due 2014 -- Ba3 (LGD3, 32%) * $100 Million Senior Secured First Priority Term Loan (UK Tranche) due 2014 -- Ba3 (LGD3, 32%) * $245 Million Senior Secured Second Priority Term Loan due 2015 -- Caa1 (LGD5, 84%) The ratings outlook is stable. Headquartered in Plainview, NY, Aeroflex Inc. is a specialty provider of microelectronics and test and measurement products to the aerospace, defense, wireless, broadband and medical markets. For the twelve months ended March 31, 2007, revenues were $577 million. AJ PROPERTIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: A.J. Properties, Inc. P.O. Box 324 Goffstown, NH 03045 Bankruptcy Case No.: 07-10983 Type of Business: The Debtor owns a country club. Chapter 11 Petition Date: May 13, 2007 Court: District of New Hampshire (Manchester) Debtor's Counsel: Eleanor Wm. Dahar, Esq. Victor W. Dahar Professional Association 20 Merrimack Street Manchester, NH 03101 Tel: (603) 622-6595 Total Assets: $6,251,165 Total Debts: $4,269,317 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Brian and Judy Streeter $97,390 143 Cambridge Bedford, NH 03110 Hitch a Flag, L.L.C. promissory $34,000 161 Gorham Pond Road note Goffstown, NH 03045 Bank of America Business Loan 161 Gorham Pond $28,691 P.O. Box 15026 Road Wilmington, DE 19850-5026 Goffstown, NH 03045 New Hampshire Department back taxes $22,188 of Revenue Lesco, Inc. $22,109 Verizon Yellow Pages Co. $12,509 V.F. Imagewear $8,319 Precision Temperature $7,834 Control R&R Products, Inc. $6,402 Callaway Golf $6,305 Advanta Business Card $6,091 Connor & Associates, P.C. $5,775 Law Offices of Rodney L. $5,557 Stark Favorite Foods, Inc. $5,508 Agar Supply Co. $5,393 U.S. Bancorp. $5,049 Capital One, F.S.B. $4,822 Grigg Brothers $4,736 Cutter & Buck $4,083 Affiliated H.V.A.C. Service, $3,978 L.L.C. ALLIED HOLDINGS: Wants to Restructure $315-Mil. Goldman Sachs Loan ------------------------------------------------------------------ Allied Holdings Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of Georgia to restructure a $315,000,000 senior secured bank financing arranged by Goldman Sachs Credit Partners L.P. As reported in the Troubled Company Reporter on May 7, 2007, the Court entered a final order authorizing the Debtors to enter and execute the Goldman Sachs financing commitment letter. Pursuant to a commitment letter, Goldman Sachs agreed to arrange the refinancing of the Debtors' $260,000,000 debtor-in-possession credit facility with General Electric Capital Corp., Morgan Stanley Senior Funding, Inc., and Marathon Structured Finance Fund. Pursuant to a Secured Super-Priority Debtor In Possession and Exit Credit and Guaranty Agreement entered into on March 30, 2007, Goldman Sachs, acting as lead arranger and syndication agent and The CIT Group/Business Credit, Inc., acting as administrative agent and collateral agent, and a syndicate of financial institutions agreed to provide the Debtors first priority credit facilities in the aggregate principal amount of up to $315,000,000 to, among others, refinance the GECC DIP Facility. The Final Order approved the Goldman Sachs Credit Agreement and other related documents, including a fee letter dated March 16, 2007. Pursuant to the Fee Letter, the First Lien Syndication Agent was permitted to change the terms, conditions, pricing or structure of the Credit Agreement within certain narrow parameters if the changes are reasonably necessary to facilitate successful syndication. Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, relates that the Debtors and the First Lien Lenders have negotiated a restructuring of the facilities to achieve a successful syndication of the Financing. In particular, the Debtors want to: (a) restructure the Goldman Sachs Financing into: -- first lien credit facilities in an aggregate principal amount of $265,000,000 under an Amended and Restated First Lien Secured Super-Priority Debtor in Possession and Exit Credit and Guaranty Agreement; and -- a second lien credit facility in an aggregate principal amount of $50,000,000, under a Second Lien Secured Super-Priority Debtor in Possession and Exit Credit and Guaranty Agreement; and (b) grant liens and superpriority claims. AHI and certain of its debtor subsidiaries are the named Borrowers, and each Borrower and each subsidiary of AHI other than Haul Insurance Limited is a Guarantor under the Agreements. Goldman Sachs will serve as Syndication Agent, and The CIT Group/Business Credit, Inc., will serve as Administrative Agent and as Collateral Agent under the First Lien Agreement. Goldman Sachs will serve as Lead Arranger and Syndication Agent, Administrative Agent and Collateral Agent under the Second Lien Agreement. Terms and Conditions of the Restructured Financing Pursuant to the Original Credit Agreement, the Debtors obtained $315,000,000 senior secured bank financing consisting of: (a) a $230,000,000 senior secured term-loan facility; (b) a $50,000,000 senior secured synthetic letter-of-credit facility; and (c) a $35,000,000 senior secured revolving credit facility. The restructuring of the Financing contemplates that the Borrowers will borrow funds from, and incur debt to, the Second Lien Lenders in accordance with the terms and conditions of the Second Lien Credit Documents up to the aggregate amount of $50,000,000, and the Guarantors will guaranty the borrowings under the Second Lien Credit Documents. Specifically, the Borrowers have requested and the Second Lien Lenders have agreed to extend to the Borrowers a term loan facility in an aggregate amount not to exceed $50,000,000 to be used to repay a portion of the loans under the First Lien Credit Facilities on the Closing Date. As a result of the repayment, the loans due under the First Lien Credit Facilities will not exceed $265,000,000. The obligations of the Borrowers under the Second Lien Credit Documents and the obligations of the Guarantor Subsidiaries under the Second Lien Subsidiary Guaranty will be secured on a second priority basis by liens on substantially all the assets of the Borrowers and the Guarantor Subsidiaries. Mr. Winsberg notes that the weighed average interest rate chargeable under the First Lien Credit Documents and the Second Lien Credit Documents is within the range of rates previously approved by the Court in connection with the Goldman Sachs Financing and otherwise complies with the narrow parameters for changes to terms, conditions, pricing and structure set forth in the Fee Letter approved by the Court. Importantly, Mr. Winsberg relates, the contemplated Financing restructuring retains the option of the Debtors to convert the Financing into exit financing. Further, he says, no new fees will be charged in association with the restructuring of the Financing. Lenders to Stop Funding Absent Restructuring Since entry of the Final Order, Goldman Sachs has been actively syndicating the $315,000,000 first-lien refinancing. Goldman Sachs has identified a sufficient number of financial institutions to fully and successfully syndicate the loan. Many of the financial institutions, however, have indicated that if the $315,000,000 financing is not quickly restructured and syndicated, they will cease setting funds aside and will no longer be interested in participating, Mr. Winsberg tells the Court. At the Debtors' behest, the Court held an emergency hearing to consider approval of the restructuring of the $315,000,000 financing. The Court has entered an interim order authorizing the Debtors to amend the Goldman Sachs Financing, and borrow funds from, and incur debt to, the Second Lien Lenders up to the aggregate amount of $50,000,000. 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. 48; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) Plan Update The Court confirmed the Debtors' Joint Plan of Reorganization with the Yucaipa Entities and Teamsters National Automobile Transportation Industry Negotiating Committee on May 12, 2007. The Plan Proponents expect their Joint Plan to become effective on June 1, 2007. AMERIRESOURCE TECH: De Joya Griffith Raises Concern Doubt --------------------------------------------------------- De Joya Griffith & Company LLP, of Las Vegas, Nevada, expressed substantial doubt on AmeriResource Technologies Inc.'s ability to continue as a going concern after auditing the company's financial statement for the years ended Dec. 31, 2006, and 2005. De Joya reported that the company has suffered recurring losses from operations, negative working capital, and negative cash flows from operations. For the year ended Dec. 31, 2006, the company posted a net loss of $2,331,532, as compared with a net loss of $2,037,576 in the previous year. The company's revenues grew to $892,424 from $149,321 in the prior year, while operating loss increased to $3,567,229 from $2,586,936 in the prior year. The company reported increased expenses for the year ended Dec. 31, 2006: consulting expenses grew to $2,150,882 from $1,273,475 in the prior year; general and administrative expenses grew to $687,792 from $490,446 in the prior year; and expenses from employees' salaries increased to $506,584 from $100,000 in the prior year. At Dec. 31, 2006, the company suffered an uneven balance sheet with a negative working capital brought about by total current assets of $207,045 and total current liabilities of $1,834,115. The company also reported $1,383,739 in stockholders' deficit from total assets of $1,096,947 and total liabilities of $2,480,686. For the year ended Dec. 31, 2006, the company's account payables were $208,242. The company had notes payable to other parties in the amount of $1,464,608, and notes payable to related parties of $350,157, inclusive of accrued interest totaling $83,998. The company plans to decrease its liabilities and increase its assets by acquiring additional income producing companies in exchange for its securities, as well as attempting to settle additional payables with equity. The company intends to continue to improve shareholder equity by acquiring income-producing assets, which are generating profits. A full-text copy of the company's 2006 annual report is available for free at http://ResearchArchives.com/t/s?1efd About AmeriResource The Las Vegas, Nevada-based AmeriResource Technologies, Inc. - (OTC BB: AMREE) -- http://www.ameriresourcetechnologies.com/-- operates online auction drop-off locations that provide the general public to sell items on eBay. It provides software design and product development for businesses that sells items on eBay. AmeriResource also offers software and hardware system, and self- serve system called Point of Sales, which offers integrated system, including restaurant management tools/menus that offer various reports for inventory and labor control. The company was incorporated in 1989 as KLH Engineering Group, Inc. and changed its name to AmeriResource Technologies Inc. in 1996. AQUILA INC: Posts $24.3 Million Net Loss in Quarter Ended March 31 ------------------------------------------------------------------ Aquila, Inc. reported a net loss of $24.3 million for the quarter ended March 31, 2007, compared to a net loss of $1.1 million in 2006. Sales for the quarter were $444 million in 2007 versus $431 million in 2006. "Earnings in the first quarter of 2007 were reduced because of lower earnings from discontinued operations relating to our former gas utilities that were sold in 2006 and increased fuel and purchased power costs in Aquila's electric utility businesses due to a number of significant unplanned outages at some area coal- fired generating facilities during a colder than normal February," said Richard C. Green, Aquila's chairman and chief executive officer. "While service to customers was unaffected due to our ability to call on other resources, the change in power supply came at an increased and unexpected cost." The impact to Aquila from the unavailable resources totaled over 600 megawatts. Specific units included the company's Sibley #3 power plant along with Kansas City Power & Light's Iatan facility, Westar's Jeffrey Energy Center and a purchase power contract with Nebraska Public Power District. Segment EBITDA Continuing electric utility operations in Missouri and Colorado and natural gas utility operations in Iowa, Kansas, Nebraska and Colorado reported 2007 EBITDA of $35.3 million, down $13.4 million from $48.7 million reported in 2006. Electric Utilities EBITDA decreased $17.4 million from 2006, while Gas Utilities reported an EBITDA increase of $4 million. Merchant Services loss before interest, taxes, depreciation and amortization of $4.1 million was $3.3 million less than the loss of $7.4 million reported in 2006, and the Corporate and Other loss of $10.3 million in 2007 was $4.7 million greater than the $5.6 million loss in 2006. Electric Utilities Gross profit was $56.3 million in 2007, a decrease of $15.7 million from 2006. This decrease resulted primarily from an increase in the net cost of fuel and purchased power, including the unfavorable settlement of price hedges on natural gas used as fuel for generation. The increases in fuel and purchased power costs were driven by unplanned or extended plant outages and curtailed delivery under a purchased power contract due to transmission constraints at plants noted previously and a surge in wholesale power prices. Partially offsetting these factors was a rate settlement in Missouri in early 2006. In addition to the decrease in gross profit, the company experienced higher operating and maintenance expenses. Higher labor and benefit costs and increased maintenance costs related to the plant outages caused Electric Utilities operation and maintenance expenses to increase over 2006. Partially offsetting the decreased gross profit and increased operation and maintenance expense was increased other income. Other income increased $4 million primarily due to the receipt of a $3.2 million breakup fee on the termination of the Aries purchase and increased Allowance for Funds Used During Construction associated with the construction of Iatan 2. Gas Utilities Gross profit was $63.7 million in 2007, $7.7 million higher than 2006 due to favorable weather and other volume increases compared to 2006 and an interim rate increase in Nebraska. Partially offsetting the increase in gross profit were increased operation and maintenance expenses related to outside services, labor and other operating costs. Merchant Services Merchant Services reported a gross loss of $3.4 million in 2007, compared to a gross loss of $11.2 million a year earlier. The improvement in gross loss from 2006 was a result of exiting the Elwood tolling contract in June 2006, which eliminated $9.6 million of capacity payments for the quarter. The decreased gross loss was offset in part by an increase in operation and maintenance expenses primarily due to the 2006 reversal of allowances for bad debts. Corporate and Other Corporate and Other reported a 2007 EBITDA loss of $10.3 million, compared to a $5.6 million loss in 2006. First quarter 2007 results include fees associated with the pending merger with a subsidiary of Great Plains Energy Incorporated. Discontinued Operations Discontinued Operations includes the company's former Kansas electric utility operations; its former Michigan, Minnesota, and Missouri gas utility operations; its former Merchant Services peaking plants in Illinois; and its former Everest Connections telecommunications business. The company's discontinued operations reported EBITDA of $8.8 million in 2007, which was a $35.4 million decrease from $44.2 million reported in 2006. The EBITDA decrease was due primarily to the sale of the gas utility properties and Everest Connections. Full-text copies of the company's financial statements for the quarter ended March 31, 2007 is available for free at: http://ResearchArchives.com/t/s?1f0e About Aquila Inc. Based in Kansas City, Missouri, Aquila Inc. (NYSE:ILA) -- http://www.aquila.com/-- owns electric power generation and operates electric and natural gas transmission and distribution networks serving over 900,000 customers in Colorado, Iowa, Kansas, Missouri and Nebraska. * * * As reported in the Troubled Company Reporter on Feb. 12, 2007, Standard & Poor's Ratings Services placed its 'B-2' short-term corporate credit rating on Aquila Inc. on CreditWatch with positive implications. ASBURY AUTOMOTIVE: Net Income Lowers to $433,000 in 1st Qtr 2007 ---------------------------------------------------------------- Asbury Automotive Group Inc. reported a net income of $433,000 on total revenues of $1.4 billion for the first quarter ended March 31, 2007. The company had a net income of $12.6 million for the first quarter ended March 31, 2006. Income from continuing operations for the first quarter ended March 31, 2007, was $2.4 million. These results include an after- tax charge of $11.1 million related to a debt refinancing and after-tax charges of $1.8 million, related to the planned retirement next month of current chief executive officer, Kenneth B. Gilman. Summary financial information for the first quarter of 2007, as compared to last year's first quarter, included: -- Total revenue for the quarter increased $49.8 million to $1.4 billion. Total gross profit was $224.1 million, up 7%. -- Same-store retail revenue and gross profit increased 4% and 7%, respectively. -- New vehicle retail revenue and gross profit increased 2% and 4%, respectively. New retail unit sales were up 1%. Total new unit sales were up 2%. -- Used vehicle retail revenue and gross profit both increased 11%. Used retail unit sales were up 9%. -- Parts, service and collision repair revenue increased 3%, and gross profit rose 6%. -- Net finance and insurance revenue increased 10% and dealership-generated F&I per vehicle retailed rose 9%. -- Selling, general and administrative expenses as a percentage of gross profit were 78.7% for the quarter. Adjusted for the charge related to the retirement of the current CEO, SG&A expenses were 77.4% of gross profit for the quarter, an 80 basis-point improvement compared to 78.2% a year ago. The company had total assets of about $2 billion, total liabilities of about $1.4 billion, and total stockholders' equity of about $569.4 billion at March 31, 2007. Full-text copies of the company's 2007 first quarter results are available for free at http://ResearchArchives.com/t/s?1f0f Charles R. Oglesby, who will succeed Mr. Gilman as president and CEO on May 4, said, "The results for the first quarter again demonstrate the strength of Asbury's well-balanced business model. As the numbers reveal, it's the depth and breadth of the performance that's most impressive. All four-business lines had record first quarter gross profit results, with two of them, fixed operations and used vehicles, having all-time record quarters. Overall, our gross profit margin improved to 15.8%, the highest in the Company's history. And, equally as important, our strong performance was not confined to any one geographic region, as each of our four regions delivered record first quarter results." J. Gordon Smith, senior vice president and chief financial officer, said, "This quarter was Asbury's tenth in a row of adjusted SG&A expense leverage improvement. That ratio improved another 80 basis points in the first quarter versus the prior year quarter, and we still see additional opportunity to continue to leverage our expense structure." Mr. Smith continued, "Other highlights of the quarter surrounded the refinancing of our 9% senior subordinated notes. We completed the tender offer for these notes in March, accepting $238.1 million of tendered notes, and refinanced them with a successful private placement of $150 million in 7.625% senior subordinated notes and $115 million in 3% convertible notes. The combination of these transactions is expected to reduce our annual debt service by $6.5 million. In addition, concurrently with the convertible notes offering, we repurchased 1.3 million shares of common stock, fully utilizing the capacity under our stock repurchase program which was designed to off-set dilution related to stock-based compensation." About Asbury Automotive Group Asbury Automotive Group Inc., headquartered in New York City, is an automobile retailer in the U.S. Asbury operates through nine geographically concentrated, individually branded "platforms." These platforms currently operate 100 retail auto stores, encompassing 140 franchises for the sale and servicing of 35 different brands of American, European and Asian automobiles. The company offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts and service contracts. * * * As reported in the Troubled Company Reporter on Mar. 14, 2007, Moody's Investors Service assigned a B3 rating to Asbury Automotive Group's proposed $150 million senior subordinated notes and affirmed existing ratings. The outlook has been revised to positive from stable. BELL MIRCROPRODUCTS: Revenues Up to $1 Billion in First Qtr. 2007 ----------------------------------------------------------------- Bell Microproducts Inc. reported its preliminary first quarter 2007 revenue in a range of $990 million to $1 billion, an increase of 14% to 16% from first quarter 2006 revenue of $867 million. The company's European operations posted solid revenue growth of about 13% and represented roughly 44% of the company's total first quarter revenue. In Latin America, revenues increased about 14% and represented 14% of total revenue in the quarter. North American revenue increased more than 20% and generated approximately 42% of the quarter's revenue. The Solutions category of product and services sales grew 27% to 53% of total sales in the first quarter, as compared to 48% in first quarter 2006, driven primarily by strong computer platform and storage systems sales and the acquisition of ProSys. The Components and Peripherals category grew approximately 6% and represented 47% of sales in the first quarter, as compared to 52% in first quarter 2006. Disk drive revenue increased about 20% year over year, increased slightly from fourth quarter 2006 levels, and represented about 30% of total revenue. Commenting on the preliminary first quarter results, W. Donald Bell, president and chief executive officer of Bell Microproducts, said, "We are pleased with our strong revenue growth again this quarter. Our international businesses in Europe and Latin America performed well in the first quarter and both generated double- digit revenue growth. In our North American operations, we experienced substantial revenue growth in our higher margin Industrial and Enterprise sales channels. This was partially offset by revenue decreases in our US commercial sales channel as we continue to focus on more profitable products and customers. In its second quarter of results as part of Bell Microproducts, ProSys Information Systems generated revenue in line with our expectations. Our solid start to the new year gives us confidence that we are well positioned for continued growth for the balance of 2007 and beyond." Bell Microproducts has also received a written notification from the Nasdaq Listing and Hearing Review Council that the Listing Council has stayed the previously disclosed Feb. 21, 2007, delisting decision of the Nasdaq Listing Qualifications Panel, which gave the company until May 22, 2007, to become current in its SEC periodic reports and file any required restatements. The Listing Council has taken review of the Qualification Panel's prior decision and has given the company until June 29, 2007, to submit additional information for the Listing Council to consider in its review. The company said it is unable at this time to provide additional quantitative information regarding its quarterly results or any further comparison of such results to first quarter 2006 until the previously announced restatement of its financial statements for certain prior periods, the review of its historical stock option grants, and the impact on the 2006 audit has been completed. A special committee of the board of directors has been appointed to conduct an evaluation of the company's stock option practices with the assistance of independent counsel and independent accounting consultants. The accounting adjustments expected as a result of the review cannot be quantified until completion of the independent review. About Bell Microproducts Headquartered in San Jose, California, Bell Microproducts Inc. (Nasdaq: BELM) -- http://www.bellmicro.com/-- is an international, value-added distributor of high-tech products, solutions and services, including storage systems, servers, software, computer components and peripherals, as well as maintenance and professional services. Bell is a Fortune 1000 company that has operations in Argentina, Brazil, Chile and Mexico. * * * In March 2007, the company received a Nasdaq Staff Determination notice because the company did not file its Annual Report 10-K for the period ended Dec. 31, 2006. The Nasdaq Listing and Hearing Review Council expects a response to why the company failed to file its annual report. Nasdaq Listing Qualifications Panel extended until May 22, 2007, the company's request for continued listing. In addition, the company received waivers in relation to the delivery of certain of its quarterly information and documentation until May 31, 2007, under credit agreements with Wachovia Capital Finance Corp., Wachovia Bank, National Association, and the Teachers' Retirement Systems of Alabama. BILL GILES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Bill Giles Motor Co., Inc. dba Bill Giles Chevrolet 750 Goldfield Avenue Yerington, NV 89447 Bankruptcy Case No.: 07-50574 Type of Business: The Debtor is a dealer of Chevrolet vehicles. See http://www.billgileschevrolet.com/ Chapter 11 Petition Date: May 12, 2007 Court: District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Alan R. Smith, Esq. 505 Ridge Street Reno, NV 89501 Tel: (775) 786-4579 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nevada Department of Taxation sales tax $750,000 555 East Washington Avenue, Suite 1300 Las Vegas, NV 89101 Anna Giles loan $125,000 951 Belmont Place Pittsburg, CA 94565 Internal Revenue Service federal $100,000 Stop 5028LVG withholding 110 City Parkway tax Las Vegas, NV 89106 Kristina Nelson loan $92,000 Maurice Simon goods and services $42,000 Terry Mercurio loan $20,000 Pacificare insurance premium $6,385 Nevada State Bank loan $6,000 Lyon County Treasurer tax $5,000 Chase $4,000 Deals & Wheels goods and services $3,300 Yerington Auto Parts goods and services $2,600 Plaza Auto Parts goods and services $2,500 Best Deals goods and services $2,500 Jones West Ford goods and services $2,387 Local Pages goods and services $661 Sparks Auto Wrecking goods and services $650 Saturn of Reno goods and services $354 Reno Dodge goods and services $70 Giles' Goldfield, L.L.C. lease on business $1 premises BNC MORTGAGE: Moody's Puts Low-B Ratings to Class B Certificates ---------------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by BNC Mortgage Loan Trust 2007-2 and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by adjustable-rate and fixed-rate subprime mortgage loans acquired by BNC Mortgage, Inc. The ratings are based primarily on the credit quality of the loans and on the protection from subordination, overcollateralization, excess spread, an interest rate swap and an interest rate cap agreement. Moody's expects collateral losses to range from 5.15% to 5.65%. JPMorgan Chase Bank, National Association will service the loans, and Aurora Loan Services LLC will act as master servicer. Moody's has assigned JPMorgan Chase Bank, National Association its top servicer quality rating of SQ1 as a primary servicer of subprime mortgage loans. Furthermore, Moody's has assigned Aurora Loan Services LLC its servicer quality rating of SQ1- as master servicer. The complete rating actions are: BNC Mortgage Loan Trust 2007-2 -- Mortgage Pass-Through Certificates, Series 2007-2 * Class A1, Assigned Aaa * Class A2, Assigned Aaa * Class A3, Assigned Aaa * Class A4, Assigned Aaa * Class A5, Assigned Aaa * Class M1, Assigned Aa1 * Class M2, Assigned Aa2 * Class M3, Assigned Aa3 * Class M4, Assigned A1 * Class M5, Assigned A2 * Class M6, Assigned A3 * Class M7, Assigned Baa1 * Class M8, Assigned Baa1 * Class M9, Assigned Baa2 * Class B1, Assigned Ba1 * Class B2, Assigned Ba2 CARDTRONICS INC: March 31 Balance Sheet Upside-Down by $42.2 Mil. ----------------------------------------------------------------- Cardtronics Inc. recorded $363.6 million in total assets, $329.1 million in total liabilities, $76.7 million in redeemable preferred stock, and $42.2 million in total stockholders' deficit at March 31, 2007. The company had a negative working capital of $15.9 million at March 31, 2007, with total current assets of $30.7 million and total current liabilities of $46.6 million at March 31, 2007. The company had a net loss for the first quarter of 2007 of $3.4 million, which compares to a net loss of $3.1 million for the same period in 2006. The 2007 net loss amount reflects the aforementioned incremental selling, general, and administrative costs, as well as higher depreciation expense amounts associated with the company's ongoing Triple-DES ATM upgrade and replacement program. The 2006 net loss amount includes a $2.8 million impairment charge related to a previously acquired domestic ATM portfolio. For the quarter ended March 31, 2007, its revenues totaled $74.5 million, representing a 7.8% increase over the $69.1 million in revenues recorded during the first quarter of 2006. The year-over-year increase in revenues was primarily attributable to an increase in ATM operating revenues from the company's United Kingdom operations as a result of additional ATM deployments and higher withdrawal transactions per ATM when compared to the same period in 2006. Also contributing to the increase was an increase in ATM operating revenues associated with the company's Mexico operations, which also resulted from additional ATM deployments. Key Statistics Average transacting ATMs for the first quarter of 2007 totaled 25,228, representing a decrease of 3.7% when compared to the 26,188 average transacting ATMs during the same period in 2006. Average cash withdrawal transactions per ATM per month during the first quarter of 2007 increased 7.9% to 412 from 382 during the same period in 2006. Capital expenditures during the quarter totaled $13.9 million. "Our first quarter results were generally where we expected them to be," commented Jack Antonini, chief executive officer of Cardtronics. "As previously communicated, we expect 2007 to be a year of significant investment for Cardtronics as we look to take advantage of what we believe are favorable trends in our key markets. On the domestic front, we have already converted over 3,100 existing company-owned ATMs to our in-house transaction- processing switch during 2007. This conversion effort, which is currently ahead of schedule, will ultimately allow us to offer advanced functionality and services on all of our domestic company-owned ATMs, and is critical to our strategic initiative to offer additional ATM solutions to financial institutions throughout the United States. Internationally, we deployed over 300 ATMs in high-volume retail locations in the United Kingdom and Mexico during the quarter, further building on the strong foundations that we have created in those markets." Recent highlights include: -- The conversion of over 3,100 company-owned ATMs to the company's in-house transaction processing switch during 2007. -- Net growth during the quarter of over 130 machines, or 9.5%, in the company's high-volume U.K. ATM fleet. This represents a substantial increase in our growth rate in this important market. -- The successful rollout of approximately 190 additional ATMs in Mexico, the majority of which were deployed under the company's long-term agreements with OXXO and FRAGUA. -- The signing of a multi-year bank branding agreement with Guaranty Bank to brand 24 ATMs in CVS/pharmacy locations across the Minneapolis, Minnesota area. -- The announcement of the planned expansion of the company's Allpoint surcharge-free network to include the company's ATMs located in the U.K. -- The recent amendment of our credit facility, which, among other things, reduced the interest rate charged on amounts outstanding under the facility and increased the amount of capital expenditures that the company can incur on an annual basis. Guidance for 2007 The company continues to expect revenues of $310 million to $325 million, gross profits of $79 million to $83 million, and adjusted EBITDA of $53 million to $57 million for the year ending Dec. 31, 2007. Furthermore, the company continues to expect capital expenditures to total about $55 million in 2007, net of minority interest. About Cardtronics Headquartered in Houston, Texas, Cardtronics Inc.-- http://www.cardtronics.com/-- is a non-bank owner/operator of ATMs with more than 25,000 locations. The company operates in every major U.S. market, at about 1,500 locations throughout the U.K. and over 500 locations in Mexico. * * * Cardtronics Inc.'s 9-1/4% Senior Subordinated Notes due 2013 carry Moody's Investors Service's 'B3' rating and Standard & Poor's 'B-' rating. CITADEL BROADCASTING: Earns $6.7 Million in Quarter Ended March 31 ------------------------------------------------------------------ Citadel Broadcasting Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q for the quarter ended March 31, 2007. For the quarter ended March 31, 2007, the company reported net income of $6,762,000 down from $9,525,000 for the quarter ended March 31, 2006. Broadcasting revenue for the quarter was $92,920,000 down from $93,999,000 a year ago. At March 31, 2007, the company's balance sheet showed $2.15 billion in total assets and $1.06 billion in total liabilities. Merger Agreement On Feb. 6, 2006, the company and Alphabet Acquisition Corp., a wholly-owned subsidiary, entered into an Agreement and Plan of Merger with The Walt Disney Company and ABC Radio Holdings, Inc., formerly known as ABC Chicago FM Radio, Inc., a Delaware corporation and wholly-owned subsidiary of Walt Disney. The Agreement and Plan of Merger was subsequently amended as of November 19, 2006. Pursuant to and subject to the terms and conditions contained in the ABC Radio Merger Agreement, the company will combine its business with ABC Radio, which includes 22 radio stations and the ABC Radio Network. The combination is structured as a reverse Morris Trust transaction. Prior to the Merger, Walt Disney will distribute ownership of ABC Radio to Walt Disney shareholders in a spin-off transaction. As of Nov. 19, 2006, the transaction was expected to be valued at approximately $2.6 billion, which was comprised of $1.5 billion in Company common stock to be received by Walt Disney shareholders and cash to be retained by TWD On March 22, 2007, the Federal Communications Commission adopted an Order granting the transfers of control of the ABC radio stations and renewal applications, which Order became effective on April 4, 2007. In granting its approval of the Merger, the FCC has required the company to divest up to eleven stations in seven markets and place the stations in trust immediately upon closing. The company does not believe these divestitures will be material to its ongoing business. On April 17, 2006, Citadel and ABC Radio Holdings, Inc. received from the Federal Trade Commission notice of early termination of the waiting period under the Hart-Scott- Rodino Act. On May 4, 2007, the IRS issued to Walt Disney the necessary ruling for the Merger to be completed as a reverse Morris Trust transaction. The parties expect that ABC Radio Holdings, Inc. will also receive a ruling from the IRS that is substantially similar in all material respects to the ruling provided to Walt Disney; however, the ruling to ABC Radio Holdings, Inc. has not been issued yet by the IRS. A full-text copy of the company's Form 10-Q for the quarter ended March 31, 2007, is available for free at: http://ResearchArchives.com/t/s?1f03 About Citadel Broadcasting Citadel Broadcasting Corp. -- http://www.citadelbroadcasting.com/ -- (NYSE:CDL) is a radio broadcaster focused primarily on acquiring, developing and operating radio stations throughout the United States. The company owns and operates 165 FM and 58 AM radio stations in 46 markets, located in 24 states across the United States. CITADEL BROADCASTING: S&P Puts Corporate Credit Rating at B ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Las Vegas-based Citadel Broadcasting Corp. The outlook is positive. At the same time, Standard & Poor's assigned its bank loan and recovery rating to Citadel's proposed $2.65 billion senior secured credit facilities. The credit facilities are rated 'B+', at the same level as the corporate credit rating on the company. The recovery rating of '3', indicates the expectation of/or meaningful (50%-80%) recovery in the event of a payment default. The facilities consist of a $200 million revolving credit facility and a $600 million term loan A (both due 2013) and a $1.85 billion term loan B due 2014, of which approximately $1.53 billion is expected to be borrowed at closing. Prior to closing, Citadel could decide to use the remaining balance on term loan B to refinance its existing convertible subordinated notes due 2011; however, upon closing this excess capacity will no longer be available. Proceeds from the transaction will be used to finance the acquisition of the ABC Radio Business, refinance Citadel's existing debt, and issue a special distributution to pre-merger Citadel shareholders. Pro forma for the proposed transaction, total debt outstanding as of Dec. 31, 2006, was $2.458 billion. "If Citadel continues to generate good discretionary cash flow," said Standard & Poor's credit analyst Michael Altberg, "and reduces its consolidated debt to EBITDA ratio to a level closer to 6x while maintaining sufficient liquidity, we could raise the rating." COMPUDYE INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Compudye, Inc. 44-22 54th Avenue Maspeth, NY 11378 Bankruptcy Case No.: 07-42579 Type of Business: The Debtor is engaged in dyeing cotton broadwoven fabrics, manmade fiber & silk broadwoven fabric, and raw stock, yarn & narrow fabric. Chapter 11 Petition Date: May 13, 2007 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Wayne M. Greenwald, Esq. 99 Park Avenue, Suite 800 New York, NY 10016 Tel: (212) 983-1922 Fax: (212) 973-9494 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Joseph Catalano loans $600,000 52-35 240th Street Douglaston Hills, NY Paul Shafran loans $600,000 69-81 Lions Head Road Boca Raton, FL 33496 N.Y.C. Water Board water $308,005 P.O. Box 410 Church Street Stration New York, NY 10008-0410 44 Maspeth Associates, L.P. rent $157,149 Keyspan Energy Delivery $119,209 Igor Korsunsky loan $80,000 Lyntech Industries, Inc. materials $71,302 Morlot Color & Chemical materials $62,415 Independent Chemical Corp. materials $54,950 T.M. Mechanical Corp. services $35,000 President Container, Inc. supplies $18,676 Schoenberg Sales Company material $7,998 B.I.S. Trucking, Inc. services $3,918 Apple Printing, Inc. $3,481 Cinncinati Laundry Equipment supplies $3,218 Burton Plumbing Supply supplies $2,359 Rome Machine & Foundry supplies $2,241 Key Material Handling equipment lease $1,734 Equipment Group Research Corp. supplies $1,160 Barstan Sales Co. materials $1,065 COX ENT: Discovery Channel Deal Cues S&P's Positive Outlook ----------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Atlanta, Georgia-based diversified media company Cox Enterprises Inc. and its subsidiaries to positive from stable. S&P also affirmed the 'BBB-' corporate credit and all other ratings, including the 'BB+' senior unsecured debt rating on CEI. Total debt outstanding was about $15.1 billion as of Dec. 31, 2006. "The outlook revision reflects our expectations for improving credit measures," said Standard & Poor's credit analyst Allyn Arden. This follows CEI's announcement that it is exchanging its 25% stake in the Discovery Channel for a new entity, which will include the Travel Channel, and $1.275 billion in cash. S&P expects the cash proceeds to be applied to debt reduction. As such, total debt to EBITDA on an operating lease-adjusted basis and including unfunded pensions and other postemployment benefit obligations should decline to the low-3x area from about 3.8x at year-end 2006. The outlook revision also recognizes CEI's healthy operating performance, most notably at cable operating subsidiary Cox Communications Inc. and at its automobile auction business Manheim. These two entities account for about 70% and 14% of EBITDA, respectively. During 2006, consolidated revenue increased 9% while EBITDA grew 15%, partially due to strong cable industry trends, which S&P expects will continue in the foreseeable future as telephony and advanced services continue to grow. The ratings on CEI and its subsidiaries continue to reflect the company's diversified portfolio of cable TV systems, auto auctions, and media businesses, which have solid operating margins and healthy free cash flow generating characteristics; the strong investment-grade characteristics of the cable TV unit, which is the third-largest operator in the U.S.; improving credit measures; and significant asset value. Tempering factors include weaker industry trends in advertising-dependent businesses, particularly newspapers, capital spending requirements in the cable business, and longer-term competitive threats from local telephone companies in the cable segment. S&P view the credit profile of CEI and its subsidiaries on a consolidated basis, given the economic and strategic importance of the units to the parent. CWABS ASSET-BACKED: Moody's Rates Class B Certificates at Ba1 ------------------------------------------------------------- Moody's Investors Service has assigned a Aaa rating to the senior certificates issued by CWABS Asset-Backed Certificates Trust 2007- BC2 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Quick Loan Funding Inc. (25%), Wilmington Finance Incorporated (30%), and other mortgage lenders (45%) originated, adjustable-rate (70%) and fixed-rate (30%) subprime residential mortgage loans acquired or originated by Countrywide Home Loans, Inc. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, excess spread, overcollateralization, and an interest-rate swap agreement. Moody's expects collateral losses to range from 4.75% to 5.25%. Countrywide Home Loans Servicing LP will act as servicer and master servicer. The complete rating actions are: -- CWABS Asset-Backed Certificates Trust 2007-BC2 * Class 1-A, Assigned Aaa * Class 2-A-1, Assigned Aaa * Class 2-A-2, Assigned Aaa * Class 2-A-3, Assigned Aaa * Class 2-A-4, Assigned Aaa * Class A-R, Assigned Aaa * Class M-1, Assigned Aa1 * Class M-2, Assigned Aa2 * Class M-3, Assigned Aa3 * Class M-4, Assigned A1 * Class M-5, Assigned A2 * Class M-6, Assigned A3 * Class M-7, Assigned Baa1 * Class M-8, Assigned Baa1 * Class M-9, Assigned Baa2 * Class B, Assigned Ba1 DAIMLERCHRYSLER: Cerberus Takes Over Majority Interest in Chrysler ------------------------------------------------------------------ The Board of Management of DaimlerChrysler AG has decided, subject to the approval of the Supervisory Board and the relevant authorities, on the future concept for the Chrysler Group and the realignment of DaimlerChrysler AG. Completion of the transaction is subject to the satisfaction of customary closing conditions, including the receipt of regulatory approvals and Cerberus financing arrangements. Structure of the Transaction An affiliate of private equity firm Cerberus Capital Management, L.P., New York, will make a capital contribution of $7.4 billion in return for an 80.1 percent equity interest in the future new company, Chrysler Holding LLC. DaimlerChrysler will hold a 19.9 percent equity interest in the new company. Chrysler Holding LLC will hold 100 percent each of the future Chrysler Corporation LLC, which produces and sells Chrysler, Dodge and Jeep(R) vehicles, and the future Chrysler Financial Services LLC, which provides financial services for these vehicles in the NAFTA region. Of the total capital contribution of $7.4 billion, $5.0 billion will flow into the industrial business (Chrysler Corporation LLC) and $1.05 billion will flow into the financial services business in order to strengthen the equity base of both businesses. DaimlerChrysler will receive the balance of $ 1.35 billion. In addition, DaimlerChrysler will grant a loan of $0.4 billion to Chrysler Corporation LLC. According to the agreement, upon the closing of the transaction, DaimlerChrysler will transfer the industrial business of the Chrysler Group completely free of debt. Due to the Chrysler Group's anticipated negative cash flow until closing in connection with its restructuring plan, the transaction will give rise to a cash outflow of $1.6 billion for DaimlerChrysler. The overall net cash outflow resulting from the transaction will therefore be $0.65 billion. In addition, DaimlerChrysler will have to discharge long-term liabilities of the Chrysler Group in connection with the transaction. This will result in prepayment compensation of approximately $878 million, to be borne by DaimlerChrysler. The usual transaction costs will also be incurred. The Chrysler Group's financial obligations for pension and healthcare benefits towards its employees and the employees of the financial services business related to the Chrysler Group will be retained by the Chrysler companies. The pension plans are significantly over-funded at present. Effects on Key Figures The transaction will have these effects on DaimlerChrysler AG: * In total, current estimates indicate that net profit according to IFRS in 2007 will be reduced by $4.1-5.4 billion; * Due to the deconsolidation of the Chrysler companies and the resulting reduction in the balance-sheet total, the equity ratio of DaimlerChrysler's industrial business is expected to increase to more than 40 percent by the beginning of 2008; * There will be no changes relating to the bonds issued and guaranteed by DaimlerChrysler AG. In the financial services business for the Chrysler, Jeep and Dodge brands, Cerberus will take over the financing previously provided by DaimlerChrysler AG; * The 19.9 percent equity interest held by DaimlerChrysler AG in the new company Chrysler Holding LLC will be included after closing at equity in the Van, Bus, Others segment; and * The closing of the transaction is expected to take place in the third quarter of 2007. Commenting on the transaction, Dr. Dieter Zetsche, Chairman of the Board of Management of DaimlerChrysler AG and Head of the Mercedes Car Group, said, "We're confident that we've found the solution that will create the greatest overall value - both for Daimler and Chrysler. With the transaction, we have created the right conditions for a new start for Chrysler and Daimler." Ron Gettelfinger, President of the United Autoworkers said, "The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler. We are pleased that this decision has been made. Because our members and the management can now focus entirely on the development and manufacture of quality products for the future of the Chrysler Group." John W. Snow, Chairman of Cerberus Capital Management, L.P., stated that, "We welcome Chrysler into the Cerberus family of companies and believe Cerberus will be a good home for Chrysler. Cerberus believes in the inherent strength of U.S. manufacturing and of the U.S. auto industry. Most importantly, we believe in Chrysler." Mr. Snow continued, "We would like to thank DaimlerChrysler for their good stewardship of this American icon over the last decade. We are aware that Chrysler faces significant challenges, but we are confident that they can and will be overcome. A private investment firm like Cerberus will provide management with the opportunity to focus on their long-term plans rather than the pressures of short-term earnings expectations." Business Progress According to the automaker, in nearly 10 years as DaimlerChrysler, a lot has been done to move the businesses forward. The synergies possible between Mercedes-Benz and Chrysler have been fully utilized. Additional potential for collaboration is limited between two businesses operating in such different market segments. The strong volatility and pressure on margins in the Chrysler Group's North American core market have an increasingly negative impact on DaimlerChrysler's overall profitability and share-price development. The Chrysler Group has made substantial progress in recent years. For example, production hours per vehicle have fallen from 48 hours in 2001 to just over 30 at present. Quality has improved by more than 40 percent over the past six years. Since 2002, more than $10 billion has been invested in new production facilities and technologies. And with 34 new models since 2001, Chrysler has one of the youngest product lines in the industry. "As a result, Chrysler today is structurally more sound than its North American based competitors. And with Cerberus as a partner, Chrysler will have the best chances of utilizing its full potential," Mr. Zetsche said. Ongoing Collaboration The company says that existing projects with the Mercedes Car Group will be continued, for example in the development of conventional and alternative drive systems, purchasing, and sales and financial services outside the NAFTA region. Furthermore, the company discloses that a Joint Automotive Council will be established in which representatives of both sides will assess and decide on the potential of new and current projects. The Council will be led by board-level members from each company. "We very much look forward to our continued cooperation as business partners, as we want to continue to reap the mutual benefits of working together. That's one of the reasons why we're retaining a 19.9 percent equity position in Chrysler," Mr. Zetsche noted. New Daimler AG Due to the new corporate structure, the name of DaimlerChrysler AG is to be changed to Daimler AG. A decision on this is to be taken by the shareholders at an Extraordinary Shareholders' Meeting probably in fall 2007. The Board of Management of the new company will be reduced to six members. Tom LaSorda, Eric Ridenour and Tom Sidlik will leave the Board of Management with the Group's sincere thanks. There will no longer be a separate board position for procurement in the new Daimler AG. In the future, all procurement activities will be directly coordinated between the divisions. Within the Board of Management, Bodo Uebber will additionally assume overall responsibility for procurement. The leadership teams of the Mercedes Car Group, the Truck Group and Financial Services will remain unchanged, as will the teams in the vans and buses businesses. "We've done our homework in our corporate functions and in all of our divisions. As a result of our strategic review, we have a well-defined roadmap to lead us into a good future," Mr. Zetsche relates. The Mercedes Car Group will generate a return on sales of at least 7 percent this year, with higher rates to follow in the coming years. The Truck Group will achieve an average return on sales of 7 percent over the cycle as of 2008. This represents a return on net assets of approximately 30 percent. DaimlerChrysler is also a world leader and profitability benchmark for buses. And in the vans business, which is performing very well, the new Sprinter will continue the success story of its predecessor. The Financial Services division aims to earn a return on equity of more than 14 percent. Growth Perspectives "We have a strong starting position. We have an above-average financial power. And our future prospects are promising," Mr. Zetsche said. According to Mr. Zetsche, the Group has defined these main areas for continued growth: -- Further expansion in the core business, which means in the traditional segments that are the most profitable and have the highest growth rates, as well as exploiting new market opportunities on a regional basis; -- Continued development of innovative, customer-oriented and tailor-made services and activities, pursuing opportunities both up and down the value chain; and -- Strengthening leadership in sustainable, responsible and environmentally friendly technologies. By focusing on these three areas, Daimler's full potential is to be exploited and enterprise value is to be increased further through profitable and sustainable growth. Daimler intends to do this on its own, while continuing to benefit from opportunities of scale with Chrysler. About Daimler's goals, Mr. Zetsche said, "We will be the leading manufacturer of premium products and a provider of premium services in every market segment we serve worldwide. And we will pursue our commitment to excellence based on a common culture, a great heritage of innovation and pioneering achievements and - with Mercedes-Benz - the strongest automotive brand in the world." Tom LaSorda's Statement Commenting on the sale transaction, Tom LaSorda, Chrysler Corporation's president and chief executive officer, said in a press statement that, "We are confident that this transaction will create a standalone Chrysler that is financially stronger, with a winning combination of people, industry know-how, operational expertise and spirit of innovation that will accelerate the company's recovery, and help us regain our position as a competitive industry leader. Cerberus is the right strategic buyer for Chrysler, with a long- term commitment to Chrysler's growth and success. They are committed to working constructively with both union leadership and Chrysler's management team to help Chrysler realize its full potential. There are no new job cuts planned in connection with [the] transaction[. . .] . As a private company, Chrysler will be better positioned to focus on its long-term plan for recovery, rather than just short-term results. It will allow Chrysler to renew its focus on what has always made us special - our passion, creativity and commitment to delivering exciting Chrysler, Jeep and Dodge vehicles and quality Mopar parts to our customers, along with unparalleled customer service. With strong backing from Cerberus and a continued relationship with Daimler, Chrysler must demonstrate once and for all that we can win in this global marketplace. It is ours to win. And Chrysler has it in its DNA to do just that." Shearman & Sterling served as DaimlerChrysler AG's lead counsel in the transaction. Shearman & Sterling attorneys who rendered services for DaimlerChrysler are: Georg F. Thoma (partner, Corporate/M&A, Dusseldorf); John Madden and Jeffrey Lawrence (both partners, Corporate/M&A, New York; Kenneth Laverriere (partner, Executive Compensation, New York); Peter Blessing (partner, Tax, New York); and Fredric Sosnick (partner, Corporate, New York). Shearman & Sterling -- http://www.shearman.com/-- has been advising many of the world's leading corporations and financial institutions, governments and governmental organizations for more than 130 years. About Cerberus Capital Management Cerberus Capital Management, L.P., New York, is one of the largest private investment firms in the world, with approximately $23.5 billion under management in funds and accounts. Founded in 1992, Cerberus currently has significant investments in more than 50 companies that, in aggregate, generate more than $60 billion in annual revenues worldwide. About DaimlerChrysler Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The company's has locations in Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam and Australia. DaimlerChrysler lowered its operating profit forecast for full- year 2006 to be in the magnitude of EUR5 billion (US$6.4 billion) based on an expected full-year operating loss of approximately EUR1 billion (US$1.2 billion) for its Chrysler Group. 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. Chrysler Group will take additional production cuts in the third and fourth quarters to reduce dealer inventories and make way for its current product offensive. DUKE FUNDING: Fitch Affirms BB+ Rating on $32 Million Notes ----------------------------------------------------------- Fitch Ratings affirms ten classes of notes issued by Duke Funding High Grade III Ltd. These affirmations are the result of Fitch's review process and are effective immediately: -- $443,500,000 Class A-1A notes affirmed at 'AAA'; -- $1,306,500,000 Class A-1B1 notes affirmed at 'AAA'; -- $1,306,500,000 Class A-1B2 notes affirmed at 'AAA'; -- $102,000,000 Class A-2 notes affirmed at 'AAA'; -- $8,000,000 Class B-1 notes affirmed at 'AA+'; -- $8,000,000 Class B-2 notes affirmed at 'AA-'; -- $44,000,000 Class C-1 notes affirmed at 'A+'; -- $44,000,000 Class C-2 notes affirmed at 'A-'; -- $12,000,000 Class D notes affirmed at 'BBB'; -- $32,000,000 Subordinated notes affirmed at 'BB+'. Duke High Grade III is a collateralized debt obligation, which closed Aug. 3, 2005, and is managed by Duke Funding Management, LLC. Duke High Grade III is a revolving transaction and will exit its reinvestment period in August 2009. The portfolio is composed of residential mortgage-backed securities and commercial mortgage- backed securities. Since the last review on Feb. 24, 2006, the transaction has been actively managed through the collateral quality and coverage tests which have changed very little. The weighted average rating factor has remained stable at 1.22 ('AA-/A+') from 1.24 ('AA- /A+'). The class A/B overcollateralization (OC) ratio, class C OC ratio, and class D OC ratio are currently at 107.07%, 102.26% and 101.63%, respectively; from 107.08%, 102.26% and 101.64% at the last review. Additionally, there has been only positive rating migration within the portfolio and trading gains have caused credit enhancement levels to increase. There are no defaulted assets, and only 0.25% of the assets are rated lower than 'A-'. The ratings of the class A-1A notes, class A-1B1 notes, class A-2 notes, class B-1 notes, and class B-2 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the class C-1 notes, class C-2 notes, and class 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 class A-1B2 notes addresses the likelihood that investors will receive only full and timely payments of interest as per the governing documents. The rating of the Subordinated Notes addresses the likelihood that investors will receive only the ultimate payment of principal by the stated maturity date. EPICOR SOFTWARE: Completes Offering with $230MM Total Notes Issued ------------------------------------------------------------------ Epicor Software Corporation disclosed that the underwriters of its offering of $200 million in aggregate principal amount of 2.38% convertible senior notes due in 2027 have exercised in full their overallotment option to purchase $30 million of additional notes, bringing the total amount of the notes issued to $230 million. The issuance of the additional notes closed Tuesday, May 8, 2007. The notes will pay interest semiannually at a rate of 2.38% per annum until May 15, 2027. The notes will be convertible, under certain circumstances, into cash or, at the company's option, cash and shares of the company's common stock, at an initial conversion rate of 55.26 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $18.10 per share. The initial conversion price represents a 30% premium over the last reported sale price of the company's common stock on May 2, 2007, which was $13.92 per share. Epicor estimates that the net proceeds from this offering will be approximately $222.3 million after deducting discounts, commissions and estimated expenses associated with the offering. Epicor expects the offering to be accretive to its fiscal 2007 earnings per diluted share. On May 8, 2007, Epicor used approximately $94 million of the net proceeds to repay in full the company's term loan outstanding under its credit facility. The balance of the net proceeds will be used for: a) working capital; b) capital expenditures; c) other general corporate purposes, which may include funding acquisitions of businesses, technologies or product lines, although, Epicor currently has no commitments or agreements for any such specific acquisition; and d) the repurchase of outstanding shares of its common stock, through the remaining net proceeds. About Epicor Software Corporation Headquartered in Irvine, California, Epicor Software Corporation (Nasdaq: EPIC) -- http://www.epicor.com/-- is dedicated to providing integrated enterprise resource planning, customer relationship management and supply chain management software solutions to midmarket companies around the world. Founded in 1984, the company serves over 20,000 customers in more than 140 countries, providing solutions in over 30 languages. The company leverages innovative technologies like Web services in developing end-to-end, industry-specific solutions for manufacturing, distribution, enterprise service automation, retail and hospitality that enable companies to immediately drive efficiency throughout business operations and build competitive advantage. With the scalability and flexibility to support long- term growth, Epicor's solutions are complemented by a full range of services, providing a single point of accountability to promote rapid return on investment and low total cost of ownership. Epicor is a registered trademark of Epicor Software Corporation. Other trademarks referenced are the property of their respective owners. * * * As reported in the Troubled Company Reporter on April 23, 2007, Standard & Poor's Rating Services raised its corporate credit rating on Irvine, California-based Epicor Software Corp., to 'BB-' from 'B+'. The outlook is stable. FAIRFAX FINANCIAL: S&P Rates Proposed $464.2MM Senior Notes at BB ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' senior debt rating to Fairfax Financial Holdings Ltd.'s (BB/Negative/--) proposed $464.2 million, 7.75% senior notes due in 2022. At the same time, Standard & Poor's assigned its preliminary 'BB' senior unsecured debt, 'B+' subordinated debt, and 'B' preferred stock ratings to FFH's $750 million universal shelf, from which this issue is a drawdown. The new debt issuance is expected to be exchanged for the existing senior notes outstanding of $464.2 million due in 2012, and therefore leverage figures are expected to be stable with zero incremental debt. The interest rate on the existing notes is 7.75% "The ratings on FFH and its related core entities reflect the negative views of qualitative areas of governance, risk controls, and enterprise risk management, which contribute to the negative outlook," noted Standard & Poor's credit analyst Damien Magarelli. "In contrast to these negative factors are the company's good competitive position, improving earnings, good and improving capitalization, and strong liquidity." Reserves, recoverables, and financial leverage have all improved in the past few years and are not viewed as significant negatives to the rating. About Fairfax Financial Based in Toronto, Ontario, Fairfax Financial Holdings Ltd. (TSX: FFH;NYSE: FFH) -- http://www.fairfax.ca/-- is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance, investment management and insurance claims management. The company's U.S. subsidiary, Crum & Forster -- http://www.cfins.com/-- is based in Morristown, New Jersey. Crum & Forster is a commercial property and casualty insurance company that writes a broad range of commercial coverages. Its subsidiary Seneca Insurance provides property and casualty insurance to small businesses and certain specialty coverages. The company also has subsidiaries in Hong Kong through Falcon Insurance and Singapore through First Capital. Cunningham Lindsey Group Inc. -- http://www.cunninghamlindseygroup.com/-- of which Fairfax has an 81% interest in provides a wide range of independent insurance claims services, including claims adjusting, appraisal and claims and risk management services, through a worldwide network of branches in Canada, the United States, the United Kingdom, continental Europe, the Far East, Latin America and the Middle East. GEOKINETICS INC: Prices Public Offering of 4.5 Mil. Common Stock ---------------------------------------------------------------- Geokinetics Inc. has priced its underwritten public offering of 4.5 million shares of its common stock, par value $.01 per share, at a public offering price of $28 per share, before underwriting discounts and commissions. The shares are offered by Geokinetics. Geokinetics and one existing stockholder have granted the underwriters a 30-day option to purchase up to an additional 675,000 shares of common stock to cover over-allotments, if any. Geokinetics will use the net proceeds from this offering: a) to redeem the $110 million aggregate principal amount of Second Priority Senior Secured Floating Rate Notes due 2012 it issued in December 2006, including principal, premium and accrued interest; and b) to repay a portion of its revolving credit facility. The joint book-running managers for the public offering are RBC Capital Markets Corporation and UBS Investment Bank. Raymond James & Associates Inc. and Howard Weil are co-managers for the offering. A registration statement relating to these securities has been filed with, and declared effective by, the Securities and Exchange Commission on May 10, 2007. The offering of these securities was made only by means of a written prospectus, copies of which may be obtained by contacting: -- RBC Capital Markets Corporation 17th Floor No. 60 South 6th Street Minneapolis, MN 55402 Tel: (612) 371-2818 Fax: (612) 371-2837 -- UBS Investment Bank Attn: Clint Lauriston, 299 Park Avenue New York, NY 10171 Tel: (888) 827-7275 About Geokinetics Inc. Based in Houston, Texas, Geokinetics Inc. (Amex: GOK) -- http://www.geokineticsinc.com/-- is a global provider of seismic acquisition and high-end seismic data processing services to the oil and gas industry. Geokinetics has an operating presence in North America and is focused on key markets internationally. Geokinetics operates in some of the most challenging locations in the world from the Arctic to mountainous jungles to the transition zone environments. * * * Moody's Investor's Services has placed a 'B3' rating on Geokinetic Inc.'s long term corporate family rating and probability of default. Standard and Poor's rated 'B-' the company's long-term foreign and local issuer credit. GTP ACQUISITION: Moody's Rates $129.9 Million Notes at Low-B ------------------------------------------------------------ Moody's Investors Service has assigned provisional ratings to eight classes of notes to be issued by GTP Acquisition Partners I, LLC. There are 2,074 towers on sites that are owned, leased or managed by subsidiaries of the issuer and which will be the primary collateral from which the cash flow stream for repayment of the notes is derived. Issuer: GTP Acquisition Partners I, LLC Issue: Mortgage-Backed Notes, Global Tower Series 2007-1 Anticipated Repayment Date: May 15, 2012 Rated Final Payment Date: May 15, 2037 -- $197,750,000 (total*) Class A-FX and Class A-FL Notes, (P)Aaa -- $45,200,000, Class B Notes, (P)Aa2 -- $45,200,000, Class C Notes, (P)A2 -- $45,200,000, Class D Notes, (P) Baa2 -- $16,950,000, Class E Notes, (P)Baa3 -- $56,500,000, Class F Notes, (P) Ba2 -- $73,450,000, Class F Notes, (P) B2 * Allocation of issuance between Class A-FX and Class A-FL to be determined at pricing. The notes are being offered in privately negotiated transactions without registration under the 1933 Act. The issuance was designed to permit resale under Rule 144A. HANCOCK FABRICS: Equity Panel Organizational Meeting Set on May 22 ------------------------------------------------------------------ Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold an organizational meeting for Hancock Fabric, Inc. and its debtor- affiliates' equity security holders at 1:30 p.m., on May 22, 2007, at the J. Caleb Boggs Federal Building, Room 5209, 844 King Street, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee of equity security holders in the Debtor's cases. A committee of equity security holders ordinarily consists of entities, willing to serve, that hold the seven largest amounts of equity securities of the debtor. Official creditors' committees and equity security holders committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors and equity holders they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the creditors' or equity holders' committee may ask the Bankruptcy Court to replace management with an independent trustee. If either committee concludes that the reorganization of the Debtors is impossible, the respective committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Hancock Fabrics Based in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. HANOVER COMPRESSOR: Calls For Redemption of $8MM Convertible Notes ------------------------------------------------------------------ Hanover Compressor Company called for redemption on May 30, 2007, of $8,121,050 aggregate principal amount of the Convertible Junior Subordinated Debentures Due 2029, which represents the remaining outstanding principal amount. All of the debentures are owned by Hanover Compressor Capital Trust and the Trust is required to use the proceeds received from such redemption to redeem $7,873,500 aggregate liquidation amount of its 7-1/4% Convertible Preferred Securities (CUSIP NO. 41076M3 02) and $247,550 aggregate liquidation amount of its 7-1/4% Convertible Common Securities. Hanover Compressor owns all of the Common Securities of the Trust. Prior to 5:00 p.m., Eastern Time, on May 29, 2007, holders may convert their Preferred Securities called for redemption on the basis of one Preferred Security per $50 principal amount of Debentures which will then be immediately converted into shares of Hanover Compressor common stock at a price of $17.875 per share, or 2.7972 shares of Hanover Compressor common stock per $50 principal amount. Cash will be paid in lieu of fractional shares. Alternatively, holders may have their Preferred Securities that have been called for redemption, redeemed on May 30, 2007. Upon redemption, holders will receive $50 for each of their Preferred Securities, plus accrued and unpaid distributions thereon from March 15, 2006 up to but not including May 30, 2007. Any of the Preferred Securities called for redemption and not converted on or before 5:00 p.m., Eastern Time, on May 29, 2007, will be automatically redeemed on May 30, 2007 and no further distributions will accrue. Holders of the Preferred Securities should complete the appropriate instruction form for redemption or conversion, as applicable, pursuant to The Depository Trust Company's book-entry system and follow such other directions as instructed by The Depository Trust Company. About Hanover Compressor Company Headquartered in Houston, Texas, Hanover Compressor Company (NYSE:HC) -- http://www.hanover-co.com/-- is in full service natural gas compression and provider of service, fabrication and equipment for oil and natural gas production, processing and transportation applications. Hanover sells and rents this equipment and provides complete operation and maintenance services, including run-time guarantees for both customer-owned equipment and its fleet of rental equipment. Founded in 1990 and a public company since 1997, Hanover's customers include both major and independent oil and gas producers and distributors as well as national oil and gas companies. It has locations in India, China, Indonesia, Japan, Korea, Taiwan, the United Kingdom, and Vietnam, among others. * * * As reported in the Troubled Company Reporter on Feb. 8, 2007, Standard & Poor's Ratings Services placed the 'BB-' corporate credit ratings on oilfield service company Hanover Compressor Co. and its related entity Hanover Compression L.P. on CreditWatch with positive implications. HEALTH MANAGEMENT: Earns $65 Million in Quarter Ended March 31 -------------------------------------------------------------- Health Management Associates Inc. reported net operating revenue of $1.1 billion, a net income of $65 million, and an income from continuing operations of $65.6 million for the first quarter ended March 31, 2007. In the comparable quarter of 2006, the company reported net operating revenue of $1 billion and a net income of $87.2 million, and an income from continuing operations of $86.7 million. Net operating revenue from continuing operations increased 13.3%, total admissions from continuing operations grew 2.6%, and adjusted admissions from continuing operations grew 4.8% in the first quarter as compared to the same quarter a year ago, reflecting the admissions contribution from hospitals acquired by HMA during the year ended Dec. 31, 2006, as well as HMA's de novo acute care hospital, which opened during the first quarter. Commencing in February 2007, HMA began discounting its gross charges for non-elective services by 60% for uninsured patients. Uninsured discounts for the quarter ended March 31, 2007 approximated $117.7 million. During the first quarter of 2007, HMA also revised its charity/indigent care policy such that beginning in January 2007, only those uninsured accounts for which the patient meets poverty guidelines are being written off as charity/indigent. Charity/indigent care write-offs for the first quarter ended March 31, 2007 were $26.2 million compared to $142.4 million for the same quarter a year ago. Days sales outstanding from continuing operations were 52 days at March 31, 2007, compared to 53 days at Dec. 31, 2006, and 66 days at March 31, 2006. The company paid special dividend on March 1, 2007, and its common stock started trading on an ex-dividend basis beginning on March 2, 2007, in accordance with NYSE rules. In light of the $10 per share dividend, HMA's regular dividend has been suspended indefinitely, reflecting HMA's strategic reallocation of cash flow to fund future operational objectives and to de-leverage its balance sheet. At March 31, 2007, the company's total assets were $4.6 billion, total liabilities were $4.5 billion, minority interests in consolidated entities were $63.8 million, and its total stockholders' equity was $71 million. The company held $98.6 million in cash and cash equivalents and $20.5 million in restricted funds at March 31, 2007. At the end of the first quarter 2007, the company's retained earnings decreased significantly to $16.9 million, from $2.3 billion at Dec. 31, 2006. Full-text copies of the company's 2007 first quarter report are available for free at http://ResearchArchives.com/t/s?1f04 Projections for 2007 Instead of an anticipated $250 million reduction in operating net revenue and corresponding bad debt expense, HMA now expects that for the balance of fiscal 2007 the implementation of these policies will reduce net operating revenue and bad debt expense by only $100 to $150 million. Therefore, HMA is revising its fiscal 2007 objectives to include between $4.1 billion to $4.3 billion in net operating revenue and 7.5% to 8.5% in bad debt expense as a percent of net operating revenue, respectively. All remaining fiscal year 2007 objectives previously announced on February 22, 2007 remain unchanged. Joint Ownership at Riverview On Jan. 23, 2007, HMA completed a transaction giving local physicians and HMA joint ownership of Riverview Regional Medical Center, HMA's 281-bed hospital located in Gadsden, Alabama. About 58 physicians now own an interest in the hospital and participate in its governance. HMA continues to own a majority interest in the hospital and to manage its day-to-day operations. This transaction arose in furtherance of HMA's core operating objective to enhance its relationships with physicians, which HMA is doing by collaborating operationally and in some select cases financially, to the mutual benefit of physicians, patients, communities, and its hospitals. Medical Center in Naples On Feb. 5, 2007, HMA's new 100-bed Physicians Regional Medical Center -- Collier Boulevard, located in Naples, Florida, opened its doors and began treating patients. This state-of-the-art de novo hospital provides general acute care hospital services to the residents of East Naples and southern Collier County, and includes all private rooms, spacious surgical suites, a 64-slice CT scanner and a separate 14-bed women's center. Combined with the existing Physicians Regional Medical Center -- Pine Ridge, the two hospitals form the Physicians Regional Health System, and are delivering high quality health care to all of Collier County and the surrounding region. About HMA Health Management Associates Inc. (NYSE: HMA) -- http://www.hma-corp.com/-- owns and operates general acute care hospitals in non-urban communities located throughout the United States. Upon completion of the pending transaction to sell the 125-bed Southwest Regional Medical Center, the 103-bed Summit Medical Center, and the 76-bed Williamson Memorial Hospital, HMA will operate 57 hospitals in 14 states with about 8,300 licensed beds. * * * Health Management Associates Inc.'s proposed senior secured credit facilities carry Moody's Investors Service Ba2 rating. HMA also carries Moody's Ba3 Corporate Family Rating. The outlook for the ratings is stable. INNUITY INC: Posts $1.6 Million Net Loss in Quarter Ended March 31 ------------------------------------------------------------------ Innuity Inc. reported a net loss of $1.6 million for the first quarter ended March 31, 2007, compared with a net loss of $2.5 million for the first quarter of 2006. Consolidated revenues for the first quarter of 2007 increased 6% to $5.3 million from $5 million reported during the same quarter of 2006. The significant improvement to net loss is based on the elimination of royalty payments, tightening of operating costs, and a decline in interest expense. "Innuity has already made substantial business and financial progress in 2007. In the second quarter, we closed $2 million in funding with Imperium Master Fund Ltd., which allowed us to settle a $1.2 million liability to Citysearch for $600,000," said John Wall, Innuity chairman and chief executive officer. "As we move towards achieving cash flow positive operations over the next several quarters we now have additional resources and an improved balance sheet to effectively drive our progress." Wall continued, "We also have successfully introduced a new product line and created customer growth momentum with our launch of LeadConnect, which provides cost-effective local search results for small businesses. Our new agreement with Amerivon should accelerate the penetration of our products into the mass retail market, and our agreement extension with International Merchant Services designates that our Creditdiscovery product will serve as their primary customer acquisition tool." At March 31, 2007, the company's balance sheet showed $7,084,644 in total assets and $11,464,964 in total liabilities, resulting in a $4,380,320 total stockholders' deficit. The company's balance sheet at March 31, 2007, also showed strained liquidity with $3,010,338 in total current assets available to pay $10,782,786 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?1f08 Going Concern Doubt As reported in the Troubled Company Reporter on March 19, 2007, Hansen, Barnett & Maxwell P.C. expressed substantial doubt about Innuity Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's accumulated deficit, losses from operations, negative cash flows from operating activities, negative working capital and capital deficiency. About Innuity Inc. Innuity Inc. (OTCBB: INNU) -- http://innuity.com/-- designs, acquires, and integrates applications to deliver software for small business. Its Internet technology is based on an affordable, on-demand model that allows small businesses to interact simply with customers, business partners, and vendors and to manage their businesses efficiently. Using the company's on- demand applications, small businesses can grow their revenues, reach and serve customers, and run everyday operations. INTERACT HOLDINGS: Gruber & Company Raises Concern Doubt -------------------------------------------------------- Gruber & Company LLC, of Lake Saint Louis, Missouri, expressed substantial doubt about Interact Holdings Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's inability to generate sufficient cash flows to meet its obligations and sustain its operations. For the year ended Dec. 31, 2006, the company posted a net loss of $2,820,095 compared to $1,750,382 in the prior year. Net sales increased to $3,198,853 from $2,193,685 in the previous year. The company's selling, general and administrative expenses, increased to $2,851,800 for the year ended Dec. 31, 2006, from $1,363,490 in the prior year. At Dec. 31, 2006, the company suffered negative working capital in its balance sheet with $894,506 in total current assets and $2,289,084 in total current liabilities. The company had stockholders' deficit of $1,463,467 from total assets of $3,633,246 and total liabilities of $5,096,713. Liquidity The company used $2,026,287 of net cash used in operating activities for the year ended Dec. 31, 2006, compared to $120,932 used in the prior year. Net cash flows used in investing activities were $66,606 for the year ended Dec. 31, 2006, compared to $9,753 in the prior year. The cash used in investing activities for the year ended Dec. 31, 2006, was for purchase of equipment and software. Net cash flows provided by financing activities were $2,272,219 for the year ended Dec. 31, 2006, compared to net cash used for financing activities of $71,189 in the prior year. The difference results primarily from proceeds of notes payable. The company had a working capital deficit of $1,658,760 as of Dec. 31, 2006. The company is anticipating raising funds through new issuances of stock or through private transactions. A full-text copy of the company's 2006 annual report is available for free at http://ResearchArchives.com/t/s?1ef7 About Interact Holdings Headquartered in Houston, Texas, Interact Holdings Group, Inc. -- (OTC BB: IHGRE) -- http://www.diversenet.com/-- engages in the building and operation of wireless networks, and the provision of consulting and engineering services to allow its customers to build and operate their networks. It also provides data collection and management services between remote devices called Machine to Machine services. The company was founded in 2001 as Diverse Networks, Inc. and changed its name to Jackson Rivers Company in December 2005. The company further changed its name to Interact Holdings Group, Inc. in December 2006. ION MEDIA: W. Lawrence Patrick to Resign from Board of Directors ---------------------------------------------------------------- ION Media Networks Inc. reported that on May 9, 2007, its Chairman of the Board of Directors W. Lawrence Patrick, said that he intends to announce his resignation from the Board of Directors on June 18, 2007. The effective date of Mr. Patrick's resignation has not been determined, but is presently expected to be at the end of August 2007. ION Media Networks Inc. (AMEX: ION) -- http://www.ionmedia.tv/-- owns and operates a broadcast television station group and ION Television, reaching over 90 million U.S. television households via its nationwide broadcast television, cable and satellite distribution systems. ION Television currently features popular television series and movies from the award-winning libraries of Warner Bros., Sony Pictures Television, CBS Television and NBC Universal. In addition, the network has partnered with RHI Entertainment, which owns over 4,000 hours of acclaimed television content, to provide high-quality primetime programming beginning July 2007. Utilizing its digital multicasting capability, ION Media Networks has launched several new digital TV brands, including qubo, a television and multimedia network for children formed in partnership with Scholastic, Corus Entertainment, Classic Media and NBC Universal, as well as ION Life, a television and multimedia network dedicated to health and wellness for consumers and families. * * * As reported in the Troubled Company Reporter on May 9, 2007, Standard & Poor's Ratings Services placed its ratings on Ion Media Networks Inc., including the 'CCC+' corporate credit rating, on CreditWatch with developing implications. The CreditWatch placement follows Ion's announcement that it entered into an agreement with Citadel Investment Group LLC and NBC Universal Inc. for a comprehensive recapitalization of Ion. ISP CHEMCO: Shareholder Cash Distribution Cues S&P to Cut Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior secured debt ratings on ISP Chemco LLC (formerly ISP Chemco Inc.) to 'B+' from 'BB-'. The outlook is stable. "The downgrade was prompted by the company's plans to increase debt to finance an approximately $200 million cash distribution to its shareholder," said Standard & Poor's credit analyst Cynthia Werneth. "As a result, credit measures and the financial profile will no longer support the former ratings." At the same time, based on preliminary terms and conditions, S&P assigned a 'B+' rating and '2' recovery rating to ISP Chemco's proposed seven-year $1.16 billion term loan. These ratings indicate our expectation that lenders would experience substantial (80% to 100%) recovery of principal in a payment default. Proceeds will be used to finance the cash distribution and refinance an existing term loan. S&P expects the company's $250 million revolving credit facility to remain in place. Pro forma for the transaction, debt (adjusted to include about $100 million of off-balance-sheet accounts receivable and operating lease financing and unfunded postretirement obligations), will total about $1.3 billion. The ratings on ISP Chemco reflect its highly leveraged financial profile and risks associated with private ownership as well as its satisfactory business position as a global producer of specialty and industrial chemicals with about $1.4 billion in annual sales. The driver of Wayne, New Jersey-based ISP Chemco's credit quality is its diverse portfolio of specialty chemicals, which make up over 70% of its revenues and an even greater proportion of operating income. The company's remaining sales are of industrial chemicals. JAMES RIVER: Increasing Leverage Prompts S&P to Junk Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings, including its corporate credit rating, on Richmond, Va.-based James River Coal Co. to 'CCC' from 'CCC+'. The outlook remains negative. "The downgrade reflects our concerns about the company's continued inability to generate free cash flow, limited liquidity, and increasing leverage." said Standard & Poor's credit analyst Marie Shmaruk. "We have reservations about management's ability to maintain the improved cost-per-ton level of the first quarter of 2007 compared to the fourth-quarter 2006 level." Higher safety compliance costs and inherently difficult operating conditions that continuously pressure costs challenge the company's ability to sustain these levels. James River's leverage is aggressive, with adjusted debt to total capital ratio of about 82% at March 31, 2007. Although the new credit agreement has provided the company with some breathing room, S&P expects this to be short lived. "We could lower the ratings if cost increases beyond current company guidance, production declines, or liquidity shrinks as the company continues to generate negative free cash flow," Ms. Shmaruk said. "We could revise the outlook to positive if we come to expect positive free cash flow over the next couple of years and financial performance becomes less volatile." JARDEN CORPORATION: Earns $1.4 Million in First Quarter 2007 ------------------------------------------------------------ Jarden Corporation reported that for the quarter ended March 31, 2007, net sales increased 4% to $820.9 million, as compared with $791.7 million for the same period in the prior year. Net income was $1.4 million for the quarter ended March 31, 2007, as compared with $5.7 million in the first quarter of 2006. The company's balance sheet at March 31, 2007, reflected total assets of about $4.1 billion and total liabilities of about $2.8 billion, and total stockholders' equity of about $1.3 billion. At March 31, 2007, the company had cash and cash equivalents of $391.5 million. Acquisitions In April 2007, the company announced the acquisition of Pure Fishing Inc., a global provider of fishing tackle, lures, rods and reels marketed under well known fishing brands including Abu Garcia(R), Berkley(R), Mitchell(R), Strenr, Trilene(R) and Gulp(R). The consideration consisted of $300 million in cash, a $100 million five year subordinated note with a 2% coupon and a warrant exercisable into approximately 2.2 million shares of Jarden common stock with an initial exercise price of $45.32. On April 24, 2007, the company entered into a definitive merger agreement with K2 Inc., a provider of branded consumer products in the global sports equipment market. Under the terms of the agreement, the company will pay $10.85 per share of K2 common stock in cash and will issue 0.1086 of a share of Jarden common stock for each share of K2 common stock outstanding as of the closing. The cash and Jarden common stock to be issued in the transaction has a combined value of approximately $15.50 per K2 share, based on the closing price of Jarden common stock on the date of signing the merger agreement. The total estimated purchase price is about $1.2 billion. Debt and Capital Resources During February 2007, the Company completed a registered public offering for $650 million aggregate principal amount of 7-1/2% Senior Subordinated Notes due 2017 and received net proceeds of about $637 million. Of these proceeds, about $184 million was used to purchase 94.4% of the principal amount outstanding of the 9-3/4% Senior Subordinated Notes due 2012 plus the tender premium and accrued interest. As a result of the purchase of Senior Subordinated Notes, the company recorded a $14.8 million loss on the extinguishment of debt. At March 31, 2007, there was no amount outstanding under the revolving credit portion of the senior credit facility. At March 31, 2007, net availability under the Facility was $183.4 million, after deducting $16.6 million of outstanding letters of credit. The company is required to pay commitment fees on the unused balance of the revolving credit facility. At March 31, 2007, the annual commitment fee on unused balances was 0.375%. Full-text copies of the company's 2007 first quarter report are available for free at http://ResearchArchives.com/t/s?1f0c Martin E. Franklin, chairman and chief executive officer commented, "Our strong positive momentum continued from 2006 into the first quarter, as demonstrated by the growth in sales and segment earnings reported today, as well as a significant improvement in year over year cash flow from operations. Our strategy of building a world class, market leading, diversified consumer products company based on our people, products and brands continues to yield results. While we performed well across the entire company, I am particularly pleased with the expansion of gross margins as demonstrated by the 100 basis point improvement this quarter compared to the same period in 2006." Mr. Franklin continued, "The healthy momentum in our segments, despite continued pressure in supply chain costs and concerns about the consumer, continued through the quarter. While it is still early in the year, this forward progress coupled with the recent acquisition of Pure Fishing positions us well for the balance of the year, and I believe that we are on track to achieve our long-term financial goals." About Jarden Corp. Headquartered in Rye, New York, Jarden Corporation (NYSE: JAH) -- http://www.jarden.com/-- manufactures and distributes niche consumer products used in and around the home. The company's primary segments include Consumer Solutions, Branded Consumables, and Outdoor. * * * As reported in the Troubled Company Reporter on April 30, 2007, Standard & Poor's Ratings Services affirmed its ratings and outlook on Rye, New York-based Jarden Corp. (B+/Stable/--) following the company's agreement to acquire K2 Inc., a global sports equipment manufacturer with leading market positions in several categories. At the same time, Standard & Poor's placed its ratings on K2, including its 'BB' corporate credit rating, on CreditWatch with negative implications. JER CRE: Moody's Puts Low-B Ratings to Class F & G Obligations -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of eight classes of JER CRE CDO 2005-1, Limited and JER CRE CDO 2005-1, LLC, Collateralized Debt Obligations, Series 2005-1: -- Class A, $81,725,000, Floating, affirmed at Aaa -- Class B-1, $38,130,000, Fixed, affirmed at Aa2 -- Class B-2, $37,500,000, Floating, affirmed at Aa2 -- Class C, $48,400,000, Fixed, affirmed at A2 -- Class D, $46,500,000, Fixed, affirmed at Baa2 -- Class E, $23,320,000, Fixed, affirmed at Baa3 -- Class F, $15,000,000, Fixed, affirmed at Ba2 -- Class G, $10,000,000, Fixed, affirmed at B2 As of the April 17, 2007 distribution date, the transaction's aggregate collateral balance and bond balance are $418.7 million and $416.00 million, respectively, the same as at securitization. The Certificates are collateralized by 73 classes of CMBS securities from 13 transactions (96.6%) and three CDO classes from one transaction (3.4%). Moody's reviewed the ratings or shadow ratings of all the collateral supporting the Certificates. Since securitization there have been no losses. None of the CMBS classes were upgraded or downgraded. One shadow rating was downgraded and none were upgraded. Preferred equity of $115.4 million provides a cushion to absorb potential losses to the pool. Moody's uses a weighted average rating factor (WARF) as an overall indicator of the credit quality of a CDO transaction. Based on Moody's analysis, the WARF has increased slightly to 2,084, from 2,075 at securitization. The distribution of ratings (actual and shadow ratings) is as follows: -- Baa1-Baa3 (5.9% compared to 5.2% at securitization); -- Ba1-Ba3 (48.8% compared to 48.1% at securitization); -- B1-B3 (42.1% compared to 43.4% at securitization); and -- Caa1-NR (3.2%, compared to 3.3% at securitization). The CMBS certificates are from pools securitized between 1998 and 2005. The vintage exposures are 2005 (74.1%), 2004 (23.8%) and 1998 (2.1%). The five largest CMBS exposures are MLMT 2005-CKI1 (11.6%), JPMCC 2005-LDP4 (10.2%), BACM 2005-1 (9.3%), MSCI 2005- IQ10 (9.0%) and CSFB 2005-C2 (9.0%). JOAN FABRICS: Proposes Bidding Procedures for Sale of Assets ------------------------------------------------------------ Joan Fabrics Corporation asked the U.S. Bankruptcy Court for the District of Delaware to establish bidding procedures for the sale of substantially all of its assets, Bill Rochelle of Bloomberg News reports. According to the report, the company told the Court that it has received eight "non-binding preliminary indications of interest." The company proposes a May 23, 2007 bid deadline, and expects to hold an auction during the last week of June. Based in Tyngsboro, Massachusetts, Joan Fabrics Corporation manufactures automotive and furniture upholstery fabrics. The company has a manufacturing facility in North Carolina and an affiliate entity in Mexico. The Debtor and its affiliate, Madison Avenue Designs LLC filed for Chapter 11 protection on April 10, 2007 (Bankr. D. Del. Case Nos. 07-10479 and 07-10480). When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $1 million to $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Aug. 8, 2007. KNOLL INC: First Quarter 2007 Net Income Increases to $14.8 Mil. ---------------------------------------------------------------- Knoll Inc. has reported net sales of $247.9 million for the first quarter ended March 31, 2007, an increase of 13.7% from first quarter 2006. Operating income was $30.8 million, or 12.4% of net sales, an increase of 40.6% from the first quarter 2006. Net income for the first quarter 2007 was $14.8 million, as compared with $10.2 million for the same quarter in 2006. Gross profit for the first quarter of 2007 was $84.5 million, an increase of $14.7 million or 21.1%, over the same period in 2006. Operating expenses for the quarter were $53.7 million, or 21.7% of sales, compared to $47.8 million, or 21.9% of sales, for the first quarter of 2006. The company' operating income increased to 12.4% of sales from 10% of sales in the same period in the prior year. Interest expense increased $1.2 million due to increased average debt for the quarter coupled with higher average interest rates. The effective tax rate was 38% for the quarter, as compared to 39.1% for the same period last year. The decrease in the effective tax rate is largely due to the mix of pretax income in the countries in which we operate. Cash generated from operations during the first quarter 2007 was $2 million, compared to $15.2 million used in operations the year before. Capital expenditures for the period totaled $3 million compared to $1.2 million for 2006. The company repurchased about 0.5 million shares of its stock for $13.5 million during the first quarter of 2007 compared to 0.8 million shares for $16.3 million during the first quarter of 2006. The company also had net borrowings during the first quarter of 2007 of $7 million primarily to fund working capital compared to net borrowings of $16.4 million during 2006. The company also paid a quarterly dividend of $5.3 million in the first quarter of 2007 compared to $5.2 million in the first quarter of 2006. At March 31, 2007, the company had total assets of $633 million and total liabilities of $613.1 million, resulting in a total stockholders' equity of $19.8 million. The company recorded retained earnings of $6.7 million at March 31, 2007, as compared with retained deficit of $2.7 million at Dec. 31, 2006. Full-text copies of the company's first quarter 2007 are available for free at http://ResearchArchives.com/t/s?1ef6 "Knoll is firing on all cylinders," said Andrew Cogan, chief executive officer. "Thanks to the breadth and diversity of our growth initiatives, for the third year in a row we are growing our sales faster than the industry. And, importantly in 2007, investments in our operations are resulting in significant improvements in both our gross and industry leading operating margins." "We are encouraged by the ongoing activity in the business and look forward to an exciting NeoCon trade show in June, as we continue to make investments in strengthening and expanding our product portfolio. I want to congratulate and thank our associates and dealers for their strong performance and continued commitment to our success." Barry L. McCabe, chief financial officer said, "We are very pleased with both our gross and operating margin expansions and the strength of our balance sheet. We reduced our leverage ratio to 2.4 to 1 and have $106 million available to us under our revolving credit facility." Second Quarter 2007 Outlook The company expects second quarter 2007 revenue to be in the $262 million to 272 million range, an increase of 6% to 10% from the second quarter of 2006. About Knoll Inc. Headquartered in East Greenville, Pennsylvania, Knoll Inc., (NYSE: KNL) -- http://www.knoll.com/-- designs and manufactures branded office furniture products and textiles, serves clients worldwide. It distributes its products through a network of more than 300 dealerships and 100 showrooms and regional offices. The company has locations in Argentina, Australia, Bahamas, Cayman Islands, China, Colombia, Denmark, Finland, Greece, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Poland, Portugal and Singapore, among others. * * * Knoll Inc. carries Moody's Investors Service's B1 Corporate Family Rating and the company's $200 million senior secured revolver and $250 million senior secured term loan carry Moody's Ba2. Moody's assigned an LGD2 rating to both loans, suggesting note holders will experience a 27% loss in the event of a default. LEGENDS GAMING: Weak Performance Prompts S&P's Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Legends Gaming LLC to stable from positive. Outstanding ratings on the company, including the 'B' corporate credit rating, were affirmed. "The outlook revision reflects somewhat weaker operating performance than we previously expected, preventing near-term upside potential for the rating," explained Standard & Poor's credit analyst Ariel Silverberg. The 'B' rating on Frankfort, Illinois-based Legends reflects the company's high debt levels, small portfolio of gaming properties, and competitive environments in both markets in which it operates. Legends' two facilities are located in Vicksburg, Miss. and Bossier City, La., and are both branded Diamond Jacks. Legends is a private company and, therefore, does not publicly disclose its financial performance. For the period since it has operated the casinos (beginning in August 2006), operating performance has been weaker than S&P's expectations, which has prevented the improvement in credit measures that S&P previously anticipated. The weakness in earnings reflects, in part, the inability to successfully execute marketing initiatives and generate sufficient customer volumes, while maintaining margins. This is highlighted more so in the Bossier City/Shreveport market, where aggregate market revenue was up 9% between August and December 2006, demonstrating the existence of solid demand, and highlighting Legends' inability to capture this demand. Management has, however, taken steps to adjust its marketing strategy and improve customer experience at the properties. If the company is successful in building its customer base, we believe that revenue growth, combined with a more efficient use of marketing spend, will sustain credit measures in line with the current rating. MAGNA ENTERTAINMENT: Unit Completes Credit Refinancing ------------------------------------------------------ Magna Entertainment Corp.'s wholly owned subsidiary, AmTote International Inc., has completed a refinancing of its existing credit facilities, with SunTrust Bank as the new lender. The refinancing with SunTrust includes: a) a $4.2 million term loan for the repayment of AmTote's existing debt outstanding under its Lasalle Bank term loan facilities; b) $3 million revolving credit facility to finance working capital needs; and c) a $10 million term loan facility to finance up to 80% of eligible capital costs related to tote service contracts. "The company expects that the new credit facilities will provide increased flexibility and growth capacity for AmTote," Blake Tohana, executive vice-president and chief financial officer of MEC, said. "These credit facilities will allow AmTote to finance a substantial portion of the capital costs related to new tote service contacts, which includes the recent contract with Alberta's Northlands Park and the anticipated contract with Woodbine Entertainment Group." Headquartered in Hunt Valley, Maryland, AmTote International Inc. -- http://www.amtote.com/-- is an industry in real-time transaction processing, providing computerized pari-mutuel wagering services and equipment to both domestic and international customers. About Magna Entertainment Headquartered in Aurora, Ontario, Magna Entertainment Corp. (NASDAQ: MECA; TSX: MEC.A) -- http://www.magnaentertainment.com/ -- owns and operates horse racetracks, based on revenue, acquires, develops, owns and operates horse racetracks and related pari- mutuel wagering operations, including off-track betting facilities. The company also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. The company owns and operates AmTote International Inc., XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, the company has a 50% interest in HorseRacing TV(TM), a 24-hour horse racing television network, and TrackNet Media Group, LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Going Concern Doubt Chartered accountants, Ernst & Young LLP raised substantial doubt of Magna Entertainment 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 accountants pointed to the company's recurring operating losses and working capital deficiency. MASTR ASSET: Moody's Puts Low-B Ratings on Two Cert. Classes ------------------------------------------------------------ Moody's Investors Service has assigned provisional ratings to certificates issued by MASTR Asset Backed Securities Trust 2007- HE1. The complete provisional rating actions are: * MASTR Asset Backed Securities Trust 2007-HE1 Mortgage Pass-Through Certificates, Series 2007-HE1 -- Class A-1, Assigned (P)Aaa -- Class A-2, Assigned (P)Aaa -- Class A-3, Assigned (P)Aaa -- Class A-4, Assigned (P)Aaa -- Class M-1, Assigned (P)Aa1 -- Class M-2, Assigned (P)Aa2 -- Class M-3, Assigned (P)Aa3 -- Class M-4, Assigned (P)Aa3 -- Class M-5, Assigned (P)A1 -- Class M-6, Assigned (P)A2 -- Class M-7, Assigned (P)A3 -- Class M-8, Assigned (P)Baa1 -- Class M-9, Assigned (P)Baa2 -- Class M-10, Assigned (P)Baa3 -- Class M-11, Assigned (P)Ba1 -- Class M-12, Assigned (P)Ba2 Investors should be aware that the certificates have not yet been issued. Upon issuance of the certificates and upon conclusive review of all documents and information about the transaction, as well as any subsequent changes in information, Moody's will endeavor to assign definitive ratings, which may differ from the provisional ratings. MORGAN STANLEY: Moody's Lifts Ratings on Class H Certificates ------------------------------------------------------------- Moody's Investors Service upgraded the ratings of two classes and affirmed the rating of one class of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 1997-ALIC as follows: -- Class X, Notional, affirmed at Aaa -- Class F, $39,640,133, Fixed, upgraded to Aaa from A2 -- Class H, $14,047,000, Fixed, upgraded to A2 from Ba1 As of the April 16, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 83.7% to $130.9 million from $802.7 million at securitization. The Certificates are collateralized by seven loans ranging in size from 6.5% to 25.6% of the pool. Two loans have been liquidated from the pool resulting in aggregate realized losses of approximately $9.1 million. Currently there are no loans in special servicing. Moody's was provided with year-end 2005 and partial-year 2006 operating results for 100.0% of the pool. Moody's weighted average loan to value ratio is 72.5%, compared to 80.5% at Moody's last full review in March 2005 and compared to 84.0% at securitization. Moody's is upgrading Classes F and H due to increased subordination levels and improved overall pool performance. The top three loans represent 67.7% of the outstanding pool balance. The largest loan is the Glen Pointe Centre West Loan ($33.5 million -- 25.6%), which is secured by a 330,000 square foot Class A office building located in Teaneck, New Jersey. The property is 70.0% occupied, compared to 97.0% at last review. The decline in occupancy is due to the February 2007 lease expiration of EISAI Corp., which formerly occupied approximately 30.0% of the property's GLA. Moody's LTV is 91.6%, compared to 62.5% at last review. The second largest loan is the Court Plaza Loan ($33.1 million -- 25.3%), which is secured by a 325,000 square foot office property located in Hackensack, New Jersey. The property was 81.7% leased as of December 2006, compared to 72.1% at last review. Performance has improved since last review, but property performance is still depressed due to low occupancy. The loan is on the master servicer's watchlist due to low debt service coverage. Moody's LTV is in excess of 100.0%, the same as at last review. The third largest loan is the Doubletree Hotel -- Fisherman's Wharf Loan ($21.9 million -- 16.8%), which is secured by a 374- room hotel located in Monterey, California. Performance has improved since last review due to increased revenues and loan amortization. RevPAR for the trailing 12-month period ending September 2006 was $132.88, compared to $122.27 at last review. The loan has amortized by approximately 18.0% since securitization. Moody's LTV is 38.3%, compared to 42.9% at last review. The pool's collateral is a mix of office (65.7%), lodging (26.0%) and retail (8.3%). The collateral properties are located in New Jersey (50.8%), California (25.1%), Kansas (14.8%) and Indiana (9.3%). The pool's weighted average maturity is 41 months. MUELLER WATER: Plans Offering of $350 Million of Senior Notes ------------------------------------------------------------- Mueller Water Products, Inc., disclosed last week that it intends to offer, subject to market and other conditions, $350 million aggregate principal amount of senior subordinated notes due 2017. The company intends to use the net proceeds from the offering of the notes, together with cash on hand and borrowings under credit facilities, to pay the purchase price for the 14-3/4% senior discount notes due 2014 and 10% senior subordinated notes due 2012 tendered by holders and the consent payment relating to amendments to the underlying indentures pursuant to its previously announced outstanding offers to purchase and consent solicitations. The notes will be offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. The notes have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act. About Mueller Water Based in Atlanta Georgia, Mueller Water Products, Inc. (NYSE: MWA) -- http://www.muellerwaterproducts.com/-- is a leading North American manufacturer and marketer of infrastructure and flow control products for use in water distribution networks and treatment facilities. Its broad product portfolio includes engineered valves, hydrants, pipe fittings and ductile iron pipe, which are used by municipalities, as well as the commercial and residential construction, oil and gas, HVAC and fire protection industries. With revenues of approximately $1.9 billion, the company is comprised of three main operating segments: Mueller Co., U.S. Pipe and Anvil. The company employs approximately 6,600 people. MUELLER WATER: Earns $17.9 Million in Quarter Ended March 31 ------------------------------------------------------------ Muller Water Products, Inc., filed with the U.S. Securities and Exchange Commission it quarterly report on Form 10-Q for the quarter ended March 31, 2007. For the quarter ended March 31, 2007, the company reported net income of $17.9 million on net sales of $459.7 million compared to net loss of $1.8 million on net sales of $434.9 million for the same period in 2006. Total assets at March 31 $2.9 billion while total liabilities were $1.7 billion. For the six months ended March 31, 2007, net income was $34.9 million on net sales of $871.6 million. This compares to net loss of $50.6 million on net sales of $915.3 million for the half-year ended March 31, 2006. A full-text copy of the company's Form 10-Q for the quarter ended March 31, 2007 is available for free at: http://ResearchArchives.com/t/s?1f0b About Mueller Water Based in Atlanta Georgia, Mueller Water Products, Inc. (NYSE: MWA) -- http://www.muellerwaterproducts.com/-- is a leading North American manufacturer and marketer of infrastructure and flow control products for use in water distribution networks and treatment facilities. Its broad product portfolio includes engineered valves, hydrants, pipe fittings and ductile iron pipe, which are used by municipalities, as well as the commercial and residential construction, oil and gas, HVAC and fire protection industries. With revenues of approximately $1.9 billion, the company is comprised of three main operating segments: Mueller Co., U.S. Pipe and Anvil. The company employs approximately 6,600 people. MUELLER WATER: S&P Rates Proposed $1.1 Billion Facilities at BB --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its loan and recovery ratings to Mueller Water Products Inc.'s proposed $1.1 billion senior secured credit facilities. They were rated 'BB', one notch higher than the corporate credit rating, with a recovery rating of '1', indicating the expectation for full (100%) 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. S&P We also assigned its 'B' issue rating to the company's proposed $350 million senior subordinated note offering that matures in 2017. The proposed facilities, which consist of a $300 million revolving credit facility, a $150 million term loan A, and a $640 million term loan B, along with the note offering, will be used to refinance existing debt. S&P's 'BB-' corporate credit rating has been affirmed. The outlook is stable. NEOMEDIA TECH: Posts $11.5 Million Net Loss in Qtr Ended March 31 ----------------------------------------------------------------- NeoMedia Technologies Inc. reported a net loss of $11.5 million on net sales of $399,000 for the first quarter ended March 31, 2007, compared with a net loss of $1.3 million on net sales of $199,000 for the same period last year. General and administrative expenses increased by $1,093,000, or 81%, to $2,440,000. The increase resulted from higher accounting, professional, and legal services of $1,054,000, higher audit fees and general and administrative expenses of $39,000 from Gavitec AG, which was acquired during the first quarter of 2006. Results for the first quarter ended March 31, 2007, included a loss on derivative financial instruments of $3,508,000, associated with the company's Series C preferred stock, warrants, and convertible debenture, compared with a gain of $4,768,000 in the same period in 2006, Results for the quarter ended March 31, 2006, included a loss on extinguishment of debt in the amount of $1,964,000, resulting from debt retired in connection with the Series C preferred stock issued and sold to Cornell Capital Partners on Feb. 17, 2007, with no corresponding charge in the same period in 2007. Interest expense increased $1,704,000 to $1,698,000 for the quarter ended March 31, 2007, from interest income of $6,000 for the quarter ended March 31, 2006. The increase resulted from a charge to expense the costs of obtaining the debenture financing in March 2007 of $781,000, $500,000 of interest expense and liquidated damages related to the company's convertible financing arrangements, and $417,000 of other interest expense. Loss from discontinued operations were $2.6 million in the 2007 quarter, compared to loss from discontinued operations of $1.2 million in the 2006 quarter. At March 31, 2007, the company's balance sheet showed $33.7 million in total assets and $85.6 million in total liabilities, resulting in a $51.9 million total stockholders' equity. The company's balance sheet at March 31, 2007, also showed strained liquidity with $19.1 million in total current assets available to pay $85.6 million 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?1efe Default upon Senior Securities NeoMedia is currently in default of the Investor Registration Rights Agreement entered into on Feb. 17, 2006, in connection with the $22 million Series C Convertible preferred Stock Sale, the Investor Registration Rights Agreement entered into on Aug. 24, 2006, in connection with the $5 million secured convertible debenture, the Investor Registration Rights Agreement entered into on Dec. 29, 2006, in connection with the $2.5 million secured convertible debenture, and the Investor Registration Rights Agreement entered into on Mar. 27, 2007, in connection with the $7.5 million secured convertible debenture. Going Concern Doubt As reported in the Troubled Company Reporter on April 13, 2007, Stonefield Josephson Inc. expressed substantial doubt about NeoMedia Technologies Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. Stonefield Josephson pointed to the company's significant operating losses, negative cash flows from operations and working capital deficit. About NeoMedia Technologies NeoMedia Technologies Inc. (OTC BB: NEOM) -- http://www.neom.com/ -- is a mobile enterprise and marketing technology company and offers direct-to-mobile-Web technology solutions. NeoMedia's flagship qode(R) service links the world's leading companies to the wireless, electronic world. NeoMedia is headquartered in Fort Myers, Fla., with an office in Aachen, Germany. NEW CENTURY: Wants to Hire Manatt Phelps as Securitization Counsel ------------------------------------------------------------------ New Century Financial Corporation and its debtor-affiliates seek authority from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to employ Manatt, Phelps & Phillips, LLP, as their special securitization counsel, effective as of their bankruptcy filing. MPP is a law firm with offices at Park Tower, 695 Town Center Drive, 14th Floor, in Costa Mesa, California. The firm was selected based on its broad based experience in the areas of Securitization and structured finance. The firm will, among others: -- assist with the proposed auction and sale of the Debtors' mortgage loan servicing platform, servicing rights and servicing advance reimbursement rights; -- review and analyze the agreements under which the mortgage loan servicing is performed for loans owned by Securitization trusts and other third parties; -- interface with bankruptcy counsel regarding the contracts and regarding industry practice; -- assist with the negotiation and documentation of the sale of the Debtors' assets; and -- render other services as are customary in engagements of this type. Monika L. McCarthy, senior vice president and assistant general counsel of the Debtors, assures the Court that the services to be rendered by MPP will not duplicate the services to be rendered by any other professionals retained by the Debtors in their Chapter 11 cases. The Debtors will pay the firm based on its professionals' customary hourly rates: Ellen R. Marshall $650 Ivan L. Kallick $590 Robert J. Sherman $550 Matthew S. O'Loughlin $415 Michael E. Wong $385 The fees for any additional MPP attorneys, paralegals or other professionals will be based on the firm's standard, customary hourly rates for the performance of services of this nature. MPP will be reimbursed for all reasonable out-of-pocket expenses incurred in connection with the engagement. Ms. Marshall, a partner at MPP, discloses that the firm has represented the Debtors in the past in matters unrelated to their Chapter 11 cases, specifically in several secondary mortgage market transactions involving purchases and sales of mortgage loans and mortgage servicing. MPP's principals and professionals do not have any connection with the Debtors, their creditors, or any other party-in-interest and do not hold or represent an interest materially adverse to the Debtors or their estates, Ms. Marshall states. Ms. Marshall attests that the firm is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, and represents or holds no interest adverse to the interests of the estates with respect to the matters upon which they are to be employed. About New Century Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). The Debtors' exclusive period to file a plan expires on July 31, 2007. NEW CENTURY: Taps Sheppard Mulling as Special Litigation Counsel ---------------------------------------------------------------- New Century Financial Corporation, its debtor-affiliates and New Century Warehouse Corporation, a wholly owned non-debtor subsidiary of New Century TRS Holdings Inc., seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Sheppard, Mulling, Richter & Hampton LLP, as their special corporate and litigation counsel, nunc pro tunc to April 2, 2007. SMRH has been providing the Debtors with legal services since March 2004. On Feb. 7, 2007, New Century Financial Corporation, New Century Mortgage Corporation, Home 123 Corporation, NC Capital Corporation, and certain of their affiliates entered into a comprehensive retainer letter, which superseded all prior engagement agreements between the parties. In December 2005, New Century Warehouse entered into an agreement to acquire substantially all of the assets of Access Lending Corporation. SMRH represented New Century Warehouse in connection with the transaction. Access Lending was in the business of financing residential mortgage loans originated by a network of loan brokers and smaller financial institutions. It provided financing to these loan originators that was used, in turn, by these originators to fund the loans provided to individual borrowers of the originators. Access Lending obtained its financing from three warehouse lenders who entered into various receivable purchase agreements, credit agreements and repurchase agreements. Since the acquisition, New Century Warehouse has operated largely independently of the Debtors. However, the Debtors' financial difficulties triggered cross-defaults under New Century Warehouse's warehouse loan agreements, Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, notes. One of the warehouse lenders, Goldman Sachs Mortgage Corporation, declared an event of default under a master repurchase agreement dated as of Feb. 15, 2006, as amended. New Century Warehouse's other warehouse lenders were willing to work with the company. New Century Warehouse has entered into forbearance agreements, which allowed it to continue to operate, with Galleon Capital, LLC, State Street Global Markets, LLC, and State Street Bank and Trust Company -- collectively, State Street -- and Guaranty Bank. The forbearance agreements expire on April 27, 2007. Mr. Samis tells the Court that if State Street and Guaranty Bank exercise their remedies, it is possible that there will be no value for any other creditors or shareholders in New Century Warehouse. Moreover, New Century Warehouse's employees would be likely to quit and New Century Warehouse could cease functioning as an operating business, he asserts. On March 29, 2007, SMRH was engaged to represent New Century Warehouse in restructuring and negotiating a sale of substantially all of its assets. With SMRH's assistance, New Century Warehouse has reached an agreement to sell substantially all of its assets as a going concern, which transaction also included a release that was negotiated for the benefit of the Debtors, Mr. Samis says. Daniel J. Rubio, John Hicks, David Vizcarra, individually and on behalf of themselves, all others similarly situated, and the general public commenced a lawsuit against New Century Mortgage entitled Daniel J. Rubio v. New Century Mortgage Corporation, Orange County Superior Court Case No. 05CC00063. In May 2005, SMRH was retained to represent New Century Mortgage in the Rubio Litigation, together with any related claims and proceedings. Mr. Samis points out that SMRH has a long-standing relationship with the Debtors and is already familiar with the various corporate and litigation issues faced by the company, and the Debtors desire to continue SMRH's engagement with respect to these matters. According to Mr. Samis, SMRH also has extensive experience representing clients in the defense of employment and benefit- related class action suits. It has represented clients in a broad spectrum of collective and class actions, including disputes under the Fair Labor Standards Act and state wage/hour laws involving employee classification and exemption matters. SMRH will provide, in accordance with the retainer letter, ordinary and necessary legal services, as may be required in connection with representing the Debtors in connection with litigation, general corporate legal work, and related legal matters such as: -- labor and employment matters, specifically in defense of the Rubio Litigation; -- corporate governance and SEC matters; -- regulatory matters; and -- mergers and acquisitions and asset sales, including the pending New Century Warehouse sale transaction. Mr. Samis clarifies that the Debtors do not intend for SMRH to be responsible for the provision of substantive legal advice outside of litigation and corporate legal work, including advice in areas such as patent, trademark, taxation, criminal or real estate law. He adds that the Debtors do not intend for SMRH to be required to devote attention to, form professional opinions as to, or advise the Debtors with respect to its disclosure obligations under federal securities or other non-bankruptcy laws or agreements. David H. Sands, a partner at SMRH, has advised the Debtors that the firm has not, does not, and will not represent any interested party with respect to matters related to the Debtors' Chapter 11 cases. He states that neither the firm nor any of the attorneys employed by it have any connection with the Debtors, creditors, Official Committee of Unsecured Creditors, Office of the United States Trustee, and any other party with an actual or potential interest in the Debtors' Chapter 11 cases, or their respective attorneys or accountants. The Debtors will pay SMRH based on its customary hourly rates: Attorneys $300 - $615 Paralegals and Clerks $195 - $225 SMRH will be reimbursed of all reasonable costs and expenses incurred in connection with the services. The Debtors paid $373,879 to SMRH for services provided during the 90 days before the Petition Date. As of the Petition Date, the Debtors owed $48,125 to SMRH for unpaid legal services and unreimbursed expenses incurred before the Petition Date, Mr. Samis informs the Court. The firm believes it is entitled to assert a $48,125 claim against the Debtors' estates, he adds. Mr. Sands discloses that SMRH: -- formerly represented AMERITECH Credit Corporation, Bank of the West, Barclays Bank, PLC, Greenwich Capital Financial Products, Inc., and Nomura Securities, in matters unrelated to the Debtors' cases; -- currently represents certain interested parties in matters unrelated to the Debtors' cases, including Bank of America, NA, Bank of the West, Barclays Bank, and Countrywide Home Loans, Inc.; and -- represents, or has represented, entities that might be affiliated with, or related to, various of the interested parties, in matters unrelated to the Debtors' cases. Among these are Citigroup, which is affiliated with CDC Holdings, Inc. that is affiliated with or related to CDC Mortgage Capital, Inc. or Citigroup Global Markets Realty Corp.; and Gemini Partners, Inc., which might be an affiliate of Goldman Sachs Mortgage Company. Mr. Sands tells the Court that the firm represents no interest adverse to the Debtors. About New Century Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). The Debtors' exclusive period to file a plan expires on July 31, 2007. NEW CENTURY: Gets Court Okay to Hire Lazard as Financial Advisor ---------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized New Century Financial Corporation and its debtor-affiliates to employ Lazard Freres & Co. LLC as their financial advisor. Judge Carey modified certain terms and definitions in the engagement letter. Lazard will be paid: -- a fee equal to $4,250,000 payable upon the consummation of any sale transaction; -- an additional fee payable upon the consummation of any Sale Transaction, equal to 5% of the total amount of cash and the fair market value of all other property paid and payable for the Carrington Capital Management, LLC, and Carrington Mortgage Services, LLC assets; or the Greenwich Capital Financial Products, Inc. assets, as applicable, in excess of the purchase price stated in the Carrington Agreement or Greenwich Agreement, as applicable; -- if the consideration payable in respect of the Carrington Assets or the Greenwich Assets is subject to increase by contingent payments related to future events, the portion of Lazard's fee relating thereto will be calculated based on the probability adjusted, net present value of the contingent payments and paid to Lazard upon consummation of the relevant Sale Transaction; -- an additional fee, payable upon consummation of any Sale Transaction involving all or part of the Origination Business, equal to the greater of (i) 5% of the Origination Business Consideration, which is the total amount of cash and the fair market value of all property paid and payable for any part of the Origination Business, plus the amount of all indebtedness and any other liabilities directly or indirectly transferred or assumed, and (ii) $1,000,000; -- the retainer and all monthly fees will be credited, without duplication, against any Sale Transaction Fee or Alternative Transaction Fee, and the Alternative Transaction Fee will be credited against any Sale Transaction Fee. All other references to crediting fees will be eliminated from the engagement letter; -- notwithstanding anything to the contrary in the Engagement Letter, the aggregate fees paid to Lazard will not exceed $6,000,000 if no part of the Origination Business is sold and will, in no event, exceed $7,000,000. All of Lazard's fees and expenses in the Debtors' Chapter 11 cases are approved; provided, however that all fees and expenses will be subject to approval by the Court. The Debtors will seek the approval of the Court for services rendered by Lazard beyond those stated in the Debtors' request and relevant fees. Lazard will not be entitled to reimbursement of fees of counsel or other professional advisors pursuant to the Engagement Letter. Original Engagement Terms In the Debtors' application filed last month, Lazard has agreed to advise the Debtors in connection with a variety of financial matters, including a review of the Debtors' financial position and obligations, and a review and evaluation of possible strategic alternatives, liquidity alternatives and transactions. Moreover, Lazard has agreed to advise the Debtors in connection with any Restructuring, Bankruptcy Sale Transaction, Alternative Transaction or Non-Bankruptcy Sale Transaction pursued by the Debtors, and has already provided the Debtors with certain advice in this regard. Lazard has agreed to this compensation structure: (a) A $1,000,000 retainer that was paid upon the execution of the engagement letter signed by the Debtors and Lazard. Payment of the Retainer will be credited against a Strategic Advisory Fee, a Bankruptcy Sale Fee, or an Alternative Transaction Fee; (b) A $200,000 monthly financial advisory fee payable upon the first day of each month during the term of the engagement, with the first payment due on April 1, 2007. All Monthly Fees paid will be credited against a Strategic Advisory Fee, an Alternative Transaction Fee or a Bankruptcy Sale Fee; (c) A fee equal to $2,000,000, payable upon announcement of, or the execution of a definitive agreement for, a Non-Bankruptcy Sale Transaction, Restructuring or Bankruptcy Sale Transaction. An Announcement Fee will be credited against a Strategic Advisory Fee, an Alternative Transaction Fee or a Bankruptcy Sale Fee; (d) A fee equal to $5,000,000, payable upon the consummation of a Non-Bankruptcy Other Assets Sale, and a fee equal to $7,000,000, payable upon the consummation of either a Full Non-Bankruptcy Sale or a Non-Bankruptcy Control Sale; (e) A fee equal to $5,000,000, payable upon the consummation of a Bankruptcy Other Assets Sale, and a fee equal to $7,000,000, payable upon the consummation of a Full Bankruptcy Sale; and (f) A fee to be mutually agreed in good faith, payable in connection with any Alternative Transaction, which will appropriately compensate Lazard in light of the magnitude and complexity of the Alternative Transaction and the fees customarily paid to investment bankers of similar standing for similar transactions. Any Alternative Transaction Fee will be credited against a Strategic Advisory Fee or a Bankruptcy Sale Fee. Lazard and the Debtors have agreed that the aggregate fees to be paid to Lazard under the Engagement Letter will not exceed $7,000,000. The Debtors have also agreed to reimburse Lazard for all its reasonable expenses incurred in connection with the performance of the engagement, including travel costs, document production and other expenses of this type, and also including the reasonable expenses of outside counsel and other professional advisors. The Debtors say they do not owe Lazard any amount for any services performed or expenses incurred before their bankruptcy filing. The parties have signed an Indemnification Agreement, pursuant to which the Debtors agree to, among others, indemnify Lazard and its employees for claims and liabilities arising out from the engagement. David S. Kurtz, managing director at Lazard, assured the Court that the firm: (a) is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and holds no interest adverse to the Debtors or their estates in connection with the matters for which Lazard is to be retained by the Debtors; and (b) has no connection with the Debtors, their creditors, the U.S. Trustee, or other parties-in-interest in the Chapter 11 cases. About New Century Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). The Debtors' exclusive period to file a plan expires on July 31, 2007. PEOPLE'S CHOICE: RFC Selling 1,029 Res'l. Mortgage Loans on May 22 ------------------------------------------------------------------ Residential Funding Company LLC, a secured creditor in People's Choice Financial Corp. and debtor-affiliates' bankruptcy cases, will be conducting a public sale of approximately 1,029 residential mortgage loans at 11:00 a.m. CDT on Tuesday, May 22, 2007. The sale will be held at Residential Funding Company's office at 8400 Normandale, Lake Boulevard, in Bloomington, Minnesota. The loans, originated by People's Choice Home Loan Inc. or its affiliates, have an aggregate unpaid principal balance of approximately $262,000,000. For information regarding the bidding process, contact Gregg Brown at (301) 664-6901 or Mike Mead at (952) 352-0581. 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. Case No. 07-10772). 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. The Debtors' exclusive period to file a chapter 11 plan expires on July 18, 2007. PETROL OIL: Weaver & Martin Raises Going Concern Doubt ------------------------------------------------------ Petrol Oil and Gas Inc.'s auditors, Weaver & Martin LLC in Kansas City, Missouri, have included an explanatory paragraph in their audit report regarding a substantial doubt about Petrol Oil's ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006, and 2005. The going concern doubt was raised as a result of the company's deficiency in working capital at Dec. 31, 2006, and other factors. Petrol ended year 2006 with cash of about $5.9 million in the bank, as compared with $8.44 million at the end of 2005. The company's balance sheet at the end of the year 2006 reflected total assets of $36.5 million, total liabilities of $29.2 million, resulting in a total stockholders' equity of $7.3 million. The company had a negative working capital with total current assets at $6.6 million and total current liabilities at $15.1 million as of Dec. 31, 2006. For the 12 months ended Dec. 31, 2006, revenues after royalties and overrides increased about 25% over the year ended Dec. 31, 2005. The increase in revenue resulted from higher overall gas production and sales, higher hedged prices that Petrol negotiated for gas, and higher daily spot gas prices for the first eight months of 2006. Petrol reported a 2006 net loss of $7.8 million, versus a net loss of $6 million in 2005. The 2006 net loss included interest expense of $3.08 million, as compared with $1.8 million in 2005, as Petrol utilized its credit facility to fund drilling activities and pipeline/compressor facilities, primarily at the company's Coal Creek Project. Net operating loss for the year ended Dec. 31, 2006 totaled $4.7 million, as compared with a net operating loss of $4.2 million in 2005. A full-text copy of the company's 2006 annual report is available for free at http://ResearchArchives.com/t/s?1f02 "We reported a greater-than-expected 24% increase in oil and gas revenue for 2006, when compared with the previous year," observed Paul Branagan, president and chief executive officer of Petrol. "This was a challenging year for Petrol, primarily due to technical issues involving extended de-watering periods that we encountered in the pursuit of coal bed methane production from our new Coal Creek Project in Kansas. In the wells wherein we have installed new high-rate pumps and larger diameter pump rods and included chemical shocks, we have increased water production rates, improved run times and lowered the fluid levels in our Coal Creek model wells. Meanwhile, gas production from our established Petrol-Neodesha Project continued to improve as we drilled or re- completed 14 additional wells during 2006. I am pleased with our ability to complete multiple coal seams and produce from the deeper additional coals that represent new producing resources in the area." About Petrol Oil Petrol Oil and Gas Inc. in Overland Park, Kansas (OTC BB: POIG) -- http://www.petroloilandgas.com/-- develops and acquires gas and oil assets. Its properties are located in the Cherokee and Forrest City Basins along the Kansas and Missouri border. Its current focus is Coal Bed Methane reservoirs in the central U.S., which produce both Coal Bed Methane and at times conventional gas. POLYPORE INC: Earns $6.2 Million in Quarter Ended March 31 ---------------------------------------------------------- Polypore Inc. reported results for the quarter ended March 31, 2007, in a Form 10-Q filing with the U.S. Securities and Exchange Commission. For the quarter ended March 31, 2007, the company reported net income of $6,293,000 compared to net income of $3,365,000 for the same period in 2006. Net sales for the quarter ended March 31, 2007 was $129,781,000 compared to a year ago of $115,293,000. 2006 Restructuring Plan In response to a significant decline in demand for cellulosic hemodialysis membranes driven by a shift in industry demand toward synthetic membranes, the company's separations media segment decided to exit the production of cellulosic membranes and realign its cost structure at its Wuppertal, Germany facility. On Aug. 24, 2006, the company announced a layoff of approximately 150 employees. Production of cellulosic hemodialysis membranes ceased on Dec. 27, 2006 and the majority of the employees were laid off effective Jan. 1, 2007. The total cost of the plan is expected to be approximately $17,040,000, consisting of $11,403,000 for the employee layoffs and $5,637,000 for other costs related to the shutdown of portions of the Wuppertal facility that will no longer be used. The other costs included in the restructuring plan are related to local regulations surrounding complete or partial shutdowns of a facility. The company expects to complete these activities by the end of the second quarter of 2008. 2005 Restructuring Plan In order to better accommodate customer growth and related demand for both lead-acid and lithium battery separators in the greater Asian market, the company's energy storage segment transferred certain assets from Europe and the United States to its facilities in Thailand and China. The capacity realignment plan included the closure of the company's facility in Feistritz, Austria, the downsizing of its Norderstedt, Germany facility and the relocation of certain assets from these two plants to the Company's facilities in Prachinburi, Thailand. During the three months ended Sept. 30, 2006, the company completed installation and started production with the assets relocated to Thailand. Additionally, finishing equipment from the Company's facility in Charlotte, North Carolina was relocated to its facility in Shanghai, China. The total cost of the realignment plan is expected to be approximately $8,831,000, of which $8,798,000 was recognized through March 31, 2007. The remaining expenses will be recognized in 2007. In addition to the benefit of realigning capacity with market growth, the Company expects to realize the full impact of cost savings in 2007. 2004 Restructuring Plan In an effort to manage costs and in response to the decision of a customer to outsource its dialyzer production, the company implemented a number of cost reduction measures in 2004 relating to the separations media segment, including employee layoffs, the relocation of certain research and development operations conducted in a leased facility in Europe to facilities where the related manufacturing operations are conducted and other cost reductions. All activities and charges relating to the 2004 Restructuring Plan have been completed as of December 30, 2006. Acquisition Effective Jan. 1, 2007, the company purchased from Nippon Sheet Glass Company, Limited a 60% share in Daramic NSG Tianjin PE Separator Co., LTD for $5,181,000. DNPET is a lead-acid battery separator manufacturing facility located in Tianjin, China. The acquisition supports the company's strategy of expanding capacity in the high growth Asia-Pacific region. A full-text copy of the company's Form 10-Q filed with the U.S. SEC is available for free at http://ResearchArchives.com/t/s?1f0d About Polypore Headquartered in Charlotte, North Carolina, Polypore Inc. -- http://www.polypore.net/-- develops, manufactures and markets specialized polymer-based microporous membranes used in separation and filtration processes. The company is a wholly owned subsidiary of Polypore International Inc. Polypore's business segments includes Daramic -- http://www.daramic.com-- which manufactures and supplies battery separators for automotive, industrial, and specialty applications. Daramic has marketing and sales offices in North and South America, Europe, Australia, South East Asia and China. POLYPORE INC: S&P Rates Proposed $470MM Credit Facilities at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to Polypore Inc.'s proposed first-lien $100 million revolving credit facility due in 2013 and $370 million term loans due in 2014. The 'B+' rating (one notch above the corporate credit rating) and a recovery rating of '1' indicate the likelihood of full recovery of principal (100%) in the event of a payment default. At the same time, Standard & Poor's affirmed its 'B' corporate credit rating on the company. The outlook is stable. Proceeds from the facilities will be used to refinance existing bank facilities, and closing of the financing is contingent on the successful completion of Polypore International Inc.'s IPO. Polypore International Inc. is the parent company of Polypore Inc. Should an IPO be successfully completed, the bank loan ratings would then be affirmed. As previously indicated, Standard & Poor's would then reevaluate Polypore's capital structure, its financial policies as a public company, and its growth strategy. "Subject to the final terms of the transaction, we expect that the full redemption of the senior discount notes resulting in the permanent reduction in financial leverage would result in the revision of the outlook to positive," said Standard & Poor's credit analyst Gregoire Buet. About Polypore Headquartered in Charlotte, North Carolina, Polypore Inc. -- http://www.polypore.net/-- develops, manufactures and markets specialized polymer-based microporous membranes used in separation and filtration processes. The company is a wholly owned subsidiary of Polypore International Inc. Polypore's business segments includes Daramic -- http://www.daramic.com-- which manufactures and supplies battery separators for automotive, industrial, and specialty applications. Daramic has marketing and sales offices in North and South America, Europe, Australia, South East Asia and China. PRO-BUILD: S&P Places All Ratings Under Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed all of its ratings, on building materials supplier Pro-Build Holdings Inc., including its 'BB' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch action was prompted by our concerns that depressed residential construction markets and dismal wood commodity prices will cause weaker-than-expected financial performance," said Standard & Poor's credit analyst John Kennedy. The company's year-end financials produced weaker-than-expected credit metrics, with EBITDA significantly lower than anticipated. Since end markets have deteriorated even further, we expect Pro- build will be highly challenged to maintain a financial profile appropriate for the current rating. Pro-Build's total debt, adjusted for operating leases as of Dec. 31, 2006, was $1.4 billion. "We expect that the near-term market environment could significantly erode financial performance," Mr. Kennedy said. S&P will meet with management as soon as possible to discuss liquidity and to review its financial projections to resolve the CreditWatch listing. REDDY ICE: Incurs $10.2 Million Net Loss in First Quarter 2007 -------------------------------------------------------------- Reddy Ice Holdings Inc. reported revenues for the first quarter ended March 31, 2007, of $47 million, compared to $44.8 million in the same quarter of 2006. Its net loss was $10.2 million in the first quarter of 2007, compared to a net loss of $8.2 million in the same period of 2006. Available cash for the first quarter of 2007 was negative $9.2 million compared to negative $6.9 million in the first quarter of 2006. "As expected, results for the first quarter of 2007 were challenging as compared to the first quarter of 2006," commented chairman and chief executive officer William P. Brick. "Our ongoing operating initiatives and acquisitions resulted in modest increases in revenues and volumes as compared to last year. However, our results were adversely impacted by additional costs associated with acquisitions, slight increases in energy costs and continued weakness in our non-ice operations." In connection with the company's previously announced acquisition strategy, five transactions were completed during the first quarter of 2007. The company's board of directors has approved an increase in the annual rate at which the company expects to pay dividends from $1.60 per share to $1.68 per share, beginning in the second quarter of 2007. "Based on the past performance of our operations, recent acquisitions and the outlook for the remainder of 2007 and the foreseeable future, we are pleased to increase our dividend for the second consecutive year," commented Mr. Brick. At March 31, 2007, the company's balance sheet reflected total assets of $591.4 million and total liabilities of $444.4 million, resulting in a total stockholders' equity of $147 million. Accumulated deficit at March 31, 2007, increased to $72.9 million, from $52 million at Dec. 31, 2006. The company had $10 million in cash and cash equivalents at March 2007, as compared with $39.4 million at Dec. 31, 2006. Full-text copies of the company's first quarter 2007 report are available for free at http://ResearchArchives.com/t/s?1f07 Outlook The company affirmed its guidance for 2007. Revenues in 2007 are expected to range between $360 million and $370 million and net income to range from $19.2 million to $23.4 million. Adjusted EBITDA for 2007 is expected to be in the range of $95 million to $100 million. Available cash, as defined on the company's credit agreement, is expected to range from $58.5 million to $67.9 million in 2007. Capital expenditures for the full year 2007 are expected to range between $19 million and $21 million and dispositions to total $2 million to $3 million, for net capital expenditures of $16 million to $19 million. The projections for 2007 include the effects of the acquisitions completed through the date of the company's press release. About Reddy Ice Headquartered in Dallas, Texas, Reddy Ice Holdings Inc. (NYSE: FRZ) -- http://www.reddyice.com/and its subsidiaries manufacture and distribute packaged ice in the U.S. serving about 82,000 customer locations in 31 states and the District of Columbia under the Reddy Ice brand name. Typical end markets include supermarkets, mass merchants, and convenience stores. * * * Reddy Ice Holdings Inc. carries Moody's Investors Service's 'B1' long-term corporate family rating and 'B1' probability of default rating. Also, the company carries Standard and Poor's 'B+' on long-term foreign issuer credit rating. RELIANCE INSURANCE: Supplemental Claims Resolution Procedures OK'd ------------------------------------------------------------------ In a supplemental order regarding claims procedures in Reliance Insurance Company's liquidation proceeding, the Commonwealth Court of Pennsylvania gave all holders of proofs of claim 180 days, from the date of the service of the supplement order, to submit: -- proof of payment; and -- full and complete supporting documentation for each proof of claims; or -- a written explanation as to why the information cannot be obtained. The bar date refers to proofs of claims where underlying claim is resolved, where underlying claim is not resolved, or no underlying claim has yet been asserted. The Court's supplemental order is in response to a petition filed by M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, serving as statutory liquidator of Reliance, seeking complete information and supporting documentation from proof of claim holders. A free copy of the May 1, 2007 Order can be obtained by: a) writing to: Proof of Claim Department Statutory Liquidator of Reliance Insurance Company P.O. Box 13527 Philadelphia, PA 19101-3527 b) or downloading a copy from http://www.reliancedocuments.com/ Based in New York City, Reliance Group Holdings Inc. is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Insurance Company. The holding and intermediate finance companies filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in debts. The insurance unit is being liquidated by order of the Commonwealth Court of Pennsylvania dated Oct. 3, 2001. The Bankruptcy Court confirmed the Creditors' Committee's Plan of Reorganization on Jan. 25, 2005. REMINGTON ARMS: S&P Removes Watch and Lifts Credit Rating to B- --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Remington Arms Co. Inc.), including its corporate credit rating, to 'B-' from 'CCC+'. S&P removed the ratings from CreditWatch, where they were placed April 6, 2007, with positive implications. The outlook is positive. "The upgrade reflects strengthening credit measures," said Standard & Poor's credit analyst Andy Liu, "resulting from improved operating performance in 2006, which we believe may be sustained," and modest debt reduction following the company's acquisition by an affiliate of Cerberus Capital Management L.P. RFSC SERIES 2004-RP1: Moody's Cuts Two Tranches to Low-B -------------------------------------------------------- Moody's Investors Service downgraded two tranches issued by RFSC Series 2004-RP1 securitization. The underlying collateral for the securitization is comprised of subprime and re-performing residential mortgage loans. The re-performing mortgage collateral consists of fixed-rate and adjustable-rate residential mortgage loans that were delinquent at the time of securitization or had been delinquent at some point prior to securitization. The downgrade is attributed to the fact that in recent months the transaction has experienced continued losses leading to significant deterioration in overcollateralization. In turn, this has reduced the credit enhancement available to the lowest rated tranches to levels that are inconsistent with the current ratings. Complete rating action includes: * RFSC Series 2004-RP1 Trust -- Class M-3, downgraded to Ba2, previously Baa2 -- Class M-4, downgraded B2, previously Baa3 RITE AID: Fitch Rates Proposed $1.22 Billion Notes at CCC+ ---------------------------------------------------------- Fitch Ratings has assigned ratings to Rite Aid Corp.'s proposed notes as: * $1.22 billion guaranteed senior unsecured notes 'CCC+/RR5'. Fitch has also affirmed its existing ratings on Rite Aid as: * Issuer Default Rating 'B-'; * $1.75 billion bank credit facility 'BB-/RR1'; * $1.25 billion term loans 'BB-/RR1'. * $1.058 billion 2nd lien senior secured notes 'BB-/RR1'; * $648 million guaranteed senior unsecured notes 'CCC+/RR5'. Fitch has also downgraded its rating on Rite Aid's $758 million non guaranteed senior unsecured notes to 'CCC'/RR6' from 'CCC+/RR5'. The Rating Outlook is Stable. These actions are in anticipation of the completion of Rite Aid's acquisition of 1,858 drug stores and 6 distribution centers from The Jean Coutu Group (Jean Coutu) for $3.4 billion comprised of $2.3 billion in cash and 250 million newly-issued Rite Aid common shares. The cash portion of the transaction will be financed with the new $1.22 billion issuance and borrowings under the $1.105 billion term loan. The transaction has received approval from the boards of directors and shareholders of both companies but is still awaiting final regulatory approval by the Federal Trade Commission. However, Rite Aid has reached an agreement with the FTC staff to divest 24 stores, within the transaction limits, and expects to close the acquisition by the end of May 2007. The terms loans and revolving credit facility have a first lien on the company's cash, accounts receivable, investment property, inventory and scrip lists, and is guaranteed by all Rite Aid and Jean Coutu domestic subsidiaries giving them an outstanding recovery ('RR1'). The company's senior secured notes have a second lien on the same collateral as the revolver and term loans and are guaranteed by all Rite Aid and Jean Coutu domestic subsidiaries and are also expected to have an outstanding recovery ('RR1'). The company's new $1.22 billion senior unsecured notes as well as its $148 million 9.25% senior unsecured notes due 2013 and $500 million 8.625% senior unsecured notes due 2015 will have guarantees from all Rite Aid and Jean Coutu domestic subsidiaries and therefore are expected to have recovery prospects that are below average ('RR5') but above the poor recovery prospects ('RR6') for the senior unsecured notes that do not have guarantees. The ratings consider the risk associated with integrating 1,858 Brooks and Eckerd stores with Rite Aid's existing store base and improving operations at these stores, the higher leverage of about 7.0 times following the completion of the transaction, operating statistics that trail those of competitors, and the intense competition in the drug retailing sector. The ratings also reflect Rite Aid's operating strategy to improve its store base and in-store service levels, the positive demographics of the drug retailing industry as well as the benefits received from leveraging larger store base. Pro forma for the transaction, Rite Aid will have about 5,000 stores and generate about $28 billion in revenues. Headquartered in Harrisburg, Pa., Rite Aid Corporation (NYSE, PCX: RAD) -- http://www.riteaid.com/-- is one of the nation's leading drugstore chains with annual revenues of approximately $17.5 billion and more than 3,330 stores in 27 states and the District of Columbia. ROSEDALE CLO: S&P Rates $12.5 Million Class E Notes at BB --------------------------------------------------------- Standard & Poor's Ratings Services assigned its ratings to Rosedale CLO II Ltd./ Rosedale CLO II LLC's $289.9 million notes. The transaction is a CLO backed primarily by loans. The ratings reflect: -- Adequate credit support provided in the form of overcollateralization, subordination, and excess spread; -- The characteristics of the underlying collateral pool, which consists primarily of senior secured loans; -- Scenario default rates of 50.23% for class A, 47.23% for class B, 44.64% for class C, 39.80% for class D, and 33.51% for class E; -- Scenario break-even loss rates of 82.90% for class A, 69.14% for class B, 71.98% for class C, 67.64% for class D, and 60.13% for class E; -- A weighted average rating of 'B+'; -- A weighted average maturity for the portfolio of 7.953 years; -- An S&P default measure of 3.69%; -- An S&P variability measure of 2.85%; and -- An S&P correlation measure of 2.51. Interest on the class C, D, and E notes may be deferred up until the legal final maturity in June 2022 without causing a default under these obligations. The ratings on these notes, therefore, address the ultimate payment of interest and principal. Ratings Assigned Rosedale CLO II Ltd./Rosedale CLO II LLC Class Rating Amount ----- ------ ---------- X AAA $5,000,000 A AAA $218,000,000 B AA $26,000,000 C A $15,000,000 D BBB $13,400,000 E BB $12,500,000 Preferred shares NR $19,400,000 NR - Not rated. ROTECH HEALTHCARE: Posts $21.8 Mil. Net Loss in Qtr Ended March 31 ------------------------------------------------------------------ Rotech Healthcare Inc. reported a net loss of $21.8 million on net revenues of $135.4 million for the first quarter ended March 31, 2007, compared with a net loss of $2.9 million on net revenues of $132.5 million for the same period in 2006. Cost of net revenues totaled $53.3 million for the three months ended March 31, 2007, an increase of $9.8 million or 22.4% from the comparable period in 2006. The net increase was primarily attributable to an increase in product and supply costs from the transition of patients formerly receiving compounded budesonide to commercially available alternative products. The loss on extinguishment of debt of $12.2 million equals the unamortized debt issuance costs from the Sept. 15, 2006, refinancing, as well as prepayment premiums paid in accordance with the former credit agreement. This amount was written off on March 30, 2007, upon closing of the company's new $180 million term loan and repayment of all amounts associated with the former credit facility. At March 31, 2007, the company's balance sheet showed $571.1 million in total assets, $551.7 million in total liabilities, $5.5 million in series A convertible redeemable preferred stock, and $13.9 million in total stockholders' equity. Net cash provided by operating activities was $17.4 million for the three months ended March 31, 2007, as compared to $343,000 for the same period in 2006. As of March 31, 2007, the company had the following debt facilities and outstanding debt: -- $180.0 million senior secured term loan with a maturity date of Sept. 26, 2011, the proceeds of which were used to repay the outstanding balance under the company's former term loan and revolving credit facility. As of March 31, 2007, the entire amount of the term loan was outstanding. -- $300.0 million aggregate principal amount of 9 1/2% senior subordinated notes, the proceeds of which were used to repay certain pre-petition claims owed to the creditors of the predecessor company as part of its plan of reorganization. The notes mature on April 1, 2012. As of March 31, 2007, $287 million was outstanding. The company made no interest payments during either of the three month periods ended March 31, 2006, or 2007. Accrued interest on the senior subordinated notes totaled $13.6 million at March 31, 2007. 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?1f0a About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/ -- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. * * * As reported in the Troubled Company Reporter on April 2, 2007, Standard & Poor's raised Rotech Healthcare Inc.'s corporate credit rating to 'B-' from 'CCC'. SHARP HOLDINGS: Loan Add-On Prompts S&P to Revise Rating to B- -------------------------------------------------------------- Standard & Poor's Rating Services revised its bank loan rating on Commerce, California-based Sharp Holdings Corp.'s (B-/Stable/--) first-lien term loan to 'B-' from 'B'. The recovery rating was also revised to '2' from '1' indicating the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. These actions reflect the company's decision to increase the size of the first-lien term loan due 2014 to $395.0 million from $360.0 million. The size of the second-lien term loan is being reduced to $140.0 million from $175.0 million. The first-lien term loan is rated the same as the corporate credit rating of Sharp Holdings Corp. Ratings on the second-lien term loan were affirmed at 'CCC' with a recovery rating of '5', reflecting the expectation for negligible (0%-25%) recovery of principal in the event of payment default. Ratings List Ratings Affirmed Sharp Holdings Corp. Corporate credit rating B-/Stable/-- $140 million second-lien term loan due 2014 CCC Recovery rating 5 Ratings Revised To From -- ---- $395 million first-lien term loan due 2014 B- B Recovery rating 2 1 SHIFT NETWORKS: Obtains CCAA Protection in Alberta -------------------------------------------------- Shift Networks Inc. discloses that, after careful consideration of all available alternatives, to maintain regular business operations and to continue uninterrupted delivery of services to Shift clients, Shift's Board of Directors has determined that it is in the best interests of all of its stakeholders to seek creditor protection under the Companies' Creditors Arrangement Act (Canada), and has obtained such protection pursuant to an Order from the Alberta Court of Queen's Bench. Shift has obtained debtor-in-possession financing order to finance its working capital needs and the continued growth of its customer base while under CCAA protection. The DIP Loan is in the aggregate amount of $1,500,000 and available in multiple drawdowns. Since late 2006, Shift has been hampered by capital market and financial challenges. CCAA protection will stay creditors, suppliers and others from enforcing rights against Shift and will afford Shift the opportunity to restructure its affairs. While under CCAA protection, Shift will continue with its day-to-day operations, including the provisioning of and continuing voice over IP services to it's customers. The Court has granted CCAA protection for an initial period of 30 days, expiring June 7, 2007, to be extended thereafter as the Court deems appropriate. Notwithstanding the current market and financial challenges, Shift continues to be the pre-eminent provider of small-to-medium business VoIP telephone services in Calgary, Edmonton, Vancouver, Victoria, Toronto and Ottawa, experiencing over 300% subscriber growth in fiscal 2006 compared to 2005 and continued adoption of its unique hosted VoIP services. Three of the independent directors of Shift, Mr. Donald J. Page, Mr. Donald Hathaway and Mr. Neil McPherson have resigned. Mr. Trent Johnsen remains as Director, President and Chief Executive Officer. While under CCAA protection, management of Shift will remain responsible for its operations. The Court appointed monitor, PricewaterhouseCoopers Inc., will monitor Shift's ongoing operations, assist with the development and filing of a plan of compromise and arrangement with its creditors and other stakeholders, liaise with creditors, customers and other stakeholders and report to the Court. Management will also be responsible for formulating the Plan for restructuring Shift's financial affairs. The Monitor will post the court filings and other information relating to Shift on its website at http://www.pwc.com/brs-shift/ The Plan is the proposed compromise that, in due course, Shift intends to present to its stakeholders affected by the Plan. This Plan will describe how Shift proposes to restructure its affairs. Those stakeholders affected by the Plan will have an opportunity to vote upon the offer proposed in the Plan. If the Plan is approved by the requisite number and value of the affected stakeholders, the Court must also approve the Plan before it may be implemented. Although CCAA protection enables Shift to continue its day-to-day operations until its CCAA status changes, the implications for Shift shareholders are less clear. At the end of the restructuring process, the value of what remains for the shareholders will depend upon the terms of the Plan approved by the affected stakeholders. Shift Networks Inc. -- http://shiftnetworks.com/-- (TSX VENTURE: SHF) is a voice and high-speed Internet access provider to small and medium businesses. The company generates revenues through two sources: offering a suite of voice-over Internet protocol services to commercial clients through its network and the resale of telecommunications services provided by third parties. During the year ended December 31, 2005, it discontinued the legacy line of business in order to focus specifically on VoIP services. SINCLAIR BROADCAST: Affiliate to Redeem $300 Million of 2012 Notes ------------------------------------------------------------------ Sinclair Broadcast Group Inc.'s wholly owned subsidiary, Sinclair Television Group, will redeem $300 million aggregate principal amount of the 2012 Notes plus the associated call premium and accrued interest on June 11, 2007. The trustee for its existing 8% Senior Subordinated Notes due 2012 has been notified of this action. The redemption will be effected in accordance with the terms of the indenture governing the 2012 Notes at a redemption price of 104% of the principal amount of the 2012 Notes plus accrued and unpaid interest. The redemption of the 2012 Notes, plus the associated call premium and accrued interest, thereon will be funded from the net proceeds of Sinclair Broadcast Group's recently completed offering of $300 million aggregate principal amount of 3% Senior Convertible Notes due 2027, cash on hand and bank debt. Headquartered in Baltimore, Maryland, Sinclair Broadcast Group Inc. (Nasdaq: SBGI)-- http://www.sbgi.net/-- is one of the diversified television broadcasting companies, that owns and operates, programs or provides sales services to 61 television stations in 38 markets. Sinclair's television group includes FOX, WB, ABC, CBS, NBC, and UPN affiliates and reaches approximately 23.0% of all U.S. television households. * * * As reported in the Troubled Company Reporter on May 8, 2007, 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. SINCLAIR BROADCAST: Closes $300MM Convertible Sr. Notes Offering ---------------------------------------------------------------- Sinclair Broadcast Group Inc. has completed its public offering of $300 million aggregate principal amount of convertible senior notes due 2027. In addition, Sinclair has granted the underwriters of the notes an option, solely to cover over- allotments, to purchase up to an additional $45 million aggregate principal amount of the notes. The notes mature in 2027 and, upon certain conditions, will be convertible into cash and, in certain circumstances, shares of Class A common stock of Sinclair Broadcast prior to maturity at an initial conversion price of $20.43 per share, subject to adjustment, which is equal to an initial conversion rate of approximately 48.95 shares of Sinclair Class A common stock per $1,000 principal amount of notes. The notes may not be redeemed prior to May 20, 2010 and may thereafter be redeemed by Sinclair at par. The offering was made pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission. Sinclair intends to use the net proceeds from the offering, together with available cash on hand and/or bank debt, to finance the redemption of $300 million aggregate principal amount of Sinclair Television Group Inc.'s, its wholly-owned subsidiary, existing 8% Senior Subordinated Notes due 2012. About Sinclair Broadcast Group Headquartered in Baltimore, Maryland, Sinclair Broadcast Group Inc. (Nasdaq: SBGI)-- http://www.sbgi.net/-- is one of the diversified television broadcasting companies, that owns and operates, programs or provides sales services to 61 television stations in 38 markets. Sinclair's television group includes FOX, WB, ABC, CBS, NBC, and UPN affiliates and reaches approximately 23.0% of all U.S. television households. * * * As reported in the Troubled Company Reporter on May 8, 2007, 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. SMARTIRE SYSTEMS: Declares Changes in Board & Leadership Structure ------------------------------------------------------------------ SmarTire Systems Inc. disclosed several changes to its board of directors and leadership structure. Former chairman of the board Robert Rudman and director Johnny Christiansen have resigned in order to pursue other opportunities. William Cronin, a board member since 2001, and previously from 1995 to 1998, has been appointed to serve as Interim Chairman. Messrs. Rudman and Christiansen have agreed to accept 5,719,601 common shares of the company in lieu of approximately $113,000 in outstanding director's fees. "The company wishes Robert and Johnny all the best in their future endeavors, and appreciate their efforts in getting SmarTire to this point in its corporate evolution," David Warkentin, SmarTire's ceo, said. In other board news, David Warkentin and George O'Leary have joined the board of directors. Mr. O'Leary is the ceo of SKS Consulting, which he formed in 2000 with the mission to help companies focus on executing their core business strategy. SKS Consulting is currently a consultant to SmarTire. From 1996 to 2000, Mr. O'Leary was ceo and president of Communication Resources Inc., where annual revenues grew from $5 million to $40 million during his tenure. "These changes reflect SmarTire's growth process and strategic focus," Mr. Warkentin said. "As the company moves into an era in which the trucking and fleet industry becomes the company's primary market, it is focused on the company's products, and on taking SmarTire to a higher performance level with efficient operations, increased revenues and profits. The company plans to focus on fiscal disciplines and demonstrating its achievements to shareholders through clearer communications and a more focused strategy." The company also has promoted Greg Tooke to vice president, Product and Supply Chain. A nine-year SmarTire veteran, Tooke was previously director of Business and Product Development. As part of its focus on better communications with shareholders, SmarTire has engaged the services of Walek & Associates, a New York-based public relations and investor relations agency. About SmarTire Systems Inc. Headquartered in Richmond, British Columbia, Canada, SmarTire Systems Inc. (OTC BB: SMTR.OB) -- http://smartire.com/--develops and markets technically advanced tire pressure monitoring systems for the transportation and automotive industries that monitor tire pressure and tire temperature. Its TPMSs are designed for improved vehicle safety, performance, reliability and fuel efficiency. The company has three wholly owned subsidiaries: SmarTire Technologies Inc., SmarTire USA Inc. and SmarTire Europe Limited. At Jan. 31, 2007, the company's balance sheet showed $5.3 million in total assets, and $17.6 million in total liabilities, resulting in a $12.3 million total stockholders' deficit. The company's Jan. 31 balance sheet also showed strained liquidity with $3.2 million in total current assets available to pay $4.3 million in total current liabilities. STARBOUND RE: S&P Rates Proposed $66.5 Million Bank Loan at BB -------------------------------------------------------------- Standard & Poor's Ratings Services its 'BBB+' senior unsecured bank loan rating to Starbound Re II Ltd.'s proposed $64.9 million bank loan (Debt III), its 'BBB-' senior unsecured bank loan rating to Starbound II's proposed $159.5 million bank loan (Debt II), and its 'BB' senior secured bank loan rating to Starbound II's proposed $66.5 million bank loan (Debt I). "The differences in ratings reflect the probabilities of the debt becoming impaired," said Standard & Poor's credit analyst James Brender. Starbound II is also raising $123.9 million of common equity. The ratings are preliminary pending review of final legal documents related to the transaction. Starbound II is a limited-life, special-purpose Class-3 reinsurance company domiciled in Bermuda and set up specifically to provide additional capacity to the Florida insurance market. Renaissance Reinsurance Ltd. (Ren Re; A+/Stable/--) has agreed to underwrite policies on behalf of Starbound II. These types of entities are commonly referred to as sidecars. Starbound II's structure and portfolio of risks bear a strong resemblance to Starbound Re Ltd. (its predecessor), though Debt I and Debt III have slightly higher modeled probabilities of default. "The ratings on Debt I and Debt II are based on analysis of the modeled probabilities of default, with qualitative adjustments to address risks not captured in the model," Mr. Brender added. "Debt I and Debt II have modeled probabilities of default of 100 basis points (bps) and 20 bps, respectively." The modeled probabilities of default refer to the percentage of 100,000 simulations of annual catastrophe losses for Starbound II's pro forma portfolio that resulted in a default of the term loan. Catastrophe losses incurred by Starbound II is the only variable in the model. Standard & Poor's qualitative adjustments create an appropriate cushion on the rating, given the possibility for modeling error or unfavorable variances between Starbound II's business plan assumptions and actual results. The adjusted probabilities of default for Debt I and Debt II are 231 bps and 54 bps, respectively. The adjustments reduce the model catastrophe losses required to cause a default of Debt I to $126 million from $172 million. The difference of 26% creates an appropriate cushion for the rating, given the potential for modeling error or deviation from Starbound II's pro forma portfolio. The adjustments reduce the modeled catastrophe losses required to cause a default of Debt II to $201 million from $239 million. The difference is 16%. The qualitative adjustments consider Ren Re's strong competitive position and risk management, Starbound II's predetermined exposures and risk tolerances, and healthy rate adequacy for reinsuring homeowners' risks in Florida, which is more than 95% of Starbound II's exposure. These positive factors are offset in part by the difficulties of modeling exposure to natural disasters, which is exacerbated by Starbound II's significant concentration of risk in Florida. The lack of a strong alignment of interest between Ren Re and Starbound II is a minor negative rating factor. The rating on Debt III reflects application of Standard & Poor's criteria for second-event risk. Ratings for securities that expose investors to potential loss of principal or interest from two natural disasters are capped at 'BBB+'. The modeled and adjusted probabilities of attachment are 1 bp and 15 bps, respectively. The adjusted probability of default implies a rating above the 'BBB+' cap. The adjustments reduce the model catastrophe losses required to cause a default to $252 million from $398 million. The difference is 37%. This cushion is larger than most sidecars, resulting primarily from Standard & Poor's general concerns regarding catastrophe modeling for extremely remote events and the impact on the modeling risk of Starbound II's specific concentration in Florida. The proceeds from capital-raising transactions will be placed in one or more collateral trusts and will provide Ren Re with a source of indemnity cover for losses relating to its property catastrophe lines of business and other related lines. Certain collateral trusts may enable cedents of Ren Re and Starbound II to receive credit for reinsurance recoverables. The duration of Starbound II's assets will generally be consistent with that of its obligations. Ren Re will retain a minimum of 20% of the premium from a defined selection of its property catastrophe business ceded to Starbound through multiple quota share reinsurance treaties, under which Starbound's liability will attach simultaneously with that of Ren Re and otherwise follow the fortunes with respect to the business retroceded to Starbound. STRATUS SERVICES: Posts $85,982 Net Loss in Quarter Ended March 31 ------------------------------------------------------------------ Stratus Services Group Inc. reported a net loss of $85,982 on revenues of $1,810,705 for the second quarter ended March 31, 2007, compared with a net loss of $468,554 on revenues of $1,190,086 for the same period last year. At March 31, 2007, the company's balance sheet showed $1,730,821 in total assets and $9,798,665 in total liabilities, resulting in an $8,067,844 total stockholders' deficit. The company's balance sheet at March 31, 2007, also showed strained liquidity with $1,534,372 in total current assets available to pay $9,154,596 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?1f00 Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 15, 2007, Gruber & Company LLC, in Lake Saint Louis, Mo., expressed substantial doubt about Stratus Services Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Sept. 30, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. About Stratus Services Group Headquartered in Manalapan, N.J., Stratus Services Group Inc. (OTCBB: SSVG.OB) -- http://www.stratusservices.com/-- provided a wide range of staffing and productivity consulting services nationally through a network of offices located throughout the United States until December 2005. The company plans on expanding its information technology staffing solutions business through its 50% owned consolidated joint venture, Stratus Technology Services LLC. TALCOTT NOTCH: S&P Puts Class A-4 Notes' Rating under Pos. Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its rating on the class A-4 notes issued by Talcott Notch CBO I Ltd., a high-yield arbitrage CBO transaction managed by General Re-New England Asset Management, on CreditWatch with positive implications. At the same time, the ratings on the class A-3L and A-3B notes were affirmed based on the credit enhancement available to support the notes. The CreditWatch placement reflects factors that have positively affected the credit enhancement available to support the class A-4 notes since the rating on these notes was affirmed at 'BB-' in January 2006. The primary factor is an increase in the level of overcollateralization available to support the class A-4 notes due to de-levering of the class A-3L and A-3B notes. Standard & Poor's will review the results of current cash flow runs generated for Talcott Notch CBO I Ltd. to determine the level of future defaults the rated notes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. The results of these cash flow runs will be compared with the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the credit enhancement available. Rating Placed on Creditwatch Positive Talcott Notch CBO I Ltd. Rating ------ Class To From ----- -- ---- A-4 BB-/Watch Pos BB- Ratings Affirmed Talcott Notch CBO I Ltd. Class Rating ----- ------ A-3L AAA A-3B AAA Tranche Prior Current Information Action Action Date (MM/YYYY) 01/2006 05/2007 Class A-3L note balance (mil. $) 61.073 11.846 Class A-3B note balance (mil. $) 5.434 3.285 Class A-4 note balance (mil. $) 20.0 20.0 Senior class A O/C ratio (%) 170.1 274.34 Senior class A O/C ratio minimum (%) 120.0 120.0 Class A OC ratio (%) 129.8 165.79 Class A OC ratio minimum (%) 110.0 110.0 Transaction Information Issuer: Talcott Notch CBO I Ltd. Co-issuer: Talcott Notch CBO I (Delaware) Corp. Underwriter: Bear Stearns Cos. Inc. Trustee: JPMorgan Chase Bank N.A. Transaction type: Arbitrage corporate high-yield CBO TOUSA INC: Posts $66 Million Net Loss in Quarter Ended March 31 --------------------------------------------------------------- Tousa Inc. reported a net loss of $66 million on revenues of $588.2 million for the first quarter ended March 31, 2007, compared with net income of $55 million on revenues of $614.3 million for the same period ended March 31, 2006. The company's results for the first quarter of 2007 include a $78.9 million estimated pre-tax loss contingency relating to the potential restructuring of the Transeastern joint venture pursuant to a proposed settlement. Also adversely impacting net income is $42 million of pre-tax charges resulting from the write-down of assets including, inventory impairments and write-off of deposits and abandonment costs. Of this amount, $8 million of inventory impairments are related to active communities, and $34 million are related to land impairments, deposit write-offs and abandonment costs. Excluding the impact of inventory impairments, deposit write-offs and abandonment costs, and estimated loss contingency, net income, using an effective tax rate of 35.5%, was $21.7 million. Land sale profit during the first quarter 2007 was $900,000 compared to $400,000 in the prior year's period. "Currently it is difficult to gauge the timing of a potential housing recovery, as conditions continue to vary greatly. Affordability is improving largely because of lower net pricing driven by extensive use of sales incentives and changes in our product mix. We are concerned that housing inventories appear to be on the rise again in most of our markets, and sales in March and April were disappointing. This leads us to believe that we have not reached the point of stabilization as we had previously anticipated and that the difficult conditions could persist for the foreseeable future," said Antonio B. Mon, president and chief executive officer of TOUSA. Homebuilding revenues for the first quarter of 2007 were $588.2 million, a 4% decrease from the $614.3 million of homebuilding revenues in the first quarter of 2006, due primarily to a decrease in revenue from land sales, which was down 88%. SG&A expenses decreased to $95.8 million for the three months ended March 31, 2007, from $97.4 million for the three months ended March 31, 2006. The decrease in SG&A expenses is due primarily to a reduction in overhead and related expenses, partially offset by an increase of $10.2 million in direct selling and advertising expenses, and $7.5 million in professional fees related to the Transeastern Joint Venture. EBITDA for the first quarter of 2007 was $57.6 million compared to $114.5 million in the first quarter of 2006. For the three months ended March 31, 2007, cash used in operating activities was $52.4 million, as compared to $146 million during the three months ended March 31, 2006. Transeastern Joint Venture TOUSA acquired its 50% interest in the Transeastern JV on Aug. 1, 2005, when the Transeastern JV acquired substantially all of the homebuilding assets and operations of Transeastern Properties Inc., including work in process, finished lots and certain land option rights. The Transeastern joint venture paid approximately $826.2 million for these assets and operations, which included the assumption of $127.1 million of liabilities and certain transaction costs, net of $30.1 million of cash. Upon formation of the Transeastern JV, for the benefit of the senior and mezzanine lenders to the joint venture, TOUSA entered into completion guarantees in which they guaranteed the payment of costs, the payment or bonding of mechanics' liens, and the completion of development activities associated with the completion of real estate projects started as of Aug. 1, 2005, in the event that the borrowers defaulted on such obligations. As of Dec. 31, 2006, the Transeastern JV had approximately $625 million of bank debt outstanding of which $400.0 million was senior debt. The borrowers under the credit agreements are subsidiaries of the Transeastern JV. Deutsche Bank Trust Company Americas, as administrative agent for the lenders, claims that a voluntary bankruptcy filing or commencement of insolvency proceedings by any of the borrowers, even at the ultimate direction of the lenders, would trigger the company's obligations to repay all amounts due under the credit agreements governing the loans. The company disputes that a voluntary bankruptcy filed at the direction of the lenders, either directly or indirectly, would trigger such obligations. Currently, the company is in settlement discussions with representatives of the holders of the Transeastern JV loans and with the other member of the joint venture. TOUSA has proposed a structure in which either the joint venture or the successor to some or all of its assets would become TOUSA's wholly or majority owned subsidiary. The proposal also contemplates paying the joint venture's $400.0 million of senior debt in full through the incurrence of additional indebtedness. During the year ended Dec. 31, 2006, TOUSA evaluated the recoverability of its investment in the Transeastern JV, and determined its investment to be fully impaired. As of Dec. 31, 2006, the company wrote-off $145.1 million related to its investment in the Transeastern JV, which included $31.3 million of member loans receivable and $21.4 million of receivables for management fees, advances and interest due to TOUSA from the Transeastern JV. As of Dec. 31, 2006, the company accrued an estimated loss of $275 million, reflecting its estimate of the low end of the range of the estimated loss as determined by computing the difference between the estimated fair market value of the consideration the company expects to pay in connection with the global settlement less the estimated fair market value of the business it would acquire pursuant to its proposal. During the three months ended March 31, 2007, the company accrued an additional $78.9 million due to changes in the proposed settlement and in the estimated fair market value of the business it would acquire. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (NYSE: TOA) -- http://www.tousa.com/-- builds and sells single-family homes largely for the move-up homebuyer. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. It is 67%-owned by Technical Olympic S.A. * * * As reported in the Troubled Company Reporter on April 10, 2007, Fitch Ratings has downgraded Technical Olympic USA Inc.'s Issuer Default Rating to 'B-' from 'B+'. TOA's ratings remain on Rating Watch Negative. UNIGENE LABORATORIES: Restructures $15.7 Million Credit Balance --------------------------------------------------------------- Unigene Laboratories Inc. has repaid $1 million in stockholder debt and restructured the remaining $15.7 million debt balance as eight-year term notes with a fixed simple interest rate of 9% per annum. The new notes replace short-term debt, a portion of which was in default. Payments under the new notes are not required for the first three years. "This transaction will immediately replace all notes that have been in default, reduce the company's aggregate annual interest payments to a rate that is just .75% above the prime lending rate and extend the term required for repayment," Dr. Warren Levy, president and ceo of Unigene, commented. "The terms of the new notes are favorable to Unigene and they substantially improve the company's balance sheet. The company appreciates Jay Levy's continued support of Unigene, and his willingness to accommodate these new terms, that will further strengthen the company's ability to advance its product pipeline." Based in Fairfield, New Jersey, Unigene Laboratories Inc. (OTCBB: UGNE) -- http://www.unigene.com/or http://www.fortical.com/-- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Due to the size of the worldwide osteoporosis market, Unigene is targeting its initial efforts on developing calcitonin and PTH-based therapies. Fortical(R), Unigene's nasal calcitonin product for the treatment of postmenopausal osteoporosis, received FDA approval and was launched in August 2005. Unigene has licensed the U.S. rights for Fortical to Upsher-Smith Laboratories, worldwide rights for its oral PTH technology to GlaxoSmithKline and worldwide rights for its calcitonin manufacturing technology to Novartis. Going Concern Doubt Grant Thornton LLP, in Edison, New Jersey, expressed substantial doubt about Unigene Laboratories Inc.'s ability to continue as a going after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and working capital deficiency. The auditing firm also stated that the company has stockholders demand loans in default at Dec. 31, 2006. UNION PLANTERS: Fitch Affirms BB Ratings on Class B5 Certificates ----------------------------------------------------------------- Fitch Ratings has taken rating action on Union Planters Mortgage Finance Corp. mortgage pass-through certificates: Series 1998-1 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 affirmed at 'A+'; -- Class B4 affirmed at 'BBB'; -- Class B5 affirmed at 'BB'. Series 1999-1 -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AAA'; -- Class B3 affirmed at 'AA'; -- Class B4 affirmed at 'BBB+'; -- Class B5 affirmed at 'BB'. Series 2000 -1 -- Class A affirmed at 'AAA'. The affirmations, affecting approximately $69.7 million of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. The CE levels for all of the above transactions have increased by at least 3 times the original levels. As of the April 2007 distribution date, series 1998-1 has a pool factor (i.e., current mortgage loans outstanding as a percentage of the initial pool) of 10% and is seasoned 107 months. Series 1999-1 has a pool factor of 11% and is seasoned 98 months. Series 2000-1 has a pool factor of 16% and is seasoned 81 months. UNIVERSAL HOSPITAL: March 31 Balance Sheet Upside-Down by $89.3MM ----------------------------------------------------------------- Universal Hospital Services, Inc., disclosed financial results for the quarter ended March 31, 2007. Total revenues were $63.5 million for the first quarter of 2007, representing a $5.5 million or 10% increase from total revenues of $58.0 million for the same period of 2006. Net income for the quarter was $3.2 million, compared to net income of $3.6 million for the same quarter last year. Adjusted EBITDA for the first quarter of 2007 increased $2.3 million, or 10% to $25.2 million from $22.9 million in 2006. At March 31, 2007, the company's balance sheet showed $281,384,000 in total assets and total liabilities of $370,744,000 resulting in a shareholders' deficit of $89,360,000. A full-text copy of the company's quarterly report is available for free at http://ResearchArchives.com/t/s?1f06 About Universal Hospital Universal Hospital Services, Inc. is a medical equipment lifecycle services company. UHS offers comprehensive solutions that maximize utilization, increase productivity and support optimal patient care resulting in capital and operational efficiencies. UHS currently operates through more than 75 offices, serving customers in all 50 states and the District of Columbia. UNIVERSAL HOSPITAL: UHS Merger Plans to Offer $230MM Senior Notes ----------------------------------------------------------------- Universal Hospital Services Inc. disclosed that UHS Merger Sub Inc., a subsidiary of UHS Holdco Inc., is planning to offer $230 million aggregate principal amount of second lien senior secured floating rate notes due 2015 and $230 million aggregate principal amount of second lien senior secured PIK toggle notes due 2015 as part of the financing that will be used to consummate the acquisition of UHS by Holdco, an affiliate of Bear Stearns Merchant Banking. The issuer of the notes has been formed solely for the purpose of completing the acquisition and, concurrently with the closing of this offering, will be merged with and into UHS, which will be the surviving corporation and will assume the obligations of UHS Merger Sub Inc. under the notes and related indenture. The offering is conditioned upon the consummation of the acquisition of UHS. The notes will be secured by a second priority lien on substantially all of the assets of UHS that will secure its new first priority senior secured credit facility. The notes will be offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States in reliance on Regulation S under the Securities Act. The notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. Any offers of the notes will be made only by means of a private offering memorandum. About Universal Hospital Based in Bloomington, Minnesota, Universal Hospital Services Inc. -- http://www.uhs.com/-- is a medical equipment lifecycle services company. UHS offers comprehensive solutions that maximize utilization, increase productivity and support optimal patient care resulting in capital and operational efficiencies. UHS currently operates through more than 75 offices, serving customers in all 50 states and the District of Columbia. * * * Universal Hospital Services Inc.'s 10-1/8% Series A Senior Notes due 2011 carry Moody's Investors Service's 'B3' rating and Standard & Poor's B- rating. UNIVERSAL HOSPITAL: S&P Holds B+ Rating and Removes Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Edina, Minnesota-based Universal Hospital Services Inc. and removed the rating from CreditWatch with negative implications, where it was placed April 17, 2007. The outlook is negative. At the same time, Standard & Poor's assigned its loan and recovery ratings to Universal's proposed $135 million first-lien senior secured revolving credit facility maturing in 2013. The first-lien debt is rated 'BB' (two notches higher than the corporate credit rating on Universal) with a recovery rating of '1', indicating the expectation for full (100%) recovery of principal in the event of a payment default. S&P also assigned its loan and recovery ratings to the company's proposed $230 million second-lien senior secured fixed-rate paid- in-kind toggle notes maturing in 2015 and $230 million second-lien senior secured floating-rate notes maturing in 2015. The second- lien debt is rated 'B-' (two notches lower than the corporate credit rating on Universal) with a recovery rating of '4', indicating the expectation for marginal (25%-50%) recovery of principal in the event of a payment default. The proceeds, in addition to about $252 million of common equity, will be used to finance Bear Stearns Merchant Banking's $712 million acquisition of Universal. "The negative outlook reflects our concern with Universal's very large post-transaction debt obligations," said Standard & Poor's credit analyst Jesse Juliano. "However, the corporate credit rating on Universal is affirmed given the company's significant liquidity and our expectation that Universal's financial risk profile will be more in line with a 'B+' rating within two years." The ratings on Universal reflect its dependence on a narrow but relatively predictable business, relatively small scale, heavy debt burden, and significant capital expenditure requirements. These concerns are partially mitigated by Universal's leading position, consistent growth despite its cyclical industry, and strong liquidity relative to the ratings. Universal is a leading provider of supplemental and outsourced movable medical equipment to hospitals. The company's customers include more than 7,100 hospitals and alternate-site providers. UNIVISION COMMUNICATIONS: Fitch Cuts Issuer Default Rating to B --------------------------------------------------------------- Fitch Ratings downgrades and removes Univision Communications Inc. from Rating Watch Negative. On Feb. 16, 2007, Fitch disclosed that it expected Univision's Issuer Default Rating to be lowered to 'B' from 'BB' following the filing of debt documentation consistent with Fitch's expectations. The action incorporates a review of the final debt documentation filed yesterday by the Company. The Rating Outlook is now Stable. The company's debt structure is rated as: -- $7.7 billion senior secured bank loans due 2014 'B+/RR3'; -- 3.50% senior secured notes due 2007 to 'B+/RR3' from 'BB'; -- 3.875% senior secured notes due 2008 to 'B+/RR3' from 'BB'; -- 7.85% senior secured notes due 2011 to 'B+/RR3' from 'BB'; -- $500 million second lien term loan due 2009 'B-/RR5'; -- $1.5 billion 9.75%/10.50% senior unsecured notes due 2015 'CCC+/RR6'. Headquartered in Los Angeles, Calif., Univision Communications Inc., (NYSE: UVN) -- http://www.univision.net/-- owns and operates more than 60 television stations in the U.S. and Puerto Rico offering a variety of news, sports, and entertainment programming. The company had about $2.6 billion in debt at Dec. 31, 2006. VALHI INC: Earns $26.1 Million 2007 First Quarter ------------------------------------------------- Valhi, Inc., reported net income of $26.1 million in the first quarter of 2007 compared to income of $23.4 million in the first quarter of 2006. Chemicals sales increased $9.7 million in the first quarter of 2007 compared to the first quarter of 2006 due primarily to net effects of favorable fluctuations in currency exchange rates, which increased chemicals sales by approximately $16 million, and lower average TiO2 prices. Kronos' average TiO2 selling prices in the first quarter of 2007 were 3% lower than the first quarter of 2006. Kronos' TiO2 sales volumes in the first quarter of 2007 increased less than 1% compared to the first quarter of 2006, with higher volumes in Europe and export markets offsetting the effect of lower volumes in the U.S. Chemicals operating income declined $2.9 million in the first quarter of 2007 as compared to the same period in 2006 due primarily to lower average TiO2 selling prices and higher raw material and energy costs, partially offset by the favorable effects of fluctuation in currency exchange rates, which increased chemicals operating income by approximately $3 million, and higher TiO2 production volumes. Kronos' TiO2 production volumes increased 5% in the first quarter of 2007 as compared to the first quarer of 2006. Kronos' TiO2 production facilities were operating at near full capacity in both periods, and Kronos' sales and production volumes in the first quarter of 2007 were new records for Kronos for a first quarter. In December 2006, Kronos adopted a new accounting standard related to planned major maintenance expense. Under the new standard, Kronos no longer accrues the cost of planned major maintenance expense in advance but instead recognizes the cost of planned major maintenance when incurred. The new standard was adopted retroactively, and accordingly the Company's net income in the first quarter of 2006 is approximately $500,000 higher than previously reported. Component product net sales decreased $3.5 million in the first quarter of 2007 as compared to the same quarter of 2006 due to lower sales to the office furniture market where, for certain products, Asian competitors have established selling prices at a level below which CompX considers would return an acceptable margin, partially offset by new sales volumes as a result of a performance marine acquisition in April 2006. Despite the lower level of component product sales and increasing raw material costs, component products operating income increased $.5 million in the first quarter of 2007 as compared to the first quarter of 2006 due to a more favorable product mix and a continued focus on reducing costs and improving efficiency. Waste management sales decreased, and its operating loss increased, due to lower utilization of waste management services. TIMET's sales increased 19% from $286.9 million in the first quarter of 2006 to $341.7 million in the first quarter of 2007. TIMET's operating income also increased 22% from $95.1 million to $116.2 million in the quarter. TIMET's average selling prices for melted and mill products in the first quarter of 2007 increased 37% and 20%, respectively, over the same period in 2006. While combined volume of melted and mill product shipments during the first quarter of 2007 approximated prior year volumes, market demands resulted in a shift of TIMET's product mix towards an increased level of mill products which require additional processing and resources as compared to melted products, but which also command higher selling prices. TIMET's operating income comparisons were favorably impacted by improved plant operating rates, which increased from 88% in the first quarter of 2006 to 95% in the first quarter of 2007. In addition to higher production costs associated with the shift in product mix, comparing the first quarter of 2006 and 2007, cost of sales also increased due to higher costs of certain raw materials, including titanium sponge. On March 26, 2007 the company paid a special dividend in the form of all of the TIMET common stock it owns. As a result, the company will no longer report equity in earnings of TIMET after the first quarter of 2007. General corporate interest and dividend income declined in the first quarter of 2007 as compared to the first quarter of 2006 due primarily to lower dividend distributions from The Amalgamated Sugar Company LLC. Insurance recoveries represent NL's recovery from certain former insurance carriers in settlements of claims related to certain environmental, indemnity and past litigation defense costs . These insurance recoveries (net of tax and minority interest) aggregated $.01 per diluted share in each of the first quarter of 2006 and 2007. General corporate expenses declined slightly in the first quarter of 2007 as compared to the first quarter of 2006, as higher legal, litigation and environmental expenses of NL were more than offset by lower pension and other expenses for other subsidiaries. Interest expense was lower in the first quarter of 2007 due primarily to Kronos' May 2006 redemption of its 8.875% Senior Secured Notes using the proceeds from its April 2006 issuance of its 6.5% Senior Secured Notes. A full-text copy of the company's financial result for the quarter ended March 31, 2007, is available for free at: http://ResearchArchives.com/t/s?1f09 About Valhi Valhi, Inc. (NYSE: VHI) -- http://www.valhi.net/ -- is engaged in the titanium dioxide pigments, component products (security products, furniture components and performance marine components) and waste management industries. The company's subsidiaries include NL Industries, Inc., Kronos Worldwide, Inc., CompX International, Inc., Tremont LLC and Waste Control Specialists LLC. Kronos Worldwide -- http://www.kronostio2.com/-- has locations in Louisiana, Canada, Norway, Germany and Belgium. VALHI INC: Rhode Island Litigation Cues S&P to Cut Rating to B+ --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Valhi Inc. one notch to 'B+', and removed the rating from CreditWatch where it had been placed with negative implications on Feb. 23, 2006. The outlook is stable. At the same time, Standard & Poor's affirmed its rating on Kronos International Inc.'s (a majority owned subsidiary of Valhi) existing EUR400 million senior secured notes issue due 2013 and assigned a recovery rating. The notes rating was removed from CreditWatch and affirmed at 'B' (one notch lower than the corporate credit rating) and a '3' recovery rating was assigned, following the assessment of recovery prospects that support the expectation for meaningful recovery of principal (50%-80%) in the event of default. "The downgrade of the corporate credit rating reflects ongoing concerns related to the pending lead pigment litigation in Rhode Island," said Standard & Poor's credit analyst David Bird. During February 2007, a Superior Court judge rejected all post- trial motions by Sherwin-Williams Co., Millennium Holdings, and NL Industries (a majority owned subsidiary of Valhi) in the Rhode Island lawsuit. The judge's ruling follows the February 2006 jury verdict in Rhode Island finding the companies liable for creating a public nuisance by making lead-based paints decades ago. S&P's assessment of Valhi's credit quality takes into consideration the additional potential liability resulting from the lead-pigment litigation, the resulting constraints it imposes on cash flows and the company's ability to address future investment opportunities, and the likelihood that a substantial liability will weaken the financial profile beyond expectations at the previous ratings. The ratings on Valhi reflect the company's limited business diversity, exposure to cyclical commodity product cycles, and a highly leveraged financial profile. These factors are offset by several considerations, including the company's well-established position among the leading global titanium dioxide producers. WARNER MUSIC: To Cut 400 Jobs to Realign Workforce -------------------------------------------------- Warner Music Group Corp., on May 8, 2007, disclosed plans to implement changes intended to better align its work force with the changing nature of the music industry by the end of fiscal year 2007. To implement the changes, the company expects to reduce its headcount by about 400 employees. It expects majority of any cost savings to be offset by new hirings and ongoing investment focused on new business initiatives such as the company's ongoing digital and video business initiatives. In connection with these reductions, the company expects to incur a charge ranging from $55 million to $65 million for severance and related benefits. In addition, the company expects to incur implementation charges ranging from $10 million to $15 million related to consulting fees, costs of temporary workers and stay bonuses. All of these restructuring and implementation costs will be paid in cash. The changes are part of the company's continued evolution from a traditional record and songs-based business to a music-based content company and its ongoing management of its cost structure. The changes include a continued redeployment of resources to focus on new business initiatives to help the company diversify its revenue streams, including digital opportunities. The realignment plan is also designed to improve the operating effectiveness of the company's current businesses and to realign its management structure to, among other things, effectively address the continued development of digital distribution channels along with the decline of industry-wide CD sales. The company intends to enhance its effectiveness, flexibility, structure and performance by reducing and realigning long-term costs. This will primarily consist of the reorganization of management structures to more adequately and carefully address regional needs and new business requirements, to reduce organizational complexity and to improve leadership channels. The company also intends to continue to shift resources from its physical sales channels to efforts focused on digital distribution and emerging technologies and other new revenue streams. Part of the plan will also result in the outsourcing of some back-office functions as a cost-savings measure. The company also expects to incur substantially all of the costs associated with the restructuring plan by the end of the current fiscal year. Total costs of the restructuring plan are estimated to range from $65 million to $80 million. About $12 million of restructuring costs were incurred in the company's fiscal second quarter of 2007, consisting primarily of the elimination of duplicative positions and redirecting of resources to growth areas of its businesses in Europe. About Warner Music Group Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- is a music company that operates through numerous international affiliates and licensees in more than 50 countries, including the Philippines. * * * 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). Warner Music Group Corp. carries Fitch Ratings' BB- issuer default rating assigned in May 2006. WEST CORP: March 31 Balance Sheet Upside-Down by $2.1 Billion ------------------------------------------------------------- West Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q for the period ended March 31, 2007. For the quarter ended March 31, 2007, the company reported net income of $9,019,000 down from $41,064,000 for the same period in 2006. Revenues however went up with $508,633,000 in the period ended March 31, 2007 compared to $424,738,000 for the period ended March 31, 2006. At March 31, 2007, the company's balance sheet showed $2.7 billion in total assets and $3.9 billion in total liabilities resulting in a stockholders' deficit of $2.1 billion. The balance sheet however also that the company is liquid with $692 million in total current assets and $535 million in total current liabilities. A full-text copy of the company's March 31, 2007 quarterly report is available for free at http://ResearchArchives.com/t/s?1f05 About West Corp. Based in Omaha, Nebraska, West Corp. -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West helps its clients communicate effectively, maximize the value of their customer relationships and drive greater profitability from every interaction. The company's integrated suite of customized solutions includes customer acquisition, customer care, automated voice services, emergency communications, conferencing and accounts receivable management services. The company also has operations in Australia, Canada, China, Hong Kong, India, Philippines, Singapore, Switzerland and the United Kingdom. WEST CORP: S&P Holds B+ Rating on $135 Million Loan Add-On ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' loan and '2' recovery ratings on the senior secured first-lien bank facility of business process outsourcer Omaha, Nebraska-based West Corp. (B+/Stable/--), following the announcement that the company will add $135 million to its first-lien term loan. The bank loan rating is at the same level as the corporate credit rating. The '2' recovery rating indicates the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. Pro forma for the proposed add-on term loan, the facility will consist of a $250 million revolving credit facility due 2012 and a $2.4 billion term loan B due 2013. The company will use proceeds from the proposed add-on term loan to finance the acquisition of Omnium Worldwide Inc. Omnium is a provider of revenue cycle management services to the insurance, financial services, communications, and health care industries. About West Corp. Based in Omaha, Nebraska, West Corp. -- http://www.west.com/-- provides outsourced communication solutions to many of the world's largest companies, organizations and government agencies. West helps its clients communicate effectively, maximize the value of their customer relationships and drive greater profitability from every interaction. The company's integrated suite of customized solutions includes customer acquisition, customer care, automated voice services, emergency communications, conferencing and accounts receivable management services. The company also has operations in Australia, Canada, China, Hong Kong, India, Philippines, Singapore, Switzerland and the United Kingdom. WEST PENN: Fitch Lifts Rating on $735 Million Revenue Bonds to BB ----------------------------------------------------------------- Fitch Ratings has upgraded to 'BB' from 'BB-' and removed from Rating Watch Positive the Allegheny County Hospital Development Authority's $735 million health system revenue bonds (West Penn Allegheny Health System, series 2007A). WPAHS' outstanding series 2000 bonds are similarly upgraded. The Rating Outlook is Stable. The rating action reflects the agreement reached between WPAHS and the Internal Revenue Service to the effect that federal regulations will not prohibit the advance refunding of the entire amount of the outstanding series 2000 bonds. WPAHS has terminated its invitation to tender the outstanding series. WESTAR ENERGY: Prices Public Offering of 2047 Mortgage Bonds ------------------------------------------------------------ Westar Energy Inc. has priced the public offering of its First Mortgage Bonds, 6.10% Series due 2047, pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission. Westar will pay interest quarterly at a rate of 6.10% per year beginning Aug. 15, 2007. The bonds will mature on May 15, 2047, and may be redeemed, at Westar's option, in whole or in part on or after May 15, 2012. Payments of principal and interest on the bonds will be insured by Financial Guaranty Insurance Company. The bonds will be issued in minimum denominations of $25 and multiples of $25. Westar intends to apply to list the bonds on the New York Stock Exchange. The offering is expected to close on or about May 16, 2007. Net proceeds from the offering will be approximately $144.1 million. Westar expects to use the net proceeds of the bonds: a) to repay revolver borrowings under Westar's Second Amended and Restated Credit Agreement; and b) the remainder, if any, for working capital and for general corporate purposes including funding operations and acquiring capital equipment. Citigroup Global Markets Inc. and Wachovia Capital Markets LLC are joint- bookrunning managers. UBS Securities LLC is the senior co-manager. Banc of America Securities LLC, Barclays Capital Inc. and Deutsche Bank Securities Inc. are co-managers for the offering. The offering of the bonds will be made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained by contacting: -- Citigroup Global Markets Inc. Tel: 1-877-858-5407; or -- Wachovia Capital Markets LLC Tel: 1-800-289-1262 (toll-free) About Westar Energy Inc. Westar Energy, Inc. (NYSE: WR) -- http://www.westarenergy.com/-- is an electric utility in Kansas, providing electric service to about 669,000 customers in the state. Westar Energy has about 6,100 megawatts of electric generation capacity and operates and coordinates approximately 33,000 miles of electric distribution and transmission lines. * * * As reported in the Troubled Company Reporter on April 16, 2007, Standard & Poor's Ratings Services assigned its preliminary 'BBB-/BB+/BB' rating to Westar Energy Inc.'s omnibus Rule 415 shelf registration, covering an indeterminate amount of first mortgage bonds, senior and subordinated debt securities, and preferred and preference stock. The outlook is stable. The ratings on Westar Energy reflect a satisfactory consolidated business risk position of '5' and an intermediate financial profile that is commensurate with investment-grade characteristics. WORLDGATE COMM: Posts $4.6 Million Net Loss in Qtr Ended March 31 ----------------------------------------------------------------- Worldgate Communications Inc. reported a net loss of $4.6 million for the three months ended March 31, 2007, compared with a net loss of $2.7 million for the same period last year. The three months ended March 31, 2007, included a non-cash charge of $1.3 million associated with amortization of the debt discount of the company's outstanding debentures fully offset by a $1.4 million non-cash gain on derivative warrants and conversion options. The three months ended March 31, 2006, included a non-cash gain of $1.8 million associated with the termination agreement with the company's former distributor. Revenues for the three months ended March 31, 2007, were $310,000. This represents a decrease of $199,000 or 39% versus revenues of $509,000 for the three months ended March 31, 2006. The revenue for the quarter primarily reflects retail sales and associated retail service revenue. There were minimal sales to service providers during the quarter. Operating expenses for the three months ended March 31, 2007, were $4.6 million and were slightly lower than the $4.8 million of expenses recorded in the quarter ended March 31, 2006. At March 31, 2007, the company's balance sheet showed $9.3 million in total assets, $153,000 in redeemable preferred stock, and $9.8 million in total liabilities, resulting in a $658,000 total stockholders' deficit. The company's balance sheet at March 31, 2007, also showed strained liquidity with $8 million in total current assets available to pay $8.5 million 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?1eff Going Concern Doubt As reported in the Troubled Company Reporter on March 21, 2007, Marcum & Kliegman LLP, in Melville, New York, expressed substantial doubt about WorldGate Communications 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 the company's recurring losses from operations and accumulated deficit of $247 million at Dec. 31, 2006. About WorldGate Communications Trevose, Pennsylvania based WorldGate Communications Inc. (NASDAQ: WGAT) -- http://www.wgate.com/ -- designs, manufactures, and distributes the Ojo line of personal video phones. Ojo personal video phones offer real-time, two-way video communications with video messaging. * Fried Frank Adds John Sorkin as Partner in New York ----------------------------------------------------- John E. Sorkin, Esq. will join Fried, Frank, Harris, Shriver & Jacobson LLP as a corporate partner in the Mergers and Acquisitions practice in New York. Mr. Sorkin was a partner in the Corporate Department of Latham & Watkins LLP in New York. "We are delighted to welcome John to our firm. He has valuable experience and market background in M&A and private equity," said Valerie Ford Jacob, Fried Frank's Chairperson. "John adds depth to our growing corporate practice allowing us to broaden our scope of client service and capitalize on new business opportunities," added Justin Spendlove, Fried Frank's Managing Partner. Mr. Sorkin focuses his practice on domestic and cross-border merger and acquisition transactions and leveraged buyouts as well as corporate advisory work related to corporate governance. His experience spans corporate transactions, including public and private mergers and acquisitions, acquisitions of assets in bankruptcy, proxy contests, spin-offs, exchange offers and representation of financial advisors in a wide range of corporate transactions. He has represented private equity funds and their portfolio companies in numerous transactions. Mr. Sorkin received his JD from the University of Chicago Law School, with Honors, and his BA, magna cum laude, from Yale University. He is admitted to the bar in New York. About Fried Frank Fried, Frank, Harris, Shriver & Jacobson LLP -- http://www.friedfrank.com/-- is an international law firm with more than 600 attorneys in offices in New York, Washington, D.C., London, Paris, Frankfurt and Hong Kong. Fried Frank lawyers regularly represent major investment banking firms, private equity houses and hedge funds, as well as many of the largest companies in the world. The firm offers legal counsel on M&A, capital markets and corporate finance matters, white- collar criminal defense and civil litigation, securities regulation, compliance and enforcement, government contracts, environmental law and litigation, real estate, tax, bankruptcy, antitrust, benefits and compensation, intellectual property and technology, international trade, and trusts and estates. The firm has an association with Huen Wong & Co. in Hong Kong. * Hunton & Williams Names Two Attorneys as Washington Counsel ------------------------------------------------------------- Hunton & Williams LLP has named Francine E. Friedman, Esq. and Jeffrey B. Hardie, Esq. as Washington, D.C. counsel, effective May 10, 2007. "Francine and Jeff have strong track records in building robust relationships with their clients, with their fellow lawyers, and in the community," said Wally Martinez, Esq., managing partner of the firm. "They are tremendous assets to Hunton & Williams and I am pleased to welcome them into their new positions." Based in the firm's 150-lawyer Washington office, Ms. Friedman is a member of the firm's regulated industries and government relations practice, with first-rate government relations skills and long-term, solid relationships with an extensive network of contacts in Congress, the Executive Branch and in the Washington government relations community. Ms. Friedman's practice has focused extensively on increasing the effectiveness of the nation's low-income housing tax credit program. Recently, she secured the enactment of legislation wherein the program will play a central role in federal relief efforts for states devastated by Hurricane Katrina. Ms. Friedman holds an undergraduate degree from Georgetown University and a law degree from William & Mary. Mr. Hardie, a member of the labor and employment practice, is based in the firm's 50-lawyer McLean office. An experienced litigator and employment law counselor, Mr. Hardie has formed integral relationships with several of the firm's major global clients, built on his reputation and involvement in high risk and complex labor law issues. He provides preventative counseling and training to clients and human relations groups on all federal employment-related statutes. Mr. Hardie holds an under-graduate degree from Virginia Polytechnic Institute and State University and a law degree from Tulane 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. * King & Spalding Adds Two Senior Counsel in Houston Office ----------------------------------------------------------- King & Spalding LLP adds Myron Sheinfeld, Esq. and Jarrel McDaniel, Esq. as senior counsel to its financial restructuring practice in Houston, Texas. Their addition to the Houston office complements the firm's existing financial restructuring practices in Atlanta and New York, bringing to 24 the total number of lawyers in the group. Mr. Sheinfeld and Mr. McDaniel are joining King & Spalding from Akin Gump Strauss Hauer & Feld LLP, where they were also senior counsel. "Mickey and Jerry are highly recognized bankruptcy lawyers with a long history of handling high-profile matters," said Robert E. Meadows, managing partner of King & Spalding's Houston office. "We are thrilled these outstanding lawyers have joined King & Spalding and look forward to the contributions they will make to our clients." Mr. Sheinfeld, widely regarded as the "dean" of the bankruptcy bar in Houston, has more than 40 years of experience in bankruptcy and reorganization. His practice also includes bankruptcy tax, creditors' rights, financial restructuring, corporate governance and director duties and responsibilities. A former Unites States Attorney for the Southern District of Texas, he had spent the majority of his legal career at his own firm, Sheinfeld, Maley & Kay, P.C. Mr. McDaniel focuses his practice on reorganization and insolvency matters and has extensive experience litigating the value of assets. He began practicing law in 1957 and spent most of his career at Vinson & Elkins, where he formed and headed its creditor rights and insolvency group. He is a Fellow of the American College of Bankruptcy. Sarah R. Borders, Esq., head of King & Spalding's financial restructuring practice, said, "We are proud to welcome Jerry and Mickey to King & Spalding. In handling some of the most significant bankruptcies and financial restructurings in Texas and throughout the country, they have been at the cutting edge of the legal profession." About King & Spalding King & Spalding, LLP -- http://www.kslaw.com/-- is an international law firm with more than 800 lawyers in Atlanta, Dubai, Houston, London, New York, Riyadh (affiliated office) and Washington, D.C. The firm represents half of the Fortune 100, and in a Corporate Counsel survey in August 2006 was ranked one of the top ten firms representing Fortune 250 companies overall. * 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 Bare Escentuals BARE (189) 184 91 Blount International BLT (98) 448 135 CableVision System CVC (5,349) 9,654 (638) Calpine Corp CPNLQ (6,887) 18,590 (2,890) Carrols Restaurant TAST (26) 453 (31) Centennial Comm CYCL (1,090) 1,393 92 Charter Comm-A CHTR (6,345) 15,177 (1,015) Cheniere Energy CQP (168) 2,104 108 Choice Hotels CHH (70) 305 (55) Cincinnati Bell CBB (773) 1,951 27 Claymont Stell PLTE (40) 240 165 Compass Minerals CMP (46) 691 157 Corel Corp. CRE (21) 271 42 Crown Holdings I CCK (225) 6,582 310 Crown Media HL CRWN (519) 759 64 CV Therapeutics CVTX (90) 356 263 Dayton Superior DSUP (106) 312 79 Deluxe Corp DLX (40) 1,223 (402) Denny's Corporation DENN (221) 444 (67) Depomed Inc. DEPO (37) 37 16 Domino's Pizza DPZ (561) 421 39 Dun & Bradstreet DNB (458) 1,392 (238) Echostar Comm DISH (30) 9,066 1,150 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 (20) 1,236 29 Foamex Intl FMXI (396) 565 24 Ford Motor Co F (3,447) 281,491 (8,138) Gencorp Inc. GY (65) 1,037 31 General Motors GM (3,202) 185,198 (5,059) Graftech International GTI (85) 772 241 Healthsouth Corp. HLS (1,602) 3,238 (398) 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 Incyte Corp. INCY (104) 325 261 Indevus Pharma IDEV (144) 76 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 (1) 237 25 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) Neurochem Inc NRM (34) 61 20 New River Pharma NRPH (110) 152 (19) New World Restaurant NWRG (75) 133 (8) Nexstar Broadcasting NXST (73) 725 22 NPS Pharm Inc. NPSP (213) 180 121 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 2 Regal Entertainment RGC (130) 3,085 (131) Riviera Holdings RIV (28) 221 13 Rural Cellular RCCC (587) 1,362 183 Rural/Metro Corp. RURL (93) 298 38 Savvis Inc. SVVS (14) 640 145 Sealy Corp. ZZ (154) 1,021 61 Sipex Corp SIPX (12) 53 7 St. John Knits Inc. SJKI (52) 213 80 Station Casinos STN (178) 3,694 (46) Stelco Inc STE (83) 2,788 656 Sun-Times Media SVN (369) 929 (265) 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) 5,354 972 Westmoreland Coal WLB (121) 761 (67) WR Grace & Co. GRA (467) 3,628 912 XM Satellite XMSR (445) 1943 (76) Xoma Ltd. XOMA (6) 70 28 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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The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, 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 ***