/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070808.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 8, 2007, Vol. 11, No. 186 Headlines ACCREDITED HOME: Posts $205.6 Mil. Net Loss in Year Ended Dec. 31 ADVANCED MEDICAL: Bid Retraction Cues S&P's Negative CreditWatch ALLEGHENY TECH: Improved Performance Cues S&P to Lift Rating AMERICAN GENERAL: Moody's May Lift Rating on $9 Mil. Class C Notes AMERICAN HOME: Case Summary & 39 Largest Unsecured Creditors AMERICAN HOME: Wilmington Trust Denies Unsecured Creditor Status AMERICAN HOME: Mulls Sale of Loan and Loan Servicing Businesses AMERIQUEST MORTGAGE: Fitch Junks Ratings on Seven Cert. Classes ARROW DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors ATLAS PIPELINE: Posts $20.8 Million Net Loss in 2nd Qtr. 2007 AZAD ZOLNOORIAN: Voluntary Chapter 11 Case Summary BENNETT ENVIRONMENTAL: Posts CDN$1.9 Mil. Net Loss in Second Qtr. BETTY HOWARD: Case Summary & 12 Largest Unsecured Creditors BI-STATE CONTRACTING: Case Summary & 18 Largest Unsec. Creditors BLOCKBUSTER INC: Poor Performance Cues S&P to Lower Ratings to B- BRISTOL CDO: Fitch Junks Rating on $30 Million Class B Notes CDC/IXIS CORP: Fitch Downgrades Ratings on 14 Cert. Classes CHARLES RIVER: Fitch Cuts Rating on $4.8MM Class C Notes to B CHASE FUNDING: Weak Performance Cues Moody's to Downgrade Ratings CHARTERHOUSE BOISE: Bankruptcy Filing Averts Property Auction CHRYSLER LLC: Board Names Bob Nardelli as Chairman and CEO CHRYSLER LLC: S&P Assigns BB- Rating on $5 Bil. Term Loan Tranche CITICORP MORTGAGE: S&P Affirms Ratings on 31 Certificate Classes CMP SUSQUEHANNA: Moody's Lowers Corporate Family Rating to B2 CMS ENERGY: Reduced Business Risk Cues Fitch's Positive Watch CNC: Fitch Affirms BB Rating on $7.8 Million Class C Certificates COFFEYVILLE RESOURCES: Moody's Junks Corporate Family Rating CONSECO, INC: AM Best Downgrades Issuer Credit Rating COVANTA HOLDING: To Redeem 8-1/2% and 7-3/8% Senior Secured Notes CREDIT AND REPACKAGED: Moody's Cuts Rating on $20MM Tranche Notes DAIMLERCHRYSLER AG: Completes Chrysler Group's Interest Transfer DANKA BUSINESS: June 30 Balance Sheet Upside-Down by $327.1 Mil. DARRYL PACE: Case Summary & 19 Largest Unsecured Creditors DAWN CDO: Moody's Reviews Ba2 Rating on $28.7 Mil. Class B Notes DELPHI CORP: Attains Tentative Accord with IUE-CWA and GM EAGLE BROADBAND: Dave Micek Steps Down as Chief Executive Officer ELIAS HAIDAR: Voluntary Chapter 11 Case Summary ELLIOTT VERNON: Voluntary Chapter 11 Case Summary EMEKA OKOYE: Case Summary & 11 Largest Unsecured Creditors EXTENDICARE REIT: Posts Equity Deficit of CDN$8 Mil. at June 30 FREDERICK THAYER: Case Summary & 15 Largest Unsecured Creditors FREMONT HOME: Fitch Lowers Ratings on 24 Classes of Certificates GLOBAL HOME: Court Extends Removal Period Until January 15, 2008 HANOVER COMPRESSOR: Prices Tender Offers and Consent Solicitations HARRY WEAVER: Voluntary Chapter 11 Case Summary HEALTH CARE: Completes $1.15 Bil. Unsec. Revolving Credit Facility HEALTH MANAGEMENT: Fitch Affirms BB- Issuer Default Rating HEXCEL CORP: Completes $62.5 Million Asset Sale to JPS Industries INVERNESS MEDICAL: Inks All Stock Buyout Deal with Hemosense Inc. JAMES CLINTON: Case Summary & Two Largest Unsecured Creditors JASON CAFFEY: Voluntary Chapter 11 Case Summary JEAN COUTU: Posts $6.9 Million Net Loss in Fourth Quarter 2007 K&F INDUSTRIES: Meggitt-USA Deal Cues Moody's to Withdraw Ratings KESSLER HOSPITAL: Disclosure Statement Hearing Moved to August 20 KLEENERZ INC: Case Summary & 20 Largest Unsecured Creditors LEINER HEALTH: Completed Credit Amendment Cues S&P to Hold Ratings MCMORAN EXPLORATION: Completes $1.08 Billion Buyout of Gulf Assets MORGAN STANLEY: S&P Assigns Low-B Ratings on Six Cert. Classes MOVIE GALLERY: Inks Amendment to Forbearance Agreement MUSICLAND HOLDING: Plan Confirmation Hearing Adjourned to Aug. 9 NEW YORK RACING: Court Shortens Plan Filing Deadline to Nov. 15 NEW YORK RACING: Hearing on Getnick's Retention Set for Aug. 21 NEWFIELD EXPLORATION: Completes $1.1 Billion Sale of Gulf Assets OAK HILL: S&P Lifts Ratings on Class D-1 and D-2 Notes to BB+ PAC-WEST TELECOMM: Court Sets Sept. 5 Disclosure Statement Hearing PAUL DIGRIGOLI: Case Summary & 16 Largest Unsecured Creditors POLYMER GROUP: S&P Retains Negative CreditWatch on B- Rating POPE & TALBOT: Inks Forbearance Agreement with Lenders PUGET SOUND: Board Affirms Dividends on Common and Preferred Stock REUBEN ODUM: Case Summary & Eight Largest Unsecured Creditors ROCK-TENN CO: Raises Limit on Stock Cash Repurchases to $100 Mil. SACO I TRUST: Moody's Junks Rating on 2006-8 Class B Certificates SMTC CORP: Inks Five-Year Loan Refinancing Deal with Two Lenders SOUTH CAROLINA: Moody's Withdraws "Ca" Bond Rating ST. JOSEPH: Moody's Downgrades Bond Rating to Ba2 from Baa3 STATER BROS: Commences $285MM Exchange Offer of 7-3/4% Sr. Notes STOLLE MACHINERY: Moody's Affirms B2 Corporate Family Rating SYLVEST FARMS: Court Approves Reed Smith as Attorneys TSG INC: Disclosure Statement Hearing Rescheduled to Sept. 9 U.S. ENERGY: Silver Point Wants to Buy Biogas for $9 Million Cash UNIFI INC: Posts $72.3 Million Net Loss in Year Ended June 24 WACHOVIA BANK: Fitch Holds Low-B Ratings on Six Cert. Classes WINDSOR QUALITY: Moody's Reviews Ba3 Corporate Family Rating WORD OF DELIVERANCE: Case Summary & 4 Largest Unsecured Creditors ZAIS INVESTMENT: Moody's Rates $5 Million Class D Notes at Ba1 * Omnitech Consultant Provides Default Status Report * Upcoming Meetings, Conferences and Seminars ********* ACCREDITED HOME: Posts $205.6 Mil. Net Loss in Year Ended Dec. 31 ----------------------------------------------------------------- Accredited Home Lenders Holding Co. filed its consolidated financial statements for the for the fiscal year ended Dec. 31, 2006 on Aug. 2, 2007. Accredited Home reported a net loss of $205.6 million for the year ended Dec. 31, 2006, compared with net income of $155.4 million for the year ended Dec. 31, 2005. Net interest income declined by $14.0 million from $300.1 million in 2005 to $286.1 million in 2006, as the company was unable to pass on the full amount of the increase in LIBOR rates on the company's warehouse and securitization debt to uts borrowers due to intense competitive market pressures. Other key key financial measures for the year were as follows: -- Mortgage loan origination volume decreased 4.9% from $16.6 billion in 2005 to $15.8 billion in 2006, and the company's serviced mortgage loans increased 13.7% from $9.7 billion at Dec. 31, 2005 to $11.0 billion at Dec. 31, 2006. -- Goodwill impairment of $142.4 million relating to all the goodwill initially established in conjunction with the Aames acquisition was recorded in the quarter ended Dec. 31, 2006. -- The company established a valuation allowance of $112.1 million against the total accumulated net deferred tax asset. -- Gain on sale premiums on mortgage loans sold declined $73.5 million, from 2.89% in 2005 to 1.92% in 2006, due to declining investor demand for non-prime loans amid increasing fears of credit losses in this segment of the mortgage market. -- The provision for market valuation losses on loans held for sale increased $58.9 million, driven by increasing delinquencies within that segment of the company's portfolio (which reduced gain on sale premiums). -- The provision for losses on repurchases and premium recapture increased $42.7 million, resulting from a higher frequency of early payment defaults on loans sold to investors (which reduced gain on sale premiums). -- Operating expenses increased $67.5 million, (not including the goodwill impairment) primarily due to additional expenses from the Aames operation added in the fourth quarter of 2006. These additional Aames related expenses had a significant impact on profitability. -- The provision for income taxes was $125.6 million as the company could not record a tax benefit resulting from the operating loss due to limitations on net operating loss carryforwards. -- Net cost to originate, a key measure of efficiency in originating mortgage loans, declined slightly from 1.63% in 2005 to 1.59% in 2006. At Dec. 31, 2006, the company's consolidated balance sheet showed $11.35 billion in total assets, $10.69 billion in total liabilities, $97.9 million in minority interest in subsidiary, and $556.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?2225 Merger with "Lone Star" On June 4, 2007 Accredited and affiliates of Lone Star Fund V (U.S.) L.P. ("Lone Star"), entered into a definitive merger agreement pursuant to which Lone Star has agreed to acquire all of the common stock of Accredited in an all-cash transaction. Under the terms of the agreement, Lone Star has agreed to acquire each outstanding share of Accredited common stock at a price of $15.10 per share, for a total consideration of approximately $400 million. The acquisition is structured as an all-cash tender offer for all outstanding shares of Accredited common stock to be followed by a merger in which each remaining untendered share of Accredited will be converted into the same $15.10 cash per share price paid in the tender offer. T he outstanding 9.75% Series A Preferred Shares, par value $1.00 per share ("the Series A Preferred"), of Accredited Mortgage Loan REIT Trust is anticipated to remain outstanding. The acquisition is subject to the satisfaction of customary conditions, including the tender of a majority of the outstanding Accredited shares and the receipt of certain required regulatory approvals. The tender offer was commenced on June 19, 2007. Due to the need to obtain certain regulatory approvals before the offer can be completed, the expiration date of the offer has been extended twice, and the offer is currently scheduled to expire on Aug. 14, 2007. Lone Star is not required to extend the offer beyond Dec. 31, 2007, or under certain circumstances, beyond March 31, 2008. The transaction is not subject to a financing contingency and is expected to close in the third quarter of 2007. Auditor's Report on Company's Financial and Operational Viability Squar, Milner, Peterson, Miranda & Williamson LLP, reported that turmoil and volatility in the non-prime mortgage sector in which the company operates have put substantial pressure on the company's liquidity. The auditing firm expressed concern that if the merger with an affiliate of Lone Star Fund V(U.S.) L.P. is not consummated or market conditions deteriorate further, the company's financial and operational viability is uncertain. This is because subsequent to Dec. 31, 2006, in response to challenging industry conditions and to preserve liquidity, the company sold substantially all of its mortgage loans held for sale totaling approximately $2.7 billion, borrowed $230 million under a five year term note facility, restructured or terminated credit facilities, terminated its asset backed commercial paper program, acquired new warehouse credit facilities and long-term debt financing and reduced personnel. About Accredited Home Lenders Holding Co. Headquartered in San Diego, California, Accredited Home Lenders Holding Co. (NASDAQ:LEND) -- http://www.accredhome.com/-- is a mortgage company operating throughout the U.S. and in Canada. Founded in 1990, the company originates, finances, securitizes, services, and sells non-prime mortgage loans secured by residential real estate. * * * As reported in the Troubled Company Reporter on April 5, 2007, Accredited received waivers of certain covenants on three of its warehouse facilities, which have a combined total of approximately $100 million in outstanding advances at March 31, 2007. Accredited agreed with its lenders that it will not draw down additional borrowings under the facilities at the current time. In the event such modifications or waivers on the company's credit facilities are required and Accredited is unable to obtain them during the remainder of 2007 or thereafter, Accredited may trigger an event of default under its credit facilities, which could in turn result in cross defaults under the company's other facilities. The occurrence of such events would have a material and adverse impact on the company's ability to fund mortgage loans and continue as a going concern. ADVANCED MEDICAL: Bid Retraction Cues S&P's Negative CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services revised the CreditWatch listing for the ratings on Advanced Medical Optics Inc. to CreditWatch with negative implications from CreditWatch with developing implications. "The action reflects the company's August 2 retraction of its bid to acquire Bausch & Lomb for $4.3 billion, citing unrealistic hurdles set by B&L," explained Standard & Poor's credit analyst Cheryl Richer. Thus, there is no longer the upside potential for the rating on AMO that might have been achieved through an increase in scale and product diversity. While AMO will not incur debt of about $2.6 billion (excluding the assumption of $830 million of B&L debt) to finance the acquisition, it has already been extremely acquisitive over the past several years; debt increased by $700 million in the second quarter of 2007 due to the acquisition of IntraLase Corp. The B&L bid revealed the company's willingness to increase debt leverage to a greater level (over 6.5x on an adjusted basis) than that incurred in previous transactions. In addition, the May 27 global recall of MoisturePlus multipurpose lens care solution has harmed revenues and will result in extraordinary charges; on June 26, the company lowered its guidance for 2007 and 2008 revenues and earnings. Although the company has begun to ship an alternative multipurpose solution outside the U.S., which should be available to U.S. consumers in September, it will be challenged to regain lost market share. Standard & Poor's will review AMO's strategy and financial policy given these events and resolve the CreditWatch listing within the next few weeks. ALLEGHENY TECH: Improved Performance Cues S&P to Lift Rating ------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Allegheny Technologies Inc. to 'BB+' from 'BB'. The outlook is positive. At the same time, Standard & Poor's raised its rating on the company's senior unsecured debt to 'BB+' from 'BB-', reflecting the improved position of unsecured creditors in the capital structure as the company's revolving credit facility is now unsecured. All ratings were removed from CreditWatch, where they were placed with positive implications on March 13, 2007. "The upgrade reflects the company's meaningful improvement in operating and financial performance due to strong demand in its key end markets, its shift away from commodity-based products and pricing, and its improved cost structure," said Standard & Poor's credit analyst Marie Shmaruk. "In addition, given the favorable outlook for the company's end markets, in particular aerospace, we expect that its solid performance will persist for at least the next few years. We expect that the company will continue to generate high levels of free cash flow during this time, which it will use to fund its significant growth initiatives. These improvements, together with management's commitment to retaining conservative cash balances and debt levels, should enable the company to maintain an adequate financial profile during the next cyclical downturn." Allegheny, a diversified specialty material producer, pursues market niches that enjoy some barriers to entry. "We could upgrade the ratings further if continued strong markets allow the company to fund its aggressive growth internally and financial policies remain conservative," Ms. Shmaruk said. "Conversely, ratings could be pressured if Allegheny's markets and performance weakened materially, if the company significantly increases its debt leverage to fund growth, or if the company borrows to fund shareholder-friendly actions, such as share repurchases or special dividends." AMERICAN GENERAL: Moody's May Lift Rating on $9 Mil. Class C Notes ------------------------------------------------------------------ Moody's Investor Service placed on watch for possible upgrade these notes issued in 2000 by American General CBO 2000-1 Ltd., a collateral bond obligation issuer: -- The $20,000,000 Senior Secured Class B-1 Floating Rate Notes Due 2012 Prior Rating: Baa1 Current Rating: Baa1 (on watch for possible upgrade) -- The $21,000,000 Senior Secured Class B-2 Fixed Rate Notes Due 2012 Prior Rating: Baa1 Current Rating: Baa1 (on watch for possible upgrade) -- The $9,000,000 Senior Secured Class C Fixed Rate Notes Due 2012 Prior Rating: B1 Current Rating: B1 (on watch for possible upgrade) According to Moody's, the rating action was the result of the amortization of the Senior Secured Class A Floating Rate Notes, improvement in the credit quality of the deal's portfolio and increased coverage for the notes. AMERICAN HOME: Case Summary & 39 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: American Home Mortgage Holdings, Inc. 538 Broadhollow Road Melville, NY 11747 Bankruptcy Case No.: 07-11047 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- American Home Mortgage Investment Corp. 07-11048 American Home Mortgage Acceptance, Inc. 07-11049 American Home Mortgage Servicing, Inc. 07-11050 American Home Mortgage Corp. 07-11051 American Home Mortgage Ventures, L.L.C. 07-11052 Homegate Settlement Services, Inc. 07-11053 Great Oak Abstract Corp. 07-11054 Type of business: The Debtor is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. See https://www.americanhm.com Chapter 11 Petition Date: August 6, 2007 Court: District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtors' Counsel: James L. Patton, Jr., Esq. Joel A. Waite, Esq. Pauline K. Morgan, Esq. Sean M. Breach, Esq. Matthew Barry Lunn, Esq. Kara Hammond Coyle, Esq. Kenneth J. Ennons, Esq. Young, Conaway, Stargatt & Taylor, L.L.P. The Brandywine Building, 17th Floor 1000 West Street, P.O. Box 391 Wilmington, DE 19899-0391 & 19899 Tel: (302) 571-6600 Fax: (302) 571-0453, (302) 571-1253 Debtors' Restructuring Managers: Kroll Zolfo Cooper LLC Debtors' Investment Banker: Jeffrey M. Levine Gene S. Weil Milestone Advisors, LLC 1775 Eye Street, NW, Suite 800 Washington, D.C. 20006 Tel: (202) 367-3000 -- and -- Brett Schaffer Phoenix Capital, Inc. 600 Seventeenth Street, Suite 1650 South Denver, Colorado 80202 Tel: (303) 892-7070 Debtors' Claims, Notice and Balloting Agent: Epiq Bankruptcy Solutions, LLC 757 Third Avenue, Third Floor New York, New York 10017 Attorney for the Administrative Agent: Margot B. Schonholtz, Esq. Scott D. Talmadge, Esq. Kaye Scholer LLP 425 Park Avenue New York, New York 10022 -- and -- Laurie Selber Silverstein, Esq. Potter Anderson & Corroon LLP Hercules Plaza, 6th Floor 1313 North Market Street Wilmington, Delaware 19801 Attorney for the DIP Lender: Erica M. Ryland, Esq. Jones Day 222 East 41st Street New York, New York 10017 U.S. Trustee: Office of the United States Trustee District of Delaware 844 King Street, Suite 2207 Wilmington, Delaware 19801 Quarterly Financial Condition as of March 2007: Total Assets: 20,553,940,000 Total Debts: 19,330,190,000 Debtor's 39 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deutsche Bank loan repurchase unliquidated 31 West 52nd Street request 3rd Floor NYC01-030 New York, NY 10019 Tel: (212) 250-7675 Fax: (212) 797-0521 Wilmington Trust convertible unliquidated Company, as Debenture trust preferred- Trustee A.H.M. Capital Rodney Square North Trust I 100 North Market Street Wilmington, DE 19890 Tel: (302) 636-4140 Fax: (302) 651-1000 Attention: Corporate Capital Markets-A.H.M. Capital Trust I c/o A.H.M. Capital Trust I 100 North Market Street Wilmington, DE 19890 Tel: (302) 636-4140 Fax: (302) 651-1000 J.P. Morgan Chase loan repurchase unliquidated Bank, N.A. request 194 Wood Avenue South Floor 3 Iselin, NJ 08830 Tel: (732) 452-8781 Fax: (732) 352-7611 Bank of America, N.A. loan repurchase unliquidated 901 Main Street, 66th Floor request Dallas, TX 75202 Tel: (214) 209-9170 Fax: (214) 209-0338 J.P. Morgan Chase Bank, trust preferred- unliquidated National Association, as Baylis Trust I Trustee 600 Travis, 50th Floor Houston, TX 77019 Attention: Institutional Trust Services- Baylis Trust I c/o Institutional Trust Services- Baylis Trust I 600 Travis, 50th Floor Houston, TX 77019 J.P. Morgan Chase Bank, trust preferred- unliquidated National Association, as Baylis Trust II Trustee 600 Travis, 50th Floor Houston, TX 77019 Attention: Institutional Trust Services- Baylis Trust II c/o Institutional Trust Services- Baylis Trust II 600 Travis, 50th Floor Houston, TX 77019 J.P. Morgan Chase Bank, trust preferred- unliquidated National Association, as Baylis Trust IV Trustee 600 Travis, 50th Floor Houston, TX 77019 Attention: Institutional Trust Services- Baylis Trust IV c/o Institutional Trust Services- Baylis Trust IV 600 Travis, 50th Floor Houston, TX 77019 J.P. Morgan Chase Bank, trust preferred- unliquidated National Association, as Baylis Trust V Trustee 600 Travis, 50th Floor Houston, TX 77019 Attention: Institutional Trust Services- Baylis Trust V, Madassir Mohamed Tel: (713) 216-2826 c/o Madassir Mohamed 600 Travis, 50th Floor Houston, TX 77019 Tel: (713) 216-2826 Citigroup loan repurchase unliquidated 390 Greenwich Street, request 6th Floor New York, NY 10013 Tel: (212) 733-6353 Fax: (212) 723-8613 Countrywide Capital loan repurchase unliquidated 20 North Acoma Boulevard request Lake Havasu City, AZ 86403 Tel: (212) 733-6353 Fax: (212) 723-8613 Morgan Stanley loan repurchase unliquidated 1585 Broadway request New York, NY 10036 Tel: (212) 761-4000 Fax: (212) 507-4622 Wells Fargo Bank, N.A. trust preferred- unliquidated as Trustee Baylis Trust VIII 919 North Market Street, Suite 700 Wilmington, DE 19801 Attention: Corporate Trustee Department-Baylis Trust VIII c/o Corporate Trustee Department-Baylis Trust VIII 919 North Market Street, Suite 700 Wilmington, DE 19801 SunTrust Asset Funding, loan repurchase unliquidated L.L.C. request Mail Code 3950 303 Peachtree Street, 23rd Floor Atlanta, GA 30308 Attention: Tony D. Atkins with a copy to: SunTrust Banks, Inc. 303 Peachtree Street, 36th Floor Atlanta, GA 30308 Tel: (404) 813-5244 Fax: (404) 813-5000 c/o Tony D. Atkins 303 Peachtree Street, 23rd Floor Atlanta, GA 30308 Tel: (404) 813-5244 Fax: (404) 813-5000 Impac Funding Corporation loan repurchase unliquidated 1401 Dove Street, Suite 100 request Newport Beach, CA 92660 Attention: Client Administration Tel: (800) 597-4101 Fax: (949) 260-4504 c/o Client Administration 1401 Dove Street, Suite 100 Newport Beach, CA 92660 Tel: (800) 597-4101 Fax: (949) 260-4504 Wilmington Trust Company, trust preferred- unliquidated as Trustee Baylis Trust VI Rodney Square North 1100 North Market Street Wilmington, DE 19890-001 Attention: Corporate Capital Markets c/o Corporate Capital Markets Rodney Square Northwest 1100 North Market Street Wilmington, DE 19890-001 Bear, Stearns & Co., Inc. master repurchase unliquidated Government Operations agreement 1 Metrotech Center Northwest, 7th Floor Brooklyn, NY 11201-3859 Attention: Senior Managing Director Tel: (212) 272-1203 c/o Senior Managing Director 1 Metrotech Center Northwest, 7th Floor Brooklyn, NY 11201-3859 Tel: (212) 272-1203 Bank of America, N.A. warehouse facility unliquidated Agency Management Mail Code: CA5-701-05-19 1455 Market Street, 5th Floor San Francisco, CA 94103 Attention: Anthea Del Bianco, Vice President Tel: (415) 436-2776 Fax: (415) 503-5101 c/o Anthea Del Bianco, Vice President Agency Management Mail Code: CA5-701-05-19 1455 Market Street, 5th Floor San Francisco, CA 94103 Tel: (415) 436-2776 Fax: (415) 503-5101 Citigroup Global Markets loan repurchase unliquidated Realty Corp. request 390 Greenwich Street, 6th Floor New York, NY 10013 Attention: Peter Steinmetz c/o Peter Steinmetz 390 Greenwich Street, 6th Floor New York, NY 10013 Bank of America, N.A. swap counterparty unliquidated Sears Tower (commercial paper 233 South Wacker Drive, facility) Suite 2800 Chicago, IL 60606 Attention: Swap Operations Fax: (312) 453-2787 Bank of the Americas, 17th Floor New York, NY 10036 Attention: Ronald Jost Tel: (646) 216-5311 Fax: (646) 733-4090 c/o Swap Operations Sears Tower 233 South Wacker Drive, Suite 2800 Chicago, IL 60606 Fax: (312) 453-2787 Wilmington Trust Company, trust preferred- unliquidated as Trustee Baylis Trust VII Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Attention: Corporate Capital Markets c/o Corporate Capital Markets Rodney Square Northwest 1100 North Market Street Wilmington, DE 19890-001 Wells Fargo loan repurchase unliquidated 420 Montgomery Street request San Francisco, CA 94104 Countrywide Capital loan repurchase unliquidated 20 North Acoma Boulevard requests Lake Havasu City, AZ 86403 Tel: (928) 505-1628 Fax: (928) 505-4466 Nomura Credit & Capital, Inc. loan repurchase unliquidated 2 World Financial Center, requests Building B, 21st Floor New York, NY 10281 Attention: Dante LaRocca, Managing Director; with a copy to N.C.C.I. Legal, 18th Floor Fax: (212) 667-1024 c/o Dante LaRocca 2 World Financial Center, Building B, 21st Floor New York, NY 10281 Fax: (212) 667-1024 Liquid Funding, Ltd. master repurchase unliquidated Canon's Court agreement 22 Victoria Street Hamilton H.M. 12 Bermuda Attention: Corporate Secretary; with a copy in all cases to: Bear Stearns Bank, plc, Investment Manager of Liquid Funding, Ltd. Block 8, Harcourt Centre Charlotte Way Dublin 2, Ireland Attention: Jerome Schneider/Patrick Phelan Tel: (353-1) 402-6358 Fax: (353-1) 402-6308 c/o Corporate Secretary Canon's Court 22 Victoria Street Hamilton H.M. 12 Bermuda E.M.C. loan repurchase unliquidated 383 Madison Avenue request New York, NY Tel: (212) 272-6458 Fax: (212) 272-7382 Greenwich Capital Financial loan repurchase unliquidated Products, Inc. request 600 Steamboat Road Greenwich, CT 06830 Attention: Mortgage Finance; with copies to: Greenwich Capital Financial Products, Inc. 600 Steamboat Road Greenwich, CT 06830 Attention: Legal and to: Greenwich Capital Financial Products, Inc. 600 Steamboat Road Tel: (203) 625-2700 c/o Mortgage Finance 600 Steamboat Road Greenwich, CT 06830 c/o Legal 600 Steamboat Road Greenwich, CT 06830 Tel: (203) 625-2700 Lehman Brothers, Inc. and master repurchase unliquidated Lehman Commercial Paper, agreement Inc. 745 Seventh Avenue, 28th Floor New York, NY 10019 Attention: Robert Guglielmo, Senior Vice President, Transaction Management Tel: (212) 526-7121 Fax: (212) 526-7672 c/o Robert Guglielmo 745 Seventh Avenue, 28th Floor New York, NY 10019 Tel: (212) 526-7121 Fax: (212) 526-7672 H.S.B.C. Bank loan repurchase unliquidated 452 Fifth Avenue, 10th Floor request New York, NY 10018 Tel: (212) 525-5040 Fax: (646) 366-3826 U.B.S. loan repurchase unliquidated 1251 Avenue of the Americas request New York, NY 10019 Tel: (212) 713-3734 Fax: (646) 882-3597 Lehman Brothers Special loan repurchase unliquidated Financing, Inc. request c/o Lehman Brothers Transaction Management 745 Seventh Avenue, 28th Floor New York, NY 10019 Attention: Documentation Manager Tel: (212) 526-7187 Fax: (212) 526-7672 c/o Documentation Manager 745 Seventh Avenue, 28th Floor New York, NY 10019 Tel: (212) 526-7187 Fax: (212) 526-7672 F.N.M.A. loan repurchase unliquidated 3900 Wisconsin Avenue, request Northwest Washington, D.C. 20016-2892 Tel: (202) 752-7672 Washington Mutual Bank, N.A. loan repurchase unliquidated 3200 Southwest Freeway request Houston, TX 77027 Tel: (713) 543-6141 Fax: (713) 543-6727 Luminent Manufacturing loan repurchase unliquidated (Barclays) request Suite 1350 101 California Street San Francisco, CA 94111 Tel: (415) 217-4500 IndyMac Bank, F.S.B. loan repurchase unliquidated 3465 East Foothill Boulevard request Pasadena, CA 91107 Morgan Stanley Capital derivative unliquidated Services, Inc. transaction Transaction Management Group (swap) 1585 Broadway New York, NY 10036-8293 Attention: Chief Legal Officer Fax: (212) 507-4622 c/o Chief Legal Officer 1585 Broadway New York, NY 10036-8293 Fax: (212) 507-4622 Credit Suisse First Boston loan repurchase unliquidated Eleven Madison Avenue request New York, NY 10010 Tel: (212) 325-2000 Fax: (212) 325-6665 G.M.A.C. loan repurchase unliquidated 600 Galleria Parkway, 15th Floor Atlanta, GA 30339 Tel: (678) 324-2146 Fax: (770) 859-0148 AMERICAN HOME: Wilmington Trust Denies Unsecured Creditor Status ---------------------------------------------------------------- Wilmington Trust Company denied in a press statement news reports that list the company as among the largest unsecured creditors of American Home Mortgage Investment Corp., saying that the information is "incorrect." Wilmington Trust Company, principal subsidiary of Wilmington Trust Corporation, says it provides trustee services for some of American Home's creditors, but noted that the services do not include making loans. "Wilmington Trust has no credit exposure whatsoever to American Home Mortgage," explains Ted Cecala, Wilmington Trust's chairman and chief executive officer. "American Home Mortgage's bankruptcy filing does not affect our balance sheet or bottom line, and it poses absolutely no credit risk to us." The company relates that American Home Mortgage's bankruptcy filing clearly lists Wilmington Trust "as trustee." As trustee, Wilmington Trust says it performs administrative services as specified in documents that govern the trusts. These services, which the company provides through its Corporate Client Services business, do not include extending credit. About Wilmington Trust Wilmington Trust Corporation (NYSE: WL) is a financial services holding company that provides Regional Banking services throughout the Delaware Valley region, Wealth Advisory Services for high-net- worth clients in 36 countries, and Corporate Client Services for institutional clients in 86 countries. Its wholly owned bank subsidiary, Wilmington Trust Company, which was founded in 1903, is one of the largest personal trust providers in the United States and the leading retail and commercial bank in Delaware. Wilmington Trust Corporation and its affiliates have offices in California, Connecticut, Delaware, Florida, Georgia, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania, South Carolina, Vermont, the Cayman Islands, the Channel Islands, London, Dublin, Frankfurt, and Luxembourg. About American Home Mortgage Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust focused on earning net interest income from self-originated loans and mortgage-backed securities, and, through its taxable subsidiaries, from originating and selling mortgage loans and servicing mortgage loans for institutional investors. AMERICAN HOME: Mulls Sale of Loan and Loan Servicing Businesses --------------------------------------------------------------- American Home Mortgage Investment Corp. is seeking to sell its servicing business as well as certain mortgage loans owned by the company and mortgage-backed residual interests in securitization trusts, pursuant to competitive bidding and auction. American Home will auction off its loan portfolio on Sept. 5, 2007, and the servicing business Sept. 10, 2007. Bids for the loan portfolio must be submitted by Aug. 29, 2007, while bids for the servicing business are due Sept. 6, 2007. American Home stopped taking mortgage applications on Aug. 1, 2007, and laid off roughly 6,500 employees effective August 3. The company retained roughly 1,000 employees, including 450 servicing emmployees, to help wind down the business. American Home is the sixth lender to file for Chapter 11 protection, following Ownit Mortgage Solutions LLC, Mortgage Lenders Network USA Inc., ResMae Mortgage Corp., People's Choice Financial Corporation, and New Century Financial Corp., and the first one that caters to borrowers with credit ratings above subprime level. Paul Muolo at National Mortgage News tabulates that 45 lenders and originators, representing 16.13% of the market, have shut down or filed for bankruptcy in the past year. Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) â€“ http://www.americanhm.com/-- is a mortgage real estate investment trust focused on earning net interest income from self-originated loans and mortgage-backed securities, and, through its taxable subsidiaries, from originating and selling mortgage loans and servicing mortgage loans for institutional investors. AMERIQUEST MORTGAGE: Fitch Junks Ratings on Seven Cert. Classes --------------------------------------------------------------- Fitch Ratings has taken rating actions on nine Ameriquest Mortgage Securities Inc. mortgage pass-through certificates. Affirmations total $9.75 billion and downgrades total $1.54 billion. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Argent Securities 2005-W2 -- $1 billion class A affirmed at 'AAA' (BL: 43.45, LCR: 3.55); -- $90.7 million class M-1 affirmed at 'AA+' (BL: 38.13, LCR: 3.11); -- $79.7 million class M-2 affirmed at 'AA+' (BL: 32.97, LCR: 2.69); -- $55 million class M-3 affirmed at 'AA' (BL: 29.40, LCR: 2.40); -- $41.2 million class M-4 affirmed at 'AA' (BL: 26.69, LCR: 2.18); -- $41.2 million class M-5 affirmed at 'AA-' (BL: 23.98, LCR: 1.96); -- $37 million class M-6 affirmed at 'A+' (BL: 21.49, LCR: 1.76); -- $38.6 million class M-7 affirmed at 'A' (BL: 18.79, LCR: 1.53); -- $27.5 million class M-8 downgraded to 'BBB+' from 'A-' (BL: 16.87, LCR: 1.38); -- $16.5 million class M-9 downgraded to 'BBB-' from 'BBB+' (BL: 13.72, LCR: 1.12); -- $27.5 million class M-10 downgraded to 'BB' from 'BBB' (BL: 12.00, LCR: 0.98); -- $13.7 million class M-11 downgraded to 'BB-' from 'BBB' (BL: 11.31, LCR: 0.92); -- $30.2 million class M-12 downgraded to 'B' from 'BBB-' (BL: 9.92, LCR: 0.81); -- $13.7 million class M-13 downgraded to 'B' from 'BB+' (BL: 9.47, LCR: 0.77). Deal Summary -- Originators: 100% Argent; -- 60+ day Delinquency: 15.30%; -- Realized Losses to date (% of Original Balance): 0.91%; -- Expected Remaining Losses (% of Current Balance): 12.24%; -- Cumulative Expected Losses (% of Original Balance): 9.55%. Argent Securities 2005-W4 -- $1.4 billion class A affirmed at 'AAA' (BL: 34.63, LCR: 2.59); -- $147.7 million class M-1 affirmed at 'AA+' (BL: 26.64, LCR: 2.00); -- $72.2 million class M-2 downgraded to 'A+' from 'AA' (BL: 22.91, LCR: 1.72); -- $39.2 million class M-3 downgraded to 'A' from 'AA-' (BL: 20.88, LCR: 1.56); -- $37.7 million class M-4 downgraded to 'A-' from 'A+' (BL: 18.91, LCR: 1.42); -- $36.1 million class M-5 downgraded to 'BBB' from 'A' (BL: 16.98, LCR: 1.27); -- $26.7 million class M-6 downgraded to 'BBB-' from 'A-' (BL: 15.52, LCR: 1.16); -- $28.2 million class M-7 downgraded to 'BB+' from 'BBB+' (BL: 14.06, LCR: 1.05); -- $26.7 million class M-8 downgraded to 'B+' from 'BBB' (BL: 11.53, LCR: 0.86). Deal Summary -- Originators: 100% Argent; -- 60+ day Delinquency: 15.20%; -- Realized Losses to date (% of Original Balance): 0.63%; -- Expected Remaining Losses (% of Current Balance): 13.35%; -- Cumulative Expected Losses (% of Original Balance): 11.12%. Argent Securities 2006-W3 -- $714.3 million class A affirmed at 'AAA' (BL: 40.63, LCR: 2.65); -- $57.8 million class M-1 affirmed at 'AA+' (BL: 32.27, LCR: 2.10); -- $50.3 million class M-2 affirmed at 'AA' (BL: 29.13, LCR: 1.90); -- $29.6 million class M-3 affirmed at 'AA' (BL: 26.63, LCR: 1.73); -- $26.6 million class M-4 downgraded to 'A' from 'A+' (BL: 24.01, LCR: 1.56); -- $25.1 million class M-5 downgraded to 'A-' from 'A' (BL: 21.54, LCR: 1.40); -- $23.7 million class M-6 downgraded to 'BBB' from 'A-' (BL: 19.16, LCR: 1.25); -- $22.2 million class M-7 downgraded to 'BBB-' from 'BBB+' (BL: 16.83, LCR: 1.10); -- $18.5 million class M-8 downgraded to 'BB' from 'BBB' (BL: 14.85, LCR: 0.97); -- $12.5 million class M-9 downgraded to 'B+' from 'BBB-' (BL: 13.40, LCR: 0.87); -- $11.8 million class M-10 downgraded to 'B' from 'BB+' (BL: 12.00, LCR: 0.78); -- $14.8 million class M-11 downgraded to 'CCC' from 'BB' (BL: 9.77, LCR: 0.64). Deal Summary -- Originators: 100% Argent; -- 60+ day Delinquency: 21.90%; -- Realized Losses to date (% of Original Balance): 0.35%; -- Expected Remaining Losses (% of Current Balance): 15.35%; -- Cumulative Expected Losses (% of Original Balance): 11.05%. Argent Securities 2006-W4 -- $739.2 million class A affirmed at 'AAA' (BL: 36.54, LCR: 2.66); -- $49 million class M-1 affirmed at 'AA+' (BL: 29.39, LCR: 2.14); -- $43.3 million class M-2 affirmed at 'AA' (BL: 26.47, LCR: 1.93); -- $27.7 million class M-3 affirmed at 'AA' (BL: 24.11, LCR: 1.76); -- $24.1 million class M-4 downgraded to 'A' from 'AA-' (BL: 21.69, LCR: 1.58); -- $23.4 million class M-5 downgraded to 'A-' from 'A+' (BL: 19.33, LCR: 1.41); -- $19.8 million class M-6 downgraded to 'BBB' from 'A' (BL: 17.27, LCR: 1.26); -- $19.1 million class M-7 downgraded to 'BBB-' from 'BBB+' (BL: 15.21, LCR: 1.11); -- $17 million class M-8 downgraded to 'BB' from 'BBB' (BL: 13.36, LCR: 0.97); -- $10.6 million class M-9 downgraded to 'B' from 'BBB' (BL: 10.27, LCR: 0.75); -- $14.2 million class M-10 downgraded to 'CCC' from 'BBB-' (BL: 9.32 , LCR: 0.68). Deal Summary -- Originators: 100% Argent; -- 60+ day Delinquency: 21.90%; -- Realized Losses to date (% of Original Balance): 0.26%; -- Expected Remaining Losses (% of Current Balance): 13.72%; -- Cumulative Expected Losses (% of Original Balance): 10.09%. Argent Securities 2006-W5 -- $728.1 million class A affirmed at 'AAA' (BL: 36.00, LCR: 2.51); -- $48.1 million class M-1 affirmed at 'AA+' (BL: 28.58, LCR: 1.99); -- $42.6 million class M-2 affirmed at 'AA+' (BL: 25.76, LCR: 1.80); -- $27.5 million class M-3 affirmed at 'AA' (BL: 23.62, LCR: 1.65); -- $22.6 million class M-4 downgraded to 'A' from 'AA-' (BL: 21.44, LCR: 1.50); -- $23.3 million class M-5 downgraded to 'BBB+' from 'A+' (BL: 19.10, LCR: 1.33); -- $19.9 million class M-6 downgraded to 'BBB-' from 'A' (BL: 17.05, LCR: 1.19); -- $18.5 million class M-7 downgraded to 'BB+' from 'BBB+' (BL: 15.07, LCR: 1.05); -- $15.8 million class M-8 downgraded to 'BB-' from 'BBB' (BL: 13.36, LCR: 0.93); -- $11 million class M-9 downgraded to 'B+' from 'BBB' (BL: 12.10, LCR: 0.84); -- $13.7 million class M-10 downgraded to 'CCC' from 'BB+' (BL: 9.03, LCR: 0.63). Deal Summary -- Originators: 100% Argent; -- 60+ day Delinquency: 21.40%; -- Realized Losses to date (% of Original Balance): 0.19%; -- Expected Remaining Losses (% of Current Balance): 14.34%; -- Cumulative Expected Losses (% of Original Balance): 10.66%. Argent Securities 2006-M2 -- $1 billion class A affirmed at 'AAA' (BL: 34.86, LCR: 2.95); -- $88.4 million class M-1 affirmed at 'AA+' (BL: 27.59, LCR: 2.34); -- $73.9 million class M-2 downgraded to 'AA-' from 'AA' (BL: 23.04, LCR: 1.95); -- $26.3 million class M-3 downgraded to 'AA-' from 'AA' (BL: 21.19, LCR: 1.79); -- $35.7 million class M-4 downgraded to 'A' from 'A+' (BL: 18.66, LCR: 1.58); -- $26.3 million class M-5 downgraded to 'A-' from 'A' (BL: 16.77, LCR: 1.42); -- $19.5 million class M-6 downgraded to 'BBB+' from 'A-' (BL: 15.34, LCR: 1.30); -- $24.6 million class M-7 downgraded to 'BBB-' from 'BBB+' (BL: 13.46, LCR: 1.14); -- $14.4 million class M-8 downgraded to 'BB+' from 'BBB' (BL: 12.34, LCR: 1.04); -- $13.6 million class M-9 downgraded to 'BB-' from 'BBB' (BL: 11.10, LCR: 0.94); -- $10.2 million class M-10 downgraded to 'B+' from 'BBB-' (BL: 10.13, LCR: 0.86); -- $17 million class M-11 downgraded to 'B' from 'BB' (BL: 8.82, LCR: 0.75). Deal Summary -- Originators: 100% Argent/Ameriquest; -- 60+ day Delinquency: 15.70%; -- Realized Losses to date (% of Original Balance): 0.08%; -- Expected Remaining Losses (% of Current Balance): 11.81%; -- Cumulative Expected Losses (% of Original Balance): 10.18%. Argent Securities 2006-M3 -- $1.3 billion class A affirmed at 'AAA' (BL: 27.43, LCR: 2.48); -- $110.5 million class M-1 affirmed at 'AA+' (BL: 23.76, LCR: 2.15); -- $73.7 million class M-2 downgraded to 'AA-' from 'AA' (BL: 20.26, LCR: 1.83); -- $32.8 million class M-3 downgraded to 'A+' from 'AA-' (BL: 18.33, LCR: 1.66); -- $29.8 million class M-4 downgraded to 'A' from 'A+' (BL: 16.56, LCR: 1.50); -- $29.8 million class M-5 downgraded to 'BBB+' from 'A' (BL: 14.77, LCR: 1.34); -- $25.9 million class M-6 downgraded to 'BBB-' from 'A-' (BL: 13.19, LCR: 1.19); -- $23.9 million class M-7 downgraded to 'BB+' from 'BBB+' (BL: 11.70, LCR: 1.06); -- $15.9 million class M-8 downgraded to 'BB' from 'BBB' (BL: 10.67, LCR: 0.97); -- $12.9 million class M-9 downgraded to 'B+' from 'BBB-' (BL: 9.72, LCR: 0.88); -- $19.9 million class M-10 downgraded to 'CCC' from 'BB+' (BL: 7.66, LCR: 0.69). Deal Summary -- Originators: 100% Argent/Ameriquest; -- 60+ day Delinquency: 12.70%; -- Realized Losses to date (% of Original Balance): 0.09%; -- Expected Remaining Losses (% of Current Balance): 11.05%; -- Cumulative Expected Losses (% of Original Balance): 9.70%. Park Place Securities 2005-WCW3 -- $383.2 million class A-1, A-2 affirmed at 'AAA' (BL: 55.65, LCR: 3.28); -- $68.2 million class M-1 affirmed at 'AA+' (BL: 45.43, LCR: 2.67); -- $38.2 million class M-2 affirmed at 'AA+' (BL: 39.67, LCR: 2.33); -- $25.5 million class M-3 affirmed at 'AA' (BL: 35.80, LCR: 2.11); -- $23.2 million class M-4 affirmed at 'AA-' (BL: 32.24, LCR: 1.90); -- $24.7 million class M-5 affirmed at 'A+' (BL: 28.46, LCR: 1.68); -- $22.5 million class M-6 downgraded to 'A-' from 'A' (BL: 24.96, LCR: 1.47); -- $21.7 million class M-7 downgraded to 'BBB' from 'A-' (BL: 21.46, LCR: 1.26); -- $16.5 million class M-8 downgraded to 'B+' from 'BBB+' (BL: 14.96, LCR: 0.88); -- $12 million class M-9 downgraded to 'B' from 'BBB' (BL: 13.47, LCR: 0.79); -- $9 million class M-10 downgraded to 'CCC' from 'BBB' (BL: 12.34, LCR: 0.73); -- $15 million class M-11 downgraded to 'CCC' from 'BB+' (BL: 10.78, LCR: 0.63); -- $11.2 million class M-12 downgraded to 'CCC' from 'BB+' (BL: 10.06, LCR: 0.59). Deal Summary -- Originators: 100% Ameriquest; -- 60+ day Delinquency: 20.30%; -- Realized Losses to date (% of Original Balance): 1.01%; -- Expected Remaining Losses (% of Current Balance): 16.99%; -- Cumulative Expected Losses (% of Original Balance): 8.91%. Park Place Securities 2005-WHQ2 -- $807.9 million class A affirmed at 'AAA' (BL: 47.04, LCR: 5.24); -- $92.7 million class M-1 affirmed at 'AA+' (BL: 38.87, LCR: 4.33); -- $89.2 million class M-2 affirmed at 'AA+' (BL: 31.87, LCR: 3.55); -- $49 million class M-3 affirmed at 'AA' (BL: 27.99, LCR: 3.12); -- $47.2 million class M-4 affirmed at 'AA-' (BL: 24.21, LCR: 2.70); -- $42 million class M-5 affirmed at 'A+' (BL: 20.83, LCR: 2.32); -- $26.2 million class M-6 affirmed at 'A+' (BL: 18.67, LCR: 2.08); -- $28 million class M-7 affirmed at 'A' (BL: 16.28, LCR: 1.81); -- $17.5 million class M-8 affirmed at 'A-' (BL: 14.78, LCR: 1.65); -- $17.5 million class M-9 downgraded to 'BBB-' from 'A-' (BL: 10.72, LCR: 1.19); -- $24.5 million class M-10 downgraded to 'BB+' from 'BBB+' (BL: 9.67, LCR: 1.08); -- $36.7 million class M-11 downgraded to 'BB' from 'BBB+' (BL: 8.52, LCR: 0.95); -- $21 million class M-12 downgraded to 'B' from 'BBB-' (BL: 7.22, LCR: 0.8). Deal Summary -- Originators: 100% Ameriquest; -- 60+ day Delinquency: 18.60%; -- Realized Losses to date (% of Original Balance): 0.99%; -- Expected Remaining Losses (% of Current Balance): 8.98%; -- Cumulative Expected Losses (% of Original Balance): 4.37%. In addition, these classes are removed from Rating Watch Negative: -- Classes M-12 and M-13 (from Argent Securities 2005-W2); -- Classes M-10 and M-11 (from Argent Securities 2006-W3); -- Class M-10 (from Argent Securities 2006-W4); -- Class M-10 (from Argent Securities 2006-W5); -- Class M-11 (from Argent Securities 2006-M2); -- Class M-12 (from Park Place Securities 2005-WCW3); -- Class M-12 (from Park Place Securities 2005-WHQ2). These transactions were placed on 'Under Analysis' on July 12, 2007. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions adopted after the analysis of the June 2007 remittance data. The updated assumptions better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness. -- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria' (June 12, 2007); -- 'Fitch Affirms $20B & Downgrades $2.4B of U.S. Subprime RMBS; New Surveillance Criteria for 2005-2006 Vintage Loans' (Aug. 1, 2007). ARROW DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Arrow Development, Inc. 17000 Preston Road Suite 200 Dallas, TX 75248 Bankruptcy Case No.: 07-33821 Type of business: The Debtor is a general contractor for the construction and remodelling single family homes. Chapter 11 Petition Date: August 6, 2007 Court: Northern District of Texas (Dallas) Debtor's Counsel: David L. Campbell, Esq. Campbell & Cobbe, P.C. 900 Jackson Street, Suite 120 Dallas, TX 75202 Tel: (214) 742-3600 Fax: (214) 742-5106 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 ------ --------------- ------------ Frisco Wholesale Lumber $112,414 P.O. Box 68107 Dallas, TX 75267-8107 Frisco Independent School municipal/city $33,955 District taxes P.O. Box 547 Frisco, TX 75034 K.A.T. Fabricators $26,242 P.O. Box 495368 Garland, TX 75049 Rockwall Central Appraisal municipal/city $21,765 taxes DalTile $17,331 Collin County Tax Assessor municipal/city $17,276 taxes Riverbend Sandler Pools $16,545 Dupree Industries $15,242 Fritz Plumbing $15,229 A.A. Porter Lighting Company $15,093 Capital Distributing Company $14,184 Wylie Fence Company $13,461 Sorensen Electric $10,058 Pella Windows $9,489 Dallas North Builders $9,304 Hardware Associated Ornamental $9,020 Rockwall Central Appraisal $7,269 Advanced Home Systems $7,135 Custom Stone Supply $6,495 Rockwall Central Appraisal $6,106 ATLAS PIPELINE: Posts $20.8 Million Net Loss in 2nd Qtr. 2007 ------------------------------------------------------------- Atlas Pipeline Partners L.P. reported a net loss of $20.8 million for the three months ended June 30, 2007. For the six months ended June 30, 2007, the company recorded a loss of $18.4 million. The company also reported record adjusted earnings before interest, income taxes, depreciation and amortization of $24.2 million for the second quarter 2007 compared with $22.8 million for the prior year second quarter. The quarter-over-quarter results were favorably impacted by higher system-wide volumes of about 759.4 million cubic feet per day compared with 644.1 MMcfd for the prior year comparable quarter, an increase of about 18%. Increased throughput volume on the NOARK interstate pipeline system, the addition of the Sweetwater processing facility and an increase in Appalachia gathered natural gas contributed to the aggregate growth in system volumes. The company reported total assets of $799.2 million, total liabilities of $368.5 million, and total stockholders' equity of $302 million as of June 30, 2007. Full-text copy of the company's financials are available for free at http://www.marketwire.com/mw/release.do?id=757498&sourceType=1 Cash Distribution The partnership declared a record quarterly cash distribution for the second quarter 2007 of $0.87 per common limited partner unit on June 26, 2007. The second quarter 2007 distribution will be paid on Aug. 14, 2007 to all unitholders of record as of July 6, 2007. Distributions declared per common limited partner unit for the twelve months ended June 30, 2007 were $3.44, an increase of $0.11 compared to the twelve months ended June 30, 2006. The partnership established distribution guidance at a range of $3.80 to $4 per common limited partner unit for 2008, while also increasing the targeted distribution coverage ratio to 1.2x. Anadarko Petroleum Acquisition On July 27, 2007, the partnership acquired control of Anadarko Petroleum Corporation's 100% interest in the Chaney Dell natural gas gathering system and processing plants located in Oklahoma and its approximate 73% interest in the Midkiff/Benedum natural gas gathering system and processing plants located in Texas. In connection with this acquisition, the Partnership reached an agreement with Pioneer Natural Resources Company, which provides about 50% of the natural gas processed by the Midkiff/Benedum system, to extend Pioneer's contract on the system for an additional ten years through 2022. In conjunction with this extension, the partnership granted to Pioneer, which currently holds an approximate 27% interest in the Midkiff/Benedum system, an option to buy up to an additional 14.6% interest in the Midkiff/Benedum system one year after the closing of the Partnership's acquisition of Anadarko's interest, and up to an additional 7.5% interest two years after the closing of the Partnership's acquisition of Anadarko's interest. If the options are fully exercised, Pioneer would increase its interest in the system to approximately 49%. Pioneer would pay about $230 million for the additional 22% interest if fully exercised. The partnership will manage and control the Midkiff/Benedum system regardless of whether Pioneer exercises the purchase options. The Partnership funded the purchase price of the acquisition in part from a private placement of 25.6 million common limited partner units, generating gross proceeds of $1.125 billion. Atlas Pipeline Holdings, L.P., the parent of the partnership's general partner, purchased 3.8 million of the 25.6 million common limited partner units issued by the partnership. The partnership funded the remaining purchase price with an $830 million senior secured term loan which matures in July 2014 and a partial advance against a new $300 million senior secured revolving credit facility which matures in July 2013. Atlas Holdings, which holds all of the incentive distribution rights in the Partnership, agreed to allocate a portion of its future incentive distribution rights to the Partnership in connection with the Anadarko acquisition. Atlas Holdings has agreed to allocate up to $5 million of incentive distribution rights per quarter to the Partnership through the quarter ended June 30, 2009, and up to $3.75 million per quarter thereafter. "Recent accomplishments have been transformative for our Partnership," stated Edward E. Cohen, chairman and chief executive officer of the partnership. "The acquisition of Anadarko's interest in the Chaney Dell and Midkiff/Benedum gathering and processing systems has more than doubled our daily natural gas processing capacity to approximately 750 Mmcfd. In addition, our existing assets in the Mid-Continent region generated record gathered volumes in the second quarter 2007 of almost 700 Mmcfd. Appalachian segment results were also strong this quarter, providing record throughput volume of 66.2 Mmcfd from the growing production of Atlas Energy Resources LLC. These volumes yielded our highest quarterly operating revenues to date of $124 million." About Atlas Pipeline Partners Atlas Pipeline Partners L.P. -- http://www.atlaspipelinepartners.com/-- is active in the transmission, gathering and processing segments of the midstream natural gas industry. In the Mid-Continent region of Oklahoma, Arkansas, northern Texas and the Texas panhandle, the Partnership owns and operates approximately 1,900 miles of active intrastate gas gathering pipeline and a 565-mile interstate natural gas pipeline. The Partnership also operates three gas processing plants and a treating facility in Velma, Elk City, Sweetwater and Prentiss, Oklahoma where natural gas liquids and impurities are removed. In Appalachia, it owns and operates approximately 1,600 miles of natural gas gathering pipelines in western Pennsylvania, western New York and eastern Ohio. Atlas Pipeline Holdings, L.P. is a limited partnership formed to own and control Atlas Pipeline Partners GP, LLC, the general partner of Atlas Pipeline Partners, L.P., through which it owns a 2% general partner interest, all the incentive distribution rights and 1,641,026 common units of Atlas Pipeline Partners * * * As reported in the Troubled Company Reporter on July 31, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Atlas Pipeline Partners L.P. to 'B+' from 'BB-' following the company's acquisition of control of Anadarko Petroleum Corp.'s interests in the Chaney Dell and Midkiff-Benedum natural gas gathering and processing systems for $1.85 billion. AZAD ZOLNOORIAN: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Azad Zolnoorian 4414 East Lincoln Drive Paradise Valley, AZ 85253 Tel: (602) 595-3337 Bankruptcy Case No.: 07-03773 Chapter 11 Petition Date: August 3, 2007 Court: District of Arizona (Phoenix) Judge: Eileen W. Hollowell Debtor's Counsel: James Evans Thompson, Esq. Thompson and McGinnis 1850 East Thunderbird Road Phoenix, AZ 85022 Tel: (602) 952-2661 Fax: (602) 569-8201 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. BENNETT ENVIRONMENTAL: Posts CDN$1.9 Mil. Net Loss in Second Qtr. ----------------------------------------------------------------- Bennett Environmental Inc. (TSX:BEV) announced on Friday its interim financial and operating results for the second quarter of 2007. Bennett Environmental recorded a loss of CDN$1.9 million in the second quarter of 2007, compared to a loss of CDN$1.8 million in the second quarter of 2006. Sales for the second quarter of 2007 were CDN$5.3 million compared to CDN$2.7 million for the same period a year earlier. Sales increased by CDN$3.6 million over the first quarter of 2007 and net loss increased by CDN$138,143. At the end of the second quarter of 2007 the company had cash and cash equivalents of CDN$6.2 million and working capital of CDN$2.7 million. At June 30, 2007, the company's consolidated balance sheet showed CDN$39.3 million in total assets, CDN$9.1 million in total liabilities, and $30.2 million in total stockholders' equity. Going Concern Doubt KPMG LLP'S audit of the Bennett Environmental Inc.'s consolidated financial statements for the years ended Dec. 31, 2006, and 2005, is conducted in accordance with Canadian generally accepted auditing standards., which do not permit reference to conditions which cast substantial doubt on a company's ability to continue as a going concern when these are adequately disclosed in the consolidated financial statements. During the year ended Dec. 31, 2006, the company incurred a loss of CDN$27.0 million, and accordingly, the cash flows from operations have been reduced significantly. The company has an accumulated deficit of CDN$41.3 million at Dec 31, 2006. AT June 30, 2007, the company's accumulated deficit increased to CDN$45.9 million. There is substantial doubt about the ability of the company to continue as a going concern. company closed the Recupere Sol Inc. ("RSI") facility in Quebec on Nov. 4, 2006, in order to build up production volumes. On April 30, 2007, the company reopened the RSI facility temporarily, and continued production through to June 23, 2007. Subsequent to the end of the period on July 13, 2007, the company also closed its MRR facility located in Cornwall. Both facilities are expected to reopen September 2007 when the backlog of production should reach levels to support efficient operations. About Bennett Environmental Headquartered in Oakville, Ontario, Bennett Environmental Inc. (Toronto: BEV.TO) -- http://www.bennettenv.com/-- is a North American leader in high temperature treatment services for the treatment of contaminated soil and has provided thermal solutions to contamination problems throughout Canada and the U.S. Bennett Environmental's technology provides for the safe, economical and permanent solution to contaminated soil. BETTY HOWARD: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Betty Gail Howard 24353 Mornington Drive Valencia, CA 91355 Bankruptcy Case No.: 07-12729 Chapter 11 Petition Date: August 3, 2007 Court: Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Robert P. Goe, Esq. Goe & Forsythe, L.L.P. 660 Newport Center Drive, Suite 320 Newport Beach, CA 92660 Tel: (949) 467-3780 Fax: (949) 721-0409 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ford Motor Credit Co. $2,000,000 c/o Callahan McCune & Willis 1230 Columbia Street, Suite 930 San Diego, CA 92101 James Elipas lawsuit $1,766,778 c/o Michael R. Collins 8 South Michigan Avenue, Suite 1414 Chicago, IL 60603 John Pavlopoulos lawsuit $426,439 c/o Michael R. Collins, Esq. 8 South Michigan Avenue, Suite 1414 Chicago, IL 60603 Atrium Irvine, L.L.C. lawsuit $405,472 c/o Jackson DeMarco, et al. 2030 Main Street, Suite 1200 Irvine, CA 92614 Ivo Cozzini $246,667 Thomas Pavlopoulos lawsuit $209,583 Ann Yanick lawsuit $66,553 Dennis Pavlopoulos lawsuit $60,833 Steve Leone lawsuit $36,700 Midnight Velvet $526 Seventh Avenue $222 T.U. Electric $127 BI-STATE CONTRACTING: Case Summary & 18 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Bi-State Contracting, Inc. P.O. Box 1119 Smiths Station, AL 36877 Bankruptcy Case No.: 07-80871 Chapter 11 Petition Date: August 6, 2007 Court: Middle District of Alabama (Opelika) Debtor's Counsel: J. Kaz Espy, Esq. Espy, Metcalf & Espy, P.C. P.O. Box 6504 Dothan, AL 36302-6504 Tel: (334) 793-6288 Fax: (334) 712-1617 Total Assets: $2,235,155 Total Debts: $3,618,706 Debtor's List of its 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service 941 Tax Liabilities $424,217 801 Tom Martin Drive Interest & Penalties Suite 126 Birmingham, AL 35211 D&J Enterprises, Inc. $224,411 3495 lee Road 10 Auburn, AL 36832 Cowin Equipment Co., Inc. $205,453 P.O. Box 10624 Birmingham, AL 35202-0624 SRM Aggregates, Inc. $113,903 Metrac, Inc. $90,436 Best Rental Corporation $74,347 Bridgefield Casualty Insurance $116,483 Hanson Pipe & Precast Inc. $49,718 Yancey Bros Co. $48,603 Harleysville Insurance Co. $43,991 United Rentals Inc. $42,168 Vellano Bros. Inc. $39,832 Florida Rock Industries, Inc. $38,941 Rental Service Corporation $23,954 Wright Express $22,427 Thompson Carriers Inc. $19,881 Columbus Quarry LLC Judgment $14,609 LaFarge Building Judgment $14,310 Materials, Inc. BLOCKBUSTER INC: Poor Performance Cues S&P to Lower Ratings to B- ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Dallas- based Blockbuster Inc. to 'B-' from 'B'. The outlook is negative. "The ratings action reflects deteriorating operating performance and declining credit protection metrics," said Standard & Poor's credit analyst David Kuntz, "as the company spent more on marketing and cut its fees for Total Access in response to increased competitiveness in the industry." The company also recently amended its senior secured credit agreement to avoid covenant violations. "Standard & Poor's believes Blockbuster's operating performance will remain weak," added Mr. Kuntz, "given the industry's poor fundamentals and increasing competitiveness." BRISTOL CDO: Fitch Junks Rating on $30 Million Class B Notes ------------------------------------------------------------ Fitch has downgraded one class and affirmed two classes of notes issued by Bristol CDO I, Ltd. These rating actions are effective immediately: -- $61,696,817 class A-1 notes affirmed at 'AA+'; -- $5,658,992 class A-2 notes affirmed at 'AA+'; -- $30,000,000 class B notes downgraded to 'CCC/DR2' from 'B/DR2' and removed from Rating Watch Negative. Bristol is a collateralized debt obligation that closed on Oct. 11, 2002 and is secured by a static pool of asset-backed securities. Vanderbilt Capital Advisors, LLC selected the initial collateral and serves as the administrative advisor for the transaction. The collateral is primarily composed of ABS (35.02%), diversified structured finance CDOs (18.65%), 2002 and 2001 vintage subprime residential mortgage-backed securities (RMBS; 17.13%), manufactured housing RMBS (18.40%), commercial mortgage-backed securities (CMBS; 8.01%), and corporate bonds (2.80%). Included in this review, Fitch discussed the current state of the portfolio with Vanderbilt. In addition, Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. The affirmations of the class A-1 and A-2 notes (the class A notes) are a result of the delevering of the class A and stable collateral performance since the last review on May 1, 2006. The class A notes have amortized a total of 70% of their original balance since close, and 20% of their original balance since the last review. According to the most recent July 11, 2007 trustee report the weighted average rating factor has improved to 25 ('B/B+') from 28 ('B') at the last review. Additionally, the weighted average spread and weighted average coupon have improved slightly from the last review to 1.34% from 1.30% and to 7.33% from 7.10% respectively. The class A/B overcollateralization test has slightly improved to 101.33% from 100.83% at the time of the last review, however continues to fail the trigger of 104.5%. Despite the improvement in collateral quality tests, current defaulted assets comprise 16.67% of the total portfolio and distressed assets make up 10.36% of the total portfolio. The class B notes will not receive any principal proceeds until the class A-1 and A-2 notes have been paid in full. After the payment of current interest on the class A and class B notes, and as a result of the failing A/B OC test, interest proceeds continue to be diverted towards the pay down of the class A notes in the interest waterfall. To date, the class B notes have remained current on interest and no principal proceeds have leaked towards the payment of interest in the principal waterfall. Additionally, the interest rate swap is currently in the money and overhedged, and Bristol has received payments from the swap counterparty every payment period in 2007 to date. The ratings on the class A and B notes address the timely payment of interest and ultimate payment of principal by the legal final maturity date. CDC/IXIS CORP: Fitch Downgrades Ratings on 14 Cert. Classes ----------------------------------------------------------- Fitch Ratings has taken rating actions on two CDC/IXIS Corporation's mortgage pass-through certificates. Affirmations total $1.38 billion and downgrades total $160.8 million. Break Loss Percentages and Loss Coverage Ratios for each class are included with the rating actions as: CDC / IXIS, Series 2006-HE2 -- $526.8 million class A affirmed at 'AAA' (BL: 31.65, LCR: 2.20); -- $34.5 million class M-1 affirmed at 'AA+' (BL: 29.62, LCR: 2.06); -- $32 million class M-2 affirmed at 'AA' (BL: 26.75, LCR: 1.86); -- $18.5 million class M-3 affirmed at 'AA-' (BL: 24.73, LCR: 1.72); -- $16.5 million class M-4 downgraded to 'A' from 'A+' (BL: 22.48, LCR: 1.56); -- $16 million class M-5 downgraded to 'A-' from 'A' (BL: 20.29, LCR: 1.41); -- $15 million class M-6 downgraded to 'BBB' from 'A-'(BL: 18.22, LCR: 1.27); -- $14 million class B-1 downgraded to 'BBB-' from 'BBB+'(BL: 16.24, LCR: 1.13); -- $11.5 million class B-2 downgraded to 'BB' from 'BBB'(BL: 14.52, LCR: 1.01); -- $10 million class B-3 downgraded to 'B+' from 'BBB-'(BL: 12.71, LCR: 0.88); -- $10 million class B-4 downgraded to 'B' from 'BB+'(BL: 11.13, LCR: 0.77). Deal Summary: -- Originators: (Various); -- 60+ day Delinquency: 20.01%; -- Realized Losses to date (% of Original Balance): 0.58%; -- Expected Remaining Losses (% of Current Balance): 14.37%; -- Cumulative Expected Losses (% of Original Balance):10.97%. Series 2006-HE3 -- $639.3 million class A affirmed at 'AAA' (BL: 30.92, LCR: 2.44); -- $42.6 million class M-1 affirmed at 'AA+' (BL: 27.92, LCR: 2.21); -- $30.8 million class M-2 affirmed at 'AA' (BL: 25.34, LCR: 2.00); -- $19 million class M-3 affirmed at 'AA-' (BL: 23.42, LCR: 1.85); -- $16.4 million class M-4 affirmed at 'A+' (BL: 21.47, LCR: 1.70); -- $16.9 million class M-5 affirmed at 'A' (BL: 19.43, LCR: 1.54); -- $14.9 million class M-6 downgraded to 'BBB+' from 'A-'(BL: 17.55, LCR: 1.39); -- $14.4 million class B-1 downgraded to 'BBB' from 'BBB+'(BL: 15.69, LCR: 1.24); -- $12.8 million class B-2 downgraded to 'BBB-' from 'BBB'(BL: 13.87, LCR: 1.10); -- $7.2 million class B-3 downgraded to 'BB' from 'BBB-'(BL: 12.72, LCR: 1.01); -- $8.2 million class B-4 downgraded to 'BB-' from 'BB+'(BL: 11.39, LCR: 0.90); -- $10.3 million class B-5 downgraded to 'B' from 'BB'(BL: 10.06, LCR: 0.80). Deal Summary: -- Originators: (Various); -- 60+ day Delinquency: 16.09%; -- Realized Losses to date (% of Original Balance): 0.14%; -- Expected Remaining Losses (% of Current Balance): 12.65%; -- Cumulative Expected Losses (% of Original Balance):10.62%. These transactions were placed on 'Under Analysis' on July 12, 2007. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions adopted after the analysis of the June 2007 remittance data. The updated assumptions better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness. -- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria' (June 12, 2007); -- 'Fitch Affirms $20B & Downgrades $2.4B of U.S. Subprime RMBS; New 2005-2006 Surveillance Criteria' (Aug. 1, 2007). CHARLES RIVER: Fitch Cuts Rating on $4.8MM Class C Notes to B ------------------------------------------------------------- Fitch has downgraded three and affirmed five classes of notes issued by Charles River CDO I Ltd. These rating actions are the result of Fitch's review process and are effective immediately: -- $200,423,560 class A-1A notes affirmed at 'AAA'; -- $14,048,380 class A-1B notes affirmed at 'AAA'; -- $20,000,000 class A-2F notes affirmed at 'AA'; -- $15,000,000 class A-2V notes affirmed at 'AA'; -- $3,000,000 class B-F notes downgraded to 'BB' from 'BBB' and removed from Rating Watch Negative; -- $18,000,000 class B-V notes downgraded to 'BB' from 'BBB' and removed from Rating Watch Negative; -- $4,800,000 class C notes downgraded to 'B' from 'BB' and removed from Rating Watch Negative; -- $4,682,793 combination securities affirmed at 'AAA'. Charles River is a collateralized debt obligation that closed in November 2002 and is managed by TCW Investment Management Company. Charles River has exited its reinvestment in December 2006. Included in this review, Fitch discussed the current state of the portfolio with the asset manager. Additionally Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. Fitch's rating actions reflect considerable credit quality deterioration within the portfolio, primarily of subprime residential mortgage-backed securities. The portfolio is currently comprised largely of subprime RMBS (48%), along with prime RMBS and other structured finance assets. Charles River has approximately 26% exposure to subprime RMBS bonds of 2005 and 2006 vintages. Since the beginning of 2007 approximately 7% of the portfolio has been downgraded. Further, almost 8% of the underlying assets are currently on Rating Watch Negative. The majority of these actions has taken place in the last two months and was the result of credit deterioration in the subprime RMBS space. The portfolio currently contains approximately 10% of below investment grade assets. Fitch believes that the credit deterioration in the portfolio has increased the risk profile of the class B-F, B-V and C notes. The ratings of the class A-1A, A-2F and A-2V 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 B-F, B-V and C 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 the principal by the legal final maturity date. The ratings of the class A-1B and combination securities address the likelihood that investors will receive ultimate principal payments, as per the governing documents. CHASE FUNDING: Weak Performance Cues Moody's to Downgrade Ratings ----------------------------------------------------------------- Moody's Investors Service downgraded two tranches from Group I of Chase Funding Trust, Series 2001-2 and has placed under review for possible downgrade two tranches from Group I of Chase Funding Trust, Series 2001-3. The underlying collateral for these pools consists of first-lien, fixed-rate, subprime residential mortgage loans. The loans were originated and are serviced by Chase Manhattan Mortgage Corporation. The certificates are being downgraded and placed on review for possible downgrade based upon the weaker than anticipated performance of the mortgage collateral and the resulting erosion of credit support. Overcollateralization levels in both pools are currently below their floors and pipeline losses could put pressure on the most subordinate tranches. Furthermore, existing credit enhancement levels may be low given the current projected losses on the underlying pools. Complete rating actions are: Downgrade: Issuer: Chase Funding Trust, Series 2001-2 -- Class IM-2, downgraded from A2 to Ba1 -- Class IB, downgraded from Baa2 to Caa1 Review for Possible Downgrade: Issuer: Chase Funding Trust, Series 2001-3 -- Class IM-2, current rating A2, under review for possible downgrade -- Class IB, current rating Baa2, under review for possible downgrade. CHARTERHOUSE BOISE: Bankruptcy Filing Averts Property Auction ------------------------------------------------------------- Charterhouse Boise Downtown Properties LLC, on August 1, 2007, filed for protection under Chapter 11 of the Bankruptcy Code with the U.S. Bankruptcy Court for the District of Idaho. The bankruptcy filing was done in an effort to prevent creditors from selling a property, the Idaho Business Review reports. An auction had been scheduled for August 2. According to the report, owner Gary Rogers had planned to construct a 34-story tower project dubbed "Boise Place." Financial problems however prompted Mr. Rogers to redesign and build a shorter tower. Mr. Rodgers had already defaulted on a $2.6 million loan while his architect filed a $500,000 lien against the project, the Idaho Business Review adds. The report relates that Mr. Rogers intends to reorganize and keep the project going. A case summary of the company's voluntary chapter 11 petition was published in the Troubled Company Reporter on August 3, 2007. Headquartered in Boise, Idaho, Charterhouse Boise Downtown Properties, L.L.C., develops real estate. The company filed for chapter 11 protection on Aug. 1, 2007 (Bankr. D. Id. Case No. 07- 01199). Thomas James Angstman, Esq., at Angstman, Johnson & Associates, represents the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets and debts between $10 million and $100 million. CHRYSLER LLC: Board Names Bob Nardelli as Chairman and CEO ---------------------------------------------------------- The board of directors of Chrysler LLC has appointed Bob Nardelli as chairman and CEO of Chrysler LLC. The board also disclosed that Tom LaSorda was appointed vice chairman and president of Chrysler LLC, reporting to Mr. Nardelli. "We are excited to welcome Bob to the Chrysler family," Mr. LaSorda said. "Bob has a proven track record of success and an unwavering focus on performance, and brings deep operational experience and a broad industry background to Chrysler. His background in operations will provide valuable knowledge as we continue Chrysler's turnaround." "I am very excited to be part of a team focused on re-establishing Chrysler as a standalone industry leader, with a renewed focus on meeting the needs of customers," Mr. Nardelli said. "Chrysler has many deeply talented and dedicated people, and I am confident that together we can continue the momentum of Chrysler's recovery and return this great American icon to a path for global growth and competitiveness." In addition, Eric Ridenour, chief operating officer, has elected to leave the new company to pursue other opportunities. The COO position will not be filled going forward. "Eric gave this company 23 years of great service and leadership," Mr. LaSorda said. "We wish him well in his new pursuits." Concurrent with the close of the Chrysler transaction on Aug. 3, 2007, the new board of directors of Chrysler LLC was formed. It consists of 11 members, including Mr. Nardelli, Mr. LaSorda, representatives of Cerberus and Daimler, and independent directors. Cerberus and Chrysler thank Wolfgang Bernhard for his contributions leading to the closing of this transaction. Both Cerberus and Chrysler had looked forward to his continuing contributions as non-executive chairman of Chrysler, however due to personal and family reasons he was not able to accept that role. Cerberus has also asked, and Tom LaSorda has agreed, to serve as the vice chairman of Cerberus Operating and Advisory Company LLC, Cerberus' proprietary operations advisory affiliate. In that role, Mr. LaSorda will assist in the continuing development of COAC, which works closely with the portfolio companies in which the funds and accounts managed by Cerberus are invested. Prior to joining Chrysler, Mr. Nardelli served as chairman, president and CEO of The Home Depot beginning in 2000. During his tenure at The Home Depot he doubled sales as well as the number of store operations; moved globally into Mexico and China; and delivered more than 20% earnings-per-share growth for four consecutive years while growing dividends from 16 cents to 90 cents per share. Mr. Nardelli also has extensive senior operations experience in manufacturing and transportation systems. Mr. Nardelli received his bachelor's degree in business from Western Illinois University and earned a Master of Business Administration from the University of Louisville. Mr. Nardelli, an Atlanta resident, chairs the Atlanta board of visitors of the Savannah College of Art and Design and has also served on president Bush's Council on service and civic participation. He has also chaired the advisory board for the nonprofit group Hands on Network and strongly supported KaBoom!, a national nonprofit organization building community playgrounds. Mr. Nardelli has received numerous awards for his strong support of military veterans, and received the Distinguished Pennsylvanian Award from Gannon University (1995) and the Distinguished Alumni Award from the College of Business and Technology at Western Illinois University (1997 and 1999). He is an alumni fellow and 2001 Alumnus of the Year of the University of Louisville, and serves on the national visiting committee advisory board, University of Louisville Graduate School of Business. About Cerberus Capital Management LP Headquartered in New York City, Cerberus Capital Management LP -- http://www.cerberuscapital.com/-- is a private investment firm that specializes in providing both financial resources and operational expertise to help transform undervalued companies into industry leaders for long-term success and value creation. Cerberus has affiliate and/or advisory offices in Atlanta, Chicago, Los Angeles, London, Baarn, Frankfurt, Tokyo, Osaka and Taipei. Cerberus holds controlling or significant minority interests in companies around the world. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. Its product lineup features some of the most recognizable vehicles, including the Chrysler 300, Jeep Commander and Dodge Charger. * * * As reported in the Troubled Company Reporter on July 4, 2007, Fitch has initiated rating coverage on Chrysler LLC by assigning these ratings: long-term issuer default rating 'B+'; $10 billion first-lien loan 'BB+/RR1'; $2 billion second-lien loan 'BB+/RR1'. Standard & Poor's Ratings Services assigned its 'B' corporate credit rating on Chrysler LLC. At the same time, Standard & Poor's assigned its 'B' long-term counterparty credit rating to Chrysler affiliate DaimlerChrysler Financial Services Americas LLC. The outlooks on both companies are negative. The linkage of the ratings on the two companies reflects our consideration of DCFS as a captive finance company and is driven primarily by the strong business ties between the two entities. CHRYSLER LLC: S&P Assigns BB- Rating on $5 Bil. Term Loan Tranche ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its loan and recovery ratings on Chrysler LLC's (B/Negative/--) $10 billion senior secured first-lien term loan facility due 2013, following various changes to terms and conditions prior to closing. The $10 billion first-lien term loan now consists of a $5 billion "first-out" tranche and a $5 billion "second-out" tranche, so the aggregate amount of first-lien debt remains unchanged. Accordingly, S&P assigned a 'BB-' rating to the $5 billion "first- out" first-lien term loan tranche. This rating, two notches above the corporate credit rating of 'B' on Chrysler LLC, and the '1' recovery rating indicate S&P's expectation for very high (90%- 100%) recovery in the event of payment default. S&P also assigned a 'B' rating to the $5 billion "second-out" first-lien term loan tranche. This rating, the same as the corporate credit rating, and the '3' recovery rating indicate S&P's expectation for a meaningful (50%-70%) recovery in the event of payment default. At the same time, S&P affirmed its rating on Chrysler LLC's $2 billion second-lien term loan due 2014. The corporate credit rating was not affected by the higher margins on the first-lien and second-lien term loans, which will reduce cash flow protection measures. In the new first-lien structure, the "first-out" first-lien term loan holders enjoy added protection provided by their enhanced position in the recovery process relative to the "second-out" first-lien term loan holders. The new structure resulted in better recovery estimations for the "first-out" first-lien term loan holders (from the upper 70%-90% range for the initially proposed $10 billion first-lien term loan to 90%-100% for the $5 billion "first-out" piece). The recovery prospects for the $5 billion "second-out" first-lien term loan holders are diminished as a result of their standing behind the "first-out" holders, and are now in the high end of the 50%-70% range. The previous 'B+' loan rating and '2' recovery rating on the $10 billion first-lien term loan are withdrawn. S&P note that certain changes made to the first-lien and second- lien structures did not impact our recovery analysis: -- The maturities of the first-lien and second-lien term loans are shorter; -- The pricing on the "first-out", "second-out" tranches is higher than the original single first-lien tranche; -- Cash of $2.5 billion will be included in the first-lien borrowing base and held in a collateral account managed by the agent bank; -- The provision for an accordion feature in the first lien has been eliminated; and -- The second lien will now be governed by a borrowing base and the delayed draw period extended to 12 months, although in S&P's recovery analysis they continue to assume this loan in fully drawn. The first-lien and second-lien term loans closed as part of the purchase of Chrysler LLC. The $2 billion second-lien debt is now held by Cerberus Capital Management LP ($500 million) and DaimlerChrysler AG (DCX; BBB/Watch Pos/A-2; $1.5 billion). After one year, DCX has the right to sell this loan to investors. S&P's recovery ratings are still preliminary and subject to receipt and review of final documentation. S&P would review the recovery ratings if further changes are made to any terms and conditions in conjunction with future sales of the financings. Ratings List Chrysler LLC Corporate credit rating B/Negative/-- Ratings Assigned $5 billion first-out first-lien term loan due 2013 BB- (Recovery rtg: 1) $5 billion second-out first-lien term loan due 2013 B (Recovery rtg: 3) Rating Withdrawn $10 billion first-lien term loan due 2014 B+ (Recovery rtg: 2) Rating Affirmed $2 billion second-lien term loan due 2014 B- (Recovery rtg: 5) CITICORP MORTGAGE: S&P Affirms Ratings on 31 Certificate Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 31 series issued by Citicorp Mortgage Securities Inc. The affirmations reflect remaining credit support that is sufficient to support the certificates at their current rating levels. Credit support for the transactions differs depending on the year of issuance. All outstanding CMSI series through 1989 have a Citicorp-limited guarantee as the sole source of credit support. Beginning with series 1990-5, subordination and spread accounts were added to the Citicorp guarantee for credit support. Starting in 1991, the Citicorp guarantee was replaced by an initial cash deposit. Each series since 1993-14 has a senior/subordinate structure without a spread account. Finally, series 1992-7 has a certificate guarantee insurance policy issued by MBIA Insurance Corp. The collateral backing the certificates listed below, except for those in series 1988-11, 1988-17, 1989-1, 1989-13, 1989-19, and 1992-7 (which contain adjustable-rate mortgage loans), consists of prime jumbo fixed-rate 15- and 30-year mortgage loans secured primarily by single-family detached residential properties. Ratings Affirmed Citicorp Mortgage Securities Inc. Series Class Rating ------ ----- ------ 1987-1 P-T AA 1987-3 A1 AA 1987-10 A1 AA 1988-1 A-3 AA 1988-11 A-1 AA 1988-17 A-1 AA 1989-1 A-1 AA 1989-13 A1 AA 1989-19 A-1 AA 1990-5 A-4, A-7 CC 1990-9 A-3 B 1992-7 A-1 AAA 1993-14 A-3, A-4, A-5 AAA 1994-3 A-13, A-5 AAA 1994-5 A-7 AAA 2002-11 IA-4, IA-13, IA-14 AAA 2002-11 IIA-1, IIIA-1, A-PO AAA 2002-12 IA-5, IA-13, IA-14 AAA 2002-12 IA-15, IA-PO, IIA-1 AAA 2002-12 B-1, B-2 AAA 2002-12 B-3 AA+ 2003-1 A-3, A-3A, A-4, A-65, B-1 AAA 2003-1 B-2 AA+ 2003-1 B-3 AA 2003-3 A-1, A-2, A-4, A-5, A-6 AAA 2003-3 A-7, A-8, A-16, A-17, A-18 AAA 2003-3 A-19, A-20, A-21, A-22 AAA 2003-3 A-23, A-26, A-30, A-PO AAA 2003-3 A-IO AAA 2003-4 A-1, A-2, A-3, A-4 AAA 2003-4 A-5, A-IO, B-1 AAA 2003-4 B-2 AA+ 2003-4 B-3 AA- 2003-4 B-4 BBB 2003-4 B-5 B+ 2003-6 IIA-1, IIA-2, IIA-3 AAA 2003-6 IIA-IO AAA 2003-6 B-1 AA 2003-6 B-2 A 2003-6 B-3 BBB 2003-6 B-4 BB 2003-6 B-5 B 2003-7 A-1, A-PO, A-IO AAA 2003-7 B-1 AA 2003-7 B-2 A 2003-7 B-3 BBB 2003-7 B-4 BB 2003-7 B-5 B 2003-8 A-1, A-2, A-3, A-4 AAA 2003-8 A-5, A-6, A-7, A-8 AAA 2003-8 A-9, A-10, A-11, A-12 AAA 2003-8 A-13, A-14, A-15, A-16 AAA 2003-8 A-PO, A-IO AAA 2003-9 A-1, A-2, A-3, A-4 AAA 2003-9 A-5, A-6, A-7, A-8 AAA 2003-9 A-9, A-10, A-11, A-12 AAA 2003-9 A-13, A-14, A-15 AAA 2003-9 A-16, A-17, A-18 AAA 2003-9 A-IO, A-24, A-23 AAA 2003-9 A-22, A-21, A-20 AAA 2003-9 A-19, A-PO AAA 2003-9 B-1 AA 2003-9 B-2 A 2003-9 B-3 BBB 2003-9 B-4 BB 2003-9 B-5 B 2003-10 A-1, A-3, A-4, A-PO, A-2 AAA 2003-10 B-1 AA 2003-10 B-2 A 2003-10 B-3 BBB 2003-10 B-4 BB 2003-10 B-5 B 2003-11 IA-1, IA-2, IA-3, IA-4 AAA 2003-11 IA-5, IA-6, IA-7, IA-8 AAA 2003-11 IA-PO, IA-IO, IIA-IO AAA 2003-11 IIA-1, IIA-2, IIA-3, IIA-4 AAA 2003-11 IIA-5, IIA-6, IIA-7, IIA-9 AAA 2003-11 IIA-10, IIA-11, IA-8 AAA 2003-11 IIA-12, IIA-13, IIA-14 AAA 2004-3 A-1, A-2, A-3, A-4, A-5 AAA 2004-3 A-6, A-7, A-8, A-9, A-10 AAA 2004-3 A-11, A-12, A-PO AAA 2004-4 A-1, A-2, A-3, A-4, A-5 AAA 2004-4 A-6, A-7, A-8, A-9, A-10 AAA 2004-4 A-11, A-12, A-13, A-PO AAA 2004-4 B-1 AA 2004-4 B-2 A 2004-4 B-3 BBB 2004-4 B-4 BB 2004-4 B-5 B 2004-5 IA-1, IA-2, IA-3, IA-4 AAA 2004-5 IA-5, IA-6, IA-7, IA-8 AAA 2004-5 IA-9, IA-10, AI-11, IA-12 AAA 2004-5 IA-13, IA-14, IA-15 AAA 2004-5 IA-16, IA-17, IA-18 AAA 2004-5 IA-19, IA-20, IA-21 AAA 2004-5 IA-21, IA-22, IA-23 AAA 2004-5 IA-24, IA-25, IA-26 AAA 2004-5 IA-27, IA-28, IA-29 AAA 2004-5 IA-30, IA-31, IA-PO AAA 2004-5 IIA-1, IIA-2, IIA-3 AAA 2004-5 IIA-4, IIA-5, IIA-6 AAA 2004-5 IIA-PO, IIIA-1, IVA-1 AAA 2004-5 IVA-2, IVA-3, IVA-PO AAA 2004-5 B-4 BB 2004-5 B-5 B 2004-7 IA-1, IA-2, IA-3 AAA 2004-7 IA-4, IA-5, IA-6 AAA 2004-7 IA-7, IA-8, IA-PO AAA 2004-7 IIA-1, IIA-PO AAA 2005-8 IA-2, IA-3, IA-4 AAA 2005-8 IA-5, IA-6, IA-7 AAA 2005-8 IA-8, IIA-1, IIA-2 AAA 2005-8 IIA-3, A-PO, IA-1 AAA 2005-A1 IA-6, IIA-1, A-PO, IA-5 AAA 2005-A1 IA-4, IA-3, IA-2, IA-1 AAA 2005-A1 B-1 AA 2005-A1 B-2 A 2005-A1 B-3 BBB 2005-A1 B-4 BB 2005-A1 B-5 B CMP SUSQUEHANNA: Moody's Lowers Corporate Family Rating to B2 ------------------------------------------------------------- Moody's Investors Service downgraded CMP Susquehanna Corp.'s Corporate Family Rating to B2 from B1. In addition, Moody's downgraded CMP's $800 million senior secured credit facility ($100 million senior secured revolver due 2012, $700 million senior secured term loan due 2013) to B1 from Ba3 and $250 million senior subordinated notes due 2014 to Caa1 from B3. The downgrade reflects Moody's expectation that leverage will exceed 8.5 times by fiscal year end 2007 and remain high over the rating horizon as a result of weaker than expected operating performance in several of CMP's markets. Ratings/assessments downgraded: CMP Susquehanna Corp. -- Corporate family rating -- from B1 to B2 -- Probability-of-default rating -- from B1 to B2 -- Revolving credit facility due 2012 -- from Ba3 (LGD 3, 37%) to B1 (LGD 3, 37%) -- Term loan facility due 2013 -- from Ba3 (LGD 3, 37%) to B1 (LGD 3, 37%) -- Senior subordinated notes due 2014 -- from B3 (LGD 5, 89%) to Caa1 (LGD 5, 89%) Ratings/assessments affirmed: -- Speculative grade liquidity rating -- SGL 2 The outlook is stable. CMP's ratings reflect the company's high fiscal year end 2006 debt to EBITDA leverage of 9.3x, incorporating Moody's standard adjustments and pro forma for full year of ownership of station assets, substantial revenue concentration in two markets and weakness in the company's operating and financial performance as compared to Moody's prior expectations. The rating also incorporates the company's modest free cash flow relative to debt, the highly competitive nature of the radio industry, the inherent cyclicality of the advertising market, and Moody's belief that radio is a mature industry with modest growth prospects. The ratings are supported by the company's improved EBITDA margins, large market presence and high proportion of more stable local advertising revenue. In addition, despite not being a wholly owned subsidiary of Cumulus Media, Inc., CMP benefits from Cumulus' experienced management team and clustering of CMP's stations with those of Cumulus. CMP Susquehanna Corp., headquartered in Atlanta, Georgia, is a wholly-owned subsidiary of Cumulus Media Partners LLC, the private partnership formed by Cumulus Media, Inc. and a consortium of private equity sponsors. CMP Susquehanna Corp. owns and operates 33 radio stations in 8 markets in the U.S. CMS ENERGY: Reduced Business Risk Cues Fitch's Positive Watch ------------------------------------------------------------- Fitch places the ratings of CMS Energy Corp. and Consumers Energy Co. on Rating Watch Positive. The Rating Watch Positive reflects the continuing reduction of business risk that resulted from the substantial completion of the asset sale and restructuring program and the company's plan to reduce parent debt by $650 million using a portion of the $1.6 billion of proceeds from non-strategic asset sales that closed in 2007. Fitch previously raised the ratings of both CMS and Consumers in March 2007, and commented on the favorable credit outlook and the benefits of the simplified business portfolio. Fitch expects to resolve the Rating Watch status within the next several months following Fitch's refinement of the expected improvements in forecasted credit ratios, which will hinge in part on the progress of Consumers' pending electric and gas rate cases. Consumers has requested a $282 million increase in its electric tariffs, and Michigan Public Service Commission staff is scheduled to file its testimony on the inclusion of the acquired Zeeland plant in the utility's rate base and the utility's request for an interim tariff increase on Sept. 18. Also, Consumers' gas rate case ($88 million increase requested) could be settled in the near term; the PSC staff has recommended an increase of $35 million. These ratings have been placed on Rating Watch Positive: CMS -- Issuer Default Rating 'BB-'; -- Senior secured bank loan at 'BB+'; -- Senior unsecured debt at 'BB-'; -- Preferred stock 'B'. CMS Energy Trust I -- Preferred stock 'B'. Consumers Energy -- IDR 'BB+'; -- Senior secured debt 'BBB'; -- Senior unsecured debt 'BBB-'; -- Preferred stock 'BB+'. Consumers Energy Financing I -- Preferred stock 'BB+'. CMS is a utility holding company whose primary subsidiary is Consumers, a regulated electric and gas utility serving customers in the Lower Peninsula of Michigan. Equity investments by CMS into Consumers using a portion of the asset sales proceeds will partially fund system investments that will grow the rate base. CMS has essentially completed a restructuring and will focus on investments in regulated Michigan operations. CNC: Fitch Affirms BB Rating on $7.8 Million Class C Certificates ----------------------------------------------------------------- Fitch Ratings has affirmed CNC's pass-through certificates, series 1994-1, as: -- $3.9 million class B at 'AAA'; -- $7.8 million class C at 'BB'. The $7.8 million class D remains at 'CCC/DR1'. Classes A-1 through A-3 have paid in full. The affirmations reflect scheduled amortization since the last review. As of the July 2007 distribution date, the pool's aggregate certificate balance has decreased 89.8% to $19.5 million from $192.1 million at issuance. Of the original 68 credit-tenant leases in the pool, 13 remain outstanding. There are currently only four credit tenants: Kmart (61.6%), Food Lion (23.9%), Winn-Dixie (2.9%) and Walgreens (1.6%). The ratings of CTL transactions are highly sensitive to the movements of the corporate credit ratings of the underlying tenants. Sears Holdings Corporation (Holdings is the parent company of Sears and Kmart), the credit tenant with the largest exposure in the pool, is rated 'BB' with a Stable Outlook by Fitch. COFFEYVILLE RESOURCES: Moody's Junks Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service downgraded Coffeyville Resources LLC's CRL's Corporate Family Rating from B3 to Caa1 and its senior first secured debt ratings from B3 (LGD 3; 31%) to Caa1 (LGD 3; 31%) and assigned a developing outlook. CRL's ratings were downgraded to a B3 Corporate Family Rating on July 16, 2007 and left under review for downgrade after its Coffeyville, Kansas refinery incurred an emergency shut down due to a record surge and flash flood of the nearby Verdigris River. The refinery incurred damage and the incident led to a spill of about 71,000 gallons of petroleum products into the adjacent community and regional river system. The incident further delayed a planned initial public offering that was essential for CRL to retain its initial ratings. Moody's downgrades consider that CRL has yet to finalize essential back up funding arrangements; the liquidity raising exercise is taking place in very difficult financial market conditions and while CRL remains in the midst of assessing its liquidity and capital requirements; Moody's expect significant debt incurrence and large irrevocable cash obligations under its uncovered hedge facility at a time of already very high leverage; and the full environmental and legal liabilities arising from the Verdigris flood will not be known for several months. In Moody's view, CRL's ability to arrange additional liquidity may depend on the backing of its principal sponsors, Goldman Sachs Capital Partners and Kelso Investment Associates. The source and terms of such funding remain undefined. The downgrades also consider that CRL's back-up liquidity effort and timing for re-attaining full cash flow could be further complicated by the inherent risks involved with the restart of Coffeyville. An emergency shutdown always carries the risk of increased technical difficulties upon restart or a delay in attaining full production to design specifications. This could be further complicated because Coffeyville did not have time to complete its full regimen of emergency shut down procedures and it also has incurred substantial repairs to its essential system of pumps, motors, and associated fittings. CRL states that major process units and equipment were not directly impacted by the flood but that damage to hundreds of individually minor, but systemically vital, motors and pumps was extensive. The developing outlook reflects a wide range of potential outcomes. The outlook and ratings will be impacted by the timing, sequence, and degree to which CRL's back-up liquidity, refinery re-start, full eventual liquidity and remedial capital requirements, de-leveraging plan, heavy cash obligations under its commodity hedges, and environmental and litigation liabilities are successfully clarified and covered by cash flow and/or equity infusions from its private sponsors or from a long-delayed initial public offering. The outlook indicates prospects in the near-to- medium term, depending on specific outcomes in that timeframe, of either a downgrade or a stable outlook, and also recognizes the prospect that a successful resolution of those factors could result in a positive rating before six to twelve months. The ratings remain restrained until CRL: i. completes its full assessment and resolution of its liquidity and capital requirements, ii. completes its post-flood refinery repairs, iii. attains successful start-up and performance to design specifications of the Coffeyville refinery, iv. more reliably can delimit its potential liabilities for environmental and property casualty damage and related litigation, and v. Moody's assesses expected leverage and cash flow coverage after refinery start-up. The assigned ratings also match the Caa1 corporate family rating indicated by Moody's independent refining rating methodology. As incorporated into Moody's downgrade of July 16, 2007, GSCP and Kelso have provided guaranties to back CRL's very large cash obligations under its hedging arrangements with GSCP sister affiliate, J. Aron & Company. The guarantees secured the deferral of about $89 million of hedge settlement payments due in two installments on July 25 and Aug. 5, 2007, until Sept. 7, 2007 at which time J. Aron will assess a further extension of the due date for CRL's hedge payments. Assuming CRL attained full cash flow by the end of August 2007, it would still face the immediate need for new funding for repairs, the rebuild of crude oil inventories, and its hedge payments. Together, the J. Aron obligations and new capital spending requirements add significant additional debt to CRL's capital structure. This may eventually be partially mitigated to the degree that CRL's casualty insurance payments eventually arrive. In need, CRL also expects payments from its business interruption insurance which would become effective August 15 if operations have not yet commenced, and a modest amount of cash flow from its adjacent fertilizer plant which commenced operation on July 18, 2007. However, insurers' assessment processes pose the inherent risks of altered timing and amount of such payments. Coffeyville may also be exposed to litigation claims following a July 30 announcement by Kansas health department which has identified an open valve in the refinery as the main cause of the 71,000 gallon oil spill into the local community and regional river system. On July 19 CRL initiated a buy-back plan aimed at the approximate 300 residential homes affected by the oil spill and offering to buy the affected properties for 110% of their pre- flood market value. The ratings would be vulnerable if some combination of CRL's sponsor support, business interruption insurance, remediation costs, start-up date, start-up complications, crude oil supplier arrangements and costs, sector market conditions, CRL's financial obligations, or its environmental and litigation liabilities exceed CRL's stand-alone resources or its equity sponsors' willingness to supplement CRL liquidity. CRL also faces the inherent risk of cost overruns on its major repairs and equipment replacement in a tight market for components and engineering and construction services. Once CRL re-attains sustained performance to design specifications, a higher rating may be supported by expected sound 2007 sector refining margins; CRL's established sound crude oil sourcing tactics and logistics and diversified crude oil sources; its strong regional refined product distribution logistics and proximity to end-user markets; reduced leverage with proceeds of CRL's potential eventual IPO; and, as long as CRL is up and running, the generally protective aspects of CRL's crack spread hedge on somewhat less than 60% of its expected production. However, as currently seen, such hedges are a major liability when a refinery is not operating. The ratings would also benefit from a degree of diversification provided by CRL's fertilizer business which recently came back on line and is currently benefiting from sound fertilizer prices. In the twelve months ended June 30, 2007, CRL reported about $250 million of adjusted EBITDA (over $300 million if turnaround costs are capitalized) and pro-forma EBIT/total throughput barrels in the range of its B-rated peers. This predominantly reflected historic sector crack spreads and crude oil quality price differentials and secondarily CRL's more opportunistic crude oil sourcing, important ongoing operating improvements, and increased direct sales of refined product. In Moody's view, given the macro and sector operational forces at work, the sector has already seen its cyclical peaks and refining margins will moderate during 2007. The Caa1 first secured ratings apply to CRL's $775 million senior first lien secured term loan and its $150 million senior first lien secured revolving credit facility. CRL reports that it retains the ability to draw under its revolver, with $75 million reportedly available for cash borrowings. Under Moody's Loss Given Default Methodology, CRL's Probability of Default Rating is reduced from Caa1 to Caa2. That rating is below the corporate family rating due to CRL's all-bank pari-passu first secured capital structure. Coffeyville Resources LLC is headquartered in Sugar Land, Texas. CONSECO, INC: AM Best Downgrades Issuer Credit Rating ----------------------------------------------------- A.M. Best Co. downgraded the financial strength rating to B+ (Good) from B++ (Good) and the issuer credit ratings to "bbb-" from "bbb+" of Conseco, Inc.'s core insurance subsidiaries. Concurrently, A.M. Best downgraded the ICR and the senior debt rating to "bb-" from "bb+" of Conseco. Additionally, A.M. Best has downgraded the FSR to C++ (Marginal) from B- (Fair) and the ICR to "b" from "bb-" of Conseco Senior Health Insurance Company. The outlook for all ratings has been revised to negative from stable. CSH houses the majority of Conseco's run-off long-term care block and continues to exhibit volatile operating results, exemplified by the second quarter 2007 claim reserve strengthening of $110 million. This was Conseco's second significant run-off LTC claim reserve strengthening in six months, following the fourth quarter 2006 charge of $54 million. CSH's ratings recognize that it is capitalized at regulatory minimums, incorporating substantial capital infusions from Conseco over the last two years. The rating actions reflect the impact of these charges, which exceeded A.M. Best's expectations, on the overall financial strength of the organization. A.M. Best remains cautious regarding the future performance of the run-off LTC block given the significance of the most recent reserve strengthening. In addition, the recent reoccurrence of "one-time" charges related to cost of insurance litigation, data refinements, valuation error corrections and back office consolidation/reorganization has diminished A.M. Best's confidence with respect to Conseco's ability to generate consistent, sustainable earnings in the near to medium term. These factors, coupled with unfavorable operating trends at Conseco Insurance Group, reduced holding company flexibility and elevated regulatory risk erode Conseco's overall business profile, a key contributor to a company's long-term financial strength. The FSR has been downgraded to B+ (Good) from B++ (Good) and ICRs to "bbb-" from "bbb+" for these core insurance subsidiaries of Conseco, Inc.: -- Bankers Life and Casualty Company -- Colonial Penn Life Insurance Company -- Conseco Health Insurance Company -- Conseco Insurance Company -- Bankers Conseco Life Insurance Company -- Conseco Life Insurance Company -- Washington National Insurance Company This debt rating has been downgraded: Conseco, Inc. -- -- to "bb-" from "bb+" on $300 million 3.5% senior unsecured convertible debentures, due 2035 COVANTA HOLDING: To Redeem 8-1/2% and 7-3/8% Senior Secured Notes ----------------------------------------------------------------- Covanta Holding Corporation plans to redeem: a) all outstanding Senior Secured Notes due 2010, issued by MSW Energy Holdings LLC and its wholly owned subsidiary, MSW Energy Finance Co., Inc., at a redemption price equal to 104.250% of the aggregate principal amount plus accrued and unpaid interest, on Sept. 6, 2007; and b) all outstanding 7-3/8% Senior Secured Notes due 2010, issued by MSW Energy Holdings II LLC and its wholly owned subsidiary, MSW Energy Finance Co. II, Inc., at a redemption price equal to 103.688% of the aggregate principal amount plus accrued and unpaid interest, on Sept. 6, 2007. MSW I and MSW II intend to provide the holders of the outstanding notes with formal notices of redemption on Aug. 6, 2007. As of June 30, 2007, the remaining principal amount outstanding of the MSW I Notes and MSW II Notes was $5.6 million and $0.5 million. The planned redemptions will complete Covanta's debt refinancing that was initiated in January 2007. Headquartered in Fairfield, New Jersey, Covanta Holding Corp. -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. Covanta has operations in the Philippines, China, Costa Rica, India, and Bangladesh. * * * The company carries Standard & Poor's Ratings Services' BB- corporate credit rating with a stable outlook. It also carries Moody's Investors Service's Ba2 Corporate Family Rating. CREDIT AND REPACKAGED: Moody's Cuts Rating on $20MM Tranche Notes ----------------------------------------------------------------- Moody's Investors Service lowered its rating on this class of notes issued by Credit and Repackaged Securities Limited 2005-2: -- $20,000,000 Tranche Notes due June 21, 2010 Prior Rating: Baa3, on watch for possible downgrade Current Rating: Ba3 According to Moody's, the rating action reflects the deterioration in the credit quality of the transaction's underlying reference portfolio, consisting primarily of non-investment grade corporate entities. DAIMLERCHRYSLER AG: Completes Chrysler Group's Interest Transfer ---------------------------------------------------------------- DaimlerChrysler AG has closed the transfer of a majority interest in the Chrysler Group and for the related financial services business in NAFTA to a subsidiary of Cerberus Capital Management LP, a private-equity company. A subsidiary of Cerberus takes over 80.1% in the Chrysler Holding LLC, while DaimlerChrysler retains a 19.9% interest, as disclosed in May 2007. The effects on the financial statements of DaimlerChrysler will be explained on Aug. 29, 2007. Basically, the conditions of the transaction and the economic effects have not changed since the agreement was signed on May 14, 2007. Furthermore, DaimlerChrysler and Cerberus have agreed to support the financing of the majority takeover of Chrysler by Cerberus in light of highly volatile US loan markets. Both companies will subscribe $2 billion of second lien debt for Chrysler's automotive business, to be drawn within 12 months. DaimlerChrysler's portion will be $1.5 billion. The debt will be priced at market conditions. One year after the closing, DaimlerChrysler has the right to sell this loan in the credit market. The maturity of this loan is 7 years. DaimlerChrysler's financing support is a strong sign of its overall determination to make sure that, under the majority of Cerberus, Chrysler has a good start as a stand-alone car company. The board of management of DaimlerChrysler AG is reduced to six members: Tom LaSorda, Eric Ridenour and Tom Sidlik are no longer members. Within the board, Bodo Uebber assumes responsibility for procurement. Due to the new corporate structure, DaimlerChrysler AG will be renamed as Daimler AG. The shareholders are to decide on this change at an Extraordinary Shareholders' Meeting in Berlin on Oct. 4, 2007. "This transaction marks a new chapter in the history of our company,\u201d Dr. Dieter Zetsche, chairman of the board of DaimlerChrysler AG and head of the Mercedes Car Group, said. \u201cBased on the clearly defined strategies in our Mercedes Car Group, Truck Group, Financial Services business divisions and for vans and buses, and our company's healthy balance sheet, we have every reason to move confidently into the future." About Cerberus Capital Management LP Headquartered in New York City, Cerberus Capital Management LP -- http://www.cerberuscapital.com/-- is a private investment firm that specializes in providing both financial resources and operational expertise to help transform undervalued companies into industry leaders for long-term success and value creation. Cerberus has affiliate and/or advisory offices in Atlanta, Chicago, Los Angeles, London, Baarn, Frankfurt, Tokyo, Osaka and Taipei. Cerberus holds controlling or significant minority interests in companies around the world. About DaimlerChrysler AG Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA:DCX) -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The company's worldwide operations are located in Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam, and Australia. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DANKA BUSINESS: June 30 Balance Sheet Upside-Down by $327.1 Mil. ---------------------------------------------------------------- Danka Business Systems PLC posted $502.4 million total assets, $479.1 million total liabilities, $350.4 million 6.5% senior convertible participating shares, and $327.1 million total stockholders' deficit as of June 30, 2007. The company also posted negative working capital with total current assets of $358.7 million and total current liabilities of $364.9 million. The company reported net loss of $5 million in the fiscal year 2008 first quarter ended June 30, 2007, compared with net losses of $12.2 million in the comparable fiscal 2007 quarter and $17.1 million in the quarter ended March 31, 2007. Total revenue was $106.3 million, 12.9% lower than the prior year quarter and down 6.4% sequentially. Retail equipment, supplies and related sales was $46.2 million for the quarter, down 14.6% from the prior year, and down 12.5% sequentially. Service revenue was $57.2 million, down 9.1% from the prior year, but down only 0.8% sequentially. Subsequent to the close of the quarter, the company redeemed all of its outstanding 11% senior notes due 2010 and 10% subordinated notes due 2008 in connection with the previously announced $145 million financing agreement with General Electric Capital Corporation which was completed on June 25, 2007. "The story of the first quarter is the Company's positive operating earnings," said A.D. Frazier, Danka Chairman and Chief Executive Officer. "This is a first step, but an important one, on the path to positive net income. We have restructured our balance sheet in a way that meaningfully lowers the interest burden. SG&A continues to trend lower. We have achieved four consecutive quarters of stabilized service revenue. While we did not achieve the growth we expected in hardware revenue, that business remains fundamentally sound and we expect our investments in people and training to deliver higher equipment sales. "Most important," concluded Mr. Frazier, "is that the marketplace knows Danka is there. Clients and prospects, business partners and even competitors see the changes. And that serves to drive us even harder." About Danka Danka Business Systems PLC -- http://www.danka.com/-- provides enterprise imaging systems and services. DARRYL PACE: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Darryl L. Pace, Sr. Latonia Y. Pace aka Century 21 Pacesetter Realty aka Pacesetter Mortgage Co. 23076 Eddy Street Hayward, CA 94541 Bankruptcy Case No.: 07-42457 Type of business: The Debtors are engaged in the real estate and mortgage businesses. Chapter 11 Petition Date: August 3, 2007 Court: Northern District of California (Oakland) Judge: Randall J. Newsome Debtor's Counsel: Lawrence L. Szabo, Esq. 3608 Grand Avenue, Suite 1 Oakland, CA 94610-2024 Tel: (510)834-4893 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Saxon Mortgage Services, Inc. mortgage debt; $538,108 P.O. Box 161489 value of collateral: Fort Worth, TX 76161 $535,000 Homecomings Financial mortgage; value of $139,466 P.O. Box 78426 collateral: Phoenix, AZ 85062 $68,008 H.S.B.C. Mortgage Services mortgage loan; $75,785 P.O. Box 60113 value of collateral: City of Industry, CA $18,126 91716 First Equity Card line of credit $30,491 Wells Fargo automobile; value $22,495 of collateral: $21,455 Bank of American $19,562 Wilmington, DE Portfolio Recovery collection $12,256 Associates, L.L.C. account Internal Revenue Service 1040 income $11,085 Beneficial Finance loan $10,280 G.M.A.C. Payment Processing car lease $6,200 Centera Wells Fargo Payment credit card $5,804 Remittance Center J.C. Penney credit card $4,577 Internal Revenue Service 941 tax period $3,653 2004 Asset Acceptance collection account $3,233 American Express credit card $1,914 Home Depot Credit Services credit card $1,868 Macy's credit card $1,171 Capital One credit card $1,059 Bank of America credit card $973 Newark, DE DAWN CDO: Moody's Reviews Ba2 Rating on $28.7 Mil. Class B Notes ---------------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade the rating on these notes issued in 2002 by Dawn CDO I, Ltd., a static structured finance collateralized debt obligation issuer: -- The $28,700,000 Class B Second Priority Senior Secured Floating Rate Notes due 2037 Prior Rating: Ba2 Current Rating: Ba2 (on watch for possible downgrade) According to Moody's, the rating action reflects the deterioration in the credit quality of the transaction's underlying collateral portfolio, consisting primarily of structured finance securities, as well as the occurrence of asset defaults and par losses, and the continued failure of certain collateral and structural tests. DELPHI CORP: Attains Tentative Accord with IUE-CWA and GM --------------------------------------------------------- Delphi Corp. continues to make significant progress on its transformation initiatives and has signed a Memorandum of Understanding with four additional unions representing certain U.S. hourly employees. The company reached tentative pacts with the IUE-CWA (International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communications Workers of America), International Association of Machinists (IAM), International Brotherhood of Electrical Workers (IBEW), International Union of Operating Engineers (IUOE) and General Motors covering workforce transition, legacy pension items as well as other comprehensive transformational matters. The agreements are subject to union ratification and approval by the U.S. Bankruptcy Court. "This series of tentative labor agreements demonstrates Delphi's continued commitment to achieving a consensual resolution with all parties in its Chapter 11 cases," John Sheehan, Delphi's chief restructuring officer, said. "We believe these agreements, if ratified, provide additional traction towards our emergence." Delphi will not comment on the details of the tentative agreements, pending ratification by the respective unions. Headquartered in Troy, Mich., Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Mar. 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. EAGLE BROADBAND: Dave Micek Steps Down as Chief Executive Officer ----------------------------------------------------------------- Dave Micek has stepped aside as chief executive officer and president of Eagle Broadband Inc. He has also resigned from Eagle's Board of Directors. Micek will remain with Eagle Broadband in an executive capacity working on a series of acquisition and divestiture opportunities that he has been pursuing for Eagle. According to the company, the change concluded a series of cost reduction measures which were implemented at Eagle during July, including a 15% staff downsizing, half of which involved reducing overhead functions. "Last year, Mr. Micek divested our security services business and the operations for most of our traditional cable business. Earlier this year, he completed the acquisitions of the assets of Connex and our new highly successful satellite services business. We need Dave to exercise these skills further, as we finalize the refocusing and restructuring of Eagle. He can be most effective in this capacity when unencumbered by his former chief executive officer responsibilities," said Jim Reinhartsen, chairman of the board for Eagle Broadband. "The company is at a turning point with new contracts developing, and a strengthening revenue forecast. In addition to focusing the company, Eagle must also realize the revenue opportunities we face to produce the financial results needed to drive up our stock price. We feel that it will enhance Eagle's prospects for success if we do not ask one person to exercise both roles simultaneously at this time.”" Until a new CEO is named, the company's board of directors will work closely with Eagle's executive team regarding day-to-day business matters to ensure that Eagle's customers experience a flawless transition. About Eagle Broadband Headquartered in League City, Texas, Eagle Broadband Inc. (OTC BB: EAGB) -- http://eaglebroadband.com/-- is a technology company that develops and delivers products and services in three core business segments: IPTV -- Eagle Broadband's IPTVComplete(TM) provides direct access to more than 250 channels of high-demand programming from popular entertainment providers, often using Eagle's high-definition, set-top boxes. SatMAX(R) -- Eagle Broadband's SatMAX provides indoor/outdoor communications utilizing the global Iridium-based satellite communications system. It offers both fixed and mobile solutions, including the emergency first responder SatMAX Alpha "SatMAX-in-a- suitcase" technology. Going Concern Doubt LBB & Associates Ltd. LLP in Houston, Texas, expressed substantial doubt about Eagle Broadband Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended Aug. 31, 2006, and 2005. The auditing firm pointed to the company's negative working capital, losses in 2005 and 2006, and need for additional financing necessary to support its working capital requirements. ELIAS HAIDAR: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Elias Alexander Haidar 17 Chestnut Street Charlestown, MA 02129 Bankruptcy Case No.: 07-14888 Chapter 11 Petition Date: August 3, 2007 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: David G. Baker, Esq. 105 Union Wharf Boston, MA 02109 Tel: (617) 340-3680 Fax: (866) 661-5328 Total Assets: $1,319,308 Total Debts: $1,497,975 The Debtor did not file a list of its 20 largest unsecured creditors. ELLIOTT VERNON: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Elliott H. Vernon 50 Rumson Road Rumson, NJ 07760 Bankruptcy Case No.: 07-21104 Chapter 11 Petition Date: August 6, 2007 Court: District of New Jersey (Trenton) Debtor's Counsel: Robert A. Franco, Esq. Franco & Franco 55 Madison Avenue, Suite 400 Morristown, NJ 07960 Tel: (973) 285-3223 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. EMEKA OKOYE: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Emeka Nnanyelugo Okoye 4785 Morton Bridge Lane Alpharetta, GA 30022-6264 Bankruptcy Case No.: 07-72714 Chapter 11 Petition Date: August 6, 2007 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: David L. Miller, Esq. The Galleria - Suite 960 300 Galleria Parkway, Northwest Atlanta, GA 30339 Tel: (404) 231-1933 Fax: (770) 955-6654 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Julian Sanders & Associates $22,000 951 Glenwood Avenue Apartment 1201 Atlanta, GA 30316 Tax Commissioner, Fulton County $5,561 141 Pryor Street, Southwest Atlanta, GA 30303 Catalyst Natural Gas $2,548 P.O. Box 863943 Orlando, FL 32886 Cingular $1,911 Risk Management Services $923 Home Depot $647 HSBC Card Services $600 Equinox Financial Management $406 Macy's $400 First Premier Bank $400 Tax Commissioner, Fulton County $384 EXTENDICARE REIT: Posts Equity Deficit of CDN$8 Mil. at June 30 --------------------------------------------------------------- Extendicare Real Estate Investment Trust had total assets of CDN$1,331,389,000, total liabilities of CDN$1,339,500,000, and total unit holders' deficiency of CDN$8,111,000. Extendicare reported net earnings of CDN$28.3 million for the three months ended June 30, 2007, as compared with net loss of CDN$2.4 million for the three months ended June 30, 2006. Total revenues for the second quarter 2007 were CDN$443.9 million, as compared with total revenues for the second quarter of 2006 of CDN$425.2 million. Earnings from continuing health care operations, prior to one-time restructuring charges and other items, of CDN$14.1 million in the second quarter of 2007 compared to CDN$13.7 million in the same period in 2006. During the 2007 second quarter results, the company had FFO from continuing operations of CDN$24.4 million. For the six months ended June 30, 2007, the company had net earnings of CDN$43.7 million, as compared with net earnings of CDN$11.4 million for the six months ended June 30, 2006. Total revenues for the six months ended June 30, 2007, were CDN$900.8 million, as compared with total revenues of CDN$846.7 million for the six months ended June 30, 2006. "The results of the second quarter are a direct reflection of Extendicare REIT successfully implementing its business plan which includes continued operational improvement, particularly with respect to Medicare admissions in our U.S. operations," commented Phil Small, president and chief executive officer of Extendicare REIT. "With the completion of the recent financing and closure on the sale of the legacy investment in Crown Life, the REIT has substantial financial flexibility, enabling us to continue growing the portfolio." Interim CFO Appointed Douglas J. Harris has been appointed interim chief financial officer while the REIT conducts a search to find a permanent replacement for the late Richard Bertrand. Mr. Harris has been with the Extendicare group since 1981 in various capacities, most recently as vice president and controller of Extendicare Health Services Inc.. Tendercare Acquisition Update The acquisition of Tendercare (Michigan) Inc. remains on track to close in the fourth quarter of 2007. As previously indicated, a portion of Tendercare's debt was financed by the U.S. Department of Housing and Urban Development which has a very complex process when it comes to ownership transfer. The company has met with the HUD office responsible for Tendercare, and anticipates being able to close the transaction within the previously stated timeline. Through the five months ended May 2007, Tendercare's portfolio occupancy and Medicare census was 84.6% and 15.2%, respectively. The transaction is structured to be payable with cash of $122.5 million plus the assumption of $80 million of debt, prior to working capital and the cost of the two development projects. Management will determine the optimum financing of the acquisition prior to closing. Extendicare REIT Tax Status On June 12, 2007, the Canadian House of Commons passed Bill C-52, which includes proposals to amend the income tax rules applicable to certain publicly traded entities that are specified investment flow-through trusts or partnerships. In order for Extendicare REIT to qualify for an exemption from the proposed SIFT tax until the earlier of 2011 or the first taxation year after 2006 in which the REIT exceeds "normal growth" as determined under published growth guidelines, the trust units of Extendicare REIT must have been listed on the Toronto Stock Exchange on, or prior to, Oct. 31, 2006. Although all matters relating to the conversion of Extendicare Inc. into Extendicare REIT had been completed on Oct. 31, 2006, it was not clear whether the REIT Units were "listed" on the TSX on Oct. 31, 2006. Based on management's efforts to date, including discussions with the Canada Revenue Agency, all indications are that Extendicare REIT will not qualify for the exemption. Since Bill C-52 was substantially enacted in June 2007, Extendicare REIT has recorded a provision for the additional SIFT tax beginning with its 2007 second quarter results. Based on Extendicare REIT's current structure, operations and current level of return of capital, its understanding of the SIFT proposals and certain assumptions, management recorded a provision of CDN$2.3 million, of which about CDN$1.1 million related to the 2007 first quarter. The board of trustees had already considered the income tax proposals of Bill C-52 in its determination of distributions. Therefore, if Bill C-52 is enacted in its current form, the amount of the current CDN$0.0925 monthly distributions is not expected to decrease. Cash Flow and Capital Resources Cash provided by operations was CDN$53.7 million in the first half of 2007 compared to CDN$55.3 million in the first half of 2006. Cash provided by operations includes the activity of the discontinued operations, and therefore, the 2006 cash amounts include the earnings of ALC. Property and equipment expenditures, excluding acquisitions, were CDN$35.1 million in the first half of 2007 compared to CDN$32.3 million in the first half of 2006. The expenditures in 2006 included those of ALC. Growth expenditures of the REIT were CDN$21.3 million in the first half of 2007 compared to CDN$10.3 million in the first half of 2006, which related to the construction of new beds, building improvements or capital costs aimed at earnings growth. The capital costs to sustain and upgrade existing property and equipment assets were CDN$13.8 million in the first half of 2007 compared to CDN$16.1 million in the first half of 2006. These expenditures fluctuate during the year with timing of projects and seasonality. The company estimates that based on the beds currently operated, facility maintenance costs will be about CDN$34 million for the year 2007, compared to CDN$32.2 million in 2006. In the first half of 2007, Extendicare REIT generated funds from operations of $53.7 million. total distributable income was cdn$55 million and adjusted funds from operations was CDN$48.3 million. The board of trustees of the REIT declared distributions of CDN$39 million in the first half of 2007, representing CDN$36.6 million in cash and CDN$2.4 million by way of issued units under a distribution reinvestment plan, to holders of units of the REIT and Class B limited partnership units of Extendicare Limited Partnership. At June 30, 2007, EHSI had $77.4 million available under its line of credit and cash on hand of $66.2 million. The Canadian operations had cash on hand of CDN$80.8 million and available bank lines of CDN$6.1 million. On July 5, 2007, Extendicare received cash of CDN$40 million on the sale of its investment in Crown Life. Extendicare REIT's financial position continues to be strong, with long-term debt representing 42.4% of Adjusted Gross Book Value at June 30, 2007. Excluding the 2014 Convertible Debentures, debt to AGBV was 37.7% at June 30, 2007. Sale of Crown Life As previously announced, Extendicare completed the sale of its approximate 35% equity interest in Crown Life Insurance Company on July 5, 2007. As at June 30, 2007, the carrying value of the investment in Crown Life was CDN$36.6 million. The final sale of the investment in Crown Life, including post closing adjustments and the recognition of a liability for specified contingent claims will be recognized in the third quarter of 2007. On June 29, 2007, Extendicare received CDN$45.3 million comprised of a dividend from Crown Life and settlement of a purchase and sale agreement with HARO Financial Corporation of certain securities distributed by Crown Life. On July 5, 2007, a cash payment of CDN$40 million was received from Canada Life Assurance Company for the shares of Crown Life. In total, Extendicare received cash of CDN$81.7 million and securities valued at about CDN$3.6 million. The cash payment from Canada Life for the Crown Life shares is subject to a post closing adjustment to be determined within 75 days after closing. Under the Crown Life share sale agreement with Canada Life, Extendicare remains responsible for certain possible specified contingent claims against Crown Life of up to about CDN$18.8 million and in support of the claims, has delivered letters of credit to Crown Life in such amount. In order to secure the CDN$18.8 million of letters of credit, Extendicare amended its Royal Bank of Canada line of credit to increase the availability to CDN$70 million from CDN$50 million. Depending on the type of contingent liability, the letters of credit have various terms ranging from 5 to 15 years. The company estimates that Extendicare's aggregate liability for such claims will not exceed CDN$6 million. About Extendicare REIT Extendicare REIT (TSX: EXE.UN) is the parent of an indirect wholly owned subsidiary, Extendicare Inc. The company is a provider of long-term care and related services in North America. Through its subsidiaries, Extendicare Inc. operates 234 nursing and assisted living facilities in North America, with capacity for almost 26,900 residents. As well, through its operations in the United States, Extendicare Inc. offers medical specialty services such as subacute care and rehabilitative therapy services, while home health care services are provided in Canada. Extendicare Inc. employs approximately 33,100 people in North America. FREDERICK THAYER: Case Summary & 15 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Frederick Timothy Thayer dba Thayer Construction dba Thayer Carpets Pamela Thayer 1800 Los Altos Drive San Mateo, CA 94402 Bankruptcy Case No.: 07-30995 Type of business: The Debtors provides vinyl floor covering. Chapter 11 Petition Date: August 3, 2007 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Peter N. Hadiaris, Esq. 600 Harrison Street, Suite 120 San Francisco, CA 94107 Tel: (415) 593-0077 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Taylor, Bean & Whitaker value of collateral: $47,352 1417 North Magnolia Avenue $20,000 Ocala, FL 34475 Wells Fargo Bank $37,731 P.O. Box 522 Des Moines, IA 50306-0522 G.M.A.C. Mortgage value of collateral: $33,620 P.O. Box 780 $205,000 Waterloo, IA 50704-0780 San Mateo Credit Union $24,598 San Francisco Police Credit $24,194 Union CapitalOne $17,179 H.S.B.C. Bank Nevada $13,908 Washington Mutual $12,482 American Express $8,629 Bank of America $5,736 C.I.T. Bank $5,518 Re/Max Elite $4,000 C.B. Showers, Inc. $2,483 The Village of Copper $2,379 Basin H.O.A. Citibank $557 FREMONT HOME: Fitch Lowers Ratings on 24 Classes of Certificates ---------------------------------------------------------------- Fitch Ratings has taken rating actions on four Fremont Home Loan Trust mortgage pass-through certificates. Affirmations total $4.2 billion and downgrades total $431 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Series 2006-A -- $464.6 million class A affirmed at 'AAA' (BL: 41.77, LCR: 2.71); -- $71.7 million class M-1 affirmed at 'AA+' (BL: 29.53, LCR: 1.92); -- $19.6 million class M-2 affirmed at 'AA' (BL: 27.56, LCR: 1.79); -- $18.1 million class M-3 affirmed at 'AA-' (BL: 25.60, LCR: 1.66); -- $17.6 million class M-4 downgraded to 'A' from 'A+' (BL: 23.08, LCR: 1.50); -- $16.2 million class M-5 downgraded to 'BBB+' from 'A' (BL: 20.72, LCR: 1.34); -- $15.7 million class M-6 downgraded to 'BBB-' from 'A-' (BL: 18.39, LCR: 1.19); -- $13.2 million class M-7 downgraded to 'BB+' from 'BBB+' (BL: 16.37, LCR: 1.06); -- $10.8 million class M-8 downgraded to 'BB' from 'BBB' (BL: 14.59, LCR: 0.95); -- $8.3 million class M-9 downgraded to 'B+' from 'BBB' (BL: 13.14, LCR: 0.85); -- $9.8 million class M-10 downgraded to 'B' from 'BBB-' (BL: 11.70, LCR: 0.76). Deal Summary -- Originators: 100% Fremont Investment and Loan; -- 60+ day Delinquency: 21.80%; -- Realized Losses to date (% of original balance): 0.31%; -- Expected Remaining Losses (% of Current Balance): 15.42%; -- Cumulative Expected Losses (% of Original Balance): 11.17%. Series 2006-C -- $1.1 billion class A affirmed at 'AAA' (BL: 33.88, LCR: 2.47); -- $81.8 million class M-1 affirmed at 'AA+' (BL: 30.39, LCR: 2.21); -- $77.3 million class M-2 affirmed at 'AA' (BL: 26.22, LCR: 1.91); -- $32.3 million class M-3 affirmed at 'AA-' (BL: 24.13, LCR: 1.76); -- $31.4 million class M-4 affirmed at 'A+' (BL: 22.09, LCR: 1.61); -- $28.7 million class M-5 downgraded to 'A-' from 'A' (BL: 20.19, LCR: 1.47); -- $26.9 million class M-6 downgraded to 'BBB+' from 'A-' (BL: 18.34, LCR: 1.34); -- $25.1 million class M-7 downgraded to 'BBB' from 'BBB+' (BL: 16.51, LCR: 1.20); -- $15.2 million class M-8 downgraded to 'BBB-' from 'BBB+' (BL: 15.22, LCR: 1.11); -- $21.5 million class M-9 downgraded to 'BB' from 'BBB' (BL: 13.21, LCR: 0.96); -- $14.3 million class M-10 downgraded to 'B+' from 'BBB-' (BL: 11.92, LCR: 0.87); -- $17.9 million class M-11 downgraded to 'B' from 'BB+' (BL: 10.63, LCR: 0.77). Deal Summary -- Originators: 100% Fremont Investment and Loan; -- 60+ day Delinquency: 15.16%; -- Realized Losses to date (% of original balance): 0.12%; -- Expected Remaining Losses (% of Current Balance): 13.74%; -- Cumulative Expected Losses (% of Original Balance): 11.96%. Series 2006-D -- $1.0 billion class A affirmed at 'AAA' (BL: 31.92, LCR: 2.63); -- $74.1 million class M-1 affirmed at 'AA+' (BL: 28.35, LCR: 2.34); -- $71.7 million class M-2 affirmed at 'AA' (BL: 24.12, LCR: 1.99); -- $26.3 million class M-3 affirmed at 'AA-' (BL: 22.24, LCR: 1.83); -- $30.2 million class M-4 affirmed at 'A+' (BL: 20.05, LCR: 1.65); -- $27.1 million class M-5 downgraded to 'A-' from 'A' (BL: 18.05, LCR: 1.49); -- $19.1 million class M-6 downgraded to 'BBB+' from 'A-' (BL: 16.58, LCR: 1.37); -- $17.5 million class M-7 downgraded to 'BBB' from 'BBB+' (BL: 15.15, LCR: 1.25); -- $14.3 million class M-8 downgraded to 'BBB-' from 'BBB' (BL: 13.83, LCR: 1.14); -- $19.1 million class M-9 downgraded to 'BB' from 'BBB-' (BL: 11.98, LCR: 0.99); -- $23.9 million class M-10 downgraded to 'B+' from 'BB+' (BL: 10.14, LCR: 0.84). Deal Summary -- Originators: 100% Fremont Investment and Loan; -- 60+ day Delinquency: 10.92%; -- Realized Losses to date (% of original balance): 0.02%; -- Expected Remaining Losses (% of Current Balance): 12.14%; -- Cumulative Expected Losses (% of Original Balance): 10.98%. Series 2006-E -- $869.6 million class A affirmed at 'AAA' (BL: 32.57, LCR: 2.78); -- $60.3 million class M-1 affirmed at 'AA+' (BL: 29.24, LCR: 2.49); -- $61.6 million class M-2 affirmed at 'AA' (BL: 25.28, LCR: 2.15); -- $20.5 million class M-3 affirmed at 'AA' (BL: 23.68, LCR: 2.02); -- $30.1 million class M-4 affirmed at 'AA-' (BL: 21.05, LCR: 1.79); -- $22.4 million class M-5 affirmed at 'A+' (BL: 19.05, LCR: 1.62); -- $16 million class M-6 affirmed at 'A' (BL: 17.57, LCR: 1.50); -- $16 million class M-7 downgraded to 'BBB+' from 'A-' (BL: 15.98, LCR: 1.36); -- $11.5 million class M-8 downgraded to 'BBB' from 'BBB+' (BL: 14.75, LCR: 1.26); -- $18.6 million class M-9 downgraded to 'BB+' from 'BBB' (BL: 12.70, LCR: 1.08); -- $22.4 million class M-10 downgraded to 'BB-' from 'BBB-' (BL: 10.78, LCR: 0.92). Deal Summary -- Originators: 100% Fremont Investment and Loan; -- 60+ day Delinquency: 10.34%; -- Realized Losses to date (% of original balance): 0.02%; -- Expected Remaining Losses (% of Current Balance): 11.73%; -- Cumulative Expected Losses (% of Original Balance): 10.90%. These transactions were placed on 'Under Analysis' on July 12, 2007. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions adopted after the analysis of the June 2007 remittance data. The updated assumptions better capture the deteriorating performance of pools from 2006 and late 2005 with regard to continued poor loan performance and home price weakness. -- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria' (June 12, 2007); -- 'Fitch Affirms $20B & Downgrades $2.4B of U.S. Subprime RMBS; New 2005-2006 Surveillance Criteria' (Aug 1, 2007). GLOBAL HOME: Court Extends Removal Period Until January 15, 2008 ---------------------------------------------------------------- The Honorable Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware further extended, until Jan. 15, 2008, the period within which Global Home Products LLC and its debtor- affiliates can remove state court civil actions. Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, told the Court that the extension will allow the Debtors to make fully informed decisions in removing each action and will assure that the Debtors won't forfeit valuable rights under Section 1452 of the Bankruptcy Code. As reported in the Troubled Company Reporter on Jan. 29, 2007 since filing for bankruptcy, the Debtors' efforts were directed to: a) obtain Court approval for the sale of the Burnes Group assets and WearEver assets; b) address issues attendant to that sales; c) consider going forward alternatives for the Anchor Hocking business; d) extend and modify their dip financing; and e) work with key constituencies on issues relating to their cases. Ms. Laura related that the Debtors did not have the opportunity to thoroughly review actions that may be need to be removed from other jurisdictions. Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at Pepper Hamilton LLP represent the Official Committee of Unsecured Creditors. Huron Consulting Group LLC gives financial advice to the Committee. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. HANOVER COMPRESSOR: Prices Tender Offers and Consent Solicitations ------------------------------------------------------------------ Hanover Compressor Company has priced its tender offers and consent solicitations for: 1) $200 million in aggregate principal amount of its 8.625% Senior Notes due 2010 (CUSIP 410768AF2); 2) $200 million in aggregate principal amount of its 9.% Senior Notes due 2014 (CUSIP 410768AG0); and 3) $150 million in aggregate principal amount of its 7.5% Senior Notes due 2013 (CUSIP 410768AH8). The total consideration per $1,000 principal amount of the 8.625% Notes validly tendered and not validly withdrawn prior to 5:00 p.m., New York City time, on Aug. 1, 2007 is $1,052.39, of which $30 is the consent payment. As of 2:00 p.m., New York City time, on Aug. 3, 2007, the yield to maturity on the 4.25% U.S. Treasury Note due Nov. 30, 2007, the reference security for the 8.625% Notes, was 4.863% and the tender offer yield on the 8.625% Notes was 5.363%. Holders whose 8.625% Notes are validly tendered at or after the Consent Payment Deadline and prior to 5:00 p.m., New York City time, on Aug. 17, 2007, and are accepted for payment will receive the tender offer consideration of $1,022.39 per $1,000 principal amount of 8.625% Notes tendered, which amount does not include the $30 consent payment. The total consideration per $1,000 principal amount of the 9% Notes validly tendered and not validly withdrawn prior to the Consent Payment Deadline is $1,107.26, of which $30 is the consent payment. As of the Price Determination Date, the yield to maturity on the 4.875% U.S. Treasury Note due May 31, 2009, the reference security for the 9% Notes, was 4.563% and the tender offer yield on the 9% Notes was 5.063%. Holders whose 9% Notes are validly tendered at or after the Consent Payment Deadline and prior to the Expiration Time and are accepted for payment will receive the tender offer consideration of $1,077.26 per $1,000 principal amount of 9% Notes tendered, which amount does not include the $30 consent payment. The total consideration per $1,000 principal amount of the 7.5% Notes validly tendered and not validly withdrawn prior to the Consent Payment Deadline is $1,094.11, of which $30 is the consent payment. As of the Price Determination Date, the yield to maturity on the 4% U.S. Treasury Note due April 15, 2010, the reference security for the 7.5% Notes, was 4.503% and the tender offer yield on the 7.5% Notes was 5.003%. Holders whose 7.5% Notes are validly tendered at or after the Consent Payment Deadline and prior to the Expiration Time and are accepted for payment will receive the tender offer consideration of $1,064.11 per $1,000 principal amount of 7.5% Notes tendered, which amount does not include the $30 consent payment. In addition, holders whose Notes are validly tendered and accepted for purchase will receive accrued and unpaid interest on those Notes from the last interest payment date up to, the applicable payment date for the offer. Withdrawal rights with respect to tendered Notes have expired. Accordingly, Notes tendered may no longer be withdrawn and consents delivered may no longer be revoked. The tender offers and consent solicitations will expire at the Expiration Time, unless extended or earlier terminated by the company. The company reserves the right to terminate, withdraw or amend the tender offers and consent solicitations at any time subject to applicable law. The company's obligation to accept for purchase, and to pay for, Notes validly tendered and not validly withdrawn pursuant to the tender offers and the consent solicitations is subject to the satisfaction or waiver of certain conditions, including, the consummation of the mergers contemplated by the Agreement and Plan of Merger among the company, Universal Compression Holdings Inc., Exterran Holdings Inc. fka Iliad Holdings Inc. and Exterran's subsidiaries, dated Feb. 5, 2007, as amended, and the receipt of sufficient funds to consummate the tender offers. Each tender offer and consent solicitation is independent of the others, and the complete terms and conditions of the tender offers and the consent solicitations are set forth in the tender offer documents, which are being sent to holders of Notes. The tender offers are part of the refinancing plan of the company and Universal being implemented in anticipation of the closing of their pending merger, which is currently expected to occur on or about Aug. 20, 2007, if the conditions to the closing set forth in the Agreement and Plan of Merger have been satisfied as of that date. As part of the refinancing plan, Exterran Holdings Inc., which will be the publicly traded holding company after the completion of the merger, has engaged Wachovia Capital Markets LLC and J.P. Morgan Securities Inc. to arrange and syndicate a senior secured credit facility, consisting of a revolving credit facility and a term loan, and has engaged Wachovia to provide a new asset-backed securitization facility to Exterran. The primary purpose of these new facilities will be to fund the redemption or repurchase of all of the company's and Universal's outstanding debt other than the company's convertible debt securities and the credit facility of Universal's publicly traded subsidiary, Universal Compression Partners L.P. The new facilities will replace the company's and Universal's existing bank lines and Universal's existing asset-backed securitization facility. The closing of the new facilities is subject to, the receipt of sufficient commitments from participating lenders and the execution of mutually satisfactory documentation. Wachovia Securities has been retained to act as exclusive dealer manager in connection with the tender offers and consent solicitations. Questions about the tender offers and consent solicitations may be directed to Wachovia Securities at (866) 309- 6316 (toll free) or (704) 715-8341 (collect). Copies of the tender offer documents and other related documents may be obtained from D.F. King & Co., Inc., the information agent for the tender offers and consent solicitations, at (800) 859-8508 (toll free) or (212) 269-5550 (collect). The tender offers and consent solicitations are being made solely by means of the tender offer documents. About Hanover Compressor Headquartered in Houston, Texas, Hanover Compressor Company, (NYSE: HC) -- http://www.hanover-co.com/-- rents and repairs compressors and performs natural gas compression services for oil and gas companies. The company's subsidiaries also provide service, fabrication, and equipment for oil and natural gas processing and transportation applications. It has locations in India, China, Indonesia, Japan, Korea, Taiwan, the United Kingdom, and Vietnam, among others. * * * Moody's Investor Services assigned B1 rating on Hanover Compressor Company's long term corporate family and probability of default on July 16, 2007. The outlook is stable. HARRY WEAVER: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtors: Harry A. Weaver, III Gisela K. Weaver 81862 Camino Vallecita Indio, CA 92203 Bankruptcy Case No.: 07-14598 Chapter 11 Petition Date: August 6, 2007 Court: Central District Of California (Riverside) Judge: David N. Naugle Debtors' Counsel: Lazaro E. Fernandez, Esq. 3600 Lime Street, Suite 614 Riverside, CA 92501 Tel: (951) 684-4474 Fax: (951) 684-4625 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtors did not file a list of their 20 largest unsecured creditors. HEALTH CARE: Completes $1.15 Bil. Unsec. Revolving Credit Facility ------------------------------------------------------------------ Health Care REIT Inc. has closed an expanded $1.15 billion unsecured revolving credit facility, replacing the company's existing $700 million facility scheduled to mature July 2009, and its $40 million line of credit with Fifth Third Bank, which has been consolidated into this facility. Highlights of the expanded credit facility include: * Increased financial flexibility and borrowing capacity. * Extension of agreement from three to four-year maturity expiring August 2011, with the company's option to extend for an additional year. * Reduced current borrowing cost to 60 from 80 basis points over LIBOR. * Addition of eight new banks to the company's bank group. The credit facility was arranged by KeyBank National Association as Joint Lead Arranger and Administrative Agent and Deutsche Bank Securities Inc. as Joint Lead Arranger and Syndication Agent. UBS Securities LLC, Bank of America NA, JPMorgan Chase Bank N.A., Barclays Bank PLC, Calyon and Fifth Third Bank were the Documentation Agents. “We believe that the improved terms and additional capacity of this credit facility reflect the significant changes to our business model over the past year,” George L. Chapman, chairman and chief executive officer of Health Care REIT, stated. “This facility enhances our ability to execute our strategy through all cycles of the credit market. We are also pleased with the support and additional commitments provided by our bank group.” About Health Care REIT Inc. Headquartered in Toledo, Ohio, Health Care REIT Inc. (NYSE:HCN) - http://www.hcreit.com/-- is a self-administered, equity real estate investment trust founded in 1970, that invests across the full spectrum of senior housing and health care real estate, including independent living/continuing care retirement communities, assisted living facilities, skilled nursing facilities, hospitals, long-term acute care hospitals and medical office buildings. The company also offers a full array of property management and development services. * * * As reported in the Troubled Company Reporter on July 24, 2007, Fitch Ratings has upgraded the ratings of Health Care REIT as: issuer default rating to 'BBB' from 'BBB-'; unsecured bank credit facility to 'BBB' from 'BBB-'; senior unsecured notes to 'BBB' from 'BBB-'; convertible senior unsecured notes to 'BBB' from 'BBB-'; preferred stock to 'BBB-' from 'BB+'; the rating outlook is stable. HEALTH MANAGEMENT: Fitch Affirms BB- Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has affirmed Health Management Associates, Inc.'s (NYSE: HMA) ratings as: -- Issuer Default Rating 'BB-'; -- Secured Bank Facility 'BB'; -- Senior Secured Notes 'BB'; -- Subordinated Convertible Notes 'B+'. In addition, the rating outlook has been revised to negative from stable. HMA's Negative Outlook reflects the company's deteriorating profitability and growing concerns regarding their ability to organically reduce debt over the next few years. During the second quarter, HMA recorded a $39 million charge to bad debt expense as a result of deterioration in collectibility of accounts receivable from uninsured patients. In addition, HMA announced a new bad debt accounting methodology which will result in recording bad debt expense at 12% of sales vs. historic levels of 7.5-9% of sales. HMA, along with the industry in general, is also challenged by declining volumes and rising operating expenses. If profitability and volume growth remain pressured, Fitch believes HMA will have difficultly reducing leverage to a level appropriate for their current rating category, resulting in a ratings downgrade. Alternatively, if HMA is able to improve its profitability and/or significantly reduce debt through asset divestitures, Fitch will revisit the negative outlook. HMA, like its peers, has been struggling with an escalation in bad debt from the increased uninsured population and increased patient burden of higher co-pays and coinsurance. This has lead HMA to take actions such as revising its bad debt accounting methodology in December 2006 and February 2007, and implementing a 60% discount for non-elective procedures for uninsured patients in February 2007. In July, HMA conducted a look-back analysis to review the collection performance of its self-pay accounts, and observed a deterioration in collections, particularly among accounts aged 180-270 days. As a result of the observed decline in collectibility, HMA recorded approximately $40 million in incremental bad debt expense during the second quarter and changed its reserving methodology for self-pay accounts effective July 1, 2007. Under the new methodology, HMA will continue to reserve 60% of self-pay accounts immediately, but will gradually increase the reserve over time until the balances are collected or fully reserved at 300 days (previously, HMA reserved 60% immediately and 100% at 300 days, with no increase as the accounts aged prior to 300 days). As a result of this new policy, HMA will be recording bad debt expense as a percentage of revenues at a level higher than it has recorded in the past, which Fitch believes will pressure EBITDA margins in the future. In addition to bad debt expense, HMA has also recently experienced increases in other operating expenses, including labor and related expenses. Fitch believes this pressure may continue, as the industry faces challenges such as a growing labor shortage and increased demand for on-call pay. In addition, Fitch believes HMA's focus on physician alignment and plans to increase headcount at the divisional level may keep these expense items escalated. HMA has also experienced low-to-declining volume growth over the past few quarters. In 2006, same store admissions growth was a negative 0.9% and declined 1% in the first quarter of 2007 before rebounding to 0.4% growth in the second quarter. Fitch expects flat to 1% growth in same store admissions for 2007. This slow- down in volume growth has impacted several providers in the industry and appears to be driven by several factors, including increased competition from specialty hospitals and a shift in procedures out of the inpatient setting into outpatient settings or even the doctor's office. Ultimately, volume growth should accelerate as a result of favorable demographics in the U.S.; however, Fitch expects volumes to remain near 1% over the near term. Fitch believes strong pricing will contribute to revenue growth over the forecast period in spite of low volume growth. HMA has historically lagged its peers in managed care pricing increases, but has made this a strategic focus for 2007 and made some improvement. Same store revenue per adjusted admission grew 6.2% during the first quarter of 2007 and 5.0% during the second quarter. In addition, the company has negotiated 206 managed care contracts during 1H07 vs. 73 the prior year, and is obtaining above-forecast rate increases. On March 1, 2007, HMA obtained a $3.25 billion secured bank facility comprising a seven-year, $2.75 billion Term Loan and a six-year, $500 million revolver. At March 31, 2007, there were no outstanding borrowings on the revolver. Key covenants include limitations on liens and indebtedness, restricted payments, and mandatory prepayments. Financial covenants include minimum interest coverage ratios (currently 2.25x through the end of 2007 with step-ups thereafter), maximum leverage (total debt/EBTIDA, currently 6.00x through the end of 2007 with reductions thereafter), and maximum capital expenditures. Fitch notes events of default include change of control and cross-default on other existing debt. If HMA is able to generate continued strong pricing, halt the decline in EBITDA margins and/or use proceeds from divestitures to reduce debt, Fitch believes it may be able to deleverage its balance sheet to a level more appropriate for the rating category. However, if EBITDA margins continue to decline, Fitch no longer expects HMA to be able to organically reduce leverage significantly below 5x over the next 12-18 months. HEXCEL CORP: Completes $62.5 Million Asset Sale to JPS Industries ----------------------------------------------------------------- Hexcel Corporation has completed the sale of the remaining assets of its U.S. Electronics, Ballistics & General Industrial reinforcement product lines to JPS Industries Inc. Hexcel has received the agreed upon initial cash purchase price of $62.5 million and it may receive up to $12.5 million of additional payments dependent upon future sales of the Ballistics product line. Headquartered in Stamford, Connecticut, Hexcel Corporation (NYSE: HXL) -- http://www.hexcel.com/-- is an advanced structural materials company. It develops, manufactures and markets lightweight, high-performance structural materials, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures, used in commercial aerospace, space and defense and industrial applications. * * * As reported in the Troubled Company Reporter on June 25, 2007, Moody's Investors Service raised Hexcel Corporation's Corporate Family Rating to Ba3 from B1. The ratings on Hexcel's senior secured credit facility were upgraded to Ba1 from Ba2, while the subordinated notes ratings were upgraded to B1 from B3. The ratings outlook is stable. INVERNESS MEDICAL: Inks All Stock Buyout Deal with Hemosense Inc. ----------------------------------------------------------------- Inverness Medical Innovations Inc. and HemoSense Inc. have entered into a definitive agreement for Inverness to acquire Hemosense in an all stock deal. Each holder of a share of HemoSense common stock will receive 0.274192 shares of Inverness common stock in the transaction, which represents a 37.5% premium, based on the average trading prices of both companies over the last 5 trading days. "With the acquisition of HemoSense, Inverness takes another step in our strategy of providing diagnostic testing to hospitals, physicians' offices, and the home for patient self testing," Ron Zwanziger, chairman and CEO of Inverness, said. "HemoSense is a particularly good fit with Biosite and QAS, which we have acquired. As health care moves closer to personal responsibility, Inverness is and will remain at the forefront with the materials and methods that allow individuals to take better control of their health." "This deal presents a unique opportunity for HemoSense to expand its growth as a part of Inverness,” Jim Merselis, CEO of HemoSense stated. “We are excited about the prospect of combining our capabilities with Inverness' demonstrated commitment to the field of cardiology, and we expect to make a significant impact together." The transaction is structured as a tax-free reorganization, and is expected to be slightly accretive in 2008 and accretive thereafter. The deal is subject to HemoSense shareholder approval well as the satisfaction of regulatory and other customary conditions, and is currently expected to close in fourth quarter. In connection with the merger agreement, certain HemoSense stockholders have entered into voting agreements with Inverness under which they have agreed to vote 33% of the outstanding shares of common stock of HemoSense in favor of the transaction at the meeting of HemoSense stockholders. Covington & Associates acted as financial advisor and Foley Hoag LLP acted as legal counsel to Inverness. Lazard Freres & Co. Inc. acted as financial advisor and Wilson Sonsini Goodrich & Rosati, P.C. acted as legal counsel to HemoSense. Free copies of the registration statement and the proxy statement/prospectus will be available from Inverness by contacting Shareholder Relations at (781) 647-3900 or from HemoSense by contacting Don Markley or Brandi Floberg at 310-691- 7100. About HemoSense Inc. Headquartered in San Jose, California, HemoSense Inc. – http://www.hemosense.com/-- is a point-of-care diagnostic healthcare company that initially has developed, manufactures and commercializes easy-to-use, handheld blood coagulation systems for monitoring patients taking warfarin. The HemoSense INRatio(R) system, used by healthcare professionals and patients themselves, consists of a small monitor and disposable test strips. It provides accurate and convenient measurement of blood clotting time, or PT/INR values. Routine measurements of PT/INR are necessary for the safe and effective management of the patient's warfarin dosing. INRatio is sold in the United States and internationally. HemoSense(R) and INRatio(R) are registered trademarks of HemoSense, Inc. About Inverness Medical Based in Waltham, Massachusetts, Inverness Medical Innovations, Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. * * * As reported in the Troubled Company Reporter on June 21, 2007, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit and 'B-' subordinated debt ratings on Inverness Medical Innovations Inc. The ratings were removed from CreditWatch, where they had been placed on April 10, 2007, with negative implications. The outlook is stable. JAMES CLINTON: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------------- Debtor: James Carlis Clinton 2381 Arbor Hill Road Canton, GA 30115 Bankruptcy Case No.: 07-72617 Chapter 11 Petition Date: August 6, 2007 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Robert A. Chambers, Esq. Donovan Chambers, P.C. 8440 Courthouse Square Douglasville, GA 30134 Tel: (770) 947-3540 Total Assets: $1,965,820 Total Debts: $1,002,590 Debtor's List of its Two Largest Unsecured Creditors: Entity Claim Amount ------ ------------ AT&T $695 P.O. Box 105503 Atlanta, GA 30348 Home Depot $693 Processing Center Des Moines, IA 50364-0500 JASON CAFFEY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Jason A. Caffey 1555 Fearnway Drive Mobile, AL 36604 Bankruptcy Case No.: 07-12132 Chapter 11 Petition Date: August 3, 2007 Court: Southern District of Alabama (Mobile) Debtor's Counsel: Irvin Grodsky, Esq. Irvin Grodsky, P.C. P.O. Box 3123 Mobile, AL 36652-3123 Tel: (251) 433-3657 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. JEAN COUTU: Posts $6.9 Million Net Loss in Fourth Quarter 2007 -------------------------------------------------------------- The Jean Coutu Group (PJC) Inc. reported on Aug. 3, 2007, its financial results for the fourth quarter and fiscal year ended June 4, 2007. For the fourth quarter of fiscal 2007, the company reported a net loss of $6.9 million, compared with net earnings of $30.3 million for the fourth quarter of the previous fiscal year. Earnings before specific items were $19.4 million compared with $41.5 million for the fourth quarter of the previous fiscal year. For the fiscal year ended June 4, 2007, net earnings were $140.8 million, compared with net earnings of $103.8 million for the fiscal year ended May 27, 2006. Earnings before specific items were $107.8 million compared to $114.7 million for the previous fiscal year. Highlights: -- Canadian network sales and operating performance continued to improve during the fourth quarter ended June 4, 2007. Operating income before amortization reached $49.4 million compared with $41.8 million for the fourth quarter of fiscal 2006, an 18.2% increase. -- Francois J. Coutu will become president and chief executive officer of the company, to take effect following the annual general meeting of shareholders scheduled for Oct. 16, 2007. Mr. Jean Coutu will continue in the role of chairman of the board. -- On June 4, 2007, the company completed the sale of its United States network to Rite Aid Corporation. The gain on sale of US operations amounted to $139.3 million ($76.6 million after-tax), and the company recorded restructuring charges related to this transaction of $54.3 million ($31.6 million after-tax) in fiscal 2007. -- The loss on early debt retirement when debt was repaid using cash consideration from the Rite Aid transaction amounted to $168.3 million ($117.5 million after-tax). -- 33.3% increase in the regular quarterly cash dividend, which has increased to CDN$0.04 per share. "We are satisfied with our fourth quarter and fiscal 2007 results in what was a transformational year for the company," said Jean Coutu, president and chief executive officer. "We continued to improve sales growth in our Canadian network and the US network delivered acceptable results despite challenges prior to the closing of the Rite Aid transaction. We will continue to build on our position as one of the leaders in the Canadian drugstore market, and with our leading ownership position in the expanded Rite Aid, be able to better participate in the growing U.S. drugstore industry." He added, "Our dividend increase demonstrates The Jean Coutu Group's commitment to maximizing shareholder value and total shareholder return." Canadian network sales and operating performance improved over the fourth quarter of fiscal 2006 while US sales performance was acceptable despite challenges prior to the closing of the Rite Aid transaction. Sale of U.S. Network to Rite Aid Completed On Aug. 23, 2006, the company entered into a definitive agreement with Rite Aid whereby the company would dispose of its network in the United States. On June 1, 2007, both companies announced that the Federal Trade Commission and several state regulatory agencies required Rite Aid to divest 26 stores in nine states and that the Hart-Scott-Rodino Act waiting period had expired, permitting the parties to close the transaction. On June 4, 2007, the company completed the sale of its network in the United States comprising 1,854 corporate drugstores to Rite Aid in exchange for a cash consideration of $2.3 billion, subject to a working capital adjustment, and 250 million shares of Rite Aid common stock, giving it approximately 32% common equity interest in the expanded Rite Aid. The gain on sale of the retail sales segment amounted to $139.3 million ($76.6 million after-tax). The loss on early debt retirement when the term loans and notes were repaid, using the cash consideration arising from the Rite Aid transaction, amounted to $168.3 million ($117.5 million after-tax). Since Aug. 23, 2006, the company ceased amortizing the assets related to its US operations since they were classified as assets held for sale. Accordingly, amortization charges amounting to $181.0 million were reversed in consolidation during fiscal 2007. Revenues Total revenues of the company's Canadian operations for the fourth quarter ended June 4, 2007, reached $485.7 million compared with $443.9 million for the fourth quarter ended May 27, 2006, an increase of $41.8 million or 9.4%. Fourth quarter Canadian revenues increased by 8.6% year-over-year, excluding the impact of currency exchange rate fluctuations. Canadian revenues for fiscal 2007 reached $1.890 billion, an increase of $254.4 million or 15.6% year-over-year or 11.9% in local currency. The company's US operations generated total revenues of $2.396 billion, down 1.4% from the fourth quarter ended May 27, 2006. Pharmacy sales were impacted by a reduction of 6.1% due to the conversion of branded drugs to generics, which have a lower selling price, but higher gross margins for the drugstore retailer. US revenues for fiscal 2007 increased to $9.786 billion, up $278.1 million or 2.9% from fiscal 2006. Total revenues for the fourth quarter ended June 4, 2007, increased by $6.6 million or 0.2% to $2.882 billion, from $2.875 billion for the fourth quarter ended May 27, 2006. Fiscal year revenues increased by $532.5 million or 4.8% to $11.676 billion for fiscal 2007 compared with $11.143 billion for fiscal 2006. Operating Income Before Amortization (OIBA) Fiscal 2007 fourth quarter OIBA was impacted by certain restructuring charges principally related to the transition pay program associated with the transaction. OIBA before restructuring charges increased to $130.2 million in the fourth quarter ended June 4, 2007, from $129.9 million in the fourth quarter ended May 27, 2006, and ended both periods at 4.5%. OIBA before restructuring charges increased in the fiscal year ended June 4, 2007, to $533.0 million from $496.6 million in the fiscal year ended May 27, 2006, in part due to the additional days in fiscal 2007. OIBA for the company's Canadian operations for the fourth quarter ended June 4, 2007, increased to $49.4 million compared with $41.8 million for the fourth quarter ended May 27, 2006, an increase of 18.2% or 17.1% in local currency, due to strong top line growth. OIBA as a percentage of revenues in local currency ended the quarter at 10.1% compared with 9.4% in 2006. OIBA increased in the fiscal year ended June 4, 2007, to $191.0 million from $165.0 million in the fiscal year ended May 27, 2006. OIBA before restructuring charges for US operations decreased to $80.8 million this quarter from $88.1 million for the equivalent period last year, reflecting challenges prior to the closing of the Rite Aid transaction. OIBA before restructuring charges increased in the fiscal year ended June 4, 2007, to $342.0 million from $331.6 million in the fiscal year ended May 27, 2006. Store network development During the fourth quarter of fiscal 2007, 11 drugstores were opened, of which 7 stores were relocations and 4 were closed in the Canadian and United States networks. On June 4, 2007, the US network of 1,854 corporate drugstores was sold to Rite Aid. As at the year-end date, there were 328 stores in the system, comprised of entirely of Canadian PJC Jean Coutu drugstores. Dividend The Board declared a quarterly dividend of CDN00.04 per share, which represents an increase of 33.3% over the dividend paid the previous quarter. This dividend is payable on Aug. 30, 2007, to all holders of Class A subordinate voting shares and holders of Class B shares listed in the company's shareholder ledger as of Aug. 16, 2007. On an annual basis, this represents a dividend of CDN$0.16 per share. At June 4, 2007, the company's consolidated balance sheet showed $2.208 billion in total assets, $301.8 million in total liabilities, and $1.906 billion in totasl stockholders' equity. About The Jean Coutu Group The Jean Coutu Group (PJC) Inc. (Other OTC: JCOUF.PK) -- http://www.jeancoutu.com/-- operates a network of 328 franchised drugstores in Canada located in the provinces of Quebec, New Brunswick and Ontario (under the banners of PJC Jean Coutu, PJC Clinique and PJC Sante Beaute) and employs more than 15,000 people. The company holds a significant interest in Rite Aid Corporation, one of the United States' leading drugstore chains, with annual revenues of more than $27 billion and approximately 5,100 drugstores in 31 states and the District of Columbia with strong presence on both the East and West coasts. * * * As reported in the Troubled Company Reporter on June 20, 2007, Standard & Poor's Ratings Services withdrew its ratings, including the 'B+' long-term corporate credit rating, on Montreal, Quebec- based Jean Coutu Group (PJC) Inc., following the repayment of its debt. The repayments follow the company's sale of its Brooks and Eckerd stores and distribution centers to Rite Aid Corp. (B/Stable/--) for approximately $4 billion. K&F INDUSTRIES: Meggitt-USA Deal Cues Moody's to Withdraw Ratings ----------------------------------------------------------------- Moody's Inventors Service withdrew all ratings of K&F Industries Inc. as well as its parent K&F Industries Holdings Inc. The ratings have been withdrawn due to the acquisition of K&F by Meggitt-USA Inc., the US subsidiary of Meggitt PLC (not rated by Moody's). As the result of the sale, all of K&F's senior secured debt has been repaid. Also, the company announced on July 23, 2007 that it had received tenders and consents from the holders of 99.97% of its 7-3/4% Subordinated Notes due 2014. The de-minimus amount of remaining notes outstanding have become an unguaranteed obligation of Meggitt-USA. Other than this, K&F has no other rated debt outstanding. Withdrawals: Issuer: K & F INDUSTRIES, INC. -- Senior Subordinated Regular Bond/Debenture, Withdrawn, previously rated Caa1 -- Senior Secured Bank Credit Facility, Withdrawn, previously rated Ba3 Issuer: K & F Industries Holdings, Inc. -- Probability of Default Rating, Withdrawn, previously rated B2 -- Corporate Family Rating, Withdrawn, previously rated B2 Outlook Actions: Issuer: K & F INDUSTRIES, INC. -- Outlook, Changed To Rating Withdrawn From Stable Issuer: K & F Industries Holdings, Inc. -- Outlook, Changed To Rating Withdrawn From Stable K&F Industries, Inc. is a manufacturer of braking equipment for commercial transport, general aviation and military aircraft through its Aircraft Braking Systems Corporation subsidiary. In addition, K&F operates Engineered Fabrics Corporation, a leading producer of aircraft fuel tanks, de-icing equipment and specialty coated fabrics used for storage, shipping, environmental and rescue applications for commercial and military customers. KESSLER HOSPITAL: Disclosure Statement Hearing Moved to August 20 ----------------------------------------------------------------- The Honorable Judith H. Wizmur of the United States Bankruptcy Court for the District of New Jersey moved to Aug. 20, 2007, the hearing to consider the adequacy of William B. Kessler Memorial Hospital Inc.'s Disclosure Statement explaining its Chapter 11 Plan of Reorganization. The Court originally scheduled the Debtor's Disclosure Statement hearing on July 23, 2007. Treatment of Claims The Debtor's Plan proposes to pay the secured claim of Northern Healthcare Capital Inc. in full. Northern Healthcare will be paid in accordance with the final order approving debtor-in-possession financing and the loan documents completed by the Debtor prepetition and postpetition. The Secured Claim of Berenato & Pullia and Mar-Dor Building will be paid in full. Other Secured Claims Secured Claims of Creditors Holding Liens on Equipment are composed of: -- Central Atlantic Leasing -- Winthorp Resources Corp. -- Abbot Labs. -- L.A. Barrington -- Sensory Management Services LLC The Debtor will pay the value of the creditors' collateral over 5 years with interest at 7% per annum. Creditors will receive monthly payments sufficient to fully amortize and pay the secured claim over 60 months. The Debtor will make monthly payments to Priority Claims of Creditors with Non-union, Non-Taxing Authority Employee Related Claims over 18 months commencing on the effective date sufficient to satisfy all of the claims 100%. The Debtor will cure Local 1199C and JNESCO's claims over18 months in equal monthly installments on the effective date. General Unsecured Claims will be paid in full of their respective claims and liens in this manner: i. commencing six months after the effective date, the Debtor will make six annual payments of $166,000 to the distribution trustee for deposit into to distribution trust to be distributed, pro rata, to unsecured creditors; and ii. proceeds of all avoidance litigation commenced by the estates' representative will be paid to the distribution trust after payment of any counsel fees and costs. The distribution trust will make annual distributions to beneficiaries on a pro rata basis. Holders of Equity Interests against the Debtor will not receive any distribution under the Plan. Based in Hammonton, New Jersey, William B. Kessler Memorial Hospital, Inc. -- http://www.kesslerhospital.org/-- is a non- profit corporation that operates a hospital. The Company filed for chapter 11 protection on Sept. 13, 2006 (Bankr. D. N.J. Case No. 06-18680). Albert A. Ciardi, III, Esq., at Ciardi & Ciardi, P.C., represents the Debtor in its restructuring efforts. Carol A. Slocum, Esq., at Klehr Harrison Harvey Branzburg & Ellers, represents the Official Committee of Unsecured Creditors. As of its bankruptcy filing, the Debtor disclosed total assets of $5,906,300 and total liabilities of 12,602,600. KLEENERZ INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Kleenerz, Inc. fka One Hour Martinizing fka Buzzy Bee P.O. Box 10779 Bakersfield, CA 93389 Bankruptcy Case No.: 07-12387 Type of Business: The Debtor offers garment pressing, laundry and drycleaning services. Chapter 11 Petition Date: August 3, 2007 Court: Eastern District of California (Fresno) Judge: Whitney Rimel Debtor's Counsel: T. Scott Belden, Esq. Klein, DeNatale, Goldner, Cooper 4550 California Avenue, 2nd Floor Bakersfield, CA 93309-1172 Tel: (661) 395-1000 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pitho Enterprises, Inc. Promissory Note $370,000 5640 District Boulevard Secured: Suite 132 $38,000 Bakersfield, CA 93313 Unsecured: $332,000 Ramona Koster Promissory Note $325,000 11800 Lone Oak Drive Bakersfield, CA 93312 PG&E Utilities $75,000 P.O. Box 8329 Stockton, CA 95208 United Fabricare Supply Supplies $70,000 Robin Williams Promissory Note $70,000 C&C Properties Deficiency Balance $60,000 Louis Chiaparelli Promissory Note $50,000 Chris Neeld Promissory Note $45,000 Egan & Johanna Gost Trustees Deficiency Balance $40,000 Kyle Brandon Promissory Note $30,000 Bakersfield Holding, LLC Deficiency Balance $30,000 Daniel C. Duncan Deficiency Balance $30,000 Al Alvidrez Promissory Note $25,000 Henderson Insurance Agency Insurance Premiums $22,796 William Brandon Promissory Note $20,000 Borton Petrini & Conron Professional Services $13,000 Spot Business Systems Contract Services $12,250 MBL, Inc. Tenant Improvements $10,000 Matson Alarm of Bakersfield Contract Services $9,000 City Neon Sign Systems Tenant Improvements $8,985 LEINER HEALTH: Completed Credit Amendment Cues S&P to Hold Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings, including the 'B-' corporate credit rating, on Carson, California-based Leiner Health Products Inc. The 'B-' bank loan rating on the company's $290 million senior secured credit facilities was affirmed, and the '3' recovery rating, indicating expectation of meaningful (50%-70%) recovery in the event of a payment default, remained unchanged. S&P removed the ratings from CreditWatch. The outlook is negative. Total debt outstanding at the company was about $426 million at March 31, 2007. Ratings were originally placed on CreditWatch with negative implications on March 23, 2007, following the company's announcement that it had voluntarily suspended the production and distribution of all over-the-counter products manufactured, packaged, or tested at its facilities in the U.S. because of U.S. Food and Drug Administration observations about product quality and deficiencies upon inspection of one facility. The company later announced that it had terminated a supply agreement and consolidated manufacturing facilities. It expected to realize cost savings through this consolidation and the reduction of operating expenses. "The rating affirmation and removal from CreditWatch followed Leiner's completion of an amendment to its credit facilities and restoration of near-term liquidity," said Standard & Poor's credit analyst Bea Chiem. The company received an amendment and waiver to its credit agreement on June 22, 2007, adjusting its total leverage and interest coverage covenants to provide some financial flexibility. However, the negative outlook reflects S&P's concerns about the company's ability to restore profitability after the OTC product suspension over the near term. The ratings on Leiner reflect the company's highly leveraged capital structure, customer concentration, lack of pricing flexibility in the highly competitive private-label vitamin market, and the segment's vulnerability to adverse publicity. Leiner is the largest U.S. private-label vitamins, minerals, and supplements manufacturer, a sector that accounts for about 60% of company sales, with the remainder coming from OTC drugs (30%) and contract manufacturing (10%). MCMORAN EXPLORATION: Completes $1.08 Billion Buyout of Gulf Assets ------------------------------------------------------------------ McMoRan Exploration Co. has completed its acquisition of the Gulf of Mexico Shelf oil and gas properties of Newfield Exploration Company and certain exploration rights for approximately $1.08 billion in cash. The acquisition provides McMoRan a diversified portfolio of oil and gas properties with significant production and cash flow generating capacity and an expanded exploration acreage position to pursue opportunities on the Shelf of the Gulf of Mexico. The transaction is effective July 1, 2007. The purchase price remains subject to post-closing adjustments. The transaction was funded with borrowings of approximately $394 million under a $700 million bank credit facility and $800 million in borrowings under a bridge facility. Additionally, McMoRan issued $100 million in letters of credit under its bank credit facility to support abandonment obligations associated with the acquired properties. In connection with the closing, McMoRan repaid an existing $100 million term loan. McMoRan expects to issue long-term notes and equity and equity- linked securities to replace the bridge loan facility. “The acquisition of Newfield's Gulf of Mexico Shelf properties provides us with significant reserves and production together with expanded exploration opportunities in our focused area of operations,” James R. Moffett and Richard C. Adkerson, McMoRan's co-chairmen, said. “The substantial cash flows being generated from these properties will allow us to delever rapidly and invest in high potential exploration and development opportunities. We will benefit from having increased scale in the area where we have had historical success. Our recent Flatrock discovery is an excellent example of our strategy of targeting large structures below 15,000 feet with significant additional development and exploration opportunities.” The properties include 124 fields on 148 offshore blocks which produced approximately 260 million cubic feet of natural gas equivalents per day in the second quarter of 2007. Proved reserves as of July 1, 2007, for these properties, are estimated at 323 billion cubic feet of natural gas equivalents, approximately 70% of which are natural gas. Approximately ninety percent of the proved reserves for the acquired properties were based on estimates by Ryder Scott Company LP. McMoRan acquired approximately 1.3 million gross acres of offshore leases. McMoRan also acquired a 50% interest in Newfield's nonproducing exploration leases on the Shelf and certain of Newfield's interests in leases associated with its Treasure Island prospect inventory. McMoRan is retaining personnel and contractors who have supported Newfield's management of the acquired properties. In addition, the explorationists from McMoRan and Newfield will jointly pursue exploration activities on nonproducing leases on the Shelf held by Newfield. In connection with the closing of the Newfield transaction, McMoRan has entered into hedging transactions comprising approximately 80% of its estimated proved producing volumes, excluding oil from Main Pass Block 299. Merrill Lynch & Co. and JPMorgan acted as financial advisors to McMoRan in the acquisition. About Newfield Exploration Headquartered in Houston, Texas, Newfield Exploration Company (NYSE: NFX) -- http://www.newfld.com/-- engages in the exploration, development, and acquisition of crude oil and natural gas properties primarily in the United States. The company was founded in 1988. About McMoran Exploration Headquartered in New Orleans, McMoRan Exploration Company (NYSE: MMR) -- http://www.mcmoran.com/-- is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of the Main Pass Energy HubTM which will be used for the receipt and processing of liquefied natural gas and the storage and distribution of natural gas. * * * As reported in the Troubled Company Reporter on July 23, 2007, McMoRan Exploration Co. had total assets of $446 million, total liabilities of $495.9 million, and total stockholders' deficit of $49.9 million at June 30, 2007. MORGAN STANLEY: S&P Assigns Low-B Ratings on Six Cert. Classes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Morgan Stanley Capital I Trust 2007-IQ15's $2.1 billion commercial mortgage pass-through certificates series 2007-IQ15. The preliminary ratings are based on information as of Aug. 6, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Class A-1, A-1A, A-2, A-2Fl, A-3, A-AB, A-4, A-4FL, A-M, A-MFL, A-J, and A-JFL are being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.41x, a beginning LTV of 111.9%, and an ending LTV of 104.2%. Preliminary Ratings Assigned Morgan Stanley Capital I Trust 2007-IQ15 Class Rating Amount Recommended credit Support ----- ------ ------ --------------- A-1* AAA $61,700,000 30.000% A-1A* AAA $278,738,000 30.000% A-2* AAA $227,400,000 30.000% A-2FL* AAA --* 30.000% A-3 AAA $72,800,000 30.000% A-4* AAA $796,885,000 30.000% A-4FL* AAA --* 30.000% A-M¶* AAA $205,361,000 20.000% A-MFL* AAA --* 20.000% A-J* AAA $177,124,000 11.375% A-JFL* AAA --* 11.375% X** AAA $2,053,605,662 -- B AA $33,371,000 9.750% C AA- $15,402,000 9.000% D A $28,237,000 7.625% E A- $15,402,000 6.875% F BBB+ $30,804,000 5.375% G BBB $23,103,000 4.250% H BBB- $20,536,000 3.250% J BB+ $10,268,000 2.750% K BB $5,134,000 2.500% L BB- $7,701,000 2.125% M B+ $5,134,000 1.875% N B $5,134,000 1.625% O B- $7,701,000 1.250% P NR $25,670,662 -- * The principal allocation between the class A-2 and A-2FL certificates, the class A-4 and the A-4FL certificates, the class AM and the A-MFL certificates, and the class A-J and the class A- JFL certificates, respectively, will be determined by market demand up to the amount indicated on the respective fixed-rate class. ** Interest-only class with a notional amount. NR -- Not rated. MOVIE GALLERY: Inks Amendment to Forbearance Agreement ------------------------------------------------------ Movie Gallery Inc. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that on July 31, 2007, it entered into an amendment, effective as of July 27, 2007, to a forbearance agreement it entered into on July 20, 2007 with Goldman Sachs Credit Partners L.P., as a lender and as administrative agent, Wachovia Bank, National Association, as a lender and collateral agent and the lenders party thereto, The Forbearance Agreement relates to a first lien credit and guaranty agreement, dated as of March 8, 2007, by and among the company and the guarantors party, the agents and lenders party for the purpose of making certain technical corrections to the Forbearance Agreement. A copy of the Amendment to Forbearance Agreement may be viewed for free at http://ResearchArchives.com/t/s?2228 Forbearance Agreement As reported in the Troubled Company Reporter on July 25, 2007, the company and certain lenders under its First Lien Credit Facility executed a Forbearance Agreement. Under the agreement, the senior lender group will forbear until Aug. 14, 2007, from exercising rights and remedies arising from existing defaults, absent any new defaults under the senior credit facility or the Forbearance Agreement. Joe Malugen, chairman, president and chief executive officer of Movie Gallery, said, "We are pleased to be working cooperatively with our lenders to address the company's current financial situation. In the near future, we expect to present a longer-term solution to the lender group that will address the operational and financial issues currently impacting our business. Meanwhile, our plan is to operate our stores and, together with our outside advisors, execute on our plan to conserve cash and improve profitability. We appreciate the strong support of our customers, the continued dedication of our employees, and the cooperation of our trusted business partners as we work through this challenging period." About Movie Gallery Headquartered in Dothan, Alabama, Movie Gallery, (Nasdaq: MOVI) -- http://www.moviegallery.com/-- is a provider of in-home movie and game entertainment in the United States. It operates over 4,600 stores in the United States, Canada, and Mexico under the Movie Gallery, Hollywood Entertainment, Game Crazy, and VHQ banners. * * * As reported in the Troubled Company Reporter on July 9, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Movie Gallery Inc. to 'CCC+' from 'B-' based on the announcement that the company was not able to meet its financial covenants for the fiscal quarter ended July 1, 2007, and that the company is exploring available restructuring and strategic alternatives. The outlook is developing. MUSICLAND HOLDING: Plan Confirmation Hearing Adjourned to Aug. 9 ---------------------------------------------------------------- The Hon. Stuart Bernstein adjourned the hearing to consider confirmation of Musicland Holding Corp. and its debtor-affiliates' Second Amended Joint Plan of Liquidation to August 9, 2007. The confirmation hearing began November last year and was previously scheduled for July 24, 2007. The hearing on the certain of the Debtors' Objections to Claims and the request of the Official Committee of Unsecured Creditor for Rule 2004 Examinations will also be covered on the same date. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. At March 31, 2007, the Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation with the Court. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. (Musicland Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NEW YORK RACING: Court Shortens Plan Filing Deadline to Nov. 15 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York cut short New York Racing Association Inc.'s requested extension of its exclusive periods, giving the Debtor until: -- Nov. 15, 2007, to file a plan of reorganization, instead of Jan. 15, 2008 ; and -- Jan. 15, 2008, to solicit acceptances of that plan instead of Mar. 14, 2008. In its request filed June 2007, the Debtor told the Court that before it can proceed with the formulation and confirmation of a plan, it needs to resolve these issues: a. The transfer of the Debtor's franchise to conduct racing and operating pari-mutual wagering on its racetrack; b. Dispute regarding ownership of title to racetracks; and c. New York State Non-Profit Racing Association's motion to dismiss the Debtors' bankruptcy cases. Awarding of the Franchise The Debtor's franchise to conduct racing and operating pari-mutual wagering on its racetracks is scheduled to expire on Dec. 31, 2007. On June 13, 2006, the State's Ad Hoc Committee on the Future of Racing released a request for proposals to solicit bids from entities interested in conducting racing and operating pari-mutual wagering at the Racetracks under the franchise. The Debtor and a number of other groups, each of the other groups are for-profit organization, submitted proposals for the Franchise. On Nov. 21, 2006, the Ad Hoc Committee recommended the franchise be awarded to Excelsior Racing Associates LLC. The Debtor said however that the recommendation has been cast aside. The Debtor contended that until it learns the fate of the franchise, the proposition of a viable chapter 11 plan is difficult. The Debtor remains hopeful that it will be awarded the franchise and able to pursue its goal of opening a video lottery terminal facility. The Debtor said that it plans to base a chapter 11 plan on the projected income of the video terminal facility if it is awarded the franchise. Determination of Title to the Racetracks On Dec. 12, 2006, the Debtor filed a complaint commencing an adversary proceeding, in order to, among other things, challenge the constitutionality of Section 202-2 of the New York State Racing Law. Section 202-2 provides, in pertinent part, that, upon expiration of the franchise, the assets of the franchisee "will be assigned, transferred and conveyed and distributed by the governor then in office." The Debtor argued that it currently owns the racetracks. Various parties however have taken actions that infringed upon the Debtor's quiet enjoyment of the Racetracks due to their belief that the Racetracks not only become property of the State of New York upon the expiration of the Franchise but also, that the State maintains an amorphous interest currently. The Debtor explained that in order to propose a feasible chapter 11 plan, a determination of its ownership of the Racetracks upon the expiration of the franchise must be made. The Debtor believes that, until the dispute regarding the future ownership of the Racetracks is resolved, it would be extremely difficult to have meaningful negotiations about a plan. Adjudication of the State's Motion To Dismiss Early this year, the State of New York and the New York State Non-Profit Racing Association Oversight Board sought dismissal of the Debtor's chapter 11 case citing that the Debtor was ineligible to file for bankruptcy under the definitions set in the Bankruptcy Code. The New York Thoroughbred Horseman's Association Inc., Lien Games Racing LLC, and Excelsior, have filed motions to join the State and the Oversight Board's motion. The Debtor argued that although it believes the motion has no merit, it would be difficult to commence meaningful negotiations with creditor constituencies bent on derailing its chapter 11 proceedings. Accordingly, until the issue is resolved or progress is made, the Debtor said it will be unable to propose a confirmable plan. About New York Racing Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. Edward M. Fox, Esq., Eric T. Moser, Esq., Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. NEW YORK RACING: Hearing on Getnick's Retention Set for Aug. 21 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing at 10:00 a.m. on Aug. 21, 2007, to consider approval of New York Racing Association Inc.'s motion to employ Getnick & Getnick as its special business integrity Counsel, nunc pro tunc to July 25, 2007. The firm will, among others, monitor and investigate the Debtor's business practices and operations in these areas: (i) living and working conditions on the backstretch; (ii) simulcast signal sales and rebate shops; (iii) horse drug testing and sanctions; (iv) pre-race horse monitoring; (v) segregation and maintenance of horsemen's funds; (vi) implementation of the company Code of Ethics; (vii) preparation and presentation of financial statements; and (viii) implementation of anti-money laundering policies and other financial system protections. Getnick & Getnick professionals agreed to provide services to the Debtor at these hourly rates: Principal $290 Executive Project Manager $290 Project Manager $255 Forensic Auditor $255 Investigator $165 Project Administrator $100 Pursuant to a retainer agreement, G&G's monthly retainer and minimum fee for professional services is $125,000 to be billed against hourly billings by G&G and person working under the direction of G&G. In addition, the term of G&G's representation will run for five years, starting on the effective date of any plan, provided however, that, should the Debtor cease to maintain its franchise to conduct racing and operating pari-mutual wagering on its racetracks, the term of G&G's representation will automatically terminate. The Debtor's franchise is scheduled to expire on Dec. 31, 2007. Neil V. Getnick, managing partner at the firm, assures the Court that G&G does not represent or hold any interest adverse to the Debtor or its estate with respect to the matters as to which G&G is to be employed. Committee Objects The Official Committee of Unsecured Creditors asks the Court to deny the Debtor's request arguing that while the retention agreement provides for early termination in the event the Debtor loses the franchise, it makes little sense for the Debtor's estate to incur administrative expenses in the amount $125,000 a month to enhance the integrity of racing operations that the Debtor may be forced to abandon in the very near future. According to the Committee, even if one assumes that the Debtor will obtain an extension of the franchise, the Debtor should not be permitted to commit itself to paying more than $7,500,000 in non-essential professional fees -- fees that will be entitled to priority over the claims of the Debtor's unsecured creditors -- before it has even proposed a plan of reorganization for consideration by its creditors. Moreover, the Committee says it objects to Getnick's retention to the extent it will duplicate the services presently being provided by other retained professionals. Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. Edward M. Fox, Esq., Eric T. Moser, Esq., Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. NEWFIELD EXPLORATION: Completes $1.1 Billion Sale of Gulf Assets ---------------------------------------------------------------- Newfield Exploration Company has closed its sale of its Gulf of Mexico shelf assets to McMoRan Exploration Co. for total cash consideration of $1.1 billion and the assumption of liabilities associated with future abandonment of wells and platforms. Newfield utilized Internal Revenue Code Section 1031 Tax Deferred Exchange rules for the sale of its Gulf of Mexico shelf assets and its recent $578 million acquisition of Rocky Mountain assets from Stone Energy. As a result, after-tax proceeds from the sale of the Gulf of Mexico shelf assets exceed $1 billion. Newfield's estimated 2007 and 2008 production guidance accounted for this and other anticipated divestitures and remains 240 - 253 Bcfe. The company's divestiture packages also include its assets in the U.K. North Sea and Bohai Bay, China, and other select properties in Texas and the Mid-Continent. Proceeds from these sales will be used to pay down debt and fund capital expenditures. Jefferies Randall & Dewey and Morgan Stanley & Co. Incorporated acted as financial advisors to Newfield in connection with its Gulf of Mexico shelf asset sale. About McMoran Exploration Headquartered in New Orleans, McMoRan Exploration Company (NYSE: MMR) -- http://www.mcmoran.com/-- is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of the Main Pass Energy HubTM which will be used for the receipt and processing of liquefied natural gas and the storage and distribution of natural gas. About Newfield Exploration Headquartered in Houston, Texas, Newfield Exploration Company (NYSE: NFX) -- http://www.newfld.com/-- engages in the exploration, development, and acquisition of crude oil and natural gas properties primarily in the United States. The company was founded in 1988. * * * As of June 25, 2007, Newfield Exploration Company continues to carry Fitch's BB+ long term issuer default rating. Fitch rates the company's bank loan debt and senior unsecured debt at BB+ while its senior subordinate rating is at BB-. The outlook remains stable. At the same time, the company also bears Moody's Investor Services' Ba2 long term corporate family rating and probability of default rating, Ba1 senior unsecured debt, Ba3 senior subordinate rating, and B1 preferred stock rating. The outlook is stable. The company also continues to carry Standard & Poor's BB+ long term foreign and local issuer debt ratings. The outlook remains stable. OAK HILL: S&P Lifts Ratings on Class D-1 and D-2 Notes to BB+ ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class B-1, B-2, and C notes issued by Oak Hill Credit Partners I Ltd., an arbitrage high-yield CLO transaction managed by Oak Hill Advisors L.P., and removed them from CreditWatch, where they were placed with positive implications on June 21, 2007. At the same time, S&P raised its ratings on the class D-1 and D-2 notes and affirmed our 'AAA' ratings on the class A-1a, A-1b, and A-2 notes. The raised and affirmed ratings reflect factors that have positively affected the credit enhancement available to support the notes since the last upgrades on April 4, 2007. Since origination, the transaction has paid down approximately $279.018 million to the class A-1a and A-1b notes, including a payment of $115.543 million on the June 12, 2007, payment date. Ratings Raised and Removed from Creditwatch Positive Oak Hill Credit Partners I Ltd. Rating ------ Class To From Balance ----- -- ---- ------- B-1 AAA AA-/Watch Pos $15,000,000 B-2 AAA AA-/Watch Pos $13,000,000 C AA- BBB/Watch Pos $30,000,000 Ratings Raised Oak Hill Credit Partners I Ltd. Rating ------ Class To From Balance ----- -- ---- ------- D-1 BB+ BB- $20,500,000 D-2 BB+ BB- $2,500,000 Ratings Affirmed Oak Hill Credit Partners I Ltd. Class Rating Balance ----- ------ ------- A-1a AAA $89,502,000 A-1b AAA $13,479,000 A-2 AAA $102,500,000 PAC-WEST TELECOMM: Court Sets Sept. 5 Disclosure Statement Hearing ------------------------------------------------------------------ The U.S. Bankrutpcy Court for the District of Delaware will convene a hearing on Sept. 5, 2007, at 2:00 p.m. to consider approval of the Disclosure Statement describing Pac-West Telecomm Inc. and its debtor-affiliates' Chapter 11 Plan of Reorganization. The hearing will be held at Courtroom No. 1 of the Bankruptcy Court, 6th Floor, 824 Market Street, in Wilmington, Delaware. Objections to the Disclosure Statement are due Aug. 29, 2007. The Debtors' Plan proposes to pay Class 1 Priority Claims in full, in cash. The Class 2 Prepetition Claim of Pac-West Funding Company LLC will be paid, on the effective date of the Plan, in full, in cash from the proceeds of the New Senior Secured Note to be issued by the Reorganized Debtors in the amount of $18,000,000. The Debtor, will, among others, elect to distribute to the holders of Class 3 Other Secured Claims the property securing their claims, in which event the holder will be entitled within 30 days to file a proof of claim for any deficiency claim entitled to treatment in Class 4. Holders of Class 4 General Unsecured Claims will receive pro rata beneficial interest in and to the Class 4 Liquidating Trust and the Class 4 Liquidating Trust Assets. Holders of Class 5 Equity Interests in Pac-West will neither retain nor receive property under the Plan, while holders of Class 6 Equity Interests in the Debtors other than Pac-West will retain 100% of their interest. A full-text copy of the Debtors' Joint Plan of Reorganization is available for a fee at : http://www.researcharchives.com/bin/download?id=070807042503 A full-text copy of the Disclosure Statement accompanying the Debtors' Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=070807043114 Based in Stockton, California, Pac-West Telecomm Inc. (OTC: PACW.PK) -- http://www.pacwest.com/-- provides switched local and long distance telecommunications services to, among others, internet service providers and paging companies. The company and its affiliates filed for Chapter 11 protection on April 30, 2007 (Bankr. D. Del. Case Nos. 07-10562 through 07-10567). Jeremy W. Ryan, Esq. and Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represent the Debtors in their restructuring efforts. Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, PLLC represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $53,883,888 and total debts of $66,358,711. PAUL DIGRIGOLI: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Paul J. DiGrigoli 6 Western View Avenue Holyoke, MA 01040 Bankruptcy Case No.: 07-43012 Chapter 11 Petition Date: August 3, 2007 Court: District of Massachusetts (Worcester) Judge: Henry J. Boroff Debtor's Counsel: Louis S. Robin, Esq. Fitzgerald, O'Brien & Robin 1200 Converse Street Longmeadow, MA 01106 Tel: (413) 567-3131 Total Assets: $2,459,900 Total Debts: $2,223,333 Debtor's List of its 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Bank Loan $52,000 1550 Main Street, Room 115 Springfield, MA 01103 Monogram Bank N. America $48,161 4060 Ogletown Newark, DE 19713 Town of West Springfield $38,000 26 Central Street West Springfield, MA 01089 Amex $35,728 Fred Aaron $30,000 Chase $26,218 Citibank $25,081 Home Depot Credit Services Bank Loan $18,000 Citibank USA $16,463 Holyoke Cu $5,695 John Lemanski Trade Debt $4,938 Robinson Donovan Bank Loan $4,557 Discover Financial $4,260 Commonwealth of Massachusetts $2,900 Chase N.A. $369 STCU Credit Union $69 POLYMER GROUP: S&P Retains Negative CreditWatch on B- Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said that its 'B-' corporate credit rating and other ratings on Intertape Polymer Group Inc. remain on CreditWatch with negative implications, following the company's recent announcement of a proposed rights issue of up to $90 million. The ratings were originally placed on CreditWatch in October 2006, after Intertape's announcement of a strategic review process and S&P's concerns regarding weak operating performance and tight liquidity. Littlejohn & Co. LLC's subsequent attempt to acquire the company was unsuccessful, and the related financing transaction was cancelled. S&P are withdrawing its ratings on Tape Borrower Inc. because of the cancellation of the financing transaction related to the proposed acquisition. "We remain concerned about Intertape's liquidity. Of particular concern were the company's comments at the time of the proposed acquisition that if the acquisition was not approved by shareholders, Intertape may have to seek appropriate accommodations from its lenders with respect to financial covenants," said Standard & Poor's credit analyst Paul Kurias. The company's $75 million revolving credit facility is a key source of liquidity and any constraints in access to the facility will meaningfully weaken liquidity. In the recent past, on occasions when full access to the $75 million facility would have resulted in a breach of financial covenants, Intertape has had only limited access to the facility. The company also has an unfavorable debt maturity profile with the revolving credit facility scheduled to mature in 2009. In addition, S&P have concerns about the highly leveraged financial profile. Total adjusted debt outstanding as of March 31, 2007, was $338 million. To date, Intertape Polymer has received commitments from some shareholders totaling slightly more than over $60 million for the proposed rights offering. If successful, the transaction is likely to partly address our liquidity and leverage concerns. The company plans to use proceeds to pay down debt. Pro forma for the $90 million transaction and the payment of debt, total adjusted debt to EBITDA at March 31, 2007, would have been about 4.1x, down from the actual level of 5.5x. However, Standard & Poor's notes that the commitments from shareholders are contingent on the company's ability to avoid a default on its existing credit facilities. Therefore, if the rights offering is not consummated or if the company is unable to obtain bank covenant relief, S&P will likely lower the ratings. If the transaction and debt payment occur as planned, S&P will raise the corporate credit rating on Intertape to 'B' from 'B-' to reflect a meaningful decline in leverage, an improvement in liquidity, and its expectation for an improvement in the company's operating performance. The 'B' corporate credit rating will reflect a limited scope of operations in the tapes niche of the North American packaging sector and a small presence in films, low margins with some volatility in earnings, vulnerability to cyclical end markets, and a highly leveraged financial profile. These risks are partly offset by a fair position in the company's market niches, breadth of customer base, and positive growth prospects for industrial tape demand in North America. The outlook will be stable. The need to refinance debt within the next two years and the volatility in earnings, as demonstrated in the second half of 2006 when quarterly earnings declined sharply for reasons including a weaker housing market, which is an ongoing concern, will constrain the ratings. The recent track record of low liquidity, including issues with covenant compliance, also constrains the ratings. S&P expect to resolve the CreditWatch listing when information on the company's capacity to meet its financial covenants, receipt of proceeds from the rights issue, and payment of debt becomes available. POPE & TALBOT: Inks Forbearance Agreement with Lenders ------------------------------------------------------ Pope & Talbot, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that, along with its wholly owned Canadian subsidiary, Pope & Talbot Ltd., it entered into a forbearance agreement dated as of July 31, 2007, with Ableco Finance LLC, Wells Fargo Financial Corporation Canada and the other lenders under the company's senior secured credit agreement. The company is in default of the covenant in its senior secured credit agreement that required the company to generate EBITDA of at least $30 million for the four-quarter period ended June 30, 2007. The company expected to be out of compliance with this covenant and disclosed that expectation in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2007. Under the Agreement, the senior lenders have agreed that, until Sept. 17, 2007 or the earlier occurrence of another default, they will forbear from exercising any rights or remedies they may have under the credit agreement arising from the Specified Default, and will permit the company to continue to borrow under the revolving credit facility subject to all other terms and conditions of the credit agreement. Other significant provisions of the Agreement include: * a decrease in total availability under the revolving credit facility from $75 million to $67 million, including a $50 million limit on cash borrowings and a $17 million limit on letters of credit; * the application of the 2% default interest rate to all borrowings under the credit agreement effective as of July 1, 2007; * a forbearance fee of approximately $925,000 payable by the company with interest at the time all other obligations under the credit agreement are paid in full; * implementation of a mechanism, similar to that which exists in other corporate asset-based loans, through which cash in the company's deposit accounts will be used to repay borrowings under the revolving credit facility on a daily basis and correspondingly increase availability under the facility; * covenants requiring efforts to solicit offers to purchase all or substantially all of the Company's assets or equity interests; * payment by the company of fees and expenses of a financial advisor retained by the lenders in connection with a potential restructuring of the company or the senior secured credit facility; and * additional reporting requirements relating to cash receipts and disbursements, liquidity and business plans. A copy of the Forbearance Agreement may be viewed for free at: http://ResearchArchives.com/t/s?2227 Based in Portland, Oregon, Pope & Talbot, Inc. (NYSE:POP) -– http://www.poptal.com/-- is a pulp and wood products company. Founded in 1849, the company produces market pulp and softwood lumber at mills in the U.S. and Canada. Markets for the company's products include the U.S., Belgium, Canada, South America, and the Pacific Rim. PUGET SOUND: Board Affirms Dividends on Common and Preferred Stock ------------------------------------------------------------------ The board of directors of Puget Energy and Puget Sound Energy, a wholly owned subsidiary, declared quarterly dividends on the company's common and preferred stock. A quarterly dividend of 25 cents per share was declared on Puget Energy's common stock, payable Nov. 15, 2007, to shareholders of record as of the close of business Oct. 19, 2007. The dividend is the 257th consecutive quarterly dividend paid by Puget Energy and its predecessor companies. The board declared quarterly dividends on Puget Sound Energy preferred stock at these rates: a) Series: 4.70% Dividend: $1.175 Payment Date: Nov. 15, 2007 Record Date: Oct. 19, 2007 b) Series: 4.84% Dividend: $1.21 Payment Date: Nov. 15, 2007 Record Date: Oct. 19, 2007 About Puget Energy Headquartered in Bellevue, Washington, Puget Energy (NYSE:PSD) -- http://www.pugetenergy.com/-- is the parent company of Puget Sound Energy, a regulated utility providing electric and natural gas service primarily to the growing Puget Sound region of western Washington. About Puget Sound Energy Headquartered in Bellevue, Washington, Puget Sound Energy -- http://www.pse.com/-- serves more than 1 million electric customers and 721,000 natural gas customers, primarily in western Washington. PSE has a 6,000-square-mile service area stretching across 11 counties. * * * As reported in the Troubled Company Reporter on May 18, 2007, Moody's Investors Service changed the rating outlook to positive from stable for: Puget Energy Inc.; Ba1 Issuer Rating, regulated utility subsidiary, Puget Sound Energy Inc.; Baa2 senior secured. REUBEN ODUM: Case Summary & Eight Largest Unsecured Creditors ------------------------------------------------------------- Debtors: Reuben Charles Odum Rhonda Copenny Odum 181 Glen Eagle Way McDonough, GA 30253 Bankruptcy Case No.: 07-72241 Chapter 11 Petition Date: August 3, 2007 Court: Northern District of Georgia (Atlanta) Judge: James Massey Debtors' Counsel: Paul Reece Marr, Esq. Paul Reece Marr, P.C. 300 Galleria Parkway, Northwest Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Henry County Tax Commissioner Ad Valorem Taxes $11,631 140 Henry Parkway 181 Glen Eagle Way P.O. Box 488 McDonough, GA 30253 Ad Valorem Property $6,232 Taxes, 242 Spivey Ridge Cir. RB Management Services, Inc. Account Payable $3,196 260 Peachtree Street Suite 2500 Atlanta, GA 30303 FMS Investment Corp. Direct Merchants $1,595 for Arrow Financial Services Credit Card Account P.O. Box 90849 Schaumburg, IL 60168-1535 Georgia Department of Revenue Personal Property Tax $883 HQ Global Workplace Account Payable $653 Clayton County Ad Valorem Taxes Unknown Tax Commissioner Cobb County Ad Valorem Taxes Unknown Tax Commissioner DeKalb County Ad Valorem Taxes Unknown Tax Commissioner ROCK-TENN CO: Raises Limit on Stock Cash Repurchases to $100 Mil. ----------------------------------------------------------------- Rock-Tenn Company has amended its Senior Credit Facility, dated June 6, 2005, to increase the limit on cash repurchases of the company's common stock to $100,000,000 during any fiscal year, so long as such repurchases do not cause the company's Leverage Ratio to exceed 3.25:1.00. At June 30, 2007, the company's Leverage Ratio was 2.60:1.00. Prior to this amendment, the Senior Credit Facility limited the company to stock repurchases of 200,000 shares in any fiscal year. The company's board of directors approved a stock repurchase plan that allows for the repurchase from time to time of shares of common stock over an indefinite period of time. As of June 30, 2007, the company had 2,033,000 shares of common stock available for repurchase under this plan. Headquartered in Norcross, Georgia, Rock-Tenn Company (NYSE: RKT) -- http://www.rocktenn.com/-- provides a wide range of marketing and packaging solutions to consumer products companies, with operating locations in the United States, Canada, Mexico, Argentina and Chile. The company is one of North America's manufacturers of packaging products, merchandising displays and bleached and recycled paperboard. * * * As reported in the Troubled Company Reporter on Aug. 3, 2007, Standard & Poor's Ratings Services raised its ratings on Rock-Tenn Co., including raising its corporate credit rating to 'BB+' from 'BB'. S&P removed all ratings from CreditWatch, where they were placed with positive implications on June 15, 2007. The outlook is stable. SACO I TRUST: Moody's Junks Rating on 2006-8 Class B Certificates ----------------------------------------------------------------- Moody's Investors Service upgraded three certificates, downgraded one certificate, and placed on review for possible downgrade four certificates from deals issued by SACO I Trust in 2004 and 2006. These actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The two transactions issued in 2004 are backed by closed-end second lien loans and are failing their cumulative loss triggers allowing them to pay sequentially. The sequential pay structure allows for a buildup in subordination that warrants the upgrades. The 2006 transactions are backed by home equity line of credit loans, and have seen recent losses that have exceeded the excess spread available thereby depleting the overcollateralization. Complete rating actions are: Issuer: SACO I Trust Upgrade: -- 2004-1, Class B-1, upgraded from A2 to Aa2; -- 2004-2, Class M-2, upgraded from A2 to Aa2; -- 2004-2, Class B-1, upgraded from Baa2 to A2; Downgrade: -- 2004-2, Class B-2, downgraded from Ba2 to B3; -- 2006-8, Class B, downgraded from Ba2 to Ca; Review for Possible Downgrade: -- 2006-1, Class M-4, Current rating Baa3, under review for possible downgrade; -- 2006-12, Class I-M-2, Current rating A2, under review for possible downgrade; -- 2006-12, Class I-M-3, Current rating Baa2, under review for possible downgrade; -- 2006-12, Class I-M-4, Current rating Ba1, under review for possible downgrade. SMTC CORP: Inks Five-Year Loan Refinancing Deal with Two Lenders ---------------------------------------------------------------- SMTC Corporation has signed new five year loan agreements with Wachovia Capital Finance Corporation and Monroe Capital LLC to refinance the company's short and long term debt. Under the new banking arrangements, Wachovia will provide a new asset-backed $40 million revolving credit facility to provide the Corporation with a larger revolver facility providing greater flexibility to manage working capital requirements. This new credit facility replaces a previous $35 million asset backed revolving facility and a term loan also provided by Wachovia and will be used for working capital and general purposes. In addition, Monroe will provide $21.5 million in term debt which is amortized over seven years. The Monroe term loan replaces two tranches of subordinated term debt held by a syndicate of lenders aggregating $21 million which were to mature on Dec. 31, 2007 and Dec. 31, 2008. "The refinancing of SMTC's debt is an important step in supporting the company's overall strategy for growth," Jane Todd senior vice president finance and chief financial officer, stated. "Not only do the new increased revolver and term loan facilities provide greater flexibility, the company also will achieve lower interest expense of an estimated $1 million on an annualized basis." About the SMTC Corp Headquartered in Markham, Ontario, SMTC Corporation -- http://www.smtc.com/-- is a provider of advanced electronic manufacturing services. The company's electronics manufacturing centers are located in; Boston, Massachusetts; San Jose, California; Toronto, Canada; and Chihuahua, Mexico with a third party facility in Chang An, China. SMTC offers technology companies and electronics OEMs a full range of value-added services. SMTC supports the requirements of a growing, diversified OEM customer base primarily within the industrial, networking, communications and computing markets. SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX and on The Toronto Stock Exchange under the symbol SMX. * * * Moody's Investor Services assigned Caa1 on SMTC Corporation's issuer rating and B3 on its long term corporate family rating on May 2002. The outlook is stable. SOUTH CAROLINA: Moody's Withdraws "Ca" Bond Rating -------------------------------------------------- Moody's Investors Service withdrew the Ca rating for the South Carolina Jobs-Economic Development Authority Revenue Bonds, Series 2002A in the amount of $8,715,000 and Taxable Revenue Bonds, Series 2002B in the amount $280,000. The project was sold through foreclosure in Anderson County, South Carolina, on Aug. 4, 2006. The winning bid for the project was $9,000,000 million from Canyon Creek Development, Inc., an affiliate of Southwest Management, Inc. Following payment of the fees and expenses incurred by the lender, Allied Mortgage Capital Corporation, and Marcus & Millichap who was selected to market the project in advance of the foreclosure sale, the trustee received a total of $8,445,273.46 from the foreclosure sale proceeds. On Oct. 6, 2006, the trustee distributed $8,000,000 to Senior Bondholders, and on May 11, 2007, the trustee made a final distribution of $371,974.79 to Senior Bondholders following a full accounting of operating costs incurred prior to the foreclosure sale as well as settlement with certain claims made by Guardian Foundation, Inc. for unpaid corporate administration service fees. As a result of the final distribution, all Series 2003A bondholders received about 89.92% to 93.40% of principal plus accrued interest, and 2003B bondholders received about 93% of the principal plus accrued interest. The trustee expects that no additional distributions will be made to the Senior Bondholders. Moody's did not rate the Subordinated Revenue Bonds, Series 2002C and Series 2002D. ST. JOSEPH: Moody's Downgrades Bond Rating to Ba2 from Baa3 ----------------------------------------------------------- Moody's Investors Service downgraded the bond rating of St. Joseph Health Services of Rhode Island to Ba2 from Baa3. The outlook remains negative. The rating downgrade is attributed to SJHS' continued decline in operating performance in fiscal year 2006 and through eight months interim FY 2007 as well as SJHS' significant decline in unrestricted liquidity through the interim period. The negative outlook reflects our concern over the challenges SJHS faces as the organization attempts to improve operations and make necessary capital and strategic investments, given their limited liquidity position. Legal Security The Series 1999 bonds are secured by a pledge of gross receipts of SJHS and a first priority mortgage and security interest on certain of SJHS' property, including land and buildings. Interest Rate Derivatives: None Strengths *Distinct niche, particularly for non-acute services such as psychiatry and rehab, in a competitive market *Expansion into various service lines including dental surgery, neurosurgery, lipthotripsy, and hyperbaric wound care, which may help offset declines in admissions and other utilization measures *Although rapidly declining, unrestricted cash remains healthy compared to debt (73% cash to debt as of May 31, 2007) and the operating base (30.9 days cash on hand) Challenges *Continued decline in operating performance in FY 2006 and eight months FY 2007, with an interim operating deficit of -2% and a 2.5% operating cash flow margin; unfavorable operating performance was driven primarily by the continued decline in inpatient volumes, including declining psychiatric and nursing home admissions. *Competitive environment in Providence and greater Rhode Island area, leading to challenging trends in inpatient and certain outpatient services *Significant decline in liquidity position through eight months of FY 2007 with $19.3 million in unrestricted cash and investments which is overstated with approximately $17 million of cash expected to be repaid to the state's Medicaid program over the next several years Recent Developments/Results SJHS saw another year of declining operating performance in FY 2006 with -1% operating margin and 2.5% operating cash flow margin compared to 0.3% operating margin and 3.7% operating cash flow margin in FY 2005. Management attributed the decline in operations to a light flu season and nursing home admission declines. In response, management is looking to reduce expenses via layoffs and freezing salary increases and while boosting revenue in certain niche service lines including dental surgery, neurosurgery, lipthotripsy, and hyperbaric wound care. In support of these service lines, management has made capital investments including the purchase of a 64-slice CT scanner and a Stealth Navigation system for Spine and Brain surgery. In addition, management has renegotiated their commercial payor contracts and received favorable rate increases, which should help improve operating cash flow. Management is also continuing to consider a plan to consolidate the two hospital campuses, which is not expected to require significant capital investment. While operating performance through the first 8 months of FY 2007 was substantially weaker than the same period in the prior year, management reports recent performance has improved and year-end results may be better than interim performance. SJHS has long been considering affiliations and mergers with other nearby hospitals. While these discussions continue, Moody's has not incorporated the impact of any new agreement at this time. Even though Moody's believe such an affiliation would create an improved negotiating position with payors which could be a credit positive, there would likely be significant hurdles and potential for interruption and distraction from core operations during the initial period. If such an agreement were to be solidified, Moody's would reevaluate the rating incorporating the benefits and challenges associated with such a plan. In the last several years, SJHS has reported significant liquidity gains, but through eight months FY 2007, liquidity has declined significantly from $34.4 million in unrestricted cash and investments (77.7 days cash on hand) in FY 2005 to $19.3 million (30.9 days cash on hand). The decline in cash position was due in part to excess Medicaid funds that SJHS will need to continue repaying over the next several years. The excess cash receipts are reported as unrestricted cash and as of May 31, 2007, about $17 million of the $19.3 million of unrestricted cash represented amounts due back to the state over the course of the next several years. The timing and amount that has to be repaid remains unclear as it occurs as the state completes annual cost reports for each fiscal year. Cash was also weakened by a rise in accounts receivable days associated with a systems conversation which management is currently working to resolve. Management reports these receivables represent about $4 million of unrestricted cash. Excluding the Medicaid repayment monies, days cash on hand and cash to debt drops significantly to 3.7 days and 8.9%, respectively. While we remain very concerned for the future liquidity position of SJHS, the length of the repayment cycle allows the hospital some time to rebuild its own liquidity position. However, if cash continues to decline rapidly, and operating cash flow remains weak, the rating will likely continue to decline. Outlook Moody's negative outlook reflects our concern over the challenges management faces as they attempt to improve operations, given the significantly thin liquidity levels (after consideration for funds due to the State). What could change the rating -- Up Significant gains in operating performance and rapid growth in liquidity excluding funds due to Medicaid What could change the rating -- Down Failure to grow cash reserves as repayments to the state are made and continued weak operating cash flow Key Indicators Assumptions & Adjustments: - Based on financial statements for St. Joseph Health Services of Rhode Island - First number reflects audit year ended Sept. 30, 2005 - Second number reflects audit year ended Sept. 30, 2006 - Investment returns normalized at 6% unless otherwise noted *Inpatient admissions: 8,788; 8,502 *Total operating revenues: $166.4 million; $176.6 million *Moody's-adjusted net revenue available for debt service: $8.3 million; $6.3 million *Total debt outstanding: $22.9 million; $26.1 million *Maximum annual debt service: $2.3 million; $2.3 million *Moody's-adjusted MADS Coverage with normalized investment income: 3.7 times; 2.8 times *Debt-to-cash flow: 3.26 times; 5.40 times *Days cash on hand: 77.7 days; 64.9 days (excluding amounts due to State: 33 days; 21 days respectively) *Cash-to-debt: 150.3%; 118.5% (excluding amounts due to State: 63%; 38% respectively) *Operating margin: 0.3%; -1% *Operating cash flow margin: 3.7%; 2.5% STATER BROS: Commences $285MM Exchange Offer of 7-3/4% Sr. Notes ---------------------------------------------------------------- Stater Bros. Holdings Inc. has commenced an offer to exchange an aggregate principal amount of up to $285,000,000 newly issued 7-3/4% Senior Notes due 2015, which have been registered under the Securities Act of 1933, as amended, for a like principal amount of its issued and outstanding privately placed 7-3/4% Senior Notes due 2015. The New Notes will be guaranteed on a senior basis by Stater Bros. Markets and Stater Bros. Development, Inc., the wholly-owned subsidiaries of Stater Bros., and Santee Dairies Inc. and Super Rx Inc., the indirect subsidiaries of Stater Bros. The Exchange Offer will expire on Sept. 5, 2007, at 5:00 p.m., New York City time, unless the Exchange Offer is extended by Stater Bros. The Bank of New York Trust Company N.A. was appointed as the exchange agent for the Exchange Offer. Requests for assistance or documents should be directed to Carolle Montreuil of The Bank of New York at (212) 298-1915. About Stater Bros. Headquartered in Colton, California, Stater Bros. Holdings Inc. -– http://www.staterbros.com/-- is a privately held supermarket chain. It operates 163 supermarkets through its wholly owned subsidiary, Stater Bros. Markets. Stater Bros. Markets also owns and operates Santee Dairies, manufacturer of quality "Heartland Farms" dairy products. * * * As reported in the Troubled Company Reporter on April 4, 2007, Standard & Poor's Ratings Services revised the rating outlook on Stater Bros. Holdings Inc. to negative from stable. At the same time, Standard & Poor's assigned its 'B+' rating to the company's proposed $275 million senior notes due 2015. All other ratings, including the 'B+' corporate credit rating on Stater Bros., were affirmed. STOLLE MACHINERY: Moody's Affirms B2 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service affirmed Stolle Machinery Co., LLC's corporate family rating and its probability of default rating at B2. At the same time, Moody's upgraded the company's senior secured bank credit facility to B1 from B2 and affirmed the company's senior secured second lien term loan at Caa1. These rating actions result from Stolle's announcement that it cancelled its first lien term refinancing. Due to market conditions Stolle did not increase its existing first lien term loan to $224.1 million from $125 million. The rating outlook is stable. Stolle's B2 corporate family rating reflects improved financial metrics over the past year. The continued demand for can beverages, the driver of Stolle's revenues, and improved operating efficiencies contribute to the company's strong performance. The corporate family rating also incorporates Stolle's strong competitive position, the predictability of its recurring spare parts/service and revenue streams derived from can manufacturers' recapitalization programs, and favorable trends for can beverages. Yet, these strengths are balanced against the company's customer concentration. Additionally, the corporate family rating is constrained by the willingness of Stolle's equity investor to pursue a relatively aggressive strategy by increasing the company's debt levels resulting in higher leverage for cash distributions to themselves. The rating for the company's debt instruments reflect the overall probability of default of the company, to which Moody's assigns a probability of default of B2. The B1 rating of the senior secured bank credit facility is rated one notch above the corporate family rating and reflects an LGD3 (38%) loss given default assessment. This credit facility reflects its senior position in Stolle's capital structure, a first priority in substantially all of the company's assets, and support from $50 million in junior claims. The Caa1 rating of the second lien term loan is rated two notches below the corporate family rating, reflects an LGD5 (88%) loss given default assessment, and its junior position in the company's capital structure relative to the first lien credit facility. These ratings/assessments were affected by this action: -- Corporate Family Rating affirmed at B2; -- Probability-of-default rating affirmed at B2; -- $150 million senior secured bank credit facility upgraded to B1 (LGD3, 38%) from B2 (LGD4, 51%); and -- $50 million senior secured second lien term loan due 2013 affirmed at Caa1 but its loss given default assessment is changed to (LGD5, 88%) from (LGD6, 96%). Stolle, headquartered in Centennial, Colorado, is the leading provider of capital equipment, spare parts, tooling and dies, and services to the beverage and food can industries. SYLVEST FARMS: Court Approves Reed Smith as Attorneys ----------------------------------------------------- The United States Bankruptcy Court for the Northern District of Alabama gave Sylvest Farms Inc. and its debtor-affiliates permission to employ Reed Smith LLP as their attorneys. The firm is expected to: a. advise the Debtors with respect to their powers and duties as debtors and debtors-in-possession in the continued management and operation of their businesses and properties; b. attend meetings and negotiate with representative of creditors and other parties-in-interest and advise consult on the conduct of the case, including all of the legal and administrative requirements of operating in Chapter 11; c. take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on their behalf, the defense of any actions commenced against those estates, negotiations concerning litigation in which the Debtors may be involved and objections to claims filed against the estates; d. prepare on behalf of the Debtors motions, applications, answers, orders, reports, papers and pleadings necessary to the administration of the estates; e. negotiate and prepare on the Debtors' behalf chapter 11 plan(s) of reorganization or liquidation, disclosure statement(s) and related agreements and documents and take any necessary action on behalf of the Debtors to obtain confirmation of the plan(s); f. advise the Debtors in connection with any issue relating to the sale of assets which was consummated in these cases; g. appear before the Court, any appellate courts, and the U.S. Trustee and protect the interest of the Debtors' estates before the courts and the U.S. Trustee; and h. perform other necessary legal services and provide other necessary legal advice to the Debtors in connection with those Chapter 11 cases. Richard A. Robinson, Esq., a partner of the firm, will bill the Debtors at $530 per hour for the engagement. Mr. Robinson assured the Court that his firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as that term defined in Section 101(14) of the Bankruptcy Code. Mr. Robinson can be reached at: Richard A. Robinson, Esq. Partner Reed Smith LLP 1201 Market Street, Suite 1500 Wilmington, DE 19801 Tel: (302) 778-7500 Fax: (302) 778-7575 http://www.reedsmith.com/ Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. -- http://sylvestcompanies.com/-- produces, processes and markets poultry products. The Debtors employ approximately 1,500 workers. The Company and two debtor-affiliates filed for chapter 11 protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525). Richard A. Robinson, Esq., and Eric S. Golden, Esq., at Baker & Hostetler LLP represent the Debtors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker LLC represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated their total assets and debts at $50 million to $100 million. TSG INC: Disclosure Statement Hearing Rescheduled to Sept. 9 ------------------------------------------------------------ The Honorable Tom R. Cornish of the U.S. Bankruptcy Court for the Eastern District of Oklahoma will continue the hearing to consider the adequacy of TSG Inc.'s Disclosure Statement explaining its Chapter 11 Plan of Liquidation to Sept. 9, 2007, 9:00 a.m., at U.S. Post Office & Courthouse in Courtroom 215. As reported in the Troubled Company Reporter on June 11, 2007, the Plan contemplated an orderly liquidation of the Debtors' assets to maximize the distribution to its creditors. Under the Plan, Administrative Claims will be paid in full. All Secured Claims against the Debtors will retain all of the liens and all of the security interests in the collateral that secured their liens. Holders of Unsecured Claims, totaling $38,648,829, will receive a pro rata distribution from the liquidating agent. Holders of Equity Interest and Subordinated Claims will not receive any distribution under the Plan. Headquartered in Oklahamo, TSG Inc. -- http://www.tsgincorporated.com/-- is a private health care company operating under the name, The Schuster Group. The company filed for Chapter 11 protection on Nov. 9, 2006 (Bankr. E.D. Ok. Case No. 06-80899). Cherish King Ralls, Esq., at Crowe & Dunlevy, represents the Detbotrs. Ross A. Plourde, Esq., at Mcafee & Taft, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $1 million to $100 million. U.S. ENERGY: Silver Point Wants to Buy Biogas for $9 Million Cash ----------------------------------------------------------------- U.S. Energy Systems Inc. executed a letter of intent submitted by Silver Point Finance LLC, to acquire, in an all-cash acquisition, 100% of the common stock of U.S. Energy Biogas Corp., a subsidiary of the company, for a purchase price payable to the company equal to $9 million. In connection with the Equity Acquisition, Silver Point is also willing to consider an increase in the amount available under the Credit and Guaranty Agreement of $8 million of which $2 million will be funded on the effective date of the Debt Financing and $6 million will be available subject to the approval of Silver Point. Each funding of this additional availability will be net of a fee equal to 3% of the amount so funded. Upon the effective date of the Transaction, the Credit and Guaranty Agreement would be amended to provide that the Applicable Margin with respect to LIBOR rate loans would increase to 9.50%. Each of the Debt Financing and the Equity Acquisition is conditioned upon the completion of the other. The LOI also sets out how the proceeds of the Transaction are to be used. Letter of Intent Generally, the LOI is non-binding, however, it does impose certain binding obligations on the company. In the event that at any time prior to Oct. 31, 2007, the company, USEB, U.S. Energy Overseas Investments LLC or any of their respective affiliates directly or indirectly enter into any agreement or arrangement, or accept any proposal or indication of interest from a third party, in each case relating to: i. any direct or indirect acquisition or purchase of any of the assets or capital stock of USEB or any of USEB's subsidiaries, or any merger, consolidation, plan of arrangement, amalgamation, business combination, recapitalization, reorganization, dissolution or similar transaction involving USEB or any of USEB's subsidiaries or ii. an alternative financing to the Debt Financing, the company will reimburse Silver Point for all of its out-of- pocket expenses incurred by Silver Point and its affiliates in connection with the proposed Transaction including reasonable fees and expenses incurred in connection with the potential financing thereof and pay to Silver Point, upon consummation of the Alternative Transaction, a fee equal to $3.5 million. The LOI states that Silver Point's interest in the Transaction is subject to satisfactory completion of diligence, receipt of internal approvals and entry into definitive agreements. Silver Point has a prior relationship with the company. In connection with the company's acquisition of the UK assets in 2006, Overseas borrowed about $23.3 million from certain lenders pursuant to a Credit and Guaranty Agreement dated Aug. 7, 2006, which was arranged by Silver Point. In connection with this financing, the company issued to Silver Point's designees Series G Warrants exercisable until February 2014 to acquire about 5.5 million shares of the company's common stock. In addition, in connection with USEB's emergence from bankruptcy, USEB and certain of its subsidiaries entered into a credit and guaranty agreement in May 2007 with the lenders named therein and Silver Point which provides for borrowings up to an aggregate principal amount of $80,000,000. Under the USEB Credit Agreement, substantially all of USEB's subsidiaries guaranty the repayment of the loan obligations and have granted to Silver Point a first priority lien on substantially all of their assets. In addition, the company has granted to Silver Point a first-priority pledge of its 100% equity interest in USEB. Overseas has $79,000,000 outstanding under the USEB Credit Agreement. About Silver Point Silver Point Finance LLC is the direct lending arm of Silver Point Capital L.P., -- http://silverpointcapital.com/a multi-strategy credit opportunity fund founded in 2002 and based in Greenwich, Connecticut. Silver Point Capital is a privately owned hedge fund sponsor and manages hedge funds for its clients. It invests in the public equity, fixed income, and hedging markets of the United States. The firm primarily invests in securities of distressed, large-cap, and Mid-cap companies; bank debts; bonds; and trade claims. It specializes in credit analysis and diversified credit- related investments. About U.S. Energy Biogas Headquartered in Avon, Connecticut, U.S. Energy Biogas Corp., a subsidiary of U.S. Energy Systems Corp. (Nasdaq: USEY) -- http://www.usenergysystems.com/-- develops landfill gas projects in the United States. Formerly known as Zahren Alternative Power Corporation or ZAPCO, the company was formed in May 2001 after ZAPCO's acquisition by U.S. Energy Systems Inc. Currently, the company owns and operates 23 LFG to energy projects with 52 megawatts of generating capacity. U.S. Energy Biogas and 31 of its affiliates filed separate voluntary chapter 11 petitions on Nov. 29, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12827 through 06-12857). Joseph J. Saltarelli, Esq., at Hunton & Williams represents the Debtors in their restructuring efforts. Dion W. Hayes, Esq., Joseph S. Sheerin, Esq., and Patrick L. Hayden, Esq., at McGuireWoods LLP, represent the Official Committee of Unsecured Creditors. The Debtors listed total assets of $35,472,663 and total debts of $90,250,169 in its schedules. About US Energy U.S. Energy Systems Inc. -- http://www.useyinc.com/-- (Nasdaq: USEY) owns of green power and clean energy and resources. USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production. The company has a 100% interest in U.S. Energy Biogas Corp., which owns and operates 23 landfill gas to energy projects in the United States, 20 of which produce electricity and three of which sell landfill gas as an alternative to natural gas. The company also has a 100% interest in Plymouth Envirosystems Inc., which owns a 50% interest in Plymouth Cogeneration Limited Partnership. Plymouth Cogeneration Limited Partnership owns and operates a combined heat and power plant in Massachusetts that produces 1.2MWs of electricity and 7 MWs of heat. The company further has a 79% interest in GBGH LLC, which owns energy assets and mineral rights in the United Kingdom including a 42MW gas-fired power plant and gas licenses for about 100,000 acres of onshore natural gas properties and mineral rights in North Yorkshire, England. GBGH is the parent company of UK Energy Systems Ltd. * * * As reported in the Troubled Company Reporter on June 26, 2007, U.S. Energy Systems Inc. had reported that it has insufficient funds to make certain capital contributions required under the UK financing arrangements between September and December of 2007. If the UK financing parties were to declare the UK financing arrangements in default and exercise remedies, such action could involve foreclosure on substantially all of the company's assets and would have a material adverse effect on the company. In that circumstance, the company is unable to provide assurances that it would be able to avoid bankruptcy or insolvency proceedings. UNIFI INC: Posts $72.3 Million Net Loss in Year Ended June 24 ------------------------------------------------------------- Unifi Inc. released Thursay its operating results for its fourth quarter and fiscal year ended June 24, 2007. Net income for the current quarter, including discontinued operations, was a net loss of $72.3 million compared with a net loss of $5.4 million prior year June quarter. Net income for the current quarter was negatively impacted by a pre-tax impairment charge of $84.7 million to adjust the carrying value of the company’s ownership interest in Parkdale America LLC, as well as $4.3 million in pre-tax bad debt charges. Net income from continuing operations for the current quarter was a net loss of $73.3 million compared to a net loss of $5.2 million for the prior year June quarter. Net income for the 2007 fiscal year, including discontinued operations, was a net loss of $113.1 million compared to a net loss of $14.4 million for the 2006 fiscal year. Net income from continuing operations for the 2007 fiscal year was a net loss of $114.6 million compared to a net loss of $14.7 million for the 2006 fiscal year. "Fiscal 2007 presented many challenges for us, primarily in the area of ever increasing and fluctuating raw material prices, said William Lowe, chief operating officer and chief financial officer for Unifi. "Nevertheless, we successfully integrated our most recent acquisition in Dillon, South Carolina, increased our cash position, consummated several asset sales, and have positioned the company to make its next step toward creating shareholder value by closing our Kinston facility and resourcing a certain quantity of our commodity partially oriented yarn versus manufacturing it at that facility. This will reduce our operating costs and provide flexibility in our texturing operations in the future." Net sales from continuing operations for the current June quarter of $185.3 million were up $2.1 million or 1.1 percent compared to net sales of $183.2 million for the prior year June quarter. Net sales of $690.3 million for the 2007 fiscal year represent a decrease of $48.4 million, or 6.6 percent, compared to net sales of $738.7 million for the 2006 fiscal year. Net sales of $363.5 million in the second half of the 2007 fiscal year were essentially unchanged from the $364.5 million in the second half of fiscal 2006, reversing the volume shortfalls experienced in the first half of the current fiscal year that resulted from soft retail demand and inventory adjustments throughout the supply chain. Cash-on-hand at the end of the current June quarter was $40.0 million, which is up from the $26.8 million at the end of the March quarter. Included in the current cash balance is a $6.1 million dividend received from the company’s equity affiliate partner Parkdale America. Total debt at the end of the current June quarter was $244.0 million, which is a decrease of $3.2 million over the $247.2 million at the end of the March quarter. At June 24, 2007, the company's consolidated balance sheet showed $664.1 million in total assets, $361.0 million in total liabilities, and $303.1 million in total stockholders' equity. About Unifi Inc. Unifi Inc. (NYSE: UFI) -- http://www.unifi.com/-- is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. Key Unifi brands include, but are not limited to: aio(R) - all-in-one performance yarns, Sorbtek(R), A.M.Y.(R), Mynx(R) UV, Repreve(R), Reflexx(R), MicroVista(R), and Satura(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. * * * As reported in the Troubled Company Reporter on Sept. 27, 2006, Moody's Investors Service confirmed Unifi Inc.'s B3 Corporate Family Rating and its Caa1 rating on the company's $190 million senior secured notes due 2014 in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. WACHOVIA BANK: Fitch Holds Low-B Ratings on Six Cert. Classes ------------------------------------------------------------- Fitch has affirmed Wachovia Bank Commercial Mortgage Trust commercial mortgage pass-through certificates, series 2005-C19, as: -- $21.3 million class A-1 at 'AAA'; -- $223.6 million class A-2 at 'AAA'; -- $75.0 million class A-3 at 'AAA'; -- $179.0 million class A-4 at 'AAA'; -- $202.2 million class A-5 at 'AAA'; -- $52.6 million class A-PB at 'AAA'; -- $237.3 million class A-6 at 'AAA'; -- $126.7 million class A-1A at 'AAA'; -- $80.7 million class A-FL at 'AAA'; -- $80.7 million class A-M at 'AAA'; -- $100.9 million class A-J at 'AAA'; -- Interest only class X-P at 'AAA'; -- Interest only class X-C at 'AAA'; -- $40.4 million class B at 'AA'; -- $20.2 million class C at 'AA-'; -- $32.3 million class D at 'A'; -- $16.1 million class E at 'A-'; -- $20.2 million class F at 'BBB+'; -- $16.1 million class G at 'BBB'; -- $20.2 million class H at 'BBB-'; -- $8.1 million class J at 'BB+'; -- $8.1 million class K at 'BB'; -- $6.1 million class L at 'BB-'; -- $4.0 million class M at 'B+'; -- $2.0 million class N at 'B'; -- $4.0 million class O at 'B-'. The $24.2 million class P is not rated by Fitch. The rating affirmations reflect stable pool performance and minimal paydown since Fitch's last rating action. As of the July 2007 distribution date, the transaction's aggregate principal balance has decreased 0.9% to $1.60 billion from $1.61 billion at issuance. There are currently no delinquent or specially serviced loans in the transaction. Fitch reviewed the year-end 2006 operating data for the transaction's four credit assessed loans (23.2%): AmericasMart (12.5%), U.S. Bancorp Building (6.6%), Centennial Tower (2.7%) and Courtyard by Marriott Miami Beach (1.4%). The loans maintain their investment grade credit assessments. The servicer reported net operating income at Courtyard by Marriott Miami Beach has declined 27.1% since issuance due to increased expenses. As of June 30, 2007 revenue per available room has increased to $163.92 from $113.99 at issuance. Occupancy as of YE 2006 has improved to 84% from 64% at issuance. WINDSOR QUALITY: Moody's Reviews Ba3 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service placed on review for possible downgrade the ratings of Windsor Quality Food Company Ltd., including the company's Ba3 corporate family rating and Ba3 probability of default rating. LGD assessments are also subject to change. This review action is based on Moody's concern that Windsor will be challenged to maintain credit metrics that are appropriate for its rating category over the intermediate term. That concern arises from the recent decline in the company's operating profit margin due to rising costs of commodity raw materials such as beef and cheese. Leverage has been negatively impacted by lower profitability and also by the acquisition of a strategically important new plant site in Mississippi. Leverage could further increase as the company funds higher capital expenditures to retrofit the new plant. Ratings on review for possible downgrade: -- Corporate family rating at Ba3 -- Probability of default rating at Ba3 -- $100 million senior secured revolving credit agreement expiring in November 2011 at Ba3 -- Senior secured term loan (originally $160 million) maturing in November 2012 at Ba3 Reported EBIT margin fell from 4.5% in the first quarter to 2.2% in the second quarter ended June 30, 2007, as prices of the company's most significant raw material inputs rose dramatically. Commodity cost pressures are unlikely to ease in the near term, and further margin erosion is likely. In addition, the company has purchased and will retrofit a new plant in Mississippi that will ease the capacity constraints of this growing business. Funding for this investment will preclude the debt reduction previously anticipated. Consequently, credit measures for the twelve months ended June 30, 2007 were weaker than expected -- debt to EBITDA was high at 4.7 times and EBIT to interest expense was only 1.6 times. Moody's review will focus on the company's initiatives to restore profit margins in an environment or rising commodity prices; its efforts to sustain sales growth; and potential efficiency improvements once the new Mississippi plant is on stream. Windsor Quality Food Company Ltd. is a privately held frozen food manufacturer based in Houston, Texas. The company's two major divisions are Windsor Foods, which specializes in ethnic and other frozen food categories (Italian, Asian, Mexican, chili/BBQ and coated appetizers) sold through foodservice, consumer and industrial distribution channels; and Quality Sausage, which produces pre-cooked meats for industrial and foodservice channels. The company's sales for the twelve months ended June 30, 2007 exceeded $600 million. WORD OF DELIVERANCE: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Word of Deliverance Institutional Ministries, Inc. fka Word of Deliverance Institutional Church, Inc. P.O. Box 11206 Atlanta, GA 30310 Bankruptcy Case No.: 07-72669 Type of Business: The Debtor is a religious organization. Chapter 11 Petition Date: August 6, 2007 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Herbert C. Broadfoot, II, Esq. Ragsdale, Beals, Seigler, et al. 2400 International Tower 229 Peachtree Street, Northeast Atlanta, GA 30303 Tel: (404) 588-0500 Fax: (404) 523-6714 Total Assets: $1,606,500 Total Debts: $1,204,352 Debtor's List of its Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GA District Assembly of God Promissory Note $235,000 6330 Peake Road Macon, GA 31221 BellSouth/AT&T Open Account $1,915 P.O. Box 1857 Alpharetta, GA 30023 Georgia Power Open Account $1,736 241 Ralph McGill Boulevard Atlanta, GA 30308 Scana Gas Open Account $1,701 P.O. Box 100157 Columbia, SC 29202 ZAIS INVESTMENT: Moody's Rates $5 Million Class D Notes at Ba1 -------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by ZAIS Investment Grade Limited X: -- Aaa to the $13,500,000 Class S Senior Secured Floating Rate Notes Due 2015; -- Aaa to the $152,000,000 Class A-1a Senior Secured Floating Rate Notes Due 2057; -- Aaa to the $120,000,000 Class A-1b Senior Secured Floating Rate Notes Due 2057; -- Aaa to the $59,500,000 Class A-2 Senior Secured Floating Rate Notes Due 2057; -- Aaa to the $75,000,000 Class A-3 Senior Secured Floating Rate Notes Due 2057; -- Aa2 to the $75,000,000 Class A-4 Senior Secured Floating Rate Notes Due 2057; -- A2 to the $50,000,000 Class B Senior Subordinate Secured Floating Rate Notes Due 2057; -- Baa2 to the $32,500,000 Class C Senior Subordinate Secured Floating Rate Notes Due 2057; and -- Ba1 to the $5,000,000 Class D Subordinate Secured Floating Rate Notes Due 2057. The Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of CDO securities and synthetic assets due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Zais Group, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. * Omnitech Consultant Provides Default Status Report ---------------------------------------------------- Groupe Conseil Omnitech Inc. also known as Omnitech Consultant Group, filed its default status report in compliance with CSA Staff Notice 57-301. Omnitech's directors and officers are presently the object of a Management CTO prohibiting them to trade Omnitech securities. A request to this effect has been filed to the regulatory authorities when it became apparent that Omnitech would not be able to file its year end audited financial statements, subsequent quarterly unaudited financial statements and their related management report within the prescribed delays. A press release dated Jan. 4, 2007, described the reasons of the delay, namely the procedures related to the filing of the notice of intent to make a proposal to creditors in accordance with the provisions of the Bankruptcy and Insolvency Act. The procedures were completed around April 25 by the issuance of 195,455,237 common shares of Omnitech to its creditors. The total of outstanding common shares of Omnitech is now 253,234,612. The proposals to the creditors offered the payment of 100% of the value of creditors' claims in common shares of Omnitech at a price per share of $0.05. Finally, on July 16, PricewaterhouseCoopers Inc. filed with the courts a certificate of full performance of proposal. The company says that the drafting process of the audited financial statements for the period ended Aug. 31, 2006, is at its final stages. The company says its financial statements should be filed shortly. In accordance with CSA Staff Notice 57-301, Omnitech confirms that except: (i) there is no material change in the information contained in the notice of default; (ii) there is no failure of Omnitech to fulfill the intentions stated in its notice of default or any default status report; and (iii) there is no other material information concerning the affairs of Omnitech that has not been generally disclosed. About Omnitech Consultant Omnitech Consultant Group Inc., aka Groupe Conseil Omnitech Inc. (TSX VENTURE: GCO), offers solutions as a one-stop-shop in engineering, information technology and systems maintenance. GCO integrates new technologies or optimizes existing systems by applying cutting-edge expertise currently used in the best practices. GCO and its subsidiaries filed for creditor protection in accordance with the provisions of the Bankruptcy and Insolvency Act on Oct. 31, 2006. 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http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency – Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers—the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Today's Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, Sheena Jusay, 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 ***