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/raid1/www/Hosts/bankrupt/TCR_Public/070814.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, August 14, 2007, Vol. 11, No. 191 Headlines ACCREDITED HOME: Says It Will Be Able to Close Tender Offer Today ACM MANAGED: Stockholders OK Plan of Liquidation and Dissolution ADVANCED MICRO: S&P Rates $1.5 Billion Sr. Convertible Notes at B AEGIS MORTGAGE: Case Summary & 36 Largest Unsecured Creditors AIRTRAN HOLDINGS: Ends Merger Talks with Midwest Air Group AJAY SPORTS: Judge Shefferly Confirms Amended Chapter 11 Plan ALLISON TRANSMISSION: Postponed Offering Cues S&P's Neg. Outlook AMERICAN REAL: Acquires $810 Mil. Depositary Units in Icahn Funds ARCADIA RESOURCES: Incurs $7.4 Mil. Net Loss in Qtr. Ended June 30 AREP CAR: Moody's Withdraws B2 Corporate Family Rating ASSOCIATED MATERIALS: Earns $17 Mil. in Second Quarter 2007 ATRIUM VIEW: Voluntary Chapter 11 Case Summary AVISTA CORP: Paying $0.15/Share Common Stock Dividend on Sept. 14 B&R PROPERTY: Case Summary & 17 Largest Unsecured Creditors BAY AREA: Case Summary & Three Largest Unsecured Creditors BEAVER BROOK: Case Summary & 19 Largest Unsecured Creditors BLACK BEAR: Voluntary Chapter 11 Case Summary CANARGO ENERGY: Earns $5.1 Million in Second Quarter Ended June 30 CATUITY INC: Nasdaq Says Common Stock Bid Price Below Criteria CELL THERAPEUTICS: June 30 Balance Sheet Upside-Down by $102 Mil. CLAYTON WILLIAMS: Offers to Sell Various Assets to Reduce Debt COMM 2004-LNB3: S&P Affirms Low-B Ratings on Six Cert. Classes COMMUNICATIONS & POWER: Completes $22MM Buyout of Malibu Research CONSUMERS ENERGY: Paying Preferred Stock Dividends on Oct. 1 CORSO BROTHERS: Voluntary Chapter 11 Case Summary CROWN MEDIA: June 30 Balance Sheet Upside-Down by $588 Million DANJO AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors DENNY'S CORP: M. Jenkins Leaves SVP and Chief Mktg. Officer Posts DIRECT INSITE: Earns $617,000 in Second Quarter Ended June 30 ENCYSIVE PHARMA: June 30 Balance Sheet Upside-Down by $129.3 Mil. ENDOCARE INC: Board OKs One-For-Three Reverse Common Stock Split EPOCH 2000: Fitch Holds "CC" Rating on Class IV Notes FURNITURE BRANDS: Closes $550 Mil. New Revolving Credit Facility GRAMERCY REAL: Fitch Rates $13.8 Mil. Class J Notes at BB GRUPO SENDA: Fitch Lifts Issuer Default Rating to B+ HARRAH'S OPERATING: Adjusts Conversion Price on $375MM Sr. Notes HESPERIA LENDERS: Voluntary Chapter 11 Case Summary HORIZON LINES: Completes Capital Refinancing Transaction Series IAP WORLDWIDE: S&P Junks Credit Rating and Puts on Negative Watch IASIS HEALTHCARE: Earns $6.3 Million in Third Qtr. Ended June 30 INDYMAC HE: Fitch Downgrades Class MV-2 Certificate Rating INFINITY ENERGY: Posts $16.1 Mil. Net Loss in Qtr. Ended June 30 INN OF THE MOUNTAIN: Improved Performance Cues S&P to Lift Rating INSTANT WEB: Moody's Affirms B2 Corporate Family Rating INTERFUND INVESTMENT: Voluntary Chapter 11 Case Summary IOWA TELECOMMS: Earns $6.6 Million in Quarter Ended June 30 IWCO DIRECT: S&P Junks Rating on $25MM Sr. Unsecured Facility JETBLUE AIRWAYS: Fitch Affirms B Issuer Default Rating JMG EXPLORATION: Posts Net Loss of $433,833 in Qtr. Ended June 30 JULIO GALANG: Voluntary Chapter 11 Case Summary KENNETH COBBS: Case Summary & 12 Largest Unsecured Creditors LENOX GROUP: Posts $11.3 Million Net Loss in Quarter Ended June 30 LIBERTY TAX II: June 30 Balance Sheet Upside-Down by $9.2 Million LIMITED BRANDS: Paying $.15/Share Quarterly Dividend on Sept. 14 MAC-GRAY CORP: Buys Hof Service's Assets for $43 Million in Cash MARCAL PAPER: Disclosure Statement Hearing Slated for Sept. 26 MOBILE MINI: Board OKs $50 Million Stock Repurchase Program MONITRONICS INT'L: Repaid Debt Cues S&P to Withdraw Ratings MONITRONICS INT'L: Moody's Withdraws B1 Corporate Family Rating MERRILL LYNCH: Fitch Rates $440,000 Class B-2 Certs. at B NEOMEDIA TECH: June 30 Balance Sheet Upside-Down by $52.6 Million NUANCE COMMS: Incurs $7.6 Million Net Loss in Third Qtr. 2007 PARALLEL PETROLEUM: Earns $3.5 Million in Qtr. Ended June 30 PASSARELLI SOLUTIONS: Case Summary & 20 Largest Unsec. Creditors PROGRESSIVE GAMING: Posts $34.2 Mil. Net Loss in Second Qtr. 2007 PTS INC: June 30 Balance Sheet Upside-Down by $722,781 RADNET INC: Suspends $445 Million Refinancing from GE Healthcare REDS EHP: Moody's Assigns Low-B Ratings on Three Note Classes RELIANT PHARMA: Registers Common Stock Initial Offering with SEC ROCKY POINT: Case Summary & 14 Largest Unsecured Creditors ROUGE INDUSTRIES: Has Until September 17 to File Chapter 11 Plan SASKATCHEWAN WHEAT: Signs $600 Million Credit Pact with GE Capital SATCON TECH: June 30 Balance Sheet Upside-Down by $4 Million SHARON KINSER: Case Summary & 16 Largest Unsecured Creditors STATION CASINOS: June 30 Balance Sheet Upside-Down by $167.6 Mil. SYNIVERSE TECHNOLOGIES: Inks $464 Million Amended Credit Pact TARGA RESOURCES: Moody's Affirms Ba3 Credit Facility Rating THE PANTRY: Repurchase Program Shows No Effect on Moody's Ratings THORNBURG MORTGAGE: Unsteady Capital Cues S&P to Cut Rating to B TIMKEN COMPANY: Moody's Affirms Ba1 Medium Term Notes Rating TITAN INT'L: Moody's Affirms B2 Corporate Family Rating TRANSDIGM GROUP: Buys Bruce Industries' Assets for $35 Million TRINITY PLACE: Case Summary & 39 Largest Unsecured Creditors US SHIPPING: Earnings Uncertainty Cues S&P's Negative CreditWatch VIEWPOINT CORP: Posts $5.2 Million Net Loss in Qtr. Ended June 30 WHEELING PITTSBURGH: Posts $41.6 Mil. Net Loss in Second Quarter WHOLE FOODS: Wild Oats Shares Tender Offer Expires Tomorrow WINDHAM COMMUNITY: Moody's Places B1 Rating Under Negative Watch WORLD HEART: Posts $4.5 Million Net Loss in Quarter Ended June 30 WORLDGATE COMM: Posts $4.6 Million Net Loss in Qtr. Ended June 30 * Fitch Confirms 133 Transactions Previously Under Analysis * Large Companies with Insolvent Balance Sheets ********* ACCREDITED HOME: Says It Will Be Able to Close Tender Offer Today ----------------------------------------------------------------- Accredited Home Lenders Holding Co. said it believes all conditions to the closing of a pending tender offer for Accredited's common stock will be satisfied by the expiration of the current tender offer period. Accredited added that it strongly disagrees with the statement made by affiliates of Lone Star Fund V (U.S.), L.P. that, as of Aug. 10, 2007, Accredited would fail to satisfy the conditions to the closing of the tender offer. The statement was made in an Aug. 10, 2007 filing by Lone Star with the Securities and Exchange Commission in which Lone Star also said that it does not expect to accept Accredited shares tendered as of the end of the current offer period ending at 12:00 midnight, Eastern time, on Aug. 14, 2007. Accredited noted that it had entered into an agreement that would resolve the class action lawsuit which had sought to enjoin the closing of the tender offer, Wan vs. Accredited Home Lenders Holding Co., et al., and that, as previously announced, all state regulatory approvals required to close the tender offer had been obtained. Accredited explained that, earlier in the day, both it and Lone Star had entered into a Memorandum of Understanding with the plaintiff in the Wan case. The Memorandum outlines a proposed settlement that is subject to court approval, but the Memorandum is structured in such a manner that the tender offer can be completed prior to the court's decision with respect to the proposed settlement. With the receipt of all required regulatory approvals and the resolution of the Wan litigation, Accredited believes that, assuming more than 50% of Accredited's outstanding shares are tendered by the expiration of the current tender offer period on Aug. 14, 2007, all conditions to closing of the tender offer will have then been satisfied. Accredited noted that the agreement and plan of merger with Lone Star expressly provides that changes generally affecting the non- prime industry in which the company operates which have not disproportionately affected the company do not provide a basis for Lone Star to not honor its obligations. Accredited said that it intends to hold Lone Star to its obligations, and to hold it fully responsible for any damages caused by its failure to satisfy those obligations. About Lone Star Funds Lone Star -- http://www.lonestarfunds.com/-- is a private equity firm in the U.S. Since 1995, the principals of Lone Star have organized private equity funds totaling more than $13.3 billion to invest globally in corporate secured and unsecured debt instruments, real estate related assets and select corporate opportunities. About Accredited Home 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. ACM MANAGED: Stockholders OK Plan of Liquidation and Dissolution ---------------------------------------------------------------- The stockholders of ACM Managed Income Fund Inc. approved the proposed plan of liquidation and dissolution of the fund at the fund's Special Meeting of stockholders. It is anticipated that the Liquidation will take place by the end of September 2007. The Fund expects to make one or more liquidating distributions to stockholders. Headquartered in New York City, ACM Managed Income Fund Inc. (NYSE: AMF) is a closed-end U.S.-registered management investment company advised by AllianceBernstein L.P. with total net assets of $97,898,535 as of Aug. 3, 2007. ACM Managed seeks high total return by seeking both high current income and capital appreciation. The Fund normally invests at least 65% of its assets in fixed-income securities, and at least 50% of its assets in U.S. government securities and related repurchase agreements. It may invest up to 50% of its assets in corporate bonds rated as low as CCC. The Fund is leveraged with remarketed preferred shares. ADVANCED MICRO: S&P Rates $1.5 Billion Sr. Convertible Notes at B ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its B/Negative/-- corporate credit rating on Sunnyvale, California-based Advanced Micro Devices Inc. At the same time, S&P assigned its 'B' rating to the company's $1.5 billion 5.75% senior convertible notes due 2012, and raised the rating on the company's existing senior unsecured debt to 'B' from 'B-', because the company no longer has secured debt in its capital structure. "The ratings on AMD reflect subpar execution of the company's business plans, highly aggressive market conditions, and ongoing substantially negative free cash flows, only partly offset by the company's currently adequate operating liquidity and its plans to monetize assets," said Standard & Poor's credit analyst Bruce Hyman. AMD is the second-largest supplier of microprocessors and is a major supplier of other chips for personal computers and consumer electronics. Following competitor Intel Corp.'s (A+/Stable/A-1+) product-line refresh in mid-2006, AMD's earlier technology lead and its profitability have dwindled, while the largely debt-funded acquisition of ATI Technologies Inc. reduced AMD's financial flexibility to deal with marketplace challenges. After generating good operating profitability in late 2005 and early 2006, EBITDA weakened sharply, and was negative $200 million for the combined March and June 2007 quarters. AMD has generated about $2.2 billion negative free cash flows in the last four quarters, including large capital expenditures. Cash balances stood at $1.6 billion on June 30, 2007. Proceeds of the convertible senior notes will repay in full the outstanding balance of its October 2006 term loan. The note sale somewhat reduces the company's interest expense, permits the company to use cash proceeds of future asset sales for general corporate purposes, and releases the company from financial covenants that had been a part of the term loan. AMD intends to reduce its future negative free cash flows through a combination of operating cost reductions and lowered capital expenditures, while liquidity should benefit from plans to monetize about $1 billion in assets over the near to intermediate term. Still, AMD must fundamentally correct its operating losses and negative free cash flows within the next several quarters, or find substantial additional sources of liquidity over the intermediate term. AEGIS MORTGAGE: Case Summary & 36 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Aegis Mortgage Corporation aka U.C. Lending aka New America Financial aka Caledon Capital 3250 Briarpark Suite 400 Houston, TX 77042 Bankruptcy Case No.: 07-11119 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- American Home Mortgage Holdings, Inc. 07-11047 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 HomeBanc Mortgage Corporation 07-11079 HomeBanc Corp. 07-11080 HomeBanc Funding Corp. 07-11081 HomeBanc Funding Corp. II 07-11082 HMB Acceptance Corp. 07-11083 HMB Mortgage Partners, L.L.C. 07-11084 Aegis Wholesale Corporation 07-11120 Aegis Lending Corporation 07-11121 Aegis Funding Corporation 07-11122 Aegis REIT Corporation 07-11123 Aegis Correspondent Corporation 07-11125 Solutions Settlement Services of 07-11126 America Corporation Aegis Mortgage Loan Servicing Corporation 07-11128 Aegis Loan Servicing, L.P. 07-11129 Solutions Title of America Corporation 07-11130 AMC Insurance Agency of Texas, Inc. 07-11132 Type of business: The Debtor offers a variety of mortgage loan products to brokers through its subsidiaries. See http://www.aegismtg.com Chapter 11 Petition Date: August 13, 2007 Court: District of Delaware (Delaware) Judge: Brendan Linehan Debtors' Counsel: Curtis A. Hehn, Esq. James E. O'Neill, Esq. Laura Davis Jones, Esq. Timothy P. Cairns, Esq. Pachulski, Stang, Ziehl, Young, Jones and Weintraub, L.L.P. 919 North Market Street, 16th Floor Wilmington, DE 19801, 19899-8705 Tel: (302) 652-4100 Fax: (302) 652-4400 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million Debtors' Consolidated List of its 36 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Morgan Stanley Repurchase Obligation $15,920,063 c/o Any Feighner 5002 T-Rex Avenue, Suite 300 Boca Raton, FL 33431 Tel: (561) 443-6011 Fax: (561) 544-5732 Countrywide Repurchase Obligation $14,266,813 c/o Tara Chiu 8521 Fallbrook Avenue Mail Stop WH-51M West Hills, CA 91304 Tel: (818) 316-8000 ext. 3910 Fax: (818) 316-8849 EMC Repurchase Obligation $10,796,262 c/o Bobbi Bingham 800 State Highway, Bypass Lewisville, TX 75067 Tel: (214) 626-7494 Fax: (214) 626-3753 Aurora Loan Services Repurchase Obligation $8,730,103 c/o Pat Walker 10350 Park Meadows Drive 4th Floor Littleton, CO 80124 Tel: (720) 945-4772 Fax: (720) 945-5920 Goldman Sachs Repurchase Obligation $8,041,642 c/o Sandra Keebler 100 2nd Avenue South Suite 200S St. Petersuburg, FL 33701 Tel: (727) 825-3845 Fax: (212) 256-2245 IndyMac Repurchase Obligation $7,356,477 c/o Ignacio Gomez 3465 East Foothill Boulevard Pasadena, CA 91107 Tel: (626) 535-5290 Fax: (626) 229-1851 CitiMortgage Repurchase Obligation $6,421,438 c/o Tiffany Geimer 100 Technology Drive MS 111 O'Fallon, MO 63368 Tel: (636) 261-0190 Fax: (636) 261-0199 RFC Repurchase Obligation $5,518,905 c/o Sandra Duncan One Meridian Crossing Suite 100 Minneapolis, MN 55423 Tel: (952) 979-5332 Fax: (952) 841-7666 WAMU Repurchase Obligation $2,583,632 c/o Rhonda Klansky 7255 Baymeadows Way Jacksonville, FL 32256 Tel: (904) 886-1505 Fax: (904) 866-1502 Deutsche Bank Repurchase Obligation $1,301,555 c/o Jennifer McGuinness 60 Wall Street New York, NY 10005 Tel: (212) 250-7675 Fax: (212) 797-0521 Bain & Company, Inc. Management Consulting $1,125,000 P.O. Box 11321 Boston, MA 02211 Tel: (617) 572-2000 Fax: (617) 572-2427 The Winter Group Repurchase Obligation $573,369 45 Rockfeller Plaza Suite 420 New York, NY 10111 U.S. Recordings, Inc. Trade/Services $352,296 2925 Country Drive St. Paul, MN 55117 Tel: (877) 272-5250 Fax: (651) 765-6418 Old Republic Title Trade/Services $339,295 Insurance Company 400 2nd Avenue South Minneapolis, MN 55402 Tel: (800) 328-4441 Fax: (612) 371-1191 Merrill Lynch Repurchase Obligation $301,637 c/o Molly McHugh 650 Third Avenue South Suite 1500 Minneapolis, MN 55402 Tel: (612) 336-7300 Fax: (612) 336-7414 HomEq Servicing Repurchase Obligation $280,850 c/o Audra Branco 4837 Watt Avenue, Suite 100 North Highlands, CA 95660 Tel: (916) 339-6172 Fax: (916) 339-6955 CSFB Repurchase Obligation $278,718 c/o Rick Hahn Eleven Madison Avenue 6th Floor New York, NY 10010-3629 Tel: (212) 538-1429 Fax: (212) 322-0883 Fannie Mae Repurchase Obligation $276,256 Lockbox 403207 6 Feldwood Drive College Park, GA 30349 Tel: (800) 752-1080 Fax: (202) 752-2062 and Fannie Mae Two Galleria Tower Trade/Services c/o Margaret Davis Underwriting Services 13455 Noel Road, Suite 600 Dallas, TX 75240-5003 HSBC Repurchase Obligation $192,716 Nations Holding Company Services $149,984 First American Credco Trade/Services $139,047 Land America Tax and Flood Trade/Services $115,980 United Guaranty Contract Underwriter $114,391 Services, Inc. FEDEX ERS Trade/Services $104,343 Reserve at Westchase, L.P. Landlord $102,174 Katmore Realty Ten, Ltd. Landlord $96,931 First American Flood Trade/Services $86,367 Data Services Landsafe Appraisal Services Trade/Services $84,212 Basepoint Analytics, LLC Services $81,745 Middleberg, Riddle & Gianna Professional Services $78,735 Interthinx/Appintelligence Trade/Services $77,192 Ross Real Estate, Ltd. Trade/Landlord $76,713 Interactive Trade/Services $73,707 Intelligence Inc. Irwin Home Equity Repurchase Obligation $71,807 Clear Capital.Com, Inc. Trade/Services $71,220 AIRTRAN HOLDINGS: Ends Merger Talks with Midwest Air Group ---------------------------------------------------------- AirTran Holdings Inc., the parent of AirTran Airways, disclosed that negotiations with Midwest Air Group Inc. have ended and AirTran's tender offer to purchase Midwest shares has expired. "We are disappointed that the Midwest board has rejected our enhanced offer," Joe Leonard, chairman and CEO of AirTran Airways, said. "We believe that a merger of AirTran and Midwest was a compelling strategic combination with similar fleets, complementary route networks, growth and advancement opportunities for employees and economic benefits to the communities we serve." "For the good of our shareholders and Crew Members, we have terminated negotiations and allowed our tender offer to expire," Mr. Leonard added. "At this time, we will focus our efforts on AirTran's strategic plan that has resulted in eight years of successful growth." "The Midwest board has chosen to ignore the overwhelming majority of shareholders' wishes to merge with AirTran, a partner with whom Midwest could have grown and become a national carrier, including our commitment to provide employment protection and more jobs for its employees and more choices for its customers,” Mr. Leonard stated. “Instead, the Midwest board has chosen a path that will benefit current senior management by selling out to a private equity firm and a so- called 'passive' investor whose involvement will surely raise antitrust concerns, casting doubt for shareholders on whether a transaction can, in fact, close.” “Furthermore, private equity investors are laser focused on generating short-term eturns and the only way to accomplish that goal is to slash costs by cutting back on service and eliminating jobs,” Mr. Leonard stated. “If the Midwest board is successful in selling the company to a private equity investor, the Midwest employees should be concerned about their job security and Midwest's customer service is sure to suffer.” Under the terms of the enhanced offer, AirTran proposed to acquire all Midwest common stock for $15.75 a share, based on the closing price of AirTran common stock on Aug. 10, 2007. The offer consisted of $9.50 in cash and 0.5842 shares of AirTran common stock for each Midwest share. The total equity value of the transaction would was in excess of $431 million. About Midwest Airlines Headquartered in Oak Creek, Wisconsin, Midwest Air Group Inc. (Amex: MEH) -- http://www.midwestairlines.com-- the parent company of Midwest Airlines, provides scheduled passenger service in the United States and internationally. It offers scheduled passenger service to destinations in the United States and regional scheduled passenger service to cities primarily in the Midwest and to Toronto, Canada. About AirTran Airways AirTran Holdings Inc., through its subsidiary AirTran Airways Inc. (NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily flights to 50 destinations. The airline's hub is at Hartsfield- Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel- efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its ratings on AirTran Holdings Inc. and its primary operating subsidiary, AirTran Airways Inc., including the 'B-' corporate credit rating on AirTran Holdings. As reported in the Troubled Company Reporter on Nov. 23, 2006, Moody's Investors Service confirmed its B3 Corporate Family Rating for AirTran Holdings Inc. and its Caa1 rating on the company's 7% Guaranteed Convertible Notes Due July 1, 2023, in connection with its implementation of its Probability-of-Default and Loss- Given-Default rating methodology for the Transportation sector. Moody's also assigned an LGD6 rating to those loans, suggesting noteholders will experience a 91% loss in the event of a default. AJAY SPORTS: Judge Shefferly Confirms Amended Chapter 11 Plan ------------------------------------------------------------- The Honorable Phillip J. Shefferly of the U.S. Bankruptcy Court for the Eastern District of Michigan confirmed Ajay Sports Inc. and its debtor-affiliates' Amended Chapter 11 Plan of Reorganization Plan Funding The Plan contemplates the sale of the Debtor's assets and must be completed by Sept. 30, 2007, unless extended by Comerica Bank in writing. Any sale of assets will be free of any claims, liens or interests. After Comerica's allowed secured claim is paid, the remaining proceeds from the sale will be distributed to the Debtor's other creditors. Treatment of Claims Under the Plan, Adminsitrative Claims will be paid in full. Holders of Priority Tax Claims will receive five deferred equal annual cash payments, plus interest. Each holder of Other Priority Claim will be paid the value of their claim. Secured Claims of Comerica, totaling $3,475,000 plus interest, will retain the liens securing its claim. The Debtor will continue to make adequate protection payments of $35,000 per month until the sale is complete. General Unsecured Creditors will receive a pro rata distribution under the Plan. Equity Interest will be cancelled on the effective date of the Plan. About Ajay Sports Inc. Headquartered in Farmington, Mich., Ajay Sports Inc. operates the franchise segment of its business through Pro Golf International, a 97% owned subsidiary, which was formed during 1999 and owns 100% of the outstanding stock of Pro Golf of America, and 80% of the stock of ProGolf.com, which sells golf equipment and other golf-related and sporting goods products and services over the Internet. The company and its affiliates filed for chapter 11 protection on Dec. 27, 2006 (Bankr. E.D. Mich. Case Nos. 06-529289 through 06- 529292). Richard F. Fellrath, Esq., at Fitzgerald & Dakmak, represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for protection from their creditors, they estimated assets less than $10,000 and debts between $1 million to $100 million. ALLISON TRANSMISSION: Postponed Offering Cues S&P's Neg. Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Allison Transmission Inc. to negative from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit and its 'BB-' senior secured ratings on the company and withdrew its 'B-' rating on the company's proposed $1.1 billion senior unsecured notes. The Carlyle Group and Onex Corporation acquired Allison from General Motors Corp. (B/Negative/B-3) in a leveraged buyout completed this week. The Indianapolis-based auto parts supplier has total balance sheet debt of $4.2 billion. The outlook revision reflects the postponement of the company's proposed offering of unsecured notes due to market conditions and their replacement with an unrated $1.1 billion bridge loan. Proceeds from the bridge loan, together with a $3.1 billion senior secured term loan which remains in place, were used to finance the acquisition from GM. "We expect the company's operating performance to remain strong despite a near-term decline in revenues and profitability due to the cyclical downturn in the commercial-truck market," said Standard & Poor's credit analyst Gregg Lemos Stein. If notes replace the bridge loan in the future, S&P would expect to review the outlook, taking into account the terms and conditions of the prospective refinancing and any other changes to Allison's business or financial prospects. AMERICAN REAL: Acquires $810 Mil. Depositary Units in Icahn Funds ----------------------------------------------------------------- American Real Estate Partners LP has acquired Carl C. Icahn's interests in the management company and general partners of the Icahn Funds, a group of private investment funds managed by Mr. Icahn. The purchase price for this transaction consists of $810 million of AREP Depositary Units plus a five-year contingent earn-out payable in additional Depositary Units based on AREP achieving specified net after-tax earnings from the fund management business. The additional payout of up to a maximum of $1.1 billion of Depositary Units under the earn-out is subject to achieving net after tax earnings from 2007, through 2011, of $3.9 billion from the fund management business. For the 12-months ended June 30, 2007, the Icahn Management Entities had an average of approximately $3.5 billion in third- party fee paying assets under management, which generated approximately $80 million of management fees and approximately $240 million in incentive income for a total of approximately $320 million in fees. There is approximately $5 billion of third- party fee paying assets under management. The typical third-party investor in the Icahn Funds is charged a 2.5% management fee and a 25% incentive allocation and is subject to an initial lock-up. “This transaction represents a transformational event for American Real Estate Partners, which will now be called Icahn Enterprises. The name change reflects the continued evolution of our business and its importance within my portfolio of holdings,” Mr. Icahn stated. AREP also intends to purchase approximately $700 million of limited partnership interests in the Funds on which it will not be required to pay management fees or incentive allocation. The Icahn Management Entities provide investment advisory and certain other management services to the Icahn Funds. The Icahn Management Entities do not provide investment advisory or other management services to any other entities, individual or accounts, and interests in the Icahn Funds are offered only to certain sophisticated and accredited investors on the basis of exemptions from the registration requirements of the federal securities laws and are not publicly available. “AREP has a strong balance sheet with cash and liquid investments of approximately $4.5 billion, pro forma for the sale of our gaming business,” Mr. Icahn concluded. “We intend to provide capital to grow our management companies, grow our existing businesses and make further acquisitions. Furthermore, going forward we will be in a position to capitalize on expected volatile market conditions, utilizing our expertise in activist investing both in equity and distressed securities. I believe that activist investing provides the best risk adjusted returns in all markets." In addition, Mr. Icahn has entered into a five-year employment agreement to serve as chairman of AREP and chief executive officer of the Icahn Management Entities. The agreement provides for a base salary of $900,000 per year and for substantial contingent bonus payments based on (a) returns on assets under management; and (b) our achieving non-hedge fund management related income over $400 million in any year. Mr. Icahn has also entered into a ten-year non-competition agreement. The transactions and Mr. Icahn's employment agreement were approved by the Special Committee of the independent directors of our general partner, and by the full board of directors. The Special Committee was represented by Debevoise & Plimpton LLP as its independent counsel. In addition, Sandler O'Neill & Partners, L.P. was retained by the Special Committee as its financial adviser. The Special Committee also retained Johnson & Associates, Inc. and BDO Seidman, LLP to advise on the terms of Mr. Icahn's employment agreement. About Icahn Funds The Icahn Funds were launched in November 2004 with approximately $1 billion in assets under management, of which $300 million was provided by Carl Icahn and his affiliated entities. Less than three years later, the Icahn Funds have grown to approximately $7 billion of committed capital, of which approximately $1.8 billion represents capital of Mr. Icahn and his affiliated entities. About American Real Estate Partners LP Headquartered in New York City, American Real Estate Partners LP (NYSE:ACP) -- http://www.arep.com/-- a limited partnership, is a diversified holding company engaged in a variety of businesses. The company's businesses currently include gaming, oil and gas exploration and production, real estate and home fashion. The company is in the process of divesting its Oil and Gas operating unit and their Atlantic City gaming property. The company owns a 99% limited partnership interest in American Real Estate Holdings LP. Substantially all of the company's assets and liabilities are owned by AREH and substantially all of the company's operations are conducted through AREH and its subsidiaries. American Property Investors, Inc., or API, owns a 1% general partnership interest in both the company and AREH, representing an aggregate 1.99% general partnership interest in the company and AREH. API is owned and controlled by Mr. Carl C. Icahn. * * * Moody's Investor Services placed Ba2 rating on American Real Estate Partners LP‘s long term corporate family and bank loan debt on August 2006. The outlook is stable. Standard And Poor's placed BB+ on its long term foreign and local issuer credit rating on August 2006. The outlook is stable. ARCADIA RESOURCES: Incurs $7.4 Mil. Net Loss in Qtr. Ended June 30 ------------------------------------------------------------------ Arcadia Resources Inc. reported on Aug. 9, 2007, its financial results for the first quarter ended June 30, 2007. Net loss for the fiscal first quarter of 2008 was $7.4 million, including approximately $4.9 million in non-cash charges. These non-cash charges consisted of: depreciation and amortization of $2.1 million; an impairment charge to certain long-lived assets of $1.9 million; an increase to the provision for doubtful accounts receivable of $538,000; and stock-based compensation of $499,000. Net loss for the year-ago first quarter was $158,000. Net revenues for fiscal first quarter 2008 increased $4.8 million or 13% to $42.4 million, compared to $37.6 million for the same quarter last year. The revenue increase partially reflected organic growth of approximately $1.3 million, or 4%, in the In- Home Health Services segment, which comprises approximately 74% of net revenues, as well as revenue from acquisitions made in other segments during fiscal 2007 to position the company for emerging opportunities in the health care market. EBITDA loss for the fiscal first quarter of 2008 was $2.2 million, of which $1.8 million was attributable to the company's clinic business. The fiscal 2008 first quarter results represent a sharp sequential improvement compared with net revenues of $38.4 million and a net loss of $39.2 million for the fourth quarter of 2007. "Arcadia Resources has entered fiscal 2008 as a stronger and more sharply focused company. We have improved the balance sheet through equity financing and debt restructuring, completed an acquisition that complements our retail pharmacy business, and streamlined our organization and cost structure," noted Marvin R. Richardson, president and chief executive officer. "Our goal for the balance of this year and beyond is to invest in and grow our proprietary pharmacy product, DailyMed(TM), and our profitable business segments, while continuing to explore further alternatives for improving the efficiency and productivity of our operations. We believe that the benefits of our actions should begin to be visible in the second and third quarters of fiscal 2008," Mr. Richardson added. At June 30, 2007, the company's consolidated financial statements showed $115.37 million in total assets, $55.33 million in total liabilities, and $60.04 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?224e Management Strategies — Update Subsequent to the end of fiscal 2007, the company's new management team began to implement a series of strategic initiatives to improve Arcadia Resources' financial performance, strengthen its capital base, and position its businesses to capture growth opportunities in the healthcare marketplace. An update to these key strategic initiatives is as follows: -- Restructuring/Cost Reduction. The company has closed several unprofitable facilities since March 31, including several Durable Medical Equipment (DME) locations, as well as several retail host site locations. Arcadia also has begun to transition and consolidate the corporate accounting and support functions to the Southfield, Michigan office. The company anticipates additional facility closures and the completion of the transition to Southfield during the next several months. These and other cost-control initiatives are expected to reduce overhead by approximately $5 million on an annualized basis, beginning in the fiscal 2008 second quarter. -- Equity Financing/Debt Restructuring. The company raised $13 million in equity financing in May 2007. A portion of the proceeds was used to pay down certain debt obligations and other current liabilities. Arcadia also restructured the $17 million promissory note payable to Jana Master Fund Ltd. With these two events, the company significantly improved its working capital position and strengthened the balance sheet compared to the previous quarter end. In addition, management has also recently undertaken the following initiatives: -- JASCORP LLC Acquisition. In July 2007, the company acquired JASCORP LLC, a subsidiary of The F. Dohmen Co. JASCORP is an industry leader in the pharmacy fulfillment software business. This acquisition will strengthen Arcadia's DailyMed(TM) growth and licensed pharmacy services model to retailers. It also is expected to contribute more than $2 million of incremental revenues annually, reduce the cost to provide licensed pharmacy services, and significantly improve operating margins on the licensed service model. -- Clinics Business Model. As part of its streamlining process, on Aug. 8, 2007, the company terminated an agreement to operate 18 existing non-emergency health care clinics in Michigan and Indiana. This will significantly reduce operating expenses for the company as a whole without a material impact to top line revenue. Specifically, in the first quarter of 2008, the clinic business represented $137,000 of revenues with an operating loss of $3.9 million. According to Mr. Richardson, "The delivery of health care services offered in non-traditional settings such as retail stores remains an important part of our company's growth strategy. Based on our experience and our analysis of this market segment, in the near future, we intend to remain in this space by selling similar clinic services to retailers under a licensed service model, on a fee for service basis. Retailers continue to look for ways to compete with the 'Big Box' clinic offerings as a means to drive in-store traffic. Our business model is better suited to offer our expertise and staffing as a service versus directly owning the clinic site. Subsequently, our interests become aligned with our partnered retailers — much like our pharmacy offering." Going Concern Doubt As reported in the Troubled Company Reporter on July 4, 2007, BDO Seidman LLP, in Troy, Michigan, expressed substantial doubt about Arcadia Resources Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended March 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations. About Arcadia Resources Headquartered in Southfield, Mich. Arcadia Resources, Inc. (AMEX: KAD) -- http://www.arcadiaresourcesinc.com/-- is a national provider of alternate site healthcare services and products, including respiratory and durable medical equipment; non-medical and medical staffing, including travel nursing. Through industry partnerships, the company is also establishing walk-in routine (non-emergency) medical clinics inside of retail stores. AREP CAR: Moody's Withdraws B2 Corporate Family Rating ------------------------------------------------------ Moody's Investors Service withdrew AREP Car Acquisition Corp.'s ratings that were initially assigned on May 11, 2007. The action follows the vote by Lear Corporation's shareholders on July 16, 2007 not to accept AREP's acquisition offer. Consequently, AREP's offer has expired and its acquisition financing is no longer required. Ratings withdrawn: -- Corporate Family, B2 -- Probability of Default, B2 -- Senior Secured Term Loan, B2 (LGD-3, 44%) -- Senior Secured Revolving Credit Facility, B2 (LGD-3, 44%) -- Outlook, Stable -- Speculative Grade Liquidity rating, SGL-2 Ratings on Lear Corporation are not affected by this action. AREP Car Acquisition Corp. was the entity established by American Real Estate Partners, L.P. to affect the consummation of its proposed acquisition and subsequent merger into Lear Corporation. ASSOCIATED MATERIALS: Earns $17 Mil. in Second Quarter 2007 ----------------------------------------------------------- Associated Materials Incorporated reported net income for the second quarter of 2007 of $17 million, compared to net income of $16.3 million for the same period in 2006. For the six months ended June 30, 2007, net income was $12.4 million compared to net income of $16.4 million for the same period in 2006. Net sales for the quarter ended June 30, 2007, were $338 million, a 3% decrease from net sales of $348.3 million for the same period in 2006. For the six months ended June 30, 2007, net sales were $556.1 million, or 8.5% lower than net sales of $607.6 million for the same period in 2006. Net sales decreased 3%, or $10.4 million, during the second quarter of 2007 compared to the same period in 2006 primarily due to lower sales volumes in the company's vinyl siding operations. During the second quarter of 2007 compared to the same period in 2006, vinyl window unit volumes increased by 2%, while vinyl siding unit volumes decreased by 12%. Gross profit in the second quarter of 2007 was $91.1 million, or 26.9% of net sales, compared to gross profit of $87.2 million, or 25% of net sales, for the same period in 2006. Selling, general and administrative expense increased to $53.2 million, or 15.8% of net sales, for the second quarter of 2007 versus $52.5 million, or 15.1% of net sales, for the same period in 2006. Selling, general and administrative expense for the quarter ended June 30, 2007 includes $1.2 million of transaction costs relating to an unsuccessful bid for an acquisition target. Income from operations was $37.8 million for the second quarter of 2007 compared to $34.9 million for the same period in 2006. Results for the Six Months Ended June 30 Net sales decreased by 8.5%, or $51.5 million, for the six months ended June 30, 2007, compared to the same period in 2006 primarily due to lower sales volumes across all product categories, predominately in the company's vinyl siding operations. Gross profit for the six months ended June 30, 2007 was $138.8 million, or 25% of net sales, compared to gross profit of $146.3 million, or 24.1% of net sales, for the same period in 2006. Selling, general and administrative expense decreased to $102.3 million, or 18.4% of net sales, for the six months ended June 30, 2007 versus $103.5 million, or 17% of net sales, for the same period in 2006. Selling, general and administrative expense for the six months ended June 30, 2007, includes $700,000 of separation costs related to the resignation of the company's former chief operating officer and $1.2 million of transaction costs relating to an unsuccessful bid for an acquisition target, while selling, general and administrative expense for the six months ended July 1, 2006 includes $2.1 million of separation costs related to the resignation of the company's former Chief Executive Officer. Income from operations was $36.4 million for the six months ended June 30, 2007 compared to $43 million for the same period in 2006. Tom Chieffe, president and chief executive officer, commented, "Despite the difficult macroeconomic conditions currently faced by the building products industry, our second quarter marked the highest quarterly adjusted EBITDA in Company history. We were able to increase our quarterly adjusted EBITDA through this market downturn in part due to the various cost reduction initiatives we have implemented across the entire business as well as by continuing to actively manage the relationship between selling prices and commodity costs." About Associated Materials Associated Materials Inc. - http://www.associatedmaterials.com/- Manufactures exterior residential building products, which are distributed through company-owned distribution centers and independent distributors across North America. AMI produces a broad range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing and railing. AMI is a privately held, wholly owned subsidiary of Associated Materials Holdings Inc., which is a wholly owned subsidiary of AMH Holdings Inc., which is a wholly owned subsidiary of AMH Holdings II Inc., which is controlled by affiliates of Investcorp S.A. and Harvest Partners Inc. * * * Moody's downgraded the ratings of Associated Materials Inc. and its holding company AMH Holdings Inc. AMH Holdings' corporate family rating and ratings on AMI's senior secured credit facilities were downgraded to B3 from B2, effective Jan. 19, 2006. Moody's said the ratings outlook is stable. ATRIUM VIEW: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: The Atrium View, LLC 200 Bailey Drive Stewartstown, PA 17363 Bankruptcy Case No.: 07-02478 Chapter 11 Petition Date: August 10, 2007 Court: Middle District of Pennsylvania (Harrisburg) Judge: Mary D. France Debtor's Counsel: Craig A. Diehl, Esq. 3464 Trindle Road Camp Hill, PA 17011-4436 Tel: (717) 763-7613 Fax: (717) 763-8293 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file the list of its 20 largest unsecured creditors. AVISTA CORP: Paying $0.15/Share Common Stock Dividend on Sept. 14 ----------------------------------------------------------------- Avista Corp.'s board of directors has declared a quarterly dividend of $0.15 per share on the company's common stock. A quarterly dividend of $1.73750 per share was declared on all outstanding shares of preferred stock Series K. The common and preferred stock dividends are payable Sept. 14, 2007, to shareholders of record at the close of business on Aug. 23, 2007. Headquartered in Spokane, Washington, Avista Corp. (NYSE: AVA) -– http://www.avistacorp.com/-- is an energy company involved in the production, transmission and distribution of energy well as other energy-related businesses. Avista Utilities is a company operating division that provides service to 346,000 electric and 306,000 natural gas customers in three Western states. Avista's primary non-regulated subsidiary is Advantage IQ -- http://www.advantageIQ.com/ * * * As reported in the Troubled Company Reporter on June 26, 2007, Moody's Investors Service placed all of the ratings of Avista Corp., including Ba1 senior unsecured under review for possible upgrade. B&R PROPERTY: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: B.&R. Property Management, Inc. dba B.&R. Construction Services 1030 North 5th Street Quincy, IL 62301 Bankruptcy Case No.: 07-71656 Type of business: The Debtor provides new home sales, residential building sites, and land development. See http://www.bandrproperties.com/ Chapter 11 Petition Date: August 11, 2007 Court: Central District of Illinois (Springfield) Judge: Mary P. Gorman Debtor's Counsel: E. Mont Robertson, Esq. 510 Maine Street 800 Quincy, IL 62301 Tel: (217) 223-6363 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Corn Belt Bank and Trust four mortgages on $1,191,675 Company 19 building lots and 4 single family residences and property of owned by others; value of security: $1,081,600 First Bankers Trust Co. residence under $209,381 1201 Broadway construction at 1904 Quincy, IL 62301 Fairview Drive, Mendon, IL; value of security: $102,000 Agri-Pump installation of $44,000 203 Richfield Road water mains in Liberty, IL 62347 subdivisions Sheila Jones refund on cancellation $39,000 of contract Christine Tysinger balance due on $33,000 agreement to buy back residence partially Grist Excavating road work in $31,000 subdivision Don and Louise Caley refund of deposit on $20,000 cancelled contract Vinson & Sill, Inc. plumbing services $10,100 Klingner & Associates, P.C. engineering services $9,800 Blick's Construction crane work $9,001 Sorrill Rentals office rent $7,200 Staples Credit Plan purchase of office $2,162 supplies Adams County Collector second installment $2,212 of 2006 real estate taxes (23 tax bills) Quincy Herald-Whig newspaper advertising $1,353 Home Depot purchase of materials $1,217 Capital One purchase of $463 material Porter & Swartz purchase of materials $395 at Lowe's BAY AREA: Case Summary & Three Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Bay Area Luxury Homes/El Vanada, LLC 171 Birch Street, Suite 4 Redwood City, CA 94062 Bankruptcy Case No.: 07-31024 Type of Business: The Debtor manages real estate property. Chapter 11 Petition Date: August 10, 2007 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Ignascio G. Camarena, II, Esq. Bustamante, O'Hara and Gagliasso 333 West San Carlos Street, 8th Floor San Jose, CA 95110 Tel: (408)977-1911 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sunseeker Investments, Inc. Promissory Note $400,000 171 Birch Street, Suite 4 Redwood City, CA 94062 Gregory Bock Promissory Note $130,000 171 Birch Street, Suite 4 Redwood City, CA 94062 Robert A. Johnston Promissory Note $130,000 171 Birch Street, Suite 4 Redwood City, CA 94062 BEAVER BROOK: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Beaver Brook Village, LLC 1105 Lakeview Avenue Dracut, MA 01826 Bankruptcy Case No.: 07-43103 Chapter 11 Petition Date: August 10, 2007 Court: District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtor's Counsel: William H. Harris, Esq. Harris & Dial, P.C. 65 Flagship Drive, Suite C North Andover, MA 01845 Tel: (978) 703-4975 Fax: (978) 777-3692 Total Assets: $12,019,803 Total Debts: $14,365,086 Debtor's List of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Beaver Brook Creditors Trust 101 Mill Street, $1,500,000 c/o Douglas E. Hausler, Esq. Dracut, MA and 1934 Secured: Lampert, Hausler and Lakeview Avenue, $11,500,000 Rodman, P.C. Dracut, MA Senior Lien: 10 North Road $11,150,000 Chelmsford, MA 01824 Independent Electric Supply 101 Mill Street, $401,619 c/o Rudolph Friedmann, Esq. Dracut, MA and 1934 Secured: 92 State Street Lakeview Avenue, $11,500,000 Boston, MA 02109 Dracut, MA Senior Lien: $12,656,000 Keith Gorman Loan $166,519 820 Methuen Street Dracut, MA 01826 Friend Lumber Trade Debt $138,378 Horner Millwork Corp. 101 Mill Street, $100,629 Dracut, MA and 1934 Secured: Lakeview Avenue, $11,500,000 Dracut, MA Senior Lien: $13,057,619 Better Cabinet 101 Mill Street, $100,000 Distributors, Inc. Dracut, MA and 1934 Secured: Lakeview Avenue, $11,500,000 Dracut, MA Senior Lien: $13,232,937 National Grid Utility Bill $82,748 Processing Center Environmental Strategies and $76,379 Management, Inc. Pavex, Inc. 101 Mill Street, $74,689 Dracut, MA and 1934 Secured: Lakeview Avenue, $11,500,000 Dracut, MA Senior Lien: $13,158,248 Mary Casey Loan $40,041 Keyspan Energy Delivery Utility Bill $37,222 E.L. Harvey & Sons, Inc. Trade Debt $17,173 Frank Provencher Insurance $19,372 Insurance Agency Polaris Engineering Corp. Trade Debt $17,827 Frank Gorman Loan $12,074 Harmon's Paint & Wallpaper Trade Debt $9,214 Almo's Flower and Trade Debt $8,774 Garden Center, Inc. Merrimack Valley Homes Loans 101 Mill Street, $6,000 Dracut, MA and 1934 Secured: Lakeview Avenue, $11,500,000 Dracut, MA Senior Lien: $12,650,000 Department of Environmental $6,000 Protection BLACK BEAR: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Black Bear Gypsum Supply, Inc. 13000 Automobile Boulevard, Suite 300 Clearwater, FL 33762 Bankruptcy Case No.: 07-07120 Type of Business: The Debtor manufactures gypsum products. See http://www.bbgypsum.com/ Chapter 11 Petition Date: August 11, 2007 Court: Middle District of Florida (Tampa) Debtor's Counsel: Michael C. Markham, Esq. Johnson Pope Bokor Ruppel & Burns LLP P.O. Box 1368 Clearwater, FL 33757 Tel: (727) 461-1818 Fax: (727) 443-6548 Estimated Assets: Unknown Estimated Debts: Unknown The Debtor did not file a list of its 20 largest unsecured creditors. CANARGO ENERGY: Earns $5.1 Million in Second Quarter Ended June 30 ------------------------------------------------------------------ Canargo Energy Corp. reported net income of $5.1 million and an operating loss from continuing operations of $504,000, on oil and gas sales of $2.9 million for the second quarter ended June 30, 2007, compared with a net loss of $2.7 million and an operating loss of $2.7 million, on oil and gas sales of $1.3 million for the same period ended June 30, 2006. The increase in operating revenues is attributable to higher sales volumes achieved from the Ninotsminda Field in the second quarter of 2007 partially offset by a lower price per barrel realized by the company in the period. Ninotsminda Oil Company Limited ("NOC") sold 48,095 barrels of oil for the three month period ended June 30, 2007, compared to 21,059 barrels of oil for the three month period ended June 30, 2006. Results for the quarter ended June 30, 2007, included net income from discontinued operations, net of taxes and minority interest for the three month period ended June 30, 2007, of $13.8 million, compared to net income from discontinued operations of $1.6 million for the three month period ended June 30, 2006, due to the activities of Tethys and CSL. The increase in net income from discontinued operations is attributable to an unrealized gain on Tethys securities held for sale of $15.6 million that was recorded during the period through to the Tethys initial public offering date of June 27, 2007. The decrease in operating loss is attributable to increased operating revenues, reduced field operating expenses, direct project costs and selling, general and administration costs partially offset by increased depreciation, depletion and amortization in the period. Other expense increased to $8.1 million for the three month period ended June 30, 2007, from $1.6 million for the three month period ended June 30, 2006, primarily as a result of the loss on debt extinguishment of $6.5 million arising from the issue of an aggregate of 16,111,111 compensatory warrants to the Noteholders in connection with exchange/conversion of $15,000,000 of long term debt into Tethys shares and the write off of the portion of debt discount related to $5.0 million of the debt exchange/conversion. The loss from continuing operations of $8.6 million for the three month period ended June 30, 2007, compares to a net loss from continuing operations of $4.3 million for the three month period ended June 30, 2006. At June 30, 2007, the company's consolidated balance sheet showed $123.5 million in total assets, $37.4 million in total liabilities, $2.1 million in temporary equity, and $84.0 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2252 Going Concern Doubt As reported in the Troubled Company Reporter on March 26, 2007, LJ Soldinger Associates LLC expressed substantial doubt about Canargo Energy Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has incurred net losses since inception and may not have sufficient funds to execute its business plan. About CanArgo Energy CanArgo Energy Corp. (AMEX: CNR) -- http://www.canargo.com/ -- is an oil and gas exploration and production company operating in the oil and gas provinces of the former Soviet Union. CanArgo is currently focused primarily on Georgia in the Caucasus, and more recently has become involved in the major hydrocarbon producing country of Kazakhstan. In Georgia, the company has been actively exploring for new deposits of oil and gas, and is currently appraising what could be a substantial new discovery of oil. CATUITY INC: Nasdaq Says Common Stock Bid Price Below Criteria -------------------------------------------------------------- Catuity Inc. received a letter from The Nasdaq Stock Market indicating that the bid price of its common stock for the last 30 consecutive business days had closed below the minimum $1 per share required for continued listing under Nasdaq Marketplace Rule 4310(c)(4). Pursuant to Nasdaq Marketplace Rule 4310(c)(8)(D), the company was provided an initial period of 180 calendar days, or until Jan. 29, 2008, to regain compliance. The letter states the Nasdaq staff will provide written notification that the company has achieved compliance with Rule 4310(c)(4) if at any time before Jan. 29, 2008, the bid price of the company's common stock closes at $1 per share or more for a minimum of 10 consecutive business days, although the letter also states that the Nasdaq staff has the discretion to require compliance for a period in excess of 10 consecutive business days, but generally no more than 20 consecutive business days, under certain circumstances. If the company cannot demonstrate compliance with Rule 4310(c)(4) by Jan. 29, 2008, the Nasdaq staff will determine whether the company meets The Nasdaq Capital Market initial listing criteria set forth in Nasdaq Marketplace Rule 4310(c), except for the bid price requirement. If the company meets the initial listing criteria, the Nasdaq staff will notify the company that it has been granted an additional 180 calendar day compliance period. If the company is not eligible for an additional compliance period, the Nasdaq staff will provide written notice that the company's securities will be delisted. At that time, the company may appeal the Nasdaq staff's determination to delist its securities to a Listing Qualifications Panel. About Catuity Inc. Headquartered in Charlottesville Virginia, Catuity Inc. (NasdaqCM: CTTY) (ASX: CAT) (ASX: CATN) -- http://www.catuity.com/-- is a loyalty and gift card processor targeting the needs of chain retailers and their partners. The company offers member-based loyalty programs at the point-of-sale and gift card programs utilizing a hosted, application service provider based system that enables the processing of member-based loyalty programs that can deliver customized discounts, promotions, rewards and points-based programs. The system also enables customizable gift card programs that work on a retailer's payment terminals and electronic cash registers via their internal store networks. These programs are designed to help retailers improve customer retention, add new customers and increase the average amount spent by customers. Going Concern Doubt BDO Seidman LLP, in Troy, Michigan, expressed substantial doubt about Catuity Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and substantial accumulated deficit. CELL THERAPEUTICS: June 30 Balance Sheet Upside-Down by $102 Mil. ----------------------------------------------------------------- Cell Therapeutics Inc. on Aug. 8, 2007, its financial results for the quarter and six months ended June 30, 2007. Cell Therapeutics' consolidated balance sheet at June 30, 2007, showed $89.6 million in total assets, $174.6 million in total liabilities, $5.2 million in series A convertible preferred stock, and $11.9 million in series B convertible preferred stock, resulting in a $102.1 million total stockholders' deficit. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $54.5 million in total current assets available to pay $75.9 million in total current liabilities. Net loss attributable to common shareholders for the quarter totaled $27.9 million compared to a net loss attributable to common shareholders of $20.5 million for the same quarter in 2006. For the six months ended June 30, CTI posted a net loss attributable to common shareholders of $56.6 million compared to $72.4 million in 2006. The net loss attributable to common shareholders for the six months ended June 30, 2006, included $24.5 million in make-whole interest expense as well as an $8.0 million gain on the exchange of convertible notes. The company ended the quarter with $43.8 million in cash and cash equivalents, securities available-for-sale, and interest receivable before taking into account the $20.25 million in gross proceeds received from its Series C financing in July. "The recent acquisition of Systems Medicine Inc. (Smi) is the first of two steps in strengthening our product pipeline and repositioning CTI to enter the commercial oncology market," said James A. Bianco, M.D., president and chief executive officer of CTI. "We are on track for completing the second step, acquiring a marketed product to re-establish our commercial efforts in the blood-related cancer market as well as hiring an industry veteran to lead our commercial operations this quarter. Recent Events -- Announced acquisition of SMi, leveraging SMi's partnerships and systems biology approach to cancer therapy, bringing renowned cancer drug development expertise and industry veterans to CTI, and adding a phase II drug candidate, Brostallicin, to CTI's pipeline -- Raised approximately $37.2 million in gross proceeds from the sale of Series B 3% Convertible Preferred Stock and warrants -- Announced interim results of pixantrone combination therapy, known as CPOP-R, in the RAPID (PIX203) clinical trial, which demonstrated effectiveness equivalent to standard therapy with reduced severe toxicities, including heart damage, compared to the CHOP-R treatment regimen -- Reported that XYOTAX9TM) (paclitaxel poliglumex, CT-2103) is more cost effective with fewer side effects compared to gemcitabine or vinorelbine and on the impact of estradiol in non-small cell lung cancer clinical trials at the 2007 Annual Meeting of the American Society of Clinical Oncology (ASCO) -- Announced the appointment of former Amgen-Immunex executives to the management team of its Aequus BioPharma Inc. subsidiary -- Obtained authorization of share increase at special meeting of shareholders in April Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2260 Going Concern Doubt The company's management says the company has incurred losses since inception. The company has approximately $55.9 million in principal due on its convertible subordinated and senior subordinated notes in June 2008 and the company's existing cash and cash equivalents, securities available-for-sale and interest receivable is not sufficient to repay these notes and to fund the company's planned operations for the next twelve months. The company's management believes that these factors raise substantial doubt about the company's ability to continue as a going concern. About Cell Therapeutics Based in Seattle, Cell Therapeutics Inc. (NasdaqGM: CTIC) -- http://cticseattle.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. CLAYTON WILLIAMS: Offers to Sell Various Assets to Reduce Debt -------------------------------------------------------------- Clayton Williams Energy Inc. contracted with the Oil & Gas Clearinghouse to offer for sale its production in the South Louisiana area, the majority of which is located in Plaquemines Parish. The company operates over 30 wells in the area, with a combined average net production of about 35,000 Mcf of gas per day and 1,600 barrels of oil per day. The company is also offering for sale two 2,000 HP drilling rigs that are currently under construction. To date, the company has invested about $23 million in these rigs. In addition, Larclay JV, a joint venture with Lariat Services Inc., has offered for sale both of its 2,000 HP rigs. The remaining ten drilling rigs in the Larclay fleet are actively drilling for either another operator or the company. If adequate consideration is received for these assets, the company intends to use the net proceeds from the sales to reduce the balance outstanding on its revolving bank credit facility. Larclay JV will also reduce its indebtedness with any net proceeds received upon the sale of its drilling rigs. Exploration and Development Activities Clayton Williams provided an update on its exploration and development activities by area. North Louisiana The company continues to be encouraged by the results of its drilling program in the Terryville prospect in Lincoln Parish, where it has drilled a total of 11 wells in the Cotton Valley/Gray sand intervals since mid-2006. Of the total wells drilled, five are currently producing at a combined daily rate of 12,300 Mcf gross (7,640 net) of gas and 270 barrels gross (172 net) of oil. In addition, two wells have been drilled and are in the process of being completed. The company is currently drilling three development wells in the prospect and plans to drill up to seven additional development wells this year. As previously announced in June 2007, the company temporarily abandoned the David Barton #1, an exploratory well in its Winnsboro prospect in Richland Parish prior to reaching the target interval. Based on its geological evaluation, the company recorded a pre-tax charge of $8.6 million related to the abandonment of this well in the second quarter of 2007. The company may drill an offset to the Barton well in late 2007 or 2008 in order to test the pressured Bossier interval in this area. The company has about 188,000 acres leased for Bossier drilling in North Louisiana. "We are pleased with the recent Cotton Valley/Gray sand successes in the Terryville area and remain hopeful about our Bossier prospects in North Louisiana, as well," stated Clayton W. Williams, Jr., the company's president and chief executive officer. East Texas Bossier The company continues to drill the Big Bill Simpson #1, a 19,000- foot exploratory well in Leon County (70% working interest), and the Margarita #1, a 20,000-foot exploratory well in Robertson County (100% working interest), both targeting the Bossier formation. Both wells have set intermediate casing and are expected to reach total depth in the last half of 2007. Depending upon drilling results of these two wells, the company may begin drilling operations on additional East Texas Bossier wells in 2007. Other The company currently plans to keep one rig actively drilling developmental wells in the Permian Basin. In addition, the company has initiated an in-fill drilling program on its core acreage block in the Austin Chalk (Trend) area and plans to keep one rig continuously working in this area for the near term. About Clayton Williams Clayton Williams Energy Inc. (NasdaqGM: CWEI) -- http://www.claytonwilliams.com/-- is an independent energy company located in Midland, Texas. It holds interests primarily in the Permian Basin, Louisiana; and the Austin Chalk and Cotton Valley Reef of Texas. * * * As reported in the Troubled Company Reporter on April 26, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on oil and gas exploration and production company Clayton Williams Energy Inc. and revised the outlook on the company to negative from stable. As of Dec. 31, 2006, Clayton Williams had roughly $430 million of debt outstanding. "The negative outlook reflects our concerns about Clayton Williams' ability to improve operating results and reduce its heavy debt burden in the near term," said Standard & Poor's credit analyst Paul Harvey. COMM 2004-LNB3: S&P Affirms Low-B Ratings on Six Cert. Classes -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from COMM 2004-LNB3. Concurrently, S&P affirmed its ratings on 17 classes from the same series. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades also reflect the defeasance of the collateral securing 17% ($218.5 million) of the pool. As of the July 10, 2007, remittance report, the trust collateral consisted of 93 mortgage loans with an outstanding principal balance of $1.28 billion, down slightly from 94 loans totaling $1.34 billion at issuance. The master servicer, Midland Loan Services Inc., reported primarily year-end 2006 financial information for 99% of the pool, which excludes the aforementioned defeasance as well as two credit tenant lease loans ($11.4 million). Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.85x, up from 1.63x at issuance. Although all of the loans in the pool are current, one loan ($4.4 million) is with the special servicer, CWCapital Asset Management. The trust has experienced no losses to date. The top 10 exposures secured by real estate have an aggregate outstanding balance of $653.1 million (51%) and a weighted average DSC of 2.14x, up significantly from 1.87x at issuance. However, two of the top 10 exposures are on the master servicer's watchlist and are discussed below. Standard & Poor's reviewed the property inspection reports provided by Midland for the assets underlying the top 10 exposures, and all were reported to be in "good" or "excellent" condition. Five exposures exhibited credit characteristics consistent with those of investment-grade obligations at issuance and continue to do so. Details are as follows: -- The largest exposure in the pool, Garden State Plaza, is secured by 1.5 million sq. ft. of a 2.0 million-sq.-ft. super-regional mall in Paramus, New Jersey. The loan is a $520 million interest-only A note that is split into four pari passu pieces, of which $130 million (10%) is the trust balance. The mall's performance has been stable since issuance. Reported occupancy was 99% and DSC was 2.62x as of year-end 2006, compared with occupancy of 98% and a DSC of 2.36x at issuance. -- The second-largest exposure in the pool, 731 Lexington Avenue-Bloomberg Headquarters, is secured by a 694,600- sq.-ft. class A office condominium interest in a 1.4 million-sq.-ft. property in Manhattan. The property is encumbered by a $301.7 million A note that is split into four pari passu pieces, of which $120.1 million (9%) is the trust balance. In addition, there is an $86 million B note held outside the trust. Reported DSC was 2.79x as of year-end 2006, and occupancy was 100% as of April 2007. The master servicer reported a 75% improvement in the net cash flow since issuance due to significantly higher revenue, which reflects the full lease-up of its single tenant. -- The third-largest exposure in the pool, DDR-Macquarie portfolio, has an interest-only A note with a whole-loan balance of $172.9 million. The note is split into four pari passu pieces, of which $75 million (6%) is the trust balance. In May 2007, two of the properties securing the loan were released for $42.1 million, which was used to pay down the floating-rate note component. The remaining real estate collateral securing this loan includes 19 anchored community shopping centers located across five states. Standard & Poor's underwritten NCF has decreased since issuance due to a decline in revenue. Combined occupancy was 91% and DSC was 2.73x as of year-end 2006. The DDR-Macquarie portfolio loan was placed on the master servicer's watchlist because an anchor tenant at one of the 19 remaining properties vacated its space. The borrower is actively marketing the space. -- The fourth-largest exposure in the pool, Tysons Corner Center, has a trust balance of $61.3 million (5%) and a whole-loan balance of $333.5 million. The whole loan consists of an A note that is split into four pari passu pieces. The loan is secured by 1.6 million sq. ft. of a 2.3 million-sq.-ft. super-regional retail mall in McLean, Virginia. Standard & Poor's underwritten NCF has increased by 21% since issuance. The property reported a DSC of 3.10x and occupancy of 98% as of Dec. 31, 2006. -- The AFR/Bank of America portfolio has a whole-loan balance of $375.8 million. The loan consists of a $290.4 million A note that is split into six pari passu pieces, of which $17.1 million (1%) is the trust's balance. The properties in the portfolio are also encumbered by an $85.4 million B note that is represented by the S-AFR1, S-AFR2, S-AFR3, and S-AFR4 nonpooled certificates in GMAC Commercial Mortgage Securities Inc.'s series 2003-C3; S&P affirmed its ratings on these certificates on Aug. 1, 2007. The raked certificates derived 100% of their cash flows from the B note. To date, the collateral for $71 million of the whole-loan balance has been defeased, $3.2 million of which represents the trust's portion of the outstanding loan balance. The remaining real estate collateral securing this loan includes 122 office complexes and retail bank branches totaling 6 million sq. ft. in various locations throughout the U.S. While the AFR/Bank of America portfolio's operating performance has remained stable, operating expenses have exceeded Standard & Poor's underwriting expectations. This has been mitigated, in part, by the defeasance noted above. In addition, S&P expect additional collateral will be defeased by year-end 2007. DSC and occupancy were reported at 2.02x and 91%, respectively, as of March 2007. The sole asset with the special servicer, Broadway Place, is a 72- unit multifamily apartment complex in Myrtle Beach, South Carolina, which is encumbered by a $4.4 million loan that is current. The loan was transferred to CWCapital in June 2005 due to a monetary default. The loan was fully reinstated in May 2007 and is scheduled to be returned to the master servicer as early as next month following the resolution of an outstanding insurance claim issue and the borrower fulfilling all of its payment obligations. The master servicer reported 12 loans totaling $215.3 million (17%) on the watchlist. The DDR-Macquarie portfolio and one other top-10 exposure together represent approximately 59% ($128 million) of the loans on the watchlist. The sixth-largest exposure, Equity Industrial Partners portfolio, is secured by five industrial/office buildings totaling 1.96 million sq. ft. in Plainfield, Connecticut, and various cities in Massachusetts. The $53 million (4%) loan is on the watchlist due to a decrease in DSC to 1.07x as of December 2006 from 1.31x at issuance. S&P attribute the decrease to low occupancy at one of the properties. Combined occupancy for the portfolio was 95% as of April 2007. Standard & Poor's stressed various assets in the mortgage pool as part of its analysis, including those with the special servicer, on the watchlist, or otherwise considered credit impaired. The resultant credit enhancement levels adequately support the raised and affirmed ratings. Ratings Raised COMM 2004-LNB3 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ---------------- B AA+ AA 12.81% C AA AA- 11.50% D A+ A 9.28% Ratings Affirmed COMM 2004-LNB3 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ---------------- A-1 AAA 15.94% A-1A AAA 15.94% A-2 AAA 15.94% A-3 AAA 15.94% A-4 AAA 15.94% A-5 AAA 15.94% E A- 7.32% F BBB+ 6.14% G BBB 5.10% H BBB- 4.18% J BB+ 3.27% K BB 2.74% L BB- 2.48% M B+ 2.09% N B 1.70% O B- 1.31% X AAA N/A N/A - Not applicable. COMMUNICATIONS & POWER: Completes $22MM Buyout of Malibu Research ----------------------------------------------------------------- Communications & Power Industries Inc. has completed its acquisition of Malibu Research Associates Inc. Under the terms of the acquisition, CPI, a subsidiary of CPI International Inc., purchased all outstanding common stock of Malibu Research Associates, a privately held company, for approximately $22 million in cash. The acquisition was funded entirely from CPI's cash on hand. CPI has agreed to make up to $15 million in additional earnout payments, which are contingent upon the achievement of certain financial objectives over the three years after the acquisition. Malibu Research Associates will remain in its California headquarters, where it will operate as an independent division of CPI. The division manager of Malibu Research Associates will report directly to Bob Fickett, president and chief operating officer of CPI. The acquisition will expand CPI's product offering to both new and existing customers in the radar, electronic warfare and communications markets. Malibu Research Associates' customers include major aerospace and defense contractors and government agencies. Its current programs include advanced antenna solutions for the airborne and ground nodes of the tactical common data link (TCDL) network for various platforms, including UAVs. TCDL is a high- bandwidth digital data link that transmits and receives real-time command and control, intelligence, surveillance and reconnaissance data between manned and unmanned airborne platforms and their associated ground-based and ship-based terminals. "We look forward to working with the team at Malibu Research Associates to manufacture and distribute their cutting-edge radar and communications products using CPI's established production capabilities and extensive global sales channels," Joe Caldarelli, chief executive officer of CPI, said. "This acquisition furthers CPI's goal of providing complementary, technologically advanced products and services to our existing markets and customers, while gaining innovative technology and exciting opportunities for future growth." The acquisition is expected to be accretive in fiscal 2008, excluding the impact of purchase accounting, and increasingly accretive in fiscal 2009. About Malibu Research Associates Inc. Headquartered in Camarillo, California, Malibu Research Associates Inc. -- http://www.maliburesearch.com/-- designs and manufactures advanced antenna systems for radar, radar simulators and telemetry systems, well as for strategically vital data links used in ground, airborne, unmanned aerial vehicles and shipboard systems. About CPI International Inc. Headquartered in Palo Alto, California, CPI International Inc. (Nasdaq: CPII) -- http://www.cpii.com/-- is the parent company of Communications & Power Industries Inc., that provides microwave, radio frequency, power and control solutions for critical defense, communications, medical, scientific and other applications. Its wholly owned subsidiary, Communications & Power Industries, Inc. develops, manufactures and distributes products used to generate, amplify and transmit high-power/high-frequency microwave and radio frequency signals and/or provide power and control for various applications. * * * AS reported in the Troubled Company Reporter on July 23, 2007, Standard & Poor's Ratings Services affirmed its ratings on Communications & Power Industries Inc. and its parent, CPI International Inc., including the 'B+' corporate credit rating on both entities. The outlook is stable. CONSUMERS ENERGY: Paying Preferred Stock Dividends on Oct. 1 ------------------------------------------------------------ The board of directors of Consumers Energy, the principal subsidiary of CMS Energy, has declared regular quarterly dividends on both series of the company's preferred stock. These dividends are payable Oct.1, 2007 to shareholders of record Sept. 6, 2007: a) $1.04 per share on the $4.16 stock (NYSE: CMS_pa); and b) $1.125 per share on the $4.50 stock (NYSE: CMS_pb). Also, a dividend of $0.96875 per security on CMS Energy's Quarterly Income Preferred Securities (NYSE: CMS_pz) is payable Oct. 15, 2007, to holders of record on Sept. 30, 2007. CMS Energy will pay the trustee the interest on related debentures to cover the dividend. Headquartered in Jackson, Michigan, Consumers Energy Company (NYSE: CMS-PA, CMS-PB) -- http://www.consumersenergy.com/-- is a combination of electric and natural gas utility that serves more than 3.5 million customers in Michigan's Lower Peninsula. * * * As reported in the Troubled Company Reporter on March 14, 2007, Moody's Investors Service upgraded the rating on Consumers Energy's preferred stock to 'BB+' from 'BB-'. CORSO BROTHERS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Corso Brothers Construction Corp. 2434 South 10th Street Philadelphia, PA 19148-3624 Bankruptcy Case No.: 07-14658 Type of Business: The Debtor is a quality home builder. See http://www.corsobrothers.com/ Chapter 11 Petition Date: August 10, 2007 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Stephen Raslavich Debtor's Counsel: Albert A. Ciardi, III, Esq. Ciardi & Ciardi, P.C. One Commerce Square 2005 Market Street, Suite 1930 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 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. CROWN MEDIA: June 30 Balance Sheet Upside-Down by $588 Million -------------------------------------------------------------- Crown Media Holdings Inc. had total assets of $749.4 million, total liabilities of $1.3 billion, and total stockholders' deficit of $588 million as of June 30, 2007. The company held cash equivalents of $6.9 million and $10.8 million as of June 30, 2007, and 2006, respectively. Operating Results The compay had net loss for the three month period ended June 30, 2007, totaled $43.7 million, compared to $227.4 million in the second quarter of 2006. Cash provided in operating activities totaled $4.7 million for the second quarter of 2007, compared to $2 million for the same period last year. Crown Media reported revenue of $55.9 million for the second quarter of 2007, an 11% increase from $50.5 million for the second quarter of 2006. Subscriber fee revenue in the second quarter increased 2% to $6.5 million, from $6.4 million in the prior year's quarter, as a result of a net effective rate that was higher on average and an increase in the number of subscribers under certain new and existing agreements. Advertising revenue increased 13% to $49.3 million during the quarter, from $43.5 million in the second quarter of 2006, reflecting higher advertising rates, offset in part by a growth in the company's audience deficiency reserve. Crown Media did not have licensing fees from our film library during the quarter ended June 30, 2007, as we sold our film assets in December 2006. Licensing fees for our film library were $518,000 during the prior year's quarter. The net loss for the six month period ended June 30, 2007, totaled $83.9 million, compared to $274.7 million in the same period of 2006. Cash used in operating activities totaled $8.1 million for the six months ended June 30, 2007, compared to $18.4 million for the same period last year. Crown Media reported revenue of $109.5 million for the six months ended June 30, 2007, a 15% increase from $95.5 million for the same period of 2006. Subscriber fee revenue for the six months ended June 30, 2007, increased 11% to $14 million, from $12.6 million in the prior year's period, as a result of higher net effective rates on average and an increase in the number of subscribers. Advertising revenue increased 16% to $95.3 million during the six months ended June 30, 2007, from $81.9 million for the same period of 2006, reflecting higher advertising rates. We did not have licensing fees from Crown Media's film library during the six months ended June 30, 2007, as Crown Media sold its film assets in December 2006. Licensing fees for our film library were $788,000 during the prior year's period. Management's Comments "I am pleased to report that the second quarter delivered continued strength in our core business fundamentals," remarked Henry Schleiff, president and chief executive officer of Crown Media. "We experienced significant subscriber expansion, and now stand at over 83 million subs, the appeal of and demand for our original programming and family friendly series continues to place us among the top-rated cable channels, and advertisers in growing numbers are rewarding us for the unique niche that Hallmark Channel has with our increasingly important demographic of women, 25-54. "This month marks the sixth anniversary since the Channel's launch in August 2001. It has been a remarkable journey, going from a part-time channel with 33 million subscribers, ranked twenty-ninth in Prime Time ratings to a top-ten rated cable channel for the 2007 year to date with over 83 million subscribers. Since 2001, Hallmark Channel has been America's fastest growing cable network and one of the most successful launches in television history. Continued strong demand from advertisers and an ambitious slate next year of 30 original programming events will help drive our continued success." About Crown Media Headquartered in Studio City, Calif., Crown Media Holdings Inc. (NASDAQ: CRWN) -- http://www.crownmediaholdings.com/-- currently operates and distributes the Hallmark Channel in the U.S. to over 82 million subscribers. The program service is distributed through 5,300 cable systems and communities as well as direct-to- home satellite services across the country. Significant investors in Crown Media Holdings include: Hallmark Entertainment Holdings Inc., a subsidiary of Hallmark Cards Incorporated, Liberty Media Corp., and J.P. Morgan Partners (BHCA) LP, each through their investments in Hallmark Entertainment Investments Co.; VISN Management Corp., a for-profit subsidiary of the National Interfaith Cable Coalition; and The DIRECTV Group Inc. DANJO AUTOMOTIVE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Danjo Automotive Corp. 43-43 Northern Boulevard Long Island City, NY 11101 Bankruptcy Case No.: 07-44323 Type of business: The Debtor is an auto dealer. Chapter 11 Petition Date: August 10, 2007 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Eric J. Snyder, Esq. Siller Wilk, L.L.P. 675 Third Avenue, 9th Floor New York, NY 10017 Tel: (212) 421-2233 Fax: (212) 752-6380 Total Assets: $5,647,406 Total Debts: $9,718,941 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ford Motor Creditor value of security: $7,735,000 Omni Plaza $5,000,000 333 Earle Ovington Boulevard Uniondale, NY 11553 Joel W. Tabas, Trustee $925,000 c/o Robert W. Curtis & Associates 155 Duane Street New York, NY 10013 Automotive Protection Corp. $300,000 6010 Atlantic Boulevard Norcross, GA 30071 P.&A. Pellarin Associates $200,000 Saso, L.L.C. $116,000 North Fork Bank $100,000 Brian S. Behar, Esq. $20,000 E.&M. Distributors $11,142 Lojack $10,825 T.M.&T. Services $6,876 Royal Auto Center, Inc. $6,439 North Star Auto Diagnostic $5,364 Dean's Auto Body, Inc. $5,208 C.S. Auto Sunroofs, Inc. $3,600 Mitsubishi Motors North America $3,452 Dial-A-Balloon $3,077 Gasgo Petroleum $2,625 C.Y. Prisyon $2,602 Dentmann $1,720 White Gold Auto Transport $1,625 DENNY'S CORP: M. Jenkins Leaves SVP and Chief Mktg. Officer Posts ----------------------------------------------------------------- Denny's Corporation and Margaret L. Jenkins, senior vice president, marketing and chief marketing officer of the company, agreed that Ms. Jenkins' employment with the company would terminate effective Aug. 31, 2007. In connection with her termination the company, through its subsidiary Denny's Inc., and Ms. Jenkins entered into a separation agreement, the material terms of which include, in exchange for her complete release of any and all claims against the company and her agreement to a 24 month non-compete and no solicitation provision: i. a lump sum severance payment by the company to Ms. Jenkins in the amount of $1,338,150 representing 200% of her current base salary, target annual incentive bonus and car allowance; ii. the immediate vesting of all stock option awards from the company to Ms. Jenkins and the extension to Ms. Jenkins of the right to exercise her vested stock options for the lesser of the remaining term of the stock option or 36 months; and iii. a one-time payment from the company to Ms. Jenkins equal to, for a 24 month period, the difference between the COBRA rate for continuation of the company's group health benefits and the current active employee group health benefit premium rate. About Denny's Corporation Headquartered in Spartanburg, South Carolina, Denny's Corporation (Nasdaq: DENN) -- http://www.dennys.com/-- is a full-service family restaurant chain in the U.S., with 521 company-owned units and 1,024 franchised and licensed units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. * * * Denny's Corp. carries Standard & Poor's 'B+' Long Term Foreign Issuer and 'B+' Long Term Local Issuer ratings. DIRECT INSITE: Earns $617,000 in Second Quarter Ended June 30 ------------------------------------------------------------- Direct Insite Corp. reported that net income increased 173% to $617,000 for the quarter ended June 30, 2007, from $226,000 for the quarter ended June 30, 2006. Net income increased 431.6% to $1,018,000 for the six months ended June 30, 2007 compared to a net loss of $307,000 for the six months ended June 30, 2006. Revenue from recurring ASP IOL services showed strong growth, increasing 20.5% to $1,895,000 for the three months ended June 30, 2007 compared to recurring revenue of $1,573,000 for the three months ended June 30, 2006. For the six months ended June 30, 2007 recurring revenue grew 13.7% to $3,559,000 compared to recurring revenue of $3,131,000 for the same period in 2006. Total revenue for the second quarter 2007 was $2,580,000, a 17.5% increase over revenue of $2,196,000 in the second quarter of 2006. Total revenue for the six months ended June 30, 2007, was $4,834,000, a 14.8% increase over revenue of $4,211,000 for the first six months of 2006. "Our strong results in the first half of 2007 demonstrate the breadth and depth of our global capabilities and the continued success of our business strategy," said James A. Cannavino, Chairman and CEO of Direct Insite. "Continued acceptance and deployment of our services across current and new customers, and increasing recurring revenue streams, provides a solid base for further growth," said Mr. Cannavino. Cash flows from continuing operations improved 416.7% to $1,731,000 for the six months ended June 30, 2007 compared to cash flows from continuing operations of $335,000 for the same period in 2006. The company reported total assets of $3.7 million, total liabilities of $6.3 million, and total stockholders' deficit of $2.6 million as of June 30, 2007. Full-text copies of the company's financial statements are available for free at http://researcharchives.com/t/s?2269 About Direct Insite Headquartered in Bohemia, New York, Direct Insite Corp. (OTC BB: DIRI.OB) -- http://www.directinsite.com/-- provides financial supply chain automation across Procure-to-Pay and Order- to-Cash processes. The company's global eInvoice Management services automate complex manual business processes such as invoice validation, order matching, consolidation, dispute handling, and e-payment processing. Direct Insite solutions are used by more than 7,000 corporations across 62 countries, 15 languages and multiple currencies. ENCYSIVE PHARMA: June 30 Balance Sheet Upside-Down by $129.3 Mil. ----------------------------------------------------------------- Encysive Pharmaceuticals reported on Aug. 6, 2007, its financial results for the second quarter ended June 30, 2007. Encysive Pharmaceuticals's consolidated balance sheet at June 30, 2007, showed $90.7 million in total assets, $220.0 million in total liabilities, resulting in a $129.3 million in total stockholders' deficit. For the second quarter of 2007, the company reported a net loss of $33.9 million, compared to a net loss of $28.0 million, for the same period in 2006. The net loss for the second quarter included a restructuring charge of approximately $7.9 million. Revenues of $8.9 million for the second quarter of 2007, compared to $3.7 million for the second quarter of 2006, reflected approximately $2.0 million in Thelin(R) European sales and a year- over-year increase in Argatroban royalty income of approximately $3.0 million. The growth in Argatroban royalty income, which was responsible for the year-over-year increase in revenues, was due to higher sales of Argatroban and a corresponding higher royalty rate, as cumulative sales reached a higher royalty tier within the agreement. Since the Argatroban royalty income is used to pay the outstanding Argatroban notes, the royalty income is not available to fund the company's operational requirements. "We continue to make progress commercializing Thelin(R) (sitaxentan sodium) in Europe, and recognize there is much more work to do including launches in additional countries, before we will have fully realized the value of Thelin(TM). We have significantly reorganized the company in order to better manage the challenges ahead, and are taking the appropriate steps in order to maximize the value of the assets we have while reducing our expenses," said George W. Cole, president and chief executive officer of Encysive Pharmaceuticals. "While we were very disappointed in the Food and Drug Administration's (FDA) decision to not approve Thelin(TM) at this time, we will continue to work to obtain approval." Second Quarter 2007 Financial Overview Research and development spending for the second quarter of 2007 of $16.7 million, was higher than last year's R&D spending in the second quarter of $14.7 million, due to ongoing long-term safety studies of Thelin(TM) (STRIDE-3), the Phase II study evaluating Thelin(TM) in diastolic heart failure, Phase II dose-ranging study of oral TBC3711, the company's next-generation, highly selective endothelin receptor antagonist, in resistant hypertension, and support of global Thelin(TM) regulatory submissions. Sales and marketing expenses were $9.6 million for the current quarter as compared to $11.8 million for the second quarter in 2006. General and administrative expenses were $6.3 million for the second quarter of 2007, as compared to $5.4 million during the same period in 2006. Cash, cash equivalents and accrued interest at June 30, 2007, was $65 million, compared to $43.8 million at Dec. 31, 2006. The June 30 balance includes $27.1 million in net proceeds from the company's equity line of credit with Azimuth Opportunity Ltd., approximately $10.2 million of previously restricted cash, related to the Argatroban notes received upon the resolution of a United Kingdom tax withholding issue, and approximately $4.3 million in Argatroban royalties which was used to pay principal and interest on the Argatroban notes on July 2. At the end of the second quarter the company announced that it is implementing a strategic restructuring in order to focus its resources on its most promising assets. The company's U.S. workforce was reduced by approximately 150 employees, including its U.S. sales force. The company also eliminated the position of chief operating officer. Cash severance payments were provided to employees directly affected by the workforce reduction. The company estimates that it will record approximately $15 million in restructuring and severance costs in 2007, of which approximately $7.9 million was recorded in the second quarter. The company also expects that, as a result of the strategic restructuring, its ongoing quarterly operating expenses will be approximately $20 million in Q3 2007, reducing to approximately $15 million in Q4 2007. Full-text copies of the comopany's consolidated financial statemetns for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2258 Going Concern Doubt As reported in the Troubled Company Reporter on April 30, 2007, KPMG LLP, in Houston, expressed substantial doubt about Encysive Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. About Encysive Pharmaceuticals Headquartered in Houston, Texas, Encysive Pharmaceuticals Inc. (Nasdaq: ENCY) -- http://www.encysive.com/-- is a biopharmaceutical company engaged in the discovery, development and commercialization of novel, synthetic, small molecule compounds to address unmet medical needs. The company's research and development programs are predominantly focused on the treatment and prevention of interrelated diseases of the vascular endothelium and exploit its expertise in the area of the intravascular inflammatory process, referred to as the inflammatory cascade, and vascular diseases. ENDOCARE INC: Board OKs One-For-Three Reverse Common Stock Split ---------------------------------------------------------------- The board of directors of Endocare Inc. has authorized the company to proceed with a one-for-three reverse stock split of its outstanding common stock in order to satisfy the minimum bid price requirement for initial listing on The NASDAQ Capital Market. The record date established for the reverse split is Aug. 20, 2007. Chief executive officer, Craig T. Davenport disclosed that Endocare stockholders had approved the proposal for the reverse stock split permitting the company's board to implement the reverse split at its discretion. He said that pending final approval, he believes trading could commence on NASDAQ as early as September 2007. Effective Aug. 21, 2007, Endocare Inc. common stock will trade on the OTC Bulletin Board on a split-adjusted basis under a trading symbol to be assigned by the OTC Bulletin Board. It is expected that Endocare's common stock will resume trading under the symbol “ENDO” when the NASDAQ listing becomes effective. “The company was delisted by NASDAQ in January 2003 because the company was not in regulatory compliance with its SEC filing obligations, Mr. Davenport said. “Since June 2004, when the company reestablished full compliance with its SEC filing obligations, it has been a priority of the board and management to have our common stock traded on a national exchange. While there can be no guarantee whether or when NASDAQ will approve our application, we are confident that with the completion of the reverse stock split, we will have met all of the quantitative requirements for our shares to be traded on The NASDAQ Capital Market.” Stockholders of record on Aug. 20, 2007 will be sent instructions for exchanging their existing stock certificates for new stock certificates. Stockholders with shares held in street name with a brokerage firm will have their accounts adjusted by their respective brokers. Stockholders should not destroy any stock certificates and should not submit any certificates to the company's transfer agent until requested to do so. Questions regarding this exchange process can be addressed by contacting Computershare Trust Company N.A. at (800) 962-4284. The company's board reserves the right, exercisable at any time prior to the effectiveness of the stock split, to modify the ratio or record date of the stock split or to not proceed with the stock split. About Endocare Inc. Based in Irvine, California, Endocare Inc. (OTCBB: ENDO) -- http://www.endocare.com-- is an innovative medical device company providing minimally invasive technologies for tissue and tumor ablation. Endocare has concentrated on developing technologies for the treatment of prostate cancer and believes that its proprietary technologies have broad applications across a number of markets, including the ablation of tumors in the kidney, lung and liver and palliative intervention. Going Concern Doubt As reported in the Troubled Company Reporter on March 27, 2007, Ernst & Young LLP, in Los Angeles, expressed substantial doubt about Endocare Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses, cash flow deficits, and working capital deficiency. EPOCH 2000: Fitch Holds "CC" Rating on Class IV Notes ----------------------------------------------------- Fitch upgraded three tranches of EPOCH 2000-1, Ltd. The actions are a result of Fitch's review process and are effective immediately: -- $81,500,000 class I notes upgraded to 'BBB+' from 'BB+'; -- $23,750,000 class II notes upgraded to 'BB-' from 'B-'/'DR2'; -- $14,000,000 class III notes upgraded to 'B'/'DR1' from 'CCC'/'DR5'; -- $31,762,802 class IV notes remain at 'CC'/'DR6'. The upgrades are a result of stable portfolio performance and improved credit enhancement levels. Since the last review in February 2006, credit enhancement has increased as a result of accumulation of funds in the reserve account. The reserve account currently has in excess of $5.6 million. In addition, the likelihood of credit events has reduced with the relatively short amount of time left until maturity. Upon maturity, any amounts in the reserve account will be used to pay back any written-down notes with interest in order of seniority. EPOCH 2000-1, Limited, incorporated under the laws of the Cayman Islands, was created to enter into a credit default swap with Morgan Stanley Credit Products, Ltd. and to issue the above- referenced securities. The notes are supported by the cash flows of the collateral, as well as the credit default swap premium paid by MSCPL. The credit default swap references a portfolio of securities, consisting predominantly of senior unsecured bonds. The ratings assigned to the notes address the timely payment of interest and ultimate payment of principal. FURNITURE BRANDS: Closes $550 Mil. New Revolving Credit Facility ---------------------------------------------------------------- Furniture Brands International closed a long-term debt facility it entered on Aug. 9, 2007, with certain financial institutions and JPMorgan Chase Bank, N.A., as administrative agent. The new credit agreement is a revolving credit facility with a commitment of $550 million, subject to a borrowing base of certain eligible accounts receivable and inventory. The facility allows for the issuance of letters of credit of up to $100 million and cash borrowings. Interest under the facility for the first six months will equal either: (i) the greater of the prime rate and the federal funds effective rate plus 1/2% for base rate loans, or (ii) 1.25% plus LIBOR for the applicable interest period for Eeurodollar loans. After six months interest will fluctuate with average availability. The new facility is asset-based, and is secured by all of the company's and its domestic subsidiaries' accounts receivable, inventory, cash deposit and securities accounts and certain intangibles. The company borrowed funds under the new credit agreement to pay in full the existing indebtedness in the amount of $150 million owed by the company pursuant to the terms of its credit agreement dated April 21, 2006. The old credit agreement terminated upon the payment of those amounts. The company also repaid in full the $150 million in senior notes issued under a note purchase agreement dated May 17, 2006. Along with that repayment, the company paid a make-whole premium of about $17 million and accrued interest of about $2.5 million, terminating the note purchase agreement. Partially offsetting these amounts, the company received payment of $2.8 million on an interest rate hedge. W. G. Holliman, chairman and chief executive officer, commented: "We made the decision several months ago to change our long-term debt structure to more closely match our long-term strategy and financial goals. Our new facility was well over-subscribed by our participating financial institutions, and we are pleased to have brought it to conclusion. We expect this new facility to give us the capital structure and the flexibility we need to respond to market conditions and to accommodate our growth initiatives." About Furniture Brands Based in St. Louis, Missouri, Furniture Brands International Inc. (NYSE: FBN) -- http://www.furniturebrands.com/-- is one of America's residential furniture companies. The company produces, sources and markets its products under six of the best-known brand names in the industry -- Broyhill, Lane, Thomasville, Henredon, Drexel Heritage and Maitland-Smith. * * * As reported in the Troubled Company Reporter on June 26, 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Furniture Brands International Inc. to 'BB-' from 'BBB-'. The rating remains on CreditWatch with negative implications, where it was placed on Feb. 28, 2007, because of weakness in the company's business lines, and credit protection measures below S&P's expectations for the rating. GRAMERCY REAL: Fitch Rates $13.8 Mil. Class J Notes at BB --------------------------------------------------------- Fitch assigned these ratings to Gramercy Real Estate CDO 2007-1, Ltd./LLC, (collectively, the co-issuers), which closed Aug. 8, 2007: -- $704,000,000 class A-1 first priority senior secured floating rate term notes, due 2056 'AAA'; -- $121,000,000 class A-2 second priority senior secured floating rate term notes, due 2056 'AAA'; -- $116,600,000 class A-3 third priority senior secured floating rate term notes, due 2056 'AAA'; -- $29,500,000 class B-FL fourth priority floating rate term notes, due 2056 'AA'; -- $20,000,000 class B-FX fourth priority fixed rate term notes, due 2056 'AA'; -- $20,150,000 class C-FL fifth priority floating rate capitalized interest term notes, due 2056 'A+'; -- $3,500,000 class C-FX fifth priority fixed rate capitalized interest term notes, due 2056 'A+'; -- $4,400,000 class D sixth priority floating rate capitalized interest term notes, due 2056 'A'; -- $4,950,000 class E seventh priority floating rate capitalized interest term notes, due 2056 'A-'; -- $9,350,000 class F eighth priority floating rate capitalized interest term notes, due 2056 'BBB+'; -- $2,950,000 class G-FL ninth priority floating rate capitalized interest term notes, due 2056 'BBB'; -- $2,000,000 class G-FX ninth priority fixed rate capitalized interest term notes, due 2056 'BBB'; -- $2,000,000 class H-FL tenth priority floating rate capitalized interest term notes, due 2056 'BBB-'; -- $5,150,000 class H-FX tenth priority fixed rate capitalized interest term notes, due 2056 'BBB-'; -- $13,750,000 class J eleventh priority fixed rate capitalized interest term notes, due 2056 'BB-'. GRUPO SENDA: Fitch Lifts Issuer Default Rating to B+ ---------------------------------------------------- Fitch Ratings upgraded the local and foreign currency Issuer Default Ratings of Grupo Senda Autotransporte, S.A., de C.V. to 'B+' from 'B'. The Rating Outlook is Stable. The upgrade of Grupo Senda's ratings reflect a significant improvement in the company's financial profile due to the generation of higher EBITDA and the reduction of debt. During the first half of 2007, the company generated $30 million of EBITDA, an improvement from $23 million in the first half of 2006. The improved performance of Grupo Senda was due to the continued integration of Transportes del Norte into Grupo Senda's business model, the optimization of the company's existing routes and the expansion into new routes, plus the decrease in operation costs per kilometer. For the last twelve months ended June 30, 2007, Grupo Senda generated $59 million of EBITDA, an increase from $52 million in 2006. The company's funds from operations increased at a similar pace during this timer period to $35 million from $29 million. Grupo Senda has used the increase in its cash flow plus a reduction in capital expenditures to reduce its lease adjusted total debt from $256 million as of Dec. 31, 2006 to $235 million as of June 30, 2007. As of June 30, 2007, Grupo Senda had $11 million of cash, a slight increase from $9 million at the end of 2006. The company has $8 million of debt falling due before year- end 2007. July and December are typically the busiest months for the transportation industry in Mexico. Consequently, Grupo Senda should generate more than $35 million of EBITDA in the second half of the year. This should result in an improvement in the company's total debt-to-EBITDA ratio of 4x for the LTM ended June 30, 2007 to less than 3.6x for 2007. Meanwhile, the company net debt-to-EBITDA ratio should improve from 3.8x to about 3.4x. Compared with other passenger bus companies in Mexico, Grupo Senda's business model allows the company to operate more efficiently, better adapt to market conditions and provide higher quality standardized services and enhanced safety. The model involves hiring drivers and other workers that are directly employed by the company. In contrast, most of Mexico's other authorized bus transportation companies are owner-operated such that the bus drivers typically own one or more of the buses they operate and control shares of a cooperative company in proportion to the number of buses owned. The bus service market plays a significant role in the overall passenger transportation sector of Mexico, accounting for approximately 98% of the passenger tickets sold for intercity travel. Alternative means of transportation such as by airplane or personal car are not economically viable for the average traveler as about 93% of the Mexican population earns less than $700 per month. In the future, low-cost airlines will play a more important role in intercity transportation. Considerable growth in per capita incomes will need to occur before this represents a major threat for Grupo Senda, however, this will take time. Like other bus companies, Grupo Senda's buses use diesel fuel. The price of diesel fuel and gasoline is controlled by the Mexican government and is below international prices. Any unforeseen change in the government's policy would squeeze Grupo Senda's margins and would likely lead to a decline in ticket sales. Grupo Senda is a holding company and a leading provider of interstate passenger bus transportation and package delivery services covering 15 states and more than 120 cities in northeast and central Mexico and 12 destinations in the state of Texas in the United States. In 2006, about 81% of Grupo Senda's revenues of about $256 million was generated from its passenger transportation segment for public intercity and chartered bus services and 19% from its personnel division for intracity transportation services to industrial facilities and educational institutions. The company employs more than 6,000 people and operates a fleet of more than 2,200 buses operates under several subsidiaries and brands names and transported about 53 million passengers in 2006. The company's most important subsidiary is TDN. It was purchased in 2004 for $155 million. HARRAH'S OPERATING: Adjusts Conversion Price on $375MM Sr. Notes ---------------------------------------------------------------- Harrah's Operating Company Inc., a subsidiary of Harrah's Entertainment Inc., has adjusted the conversion price under its outstanding $375 million Floating Rate Contingent Convertible Senior Notes due 2024, to $65.54 from $65.85, subject to further adjustment. The adjustment was made pursuant to the terms of the indenture as a result of the cash dividend of $0.40 per share of Harrah's Entertainment common stock that was declared on July 19, 2007, and which will be payable Aug. 22, 2007 to Harrah's Entertainment stockholders of record as of the close of business on Aug. 8, 2007. Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc. -- http://www.harrahs.com/-- through its wholly-owned subsidiary, Harrah's Operating Company Inc., operates 37 casinos, primarily under the Harrah's, Caesar's, and Horseshoe brand names. * * * Standard and Poor's placed BB rating on Harrah's Operating Company Inc.'s long term foreign and local issuer credit on December 2006. HESPERIA LENDERS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Hesperia Lenders, LLC 5482 Longley Lane, Suite B Reno, NV 89511 Bankruptcy Case No.: 07-51068 Chapter 11 Petition Date: August 9, 2007 Court: District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Alan R. Smith, Esq. 505 Ridge Street Reno, NV 89501 Tel: (775) 786-4579 Estimated Assets: $1 Million to $100 Million Estimated Debts: Less than $50,000 The Debtor did not file a list of its 20 largest unsecured creditors. HORIZON LINES: Completes Capital Refinancing Transaction Series --------------------------------------------------------------- Horizon Lines Inc. has closed on all transactions related to its capital structure refinancing. Earnings and free cash flow guidance for the third quarter and full year 2007 were also increased in recognition of the benefits resulting from the refinancing. Horizon Lines completed a series of transactions: -- repaid the $193.1 million balance, interest and fees on its LIBOR plus 2.25% senior credit facility; -- repaid the $314.3 million balance, call premiums and interest on its 9% senior notes and 11% senior discount notes; -- entered into a new $375 million senior credit facility at LIBOR plus 1.50% with initial borrowings of $258.5 million; -- issued $330 million of 4.25% convertible notes; -- entered into separate hedging transactions at a net pretax cost of $40.6 million or $24.6 million after future tax benefits to increase the conversion premium on the convertible notes from 30% to 80%; -- purchased 1 million shares of its common stock for $28.6 million; and -- paid transaction costs of $11.8 million. Interest savings from the new structure are expected to be $1.7 million on a pretax basis or $1.2 million after tax in the third quarter, and $5 million pretax or $3.5 million after tax for 2007, under current accounting methods. Interest expense savings in 2008 are expected to be $15 million on pretax basis or $10.5 million on an after tax basis, under current accounting methods. As a result of the refinancing, the company is increasing its financial guidance. Earnings per share guidance for the third quarter was increased to $.59 - $.66 and earnings per share guidance for 2007 was increased to $1.56 - $1.68, both excluding the impact of one-time expenses. Horizon Lines' previous earnings guidance for earnings per share was $.56 - .63 for the third quarter and $1.46 - $1.58 the full year 2007. Free cash flow guidance for 2007 was also increased to reflect the benefits of the refinancing to $34 - $41 million from the previous $30 - $37 million. Free cash flow benefits in 2008 are expected to be $13 million. "Horizon Lines closed on a refinancing of our capital structure that will yield benefits in terms of a lower cost of capital, improved cash flow, enhanced flexibility and greater liquidity," Chuck Raymond, chairman, president and chief executive officer, said. "This new capital structure represents an opportunistic refinancing that is cash flow positive, EPS accretive and provides access to low cost capital that will allow us to take advantage of future growth opportunities", Mark Urbania, senior vice president and chief financial officer, said. "We are pleased with the very execution of this refinancing in a challenging credit market and believe the refinancing demonstrates the market's confidence in Horizon Lines and its strategy". About Horizon Lines Headquartered in Charlotte, North Carolina, Horizon Lines Inc. (NYSE: HRZ) – http://www.horizon-lines.com/-- is a Jones Act container shipping and integrated logistics company with a fleet of 21 U.S.-flag vessels and service routes linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. An integrated service provider of ocean transportation, trucking, terminal and warehousing operations, Horizon Lines also owns Horizon Services Group, an organization with a diversified offering of transportation management systems and customized software solutions being marketed to shippers, carriers, and other supply chain participants. * * * As reported in the Troubled Company Reporter on Aug. 9, 2007, Standard & Poor's Ratings Services assigned a 'BB+' rating and a '1' recovery rating to Horizon Lines Inc.'s (BB-/Stable/--) proposed senior secured first-lien credit facilities, consisting of a $250 million revolving credit facility and a $125 million term loan A; both facilities mature in 2012. IAP WORLDWIDE: S&P Junks Credit Rating and Puts on Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Service lowered its ratings on IAP Worldwide Services, including the corporate credit rating to 'CCC' from 'B-', and placed the ratings on CreditWatch with negative implications. The Cape Canaveral, Florida-based government services contractor had total debt outstanding of about $531 million on June 30, 2007. "The downgrade reflects concerns about the company's recent operating performance and near-term liquidity. IAP's second- quarter results were weaker than expected and could result in the company being out of compliance with its covenants," said Dan Picciotto. The company's results have been challenged by delayed government funding release. Prospects were diminished following the late June announcement that IAP was not selected as one of three companies to provide logistical support to the U.S. Army under the LOGCAP IV contract. The CreditWatch placement reflects the uncertainty as to whether the company will be able to maintain adequate liquidity. IASIS HEALTHCARE: Earns $6.3 Million in Third Qtr. Ended June 30 ---------------------------------------------------------------- IASIS Healthcare LLC's net revenue for the third quarter ended June 30, 2007, totaled $470.6 million, an increase of 11.8%, compared with $421 million for the prior year quarter. Net earnings for the third quarter 2007 totaled $6.3 million, compared with $15.9 million for the prior year quarter. IASIS' results for the third quarter include a loss on extinguishment of debt of $6.2 million associated with the refinancing of its senior secured credit facilities and $1.5 million in business interruption insurance recoveries received in connection with the final settlement of the insurance claim associated with the temporary closure and disruption of operations at The Medical Center of Southeast Texas, in Port Arthur, Texas, as a result of Hurricane Rita. The prior year quarter included $8.3 million in business interruption insurance recoveries. In addition, results for the third quarter include $2.5 million in pre-opening losses, compared with $90,000 in the prior year quarter, associated with Mountain Vista Medical Center, the company's new hospital in Mesa, Arizona, which opened on July 23, 2007. Consolidated results for the third quarter and the nine months ended June 30, 2007, included operations of Glenwood Regional Medical Center in West Monroe, Louisiana, which was acquired effective Jan. 31, 2007, and Alliance Hospital in Odessa, Texas, which was acquired effective May 31, 2007, and immediately merged into Odessa Regional Hospital to form Odessa Regional Medical Center. Net revenue for the nine months ended June 30, 2007, totaled $1.4 billion, an increase of 11.6%, compared with $1.2 billion for the same prior year period. Net earnings for the nine months ended June 30, 2007, totaled $33.8 million, compared with $28.5 million for the same prior year period. As of June 30, 2007, the company had total assets of $2.1 billion, total liabilities of $1.4 billion, and total stockholders' equity of $683.6 million. Management's Comments In commenting on the quarterly results, David R. White, chairman and chief executive officer of IASIS, said, "We are pleased with our continued growth in net revenue, as well as our efforts to begin to ensure a successful integration of our recently acquired hospitals. Additionally, we are pleased with the contribution these hospitals are currently making to our overall success. We are excited about the opening of Mountain Vista Medical Center and believe that the hard work and dedication of our employees will make our new facility a valuable addition to its community and to IASIS." Uninsured Discount Program IASIS' uninsured discount program, which became effective during the third quarter of fiscal 2006, resulted in $12.9 million and $38.3 million in discounts being provided to uninsured patients during the third quarter and nine months ended June 30, 2007, respectively, compared with $6.8 million in each of the same prior year periods. The company's uninsured discount program had the effect of reducing net revenue and the provision for bad debts by generally corresponding amounts. On a same-facility basis, adjusting for the impact of uninsured discounts, net patient revenue per adjusted admission increased 7.2% and 8.9% in the third quarter and nine months ended June 30, 2007, respectively, compared with the same prior year periods. Senior PIK Loans On April 27, 2007, IASIS announced the completion of a transaction to refinance its existing credit facilities, increase its borrowing capacity and repurchase equity from the shareholders of its parent company, IASIS Healthcare Corporation. The new financing includes $854 million in Senior Secured Credit Facilities and $300 million in Holdings senior paid-in-kind loans. The $300 million Holdings senior PIK loans were borrowed by IASIS' parent company. About IASIS Healthcare IASIS Healthcare LLC is a subsidiary of IASIS Healthcare Corporation, -- http://www.iasishealthcare.com/-- located in Franklin, Tennessee, owns and operates medium-sized acute care hospitals in high-growth urban and suburban markets. Currently, IASIS owns or leases 16 acute care hospitals and one behavioral health hospital with a total of 2,693 beds in service and has total annual net revenue of about $1.8 billion. These hospitals are located in six regions: Salt Lake City, Utah; Phoenix, Arizona; Tampa-St. Petersburg, Florida; three cities in Texas, including San Antonio; Las Vegas, Nevada; and West Monroe, Louisiana. IASIS recently opened Mountain Vista Medical Center, a new 176-bed hospital located in Mesa, Arizona. IASIS also owns and operates a Medicaid and Medicare managed health plan in Phoenix that serves over 119,000 members. * * * As reported in the Troubled Company Reporter on April 13, 2007, Standard & Poor's Ratings Services lowered its ratings on Franklin, Tennessee-based IASIS Healthcare Corp. The corporate credit rating was lowered to 'B' from 'B+', and the rating on IASIS Healthcare LLC's $475 million of senior subordinated notes due 2014 was lowered to 'CCC+' from 'B-.' The rating outlook is stable. INDYMAC HE: Fitch Downgrades Class MV-2 Certificate Rating ---------------------------------------------------------- Fitch Ratings took these rating actions on these IndyMac ABS Inc. home equity issues: Series SPMD 2001-A Group 1: -- Classes AF-5, AF-6 and R affirmed at 'AAA'; -- Class MF-1 affirmed at 'BB-'; -- Class MF-2 downgraded to 'C/DR4' from 'CC/DR2'. Series SPMD 2001-A Group 2: -- Class AV affirmed at 'AAA'; -- Class MV-1 downgraded to 'BB+' from 'A-'; -- Class MV-2 downgraded to ''BB-' from 'BBB-'. The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect about $14.87 million in outstanding certificates, as of the July 25, 2007 distribution date. The downgrades are due to deterioration in the relationship between CE and expected losses and affect about $5.04 million in outstanding certificates. The mortgage loans in this transaction were originated or acquired by IndyMac Bank, FSB, which is also the master servicer for these loans. The collateral in the above transaction consists of fixed- rate and adjustable-rate subprime loans secured by first or second liens on one- to four-family residential properties. This transaction is 77 months seasoned. The pool factors are 6.33% and 5.54%, respectively, for Groups 1 & 2. The cumulative losses, as a percentage of the original collateral balances, are 4.72% and 3.04%, respectively, for Groups 1 and 2. As of the July 25, 2007 distribution date, the overcollateralization (OC) for series 2001-A Group 1 was $29,697 (0.29% of current collateral balance) versus a target of $815,000 (7.85% of current collateral balance). The 60+ delinquencies are 50.26% of current collateral balance. This includes foreclosures and real estate owned of 18.22% and 9.27%, respectively. As of the July 25, 2007 distribution date, the OC for series 2001-A Group 2 was $850,766 (8.17% of current collateral balance) versus a target of $935,000 (8.98% of current collateral balance). The 60+ delinquencies are 48.66% of current collateral balance. This includes foreclosures and REO of 15.25% and 11.42%, respectively. INFINITY ENERGY: Posts $16.1 Mil. Net Loss in Qtr. Ended June 30 ---------------------------------------------------------------- Infinity Energy Resources Inc. reported on Aug. 9, 2007, its results of operations for the three and six months ended June 30, 2007, and provided an operational update. The company reported a net loss for the three and six months ended June 30, 2007, of $16.1 million and $19.8 million, respectively. The net loss for the second quarter and first half of 2007 included a non-cash ceiling write-down of oil and gas properties of $15.8 million. Second quarter 2007 results included other income of $1.2 million, while the six-month period included other expense of $0.4 million related to changes in derivative value. For the three and six months ended June 30, 2006, the net loss included a non-cash ceiling write-down of oil and gas properties of $2.5 million and $11.6 million, respectively, other income of $3.3 million and other expense of $200,000, respectively, relating to changes in derivative value, and income from discontinued operations of $3.8 million and $7.2 million, respectively. Revenues were $2.5 million and $4.6 million for the three and six months ended June 30, 2007, a 25% and 19% decrease when compared with revenue of $3.4 million and $5.7 million, respectively, in the prior-year periods. The company reported an operating loss for the three and six months of $17.3 million and $19.5 million, compared with $2.9 million and $13.0 million in the prior year periods. EBITDA (earnings from continuing operations before interest, income taxes, depreciation, depletion, amortization and accretion expenses, gains and losses on the sale of assets, expense related to the early extinguishment of debt, change in derivative fair value and ceiling write-down of oil and gas properties) for the three and six months ended June 30, 2007, totaled $700,000 and $0, respectively, compared with $1.8 million and $1.9 million in the prior-year periods. Exploration and production operations produced 346 MMcfe (3.8 MMcfe per day) and 656 MMcfe (3.6 MMcfe per day) during the three and six months ended June 30, 2007, decreases of 18% and 12% from the 423 MMcfe (4.6 MMcfe per day) and 742 MMcfe (4.1 MMcfe per day) produced in the prior year periods. Production in Texas during the second quarter of 2007 decreased by 25% when compared to the second quarter of 2006 as a result of natural production declines, characteristic of the Barnett Shale play, from horizontal wells drilled and brought on production during the first half of 2006. Additional wells drilled and completed since January 2007, two of which were just recently brought onstream, are offsetting the production decline of older wells, and the company expects third quarter production volumes in Texas to be comparable to or higher than second quarter levels. Production in the Rockies during the second quarter of 2007 declined by approximately 11% as compared to the second quarter of 2006. The production decrease in the Rockies was due to the temporary production shut-in at the company's Wolf Mountain 15-2- 7-87 following the production equipment fire suffered in March 2007, and natural production declines at the Wamsutter Arch Pipeline Field. Production in the Rockies is expected to be comparable to, or slightly higher, than second quarter levels during the third quarter of 2007, as the Wolf Mountain 15-2-7-87 well should be in production during the entire period. Approximately $3.3 million in net cash was provided by operating activities during the three months ended June 30, 2007, compared with $5.5 million in the prior-year period (which included cash provided by discontinued operations). Net cash used in investing activities approximated $10.3 million in the second quarter of 2007, versus $10.1 million in the prior-year quarter, including $1.7 million in capital expenditures associated with discontinued operations in prior-year period. Net cash provided by financing activities totaled $7.0 million during the three months ended June 30, 2007, versus $0.4 million in the prior-year period. Net cash used in operating activities during the six months ended June 30, 2007, totaled $1.1 million, compared with $9.2 million in cash provided by operating activities in the corresponding period of the previous year (which included cash provided by discontinued operations). Net cash used in investing activities approximated $15.8 million in the first half of 2007, compared with $23.1 million in the prior-year period, including $3.5 million in capital expenditures associated with discontinued operations in prior-year period. Approximately $16.1 million in net cash was provided by financing activities during the six months ended June 30, 2007, compared with $7.9 million in the prior-year period. "I am very pleased to report that Infinity was cash-flow-positive in the second quarter, and we are making considerable progress in repositioning the company for growth on a number of fronts," stated Stanton E. Ross, president and chief executive officer of Infinity Inc. “After a thorough evaluation of strategic alternatives in recent months, we have decided to pursue the sale of our oil and gas properties in the Rocky Mountain region, which will allow us to focus on our potential in the Barnett Shale and other areas domestically, along with our potentially 'world-class' oil and gas concession offshore Nicaragua. We are currently in discussions with several parties regarding the sale of our Colorado assets." "We are also currently in discussions with a company that is quite active in the Barnett Shale play in Texas with respect to a potential joint venture that would significantly accelerate development on a portion of our Barnett Shale acreage. Although definitive agreements still need to be negotiated, we are excited by the proposal and are working diligently to finalize the deal." "Separate from this prospective development, during the second half of 2007 Infinity plans to drill three additional wells targeting the Barnett Shale in Comanche County, where we have 30,000 acres under lease," continued Ross. "Through earlier wells that we drilled in the area we have successfully demonstrated the presence of a gas-bearing Barnett shale, confirming the potential of the region as a future gas-producing province." "And finally", added Ross, "we should bring your attention to our 1.4 million-acre concession offshore Nicaragua, a virtually unexplored sedimentary basin sharing many geological similarities with other provinces where world-class oil and gas fields were discovered. The company is scheduled to present its exploration plans to regional governmental entities later this quarter, and we are hoping to finalize certain details so that we can move forward with the initial exploration phase of the operation. Our strategy for this property involves additional geological and geophysical studies, followed by joint ventures with other companies for the drilling campaign. We have already been approached by oil companies interested in a participation in our concessions, but we consider it premature to farm-out any interest at this early stage." At June 30, 2007, the company's consolidated balance sheet showed $50.9 million in total assets, $32.6 million in total liabilities, and $18.3 million in total stockholders' equity. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $2.7 million in total current assets available to pay $25.4 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2256 Default Under Revolving Credit Facility The company is currently in default under its Revolving Credit Facility as a result of our failure to meet certain financial covenants during the three months ended June 30, 2007, including the interest coverage ratio and the funded debt to EBITDA ratio. The company is currently in discussions with Amegy with respect to the potential waiver of the events of default. As of August 8, 2007, the company has borrowed all $22 million allowed under the reduced borrowing base. Additionally, Amegy Bank N.A. is currently conducting a borrowing base redetermination that could potentially result in a further reduction in the borrowing base, scheduled equal monthly commitment reductions, or other remedies. About Infinity Energy Headquartered in Denver, Infinity Energy Resources Inc. (NasdaqGM: IFNY) -- http://www.infinity-res.com/-- through its wholly-owned subsidiaries Infinity Oil and Gas of Texas Inc. and Infinity Oil & Gas of Wyoming Inc., is an independent energy company engaged in the exploration, development and production of natural gas and oil and the operation and acquisition of natural gas and oil properties. The operations of Infinity Oil and Gas of Texas are focused on exploitation of the Barnett Shale formation in the Fort Worth Basin of north-central Texas. The operations of Infinity Oil & Gas of Wyoming are focused on the Wamsutter Arch Pipeline Field in southwest Wyoming and the Sand Wash Basin in northwest Colorado. The company also has a 1.4 million acre oil and gas concession offshore Nicaragua in the Caribbean Sea. INN OF THE MOUNTAIN: Improved Performance Cues S&P to Lift Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Inn of the Mountain Gods Resort and Casino to 'B' from 'B-'. At the same time, Standard & Poor's removed the rating from CreditWatch where it was placed with positive implications on May 17, 2007. The rating outlook is stable. Mescalero, New Mexico-based IMG is an entity formed to own and operate the casino and resort operations for the Mescalero Apache Tribe. The upgrade was driven by IMG's improved operating performance and cash flow generation over the past several quarters due to extensive cost-control measures and top-line growth. Net revenue for the fourth quarter was up 22.4% than in the prior-year same period, due in part to a more normalized snow fall during the ski season, which led to significantly higher ski revenues, and an increase in slot win-per-unit. For fiscal 2007, net revenue rose 11.1%. Higher hotel occupancy rates and ADR also significantly contributed to revenue growth. Gaming revenue was slightly up. EBITDA rose 75.6% to $40.6 million, as management was able to lower expenses from 2006 levels and expand revenues. Key to management's expense reductions was a significant decline in full- time equivalent employees, which allowed IMG to decrease its payroll expenses by 19%. S&P expect this trend to continue in the intermediate term given management's focus on ongoing cost initiatives. Although management has demonstrated an ability to maintain better cost-control practices, S&P believe that the company's revenues will remain volatile over time. Because IMG is located in such a remote location, its revenues are highly dependent on tourist and vacation traffic. Therefore, revenues are expected to exhibit greater sensitivity to economic conditions than for many of IMG's rated peers. IMG's ski revenues, and associated food, beverage, and lodging revenues, are also subject to variations in weather conditions. S&P's concerns over past problems with internal controls and accounting policies have been mitigated, but not eliminated. Although IMG's SEC filings are now up to date, and its 10-K was filed on time with no additional material weaknesses disclosed, S&P are sensitive to the company's method of allocating certain overhead expenses to G&A on a quarterly basis and to business units on an annual basis, which is not standard practice among gaming companies. Notwithstanding this policy, IMG's accounting issues are reflected within the current rating. INSTANT WEB: Moody's Affirms B2 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service affirmed its B2 corporate family rating and B2 probability of default rating on Instant Web, Inc. and ratings on the first and second lien terms loans. The affirmation follows a change from the proposed deal structure. The transaction consists of a $25 million first lien revolving credit facility ($1 million drawn at close), a $230 million first lien term loan, a $20 million first lien delayed draw term loan (undrawn at close), a $110 million second lien term loan, and an unrated $25 million senior unsecured PIK term loan issued by IWCO Direct, Inc., the parent company of Instant Web. Moody's previously expected a $135 million second lien term loan and no holding company instrument. The outlook is stable and a summary of Moody's action shows: Instant Web, Inc. -- Corporate Family Rating, Affirmed B2 -- Probability of Default Rating, Affirmed B2 -- First Lien Bank Credit Facility, Affirmed B1, LGD3, 32% -- Second Lien Bank Credit Facility, Affirmed Caa1, LGD5, 82% The LGD assessment on the second lien improved slightly, to 82% from 84%. The holding company term loan provides a layer of capital junior to the second lien which would likely absorb some of the loss in the event of default, resulting in lower loss expectations for the second lien term loan compared to previous expectations, which did not incorporate holding company debt. The change in structure provides free cash flow benefits over the intermediate term given the non-cash interest payments on the PIK term loan. However, the accretion results in an increased debt load and the term loan converts to cash pay after four years, so the revised structure could over the longer term pressure financial flexibility should Instant Web perform worse than expected. The B2 corporate family rating reflects high financial risk, customer concentration, and lack of scale, somewhat offset by Instant Web's compelling business model, continued favorable trends in the direct mail industry and the company's track record. Adequate external liquidity and the about 30% equity contribution also support the rating. Headquartered in Chanhassen, Minnesota, Instant Web, Inc., a wholly owned subsidiary of parent holding company IWCO Direct Holdings, Inc., provides its clients an integrated package of direct mail production services, including print, envelope, plastic, mailing, and data services. The company is the largest commingler of standard mail in North America. Its annual revenue is about $300 million. INTERFUND INVESTMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Interfund Investment Fund I, L.L.C. 1801 Clint Moore Road, Suite 217 Boca Raton, FL 33487 Tel: (561) 912-0029 Bankruptcy Case No.: 07-16375 Chapter 11 Petition Date: August 12, 2007 Court: Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Bradley S. Shraiberg, Esq. Kluger, Peretz, Kaplan & Berlin, P.L. 2385 Northwest Executive Center Drive, Suite #300 Boca Raton, FL 33431 Tel: (561) 443-0800 Fax: (561) 998-0047 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor does not have any creditors who are not insiders. IOWA TELECOMMS: Earns $6.6 Million in Quarter Ended June 30 ----------------------------------------------------------- Iowa Telecommunications Services Inc. recorded net income of $6.6 million for the quarter ended June 30, 2007, compared to net income of $10.5 million in the second quarter of 2006. The change is primarily due to the one-time benefits of the $1.3 million gain on exchange sales and the $2.5 million income tax valuation allowance reversal, both of which were recorded in the second quarter of 2006. Revenues and sales were $62.7 million in the second quarter 2007, compared to $57.2 million in the second quarter of 2006. Network access services revenues increased $1.1 million, or 4.5%, for the second quarter. The increase is in part due to $980,000 of revenue from the resolution of certain non-recurring network access billing matters with a connecting carrier. Local services revenues decreased $692,000, or 3.6%, primarily due to access line erosion. Other services and sales revenues increased by $5.4 million, or 62.8%, primarily as a result of growth in our CPE and data business. Additionally, DSL Internet access service revenues increased $1.6 million, or 38.5%, due primarily to customer growth. As of June 30, 2007, the company had total assets of $845.9 million, total liabilities of $580.6 million, and total stockholders' equity of $265.3 million. Management's Comments "We're very pleased with our second quarter performance, which was in line with our expectations," said Alan L. Wells, Iowa Telecom chairman and chief executive officer. "The continued success of our bundled product offerings, our DSL growth, and our expanded customer premise equipment (CPE) and data business resulted in a 9.7% increase in revenue from a year ago. While the second quarter has historically been our softest due to seasonal trends, sales of our DSL product remained solid as we added 2,700 new customers during the quarter. Our rate of access line loss for the quarter increased to 3,300 lines, but approximately 500 of the ILEC lines lost were related to internet service for a single wholesale customer that scaled back operations in our markets. "Adjusted EBITDA for the quarter was consistent with the year ago quarter at $32.2 million," added Mr. Wells. "Income tax expense for the quarter was $4.8 million compared to $2.8 million a year ago, but our actual cash taxes paid during the quarter were only $439,000. For the first six months of this year, our actual cash taxes paid were $442,000. Our net operating loss carry forwards and our continued goodwill amortization for tax purposes serve to minimize our cash income tax obligations, and thus our recorded tax expense has little impact on our cash flow, or more importantly, on our ability to pay dividends to our shareholders. "Our guidance for 2007 remains on track as we continue to expect capital expenditures for the year to be between $25 million and $27 million, and expect cash interest expense to be between $30 million and $32 million," Mr. Wells continued. "For the first six months of this year, capital expenditures were $13.2 million, and our cash interest expense was $15.8 million. "We are very pleased with our results for the first half of 2007. As we move into the balance of the year, our focus will be on continuing to expand our data and CPE business, growing our DSL subscriber base, and retaining access lines through innovative bundled product offerings," Mr. Wells concluded. "We will also continue to identify and evaluate acquisition opportunities that are accretive and strategically beneficial to our rural telecommunications business." About Iowa Telecom Iowa Telecommunications Services Inc., d/b/a Iowa Telecom, (NYSE: IWA) -- http://www.iowatelecom.com/ is a telecommunications service provider that offers local telephone, long distance, Internet, broadband and network access services to business and residential customers. The company serves over 440 communities and employs over 600 people throughout the State of Iowa. The company's headquarters are in Newton, Iowa. * * * As reported in the Troubled Company Reporter on June 15, 2007, Standard & Poor's Ratings Services revised the outlook on Iowa Telecommunications Services Inc. to stable from negative, and affirmed its ratings, including the 'BB-' corporate credit rating. IWCO DIRECT: S&P Junks Rating on $25MM Sr. Unsecured Facility ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue level rating to the planned $25 million senior unsecured facility of IWCO Direct Inc., the unrated parent of Instant Web Inc. (B/Stable/--). The facility is rated 'CCC+', two notches lower than Instant Web's corporate credit rating. Proceeds from the unsecured facility, along with the secured facility, will be used to fund the purchase of IWCO Direct Inc., Instant Web's holding company parent, by Avista Capital Partners. "Since IWCO Direct Inc. is a holding company with no other operations besides Instant Web, the ratings on IWCO Direct reflect the credit quality of Instant Web," said Standard & Poor's credit analyst Ariel Silverberg. At the same time, Standard & Poor's affirmed its issue level and recovery ratings on Instant Web's planned first- and second-lien facilities, which now total $385 million. The change in amount of the secured financing reflects a change to the second-lien facility, which now totals $110 million. These facilities were initially rated on July 16, 2007. The first-lien facilities are rated 'B+' with a recovery rating of '2', indicating that lenders can expect substantial (70% to 90%) recovery. The second-lien term loan is rated 'CCC+' with a recovery rating of '6', indicating that lenders can expect negligible (0% to 10%) recovery in the event of a payment default. The assumptions underlying Standard & Poor's recovery report on Instant Web, published on RatingsDirect on July 16, 2007, are substantially unchanged except for these: -- First-lien covenants are expected to include net leverage maintenance covenant and minimum interest coverage at Instant Web, and maximum capex. -- Second-lien covenants are expected to include net leverage maintenance covenant and maximum capex covenant at Instant Web. -- Administrative claims of 7% of enterprise value. The stable outlook on Instant Web reflects S&P's view that it will continue to grow revenue and EBITDA through existing customers and new customer wins as the company continues to efficiently allocate capacity among its plants, realizing economies of scale and cost savings. S&P expect this growth to somewhat improve credit measures, which should remain in line with the current rating over the intermediate term. An outlook revision to positive may be considered if the company demonstrates a sustained and measured improvement in credit measures. An outlook revision to negative may be considered if operating trends within direct mail shift meaningfully toward other types of business-to-consumer advertising, or if Instant Web were to lose a major customer, resulting in significant deterioration to credit measures. JETBLUE AIRWAYS: Fitch Affirms B Issuer Default Rating ------------------------------------------------------ Fitch Ratings affirmed the debt ratings of JetBlue Airways Corp. as: -- Issuer Default Rating at 'B' -- Senior unsecured convertible notes at 'CCC' with a recovery rating of 'RR6' The senior unsecured rating applies to $425 million of outstanding convertible notes. The Rating Outlook is Stable. Ratings for JBLU reflect the low-cost carrier's highly levered capital structure and weak free cash flow generation capacity, balanced against its competitive cost structure, improving operating profile and fleet plan flexibility in an industry that remains highly vulnerable to over-capacity, demand shocks and very high energy costs. Because of its rapid growth-from the start of operations in 2000 to 130 aircraft in service today, JBLU's credit profile has been under pressure, especially since the dramatic run-up in jet fuel prices that began in 2004. High growth rates have necessitated heavy aircraft capital expenditures, absorbing operating cash flow and pushing leverage higher. Eventhough JBLU's low-cost, non-union model should allow it to generate industry-leading margins for some time to come, credit metrics will likely remain weak as new aircraft deliveries are financed with incremental debt and leases. Management has signaled its willingness to slow growth in 2H07 and next year by reducing the number of Embraer E190 jets introduced into service, and by selling some Airbus A320s in the secondary aircraft market. A similar approach was taken last year when JBLU sold five A320s to help it reduce the available seat mile growth rate. On July 24, management announced the sale of three more A320s and the deferral of 16 E190 deliveries from the 2007-2012 period to 2013 and beyond. Fitch regards this as a positive development, setting the stage for reduced financing needs and somewhat stronger liquidity moving into 2008. Following a difficult winter, during which severe storms affecting the Northeast brought JBLU's operation to a virtual halt for several days in February, the airline's performance rebounded in Q2 as somewhat slower ASM growth and the introduction of the 100- seat E190 aircraft in new markets pushed JBLU's passenger RASM up by 5.4% versus Q206. The strong revenue performance came in spite of some softness in demand during April and May as slower U.S. economic growth undermined the ability of U.S. carriers to push fares higher. At the same time, high jet fuel costs have continued to pressure operating margins, with increases in crude oil prices and refining margins pushing spot jet fuel to above $2.20 per gallon by early August. As JBLU matures as an organization, it is taking a more disciplined approach to route profitability analysis and capacity planning. Slower growth will have a positive impact on free cash flow and will bolster liquidity-both positive from a credit quality perspective. Management has emphasized the importance of fleet plan flexibility as a tool in coping with changing operating conditions. In addition to the advantages JBLU enjoys as a result of its low-cost, non-union model, the carrier's ability to pull back on aircraft capital spending in response to weak operating conditions represents an important credit safety valve. In addition to fuel price pressure, JBLU's unit operating costs have been increasing as a result of the introduction of the shorter-haul E190 aircraft into the fleet and by rising maintenance costs. For the full year 2007, JBLU expects non-fuel operating cost per ASM to be up 6% to 8%. Fitch expects non-fuel unit cost pressure to persist moving into 2008, though year-over- year increases should moderate as operational challenges related to the E190 launch are addressed. Through Q2, management was reporting improvement in the dispatch reliability and utilization of the E190, helping to ease cost pressure while opening up new potential markets for the E190 elsewhere in the JBLU route network. Although Q2 finished strongly and the advanced booking outlook for Q3 is good, competitive conditions in domestic markets remain tough. Legacy carriers have pulled back on domestic ASM growth plans for 2H07 and 2008, but low-cost carrier seats are still being added across the JBLU system. The most notable change in the capacity picture will occur in transcon markets to be served by Virgin America, which launched its operation on Aug. 8. Virgin will enter a number of long-haul and short-haul markets to be served from its San Francisco hub, and it will compete directly with JBLU on JFK service to the Bay Area and the Los Angeles Basin. Fitch expects competitive fare pressure in transcon, Florida and Caribbean markets to continue into next year- especially in a slower-growth U.S. economic scenario. As of June 30, 2007, JBLU's liquidity consisted of $772 million of cash, cash equivalents and investment securities, augmented by $55 million in availability on a $77 million facility to cover aircraft pre-delivery deposits. Unrestricted liquidity at June 30 represented 29.7% of latest 12 month revenues. JBLU has no revolver in place, but the carrier has had consistent access to the debt capital markets in financing both A320 and E190 aircraft entering the fleet. The potential sale of additional A320s in the secondary market represents an important supplemental source of liquidity that could become more critical if industry operating conditions deteriorate and credit market tightness persists in 2008. Scheduled debt maturities for the second half of 2007 total $103 million, with $240 million coming due in 2008. In addition, the $175 million 3.5% convertible note issue in JBLU's debt structure includes a put option that could force repurchase of the notes on July 15, 2008. New debt issuance may be required in anticipation of this repurchase if the airline is to maintain its current liquidity position. JMG EXPLORATION: Posts Net Loss of $433,833 in Qtr. Ended June 30 ----------------------------------------------------------------- JMG Exploration Inc. reported a net loss of $433,833 for the second quarter ended June 30, 2007, compared with a net loss of $850,818 for the same period ended June 30, 2006. Revenues were $167,551 and $475,517 for the three month periods ended June 30, 2007 and 2006, respectively. The decrease in revenue was principally due to the sale of oil and gas assets in North Dakota. The decrease in net loss primarily reflects a decrease in depletion, depreciation and impairment expenses, an increase in other income, net, partly offset by the decrease in net revenue, and an increase in general and administrative expenses. General and administrative expenses were $404,323 and $338,494 for the three month periods ended June 30, 2007 and 2006, respectively. The increase in general and administrative expense was principally due to stock based compensation expense. Depletion, depreciation and impairment expense were $151,117 and $839,743 for the three month period ended June 30, 2007 and 2006, respectively. This decrease was due to impairment charges of $4.9 million in the year ended Dec. 31, 2006, that reduced the depletable cost basis, and the sale of oil and gas assets in North Dakota effective January 2007. Interest income was $31,014 and $0 for the three month period ending June 30, 2007 and 2006, respectively, and increased due to greater cash balances on hand in the current year. Interest expense was nil and $89,975 for the three month period ending June 30, 2007 and 2006, respectively. Interest expense decreased due to the repayment of the promissory note and interest by an unrelated industry partner on June 28, 2005. At June 30, 2007, the company's consolidated balance sheet showed $9.8 million in total assets, $2.9 million in total liabilities, and $6.9 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2251 Going Concern Doubt Hein & Associates LLP, in Irvine, Calif., expressed substantial doubt about JMG Exploration Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company has not realized a profit from operations since its incorporation on July 16, 2004, and it is in a negative working capital position as of Dec. 31, 2006. About JMG Exploration JMG Exploration Inc. (NYSEArca: JMG) is an independent energy company that explores for, develops and produces natural gas, crude oil and natural gas liquids in Canada and the United States. Currently, all of the company's proved reserves are located in the United States. JULIO GALANG: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Julio I. Galang Aurora-Ruby P. Galang 1791 Beach Park Boulevard Foster City, CA 94404 Bankruptcy Case No.: 07-31029 Chapter 11 Petition Date: August 10, 2007 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: William F. McLaughlin, Esq. Law Offices of Robert A. Ward 1305 Franklin Street, Suite 301 Oakland, CA 94612 Tel: (510) 839-5333 Estimated Assets: Unknown Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. KENNETH COBBS: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Kenneth Franklin Bryan Cobbs Courtney Cheyne Cobbs P.O. Box 20545 Waco, TX 76702 Bankruptcy Case No.: 07-60784 Type of business: The Debtors once practice medicine. Chapter 11 Petition Date: August 7, 2007 Court: Western District of Texas (Waco) Judge: Robert C. McGuire Debtor's Counsel: Erin B. Shank, Esq. Courtney, Cheyne, Cobbs 2309 Austin Avenue Waco, TX 76701 Tel: (254) 296-1161 Fax: (254) 296-1165 Total Assets: $1,349,071 Total Debts: $2,955,040 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of Star Valley debt guaranty $1,032,000 384 Washington Street Afton, WY 83110 Compass Bank debt guaranty $453,000 702 West Pearl Street Granbury, TX 76048 Community Bank debt guaranty $229,000 500 South Morgan Granbury, TX 76048 American Express possible liability $72,100 credit card $23,100 Bank of America, M.B.N.A. from credit report $64,000 credit card $370 Chase Card Service credit card $36,300 U.S.A.A. Federal Savings Bank credit card $30,000 G.M.A.C. purchase money; $28,000 value of security: $22,000 Wells Fargo possible liability $24,700 M.B.N.A. Platinum Plus for possible liability $14,200 Business H.P.S.C. possible liability $7,000 Capital One credit card $182 LENOX GROUP: Posts $11.3 Million Net Loss in Quarter Ended June 30 ------------------------------------------------------------------ Lenox Group Inc. reported on Aug. 7, 2007, its financial results for its second quarter ending June 30, 2007. The net loss for the second quarter was $11.3 million, compared with a net loss of $41.2 million in the second quarter of 2006. The net loss for the first six months was $24.3 million, compared to a net loss of $48.3 million in the prior year. Revenues for the second quarter were $93.0 million compared to $98.4 million in the second quarter of 2006, reflecting declines of $3.0 million, $1.3 million and $800,000 in the company's Wholesale, Retail and Direct segments, respectively. Revenues for the first six months were $179.4 million compared to $189.2 million in the same period of 2006. Marc Pfefferle, interim chief executive officer said, "These results are consistent with our expectations that the residual effects of the market and sourcing issues faced in 2006 would result in lower revenues, but the impact on our profitability would be significantly negated by our restructuring programs. We have made substantial progress in implementing the plan approved by the Board in March. Through the first half of the year we are slightly ahead of this plan, which calls for increasing improvement in 2007 relative to last year as the year progresses." “We have been led by a better than planned performance by our Wholesale segment. This has been offset by the Retail segment which has been slow to transition back to a normalized level of 1st quality product sales. We were also behind our plan in the Direct segment. We will focus on both of these segments as we approach the important holiday season." The comparability of the net loss for the second quarter of 2007 to the same period in 2006 was affected by a number of factors. The second quarter of 2007 included a $5.9 million loss on refinancing of debt, $2.1 million of restructuring costs and $1.2 million of executive management consulting fees, while the second quarter of 2006 included a goodwill impairment charge of $37.1 million and a $300,000 favorable purchase accounting adjustment. Excluding these items and their related tax effect, the net loss for the second quarter of 2007 was flat to 2006 at $5.7 million, despite lower revenues of $5.4 million. The comparability of the net loss for the first six months of 2007 to the same period in 2006 was affected by a number of factors. The first six months of 2007 included a $5.9 million loss on refinancing of debt, $6.9 million of restructuring costs and $2.7 million of executive management consulting fees, partially offset by a separate $1.8 million after tax benefit as a result of the expiration of the statute of limitations on certain tax positions the company had taken. The first six months of 2006 was negatively affected by the 2nd quarter goodwill impairment charge of $37.1 million, partially offset by a favorable purchase accounting adjustment of $3.5 million. Excluding these items and their related tax effect, the net loss for the first six months of 2007 was $16.7 million compared to a net loss of $14.8 million during the same period of 2006. Mr. Pfefferle continued, "We have come a long way, in a short period of time, but recognize there is still a great deal of work to be accomplished. We have reduced the cost structure of the business and will continue to strive to increase the efficiency of the company. At the same time, we are very excited with the progress we have made in repositioning Dansk and in strengthening our Lenox, Gorham and Department 56 brands. We have also dramatically increased the speed and effectiveness of our product development which will be evident in our Lenox and Gorham offerings in October. In addition, the Kinston manufacturing facility is operating much more efficiently, making it more competitive with off-shore facilities. At June 30, 2007, the company's consolidated balance sheet showed $407.8 million in total assets, $291.7 million in total liabilities, and $116.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statemenbts for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2261 Going Concern Doubt As reported in the Troubled Company Reporter on March 20, 2007, Deloitte & Touche, LLP, in Minneapolis, Minnesota, raised substantial doubt about Lenox Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's difficulties in meeting its loan agreement covenants and financing needs. On Feb. 9, 2007, the company entered into waivers and amendments to its revolving credit facility and term loan credit facility in connection with the company's noncompliance with certain financial covenants under the credit facilities for the period ended Dec. 30, 2006. On April 20, 2007, the company completed the refinancing of its credit facilities by entering into amended and restated revolving and term loan facilities. The amended and restated credit facilities contain customary financial conditions and covenants, including restrictions on additional indebtedness, liens, investments, capital expenditures, issuances of capital stock and dividends. About Lenox Group Based in Eden Prarie, Minnesota, Lenox Group Inc (NYSE: LNX) -- http://www.lenoxgroupinc.com/-- sells tabletop, collectible and giftware products under the Lenox, Department 56, Gorham, and Dansk brand names. The company sells its products through wholesale customers who operate gift, specialty and department store locations in the United States and Canada, company-operated retail stores, and direct-to-the-consumer through catalogs, direct mail, and the Internet. LIBERTY TAX II: June 30 Balance Sheet Upside-Down by $9.2 Million ----------------------------------------------------------------- Liberty Tax Credit Plus II LP's consolidated balance sheet at June 30, 2007, showed $39.6 million in total assets, $48.8 million in total liabilities, ($20,202) in minority interest, resulting in a $9.2 million in total partners' deficit. The partnership reported a net loss of $54,040 on total revenues of $2.1 million for the second quarter ended June 30, 2007, compared with a net loss of $3.4 million on total revenues of $2.0 million for the same period ended June 30, 2006. Rental income increased approximately 3% for the three months ended June 30, 2007, as compared to the corresponding period in 2006, primarily due to increases in rental rates and decreases in vacancies at three Local Partnerships partially offset by a decrease in occupancy at one Local Partnership affected by fire in 2006. Total expenses, excluding general and administrative, general and administrative-related parties, repair and maintenance and operating, remained fairly consistent with an increase of less than 1% for the three months ended June 30, 2007, as compared to the corresponding period in 2006. General and administrative expenses increased approximately $100,000 for the three months ended June 30, 2007, as compared to the corresponding period in 2006, primarily due to an increase in accounting fees and an increase in legal fees due to high sales activity at the Partnership level. General and administrative-related parties expenses decreased approximately $190,000 for the three months ended June 30, 2007, as compared to the corresponding period in 2006, primarily due to a decrease in partnership management fees at the Partnership level resulting from the sale of properties. Repair and maintenance expenses increased approximately $226,000 for the three months ended June 30, 2007, as compared to the corresponding period in 2006, primarily due to increases in maintenance and repair contracts, including painting and decorating, and non-recurring repairs relating to fire damage at one Local Partnership, increases in maintenance payroll, security contract and painting and decorating expenses at a second Local Partnership, increases in plumbing and elevator repair expenses at a third Local Partnership, and increases in floor repairs, carpet and windows replacement and appliance repair expenses at two other Local Partnerships. Operating expenses increased approximately $26,000 for the three months ended June 30, 2007, as compared to the corresponding period in 2006, primarily due to increases in electricity costs at two Local Partnerships partially offset by a decrease in water and sewer expenses at a third Local Partnership which received a downward adjustment for an overcharge in the previous year. Full-text copies of the partnership's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2257 Liquidity and Capital Resources The Partnership's capital was originally invested in 27 Local Partnerships. As of June 30, 2007, the properties and the related assets and liabilities of fourteen Local Partnerships and the limited partnership interest in 6 Local Partnerships were sold. In addition, as of June 30, 2007, one Local Partnership has entered into an agreement to sell its property and the related assets and liabilities. Going Concern Trien Rosenberg Rosenberg Weinberg Ciullo & Fazzari LLP, in New York, expressed substantial doubt about the ability of Liberty Tax Credit Plus II LP's two limited partnerships' ability to continue as a going concern after auditing the partnership's consolidated financial statemnts for the years ended March 31, 2007, and 2006. The auditing firm pointed to the two subsidiary partnerships' net losses of $186,984, $263,008 and $146,138 for the fiscal years 2006, 2005 and 2004, respectively. About Liberty Tax Liberty Tax Credit Plus II L.P. invests in other limited partnerships owning leveraged low-income multifamily residential complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, and to a lesser extent in Local Partnerships owning properties that are eligible for the historic rehabilitation tax credit. LIMITED BRANDS: Paying $.15/Share Quarterly Dividend on Sept. 14 ---------------------------------------------------------------- Limited Brands declared its regular quarterly dividend of $.15 per share payable on Sept. 14, 2007, to shareholders of record at the close of business on Aug. 30, 2007. This is the company's 131st consecutive quarterly dividend. Limited Brands (NYSE: LTD) through Victoria's Secret, Bath & Body Works, C.O. Bigelow, Limited Stores, La Senza, White Barn Candle Co., Henri Bendel and Diva London, presently operates 3,140 specialty stores. The company's products are also available online at -- http://www.VictoriasSecret.com/-- http://w.BathandBodyWorks.com/ -- and -- http://www.LaSenza.com/-- * * * As reported in the Troubled Company Reporter on July 3, 2007, Moody's Investors Service lowered both the long term and short term ratings of Limited Brands, Inc. with a stable outlook (senior unsecured to Baa3 and the short term rating to Prime-3). Moody's downgrades these ratings: Senior unsecured to Baa3 from Baa2; Senior unsecured shelf at to (P) Baa3 from (P) Baa2; Subordinated shelf at to (P) Ba1 from (P) Baa3; Preferred shelf at to (P) Ba2 from (P) Ba1; Commercial paper to Prime-3 from Prime-2. MAC-GRAY CORP: Buys Hof Service's Assets for $43 Million in Cash ---------------------------------------------------------------- Mac-Gray Corporation has acquired the assets of Hof Service Company for a cash purchase price of approximately $43 million, subject to certain post-closing adjustments. "The acquisition of Hof provides us with an excellent opportunity to profitably expand our position in the Washington, D.C., Baltimore, and Virginia markets," Stewart G. MacDonald, Mac-Gray's chairman and chief executive officer, said. "With more than 50 years of experience, Hof has a first-class reputation in laundry facilities management, and their long-standing dedication to customer service aligns closely with Mac-Gray's values. The company's president Daryle Bobb and his talented team are a welcome addition to Mac-Gray. Because of their commitment to service and innovation, we believe they will be a natural fit with our organization. “Hof's operations are highly concentrated in their markets, which made the company an attractive acquisition,” Mr. MacDonald concluded. “Hof's client locations complement our existing footprint in the mid-Atlantic region and provide far greater density in those two key urban areas. We anticipate that the acquisition will contribute approximately $2 million in incremental monthly revenue and will be fully accretive to earnings in 2008.” “While this is an emotional and important event for our family, we nevertheless made the decision to sell to Mac-Gray because we knew that our employees, clients, and customers would be in the best hands,” Stanley Bobb, CEO of Hof, said. “After more than four decades in this business, it's time to plan for the future, and I'm excited that my son Daryle and I will continue to be involved in developing the Washington, Baltimore, and Virginia markets with Mac-Gray.” “They have resources and technology that will only continue to improve the quality of laundry facilities management for our clients and customers, and allow us to grow our client base in the region,” Mr. Bobb added. “We are proud of what all of Hof's team players have achieved over many years, but we are also very pleased and proud that Hof is now part of Mac-Gray.” Due to its success and leadership position in the Washington and Baltimore markets, and recognized brand, the organization will continue to operate under the Hof Laundry Systems name. Daryle Bobb will join Mac-Gray as a vice president and general manager in these markets. Mac-Gray is funding this acquisition with an expansion of its existing bank credit facility, which was increased from $65 million to $85 million. JPMorgan Chase Bank leads the company's bank group. Mufson Howe Hunter & Company LLC acted as financial advisors to Hof Laundry in this transaction. About Hof Service Company Headquartered in Beltsville, Maryland, Hof Service Company serves multi-housing clients in Washington, D.C., Maryland, and Virginia, Hof Service Company is a laundry facilities management services and equipment provider, well as a distributor of commercial laundry equipment, serving the mid-Atlantic region. About Mac-Gray Corporation Headquartered in Waltham, Massachusetts, Mac-Gray Corporation (NYSE: TUC) -- http://www.macgray.com/-- provides card-and coin- operated laundry facilities management services and energy- efficient MicroFridge(R) appliances to multi-nit housing locations such as apartment buildings, college and university residence halls, condominiums and public housing complexes. Founded in 1927, Mac-Gray also sells services and leases commercial laundry equipment to commercial laundromats and institutions through its product sales division. Mac-Gray serves approximately 63,000 multi-housing laundry rooms located in 40 states and the District of Columbia. * * * Moody's Investor Services assigned B1 on Mac-Gray Corporation's probability of default and long term corporate family rating on September 2006. The outlook is stable. Standard and Poor's placed BB rating on the company's long term foreign and local issuer credit on September 2005. The outlook is negative. MARCAL PAPER: Disclosure Statement Hearing Slated for Sept. 26 -------------------------------------------------------------- The Honorable Morris Stern of the United States Bankruptcy Court for the District of New Jersey will convene a hearing on Sept. 26, 2007, at 10:00 a.m, to consider the adequacy of Marcal Paper Mills Inc.'s Amended Disclosure Statement Explaining its Amended Chapter 11 Plan of Reorganization. Treatment of Claims Under the Plan, Other Priority Claims will receive cash equal to the allowed claim after the effective date. Prepetition Secured Lender Claims will be paid in full, in cash in an amount equal to the principla and all interest accrued. Holders of Other Secured Claims will be reinstated in accordance with the provision of Section 1124(20 of the Bankruptcy Code. General Unsecured Claims will receive a pro rata share of up to $31.72 million in aggregate, provided, no holder of this claim will receive more than 52% of the holder's claim. Equity Interest will not receive any distribution under the Plan. A full-text copy of Marcal Paper's Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070813031049 About Marcal Paper Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals offices and factories. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. MOBILE MINI: Board OKs $50 Million Stock Repurchase Program ----------------------------------------------------------- Mobile Mini Inc. reported that its board of directors has authorized a stock repurchase program of up to $50 million of the company's common stock over a period of six months. Under the terms of the stock repurchase program, Mobile Mini may repurchase shares in open market purchases or in privately negotiated transactions in compliance with applicable securities laws and regulations including the SEC's Rule 10b-18. The timing and amount of repurchases under this program will depend on market conditions and other corporate considerations, and will also be subject to Rule 10b-18 requirements. The repurchase program will be funded from available working capital. There were approximately 36.4 million shares of Mobile Mini common stock outstanding as of Aug. 3, 2007. Steven Bunger, chairman, president & chief executive officer stated, "Our board of directors believes that the recent trading price of our common stock does not adequately reflect the company's present value and strong growth prospects. We believe that, based on current market prices, the repurchase program is a good investment of our available funds and reaffirms our commitment to building shareholder value." About Mobile Mini Based in Tempe, Arizona, Mobile Mini Inc. (Nasdaq: MINI) -- http://www.mobilemini.com/-- designs and manufactures portable steel storage containers, portable offices, telecommunication shelters and a variety of delivery systems. The company markets, services and distributes its products through a network of company-owned branch locations in the U.S., Canada, the UK and The Netherlands and over 1,950 dedicated employees. * * * As of Aug. 9, 2007, the company holds Moody's Ba3 long-term corporate family rating and B1 senior unsecured debt rating. The outlook is positive. Standard & Poor's also rates the company's long-term foreign and local issuer credits at BB with a positive outlook. MONITRONICS INT'L: Repaid Debt Cues S&P to Withdraw Ratings ----------------------------------------------------------- On Aug. 10, 2007, Standard & Poor's Ratings Services said that it has withdrawn its ratings, including its B+/Negative/-- corporate credit rating, on Dallas, Texas-based Monitronics International Inc. "The company recently announced the completion of a tender offer for its 11.75% senior subordinated notes, and has also repaid all other existing publicly rated debt," said Standard & Poor's credit analyst Ben Bubeck. MONITRONICS INT'L: Moody's Withdraws B1 Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service withdrew Monitronics International Inc.'s ratings following the recent redemption of its $160 million senior subordinated notes due 2010 and recent cancellation of its $145 million senior secured revolver due 2008. These ratings were withdrawn: -- B1 Corporate Family Rating; -- B1 Probability of Default Rating; -- Ba2 (LGD2/29%) rating on $145 million Senior Secured Revolver due 2008; and -- B3 (LGD5/84%) rating on $160 million 11.75% Senior Subordinated Notes due 2010. Headquartered in Dallas, Texas, Monitronics International, Inc. provides security alarm monitoring and related services to residential and business subscribers throughout the United States and North America. For the twelve months ended March 31, 2007, the company generated revenues of about $191 million. MERRILL LYNCH: Fitch Rates $440,000 Class B-2 Certs. at B --------------------------------------------------------- Fitch rated Merrill Lynch Mortgage Investors Trust, MLCC Series 2007-3 residential mortgage pass-through certificates, as: -- $284,200,000 classes I-A1, I-A2, II-A1, II-A2, III-A1, III-A2 and A-R 'AAA' ('senior certificates'); -- $4,698,000 class M-1 'AA'; -- $1,762,000 class M-2 'A'; -- $1,174,000 class M-3 'BBB'; -- $734,000 class B-1 'BB'; -- $440,000 class B-2 'B'. The 'AAA' rating on the senior certificates reflects the 3.20% subordination provided by the 1.60% M-1 class, the 0.60% M-2 class, the 0.40% M-3 class, the 0.25% non-offered class B-1 class, the 0.15% non-offered class B-2 class and the 0.20% non-offered, non-rated class B-3 class. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults, as well as bankruptcy, fraud, and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, the strength of the legal and financial structures, and the capabilities of Wells Fargo Bank, N.A. as master servicer (rated 'RMS1' by Fitch). The mortgage pool consists primarily of 390 recently originated, adjustable rate, conventional, first lien, one - to four-family, residential mortgage loans, a substantial majority of which have original terms to maturity of 30 years. As of the cut-off date, the pool had an aggregate principal balance of about $293,596,173. The average loan balance is $752,811, and the weighted average original loan-to-value ratio for the mortgage loans in the pool is approximately 68.49%. The weighted average FICO credit score for the pool is about 749. Cash-out and rate/term refinance loans represent 25.52% and 20.16% of the pool, respectively. Second and investor-occupied homes account for 19.91% and 5.51% of the pool, respectively. The states that represent the largest geographic concentration are California (17.35%), New York (10.19%) and Florida (8.87%) None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. The loans were purchased by Merrill Lynch Mortgage Lending, Inc., which were subsequently sold to Merrill Lynch Mortgage Investors, Inc. Merrill Lynch Mortgage Investors, Inc. deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, elections will be made to treat the trust as separate multiple real estate mortgage investment conduits. HSBC Bank USA, National Association, will act as trustee. NEOMEDIA TECH: June 30 Balance Sheet Upside-Down by $52.6 Million ----------------------------------------------------------------- NeoMedia Technologies Inc.'s consolidated balance sheet at June 30, 2007, showed $27.1 million in total assets and $79.7 million in total liabilities, resulting in a $52.6 million total stockholders' deficit. The company's balance sheet at June 30, 2007, also showed strained liquidity with $12.4 million in total current assets available to pay $39.6 million in total current liabilities. NeoMedia Technologies Inc. reported a net loss of $2.6 million, which includes a loss from discontinued operations of $722,000, for the second quarter ended June 30, 2007. This compares to net income of %5.1 million, which includes loss from discontinued operations of $2.1 million, in the comparable period last year. Total net sales for the three months ended June 30, 2007, were $624,000, which represented a $135,000, or 28%, increase from $489,000 for the three months ended June 30, 2006. This increase resulted from $135,000 increased net sales in 2007 from Gavitec provided through new program development. Loss from operations decreased to $2.0 million in the current quarter, versus loss from operations of $3.9 million in the comparable period a year ago. The decrease in loss from operations was primarily due to an increase in gross profit and reduced expenses for sales and marketing, general and administrative, and research and development. The net loss for the current quarter primarily reflects a smaller gain from the change in fair value of embedded conversion features associated with the Series C preferred stock, warrants, and convertible debentures in the amount of $1.2 million in the current quarter, compared with a gain of $11.0 million in the same period in 2006, and $908,000 of additional interest expense during the three months ended June 30, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?224a Going Concern Doubt As reported in the Troubled Company Reporter on April 13, 2007, Stonefield Josephson Inc. expressed substantial doubt about NeoMedia Technologies Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. Stonefield Josephson pointed to the company's significant operating losses, negative cash flows from operations and working capital deficit. About NeoMedia Technologies NeoMedia Technologies Inc. -- http://www.neom.com/-- (OTC BB: NEOM) is a mobile enterprise and marketing technology company and offers direct-to-mobile-Web technology solutions. NeoMedia's flagship qode(R) service links the world's leading companies to the wireless, electronic world. NeoMedia is headquartered in Fort Myers, Fla., with an office in Aachen, Germany. NUANCE COMMS: Incurs $7.6 Million Net Loss in Third Qtr. 2007 ------------------------------------------------------------- Nuance Communications Inc. reported revenues of $156.6 million in the quarter ended June 30, 2007, a 39% increase over revenues of $113.1 million in the quarter ended June 30, 2006. Nuance recognized a net loss of $7.6 million in the quarter ended June 30, 2007, compared with a net loss of $9.4 million in the quarter ended June 30, 2006. For the nine months ended June 30, 2007, the company reported revenues of $422.1 million, as compared with revenues of $122.3 million for the nine months ended June 30, 2006. The company recognized net loss of $10.6 million for the nine months ended June 30, 2007, as compared with net loss of $15.7 million for the nine months ended June 30, 2006. As of June 30, 2007, the company's balance sheet showed total assets of $1.6 billion, total liabilities of $806.7 million, and total stockholders' equity of $749.6 million. The company held cash and cash equivalents of $168 million and marketable securities of $7.8 million at June 30, 2007. "Nuance experienced solid growth in its embedded, network and healthcare speech business lines, fueling strong revenue and earnings above expectations," said Paul Ricci, chairman and chief executive officer of Nuance. "These results further demonstrate our ability to extend Nuance's position in the global speech industry and to realize the benefits and synergies of recent acquisitions." Strategic Acquisitions The company announced the acquisitions of VoiceSignal and Tegic Communications, adding proven solutions, broad industry relationships and talented employees that enhance Nuance's position in mobile markets. The companies present compelling opportunities for Nuance with respect to their technical and operational capabilities, respective growth trajectories and financial returns afforded shareholders. Nuance expects these acquisitions will close during its fourth fiscal quarter. About Nuance Communications Based in Burlington, Massachusetts, Nuance Communications Inc. (NASDAQ: NUAN), fka ScanSoft Inc., -- http://www.nuance.com/-- provides speech and imaging solutions for businesses and consumers around the world. Its technologies, applications and services that help users interact with information, and create, share and use documents. * * * As reported in the Troubled Company Reporter on Aug. 9, 2007, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Burlington, Massachusetts-based Nuance Communications Inc. and assigned its 'B-' rating to Nuance's proposed $150 million senior unsecured convertible notes due 2027. Proceeds from the notes will be used to partially fund the previously announced acquisition of Tegic Communications Inc. The outlook is positive. PARALLEL PETROLEUM: Earns $3.5 Million in Qtr. Ended June 30 ------------------------------------------------------------ Parallel Petroleum Corporation Parallel reported net income of $3.5 million for the three months ended June 30, 2007. Included in net income was a $2.2 million pre-tax loss on derivatives, which included settlements of $3.4 million. Parallel had no derivatives classified as hedges during the second quarter of 2007. For the three months ended June 30, 2006, Parallel recorded net income of $2.5 million. Included in net income for the three months ended June 30, 2006, was a $5.4 million pre-tax loss on derivatives, which included settlements of $1.1 million and a gain on ineffective portion of hedges of $50,000. For the second quarter of 2007, Parallel's oil and natural gas sales were 270 MBbls of oil and 1,679 MMcf of natural gas, or 550 MBOE. During this period, the average prices the company received for its oil and natural gas on an unhedged basis were $59.24 per barrel and $6.79 per Mcf, or $49.81 per BOE. For the same period of 2006, oil sales were 298 MBbls at an average unhedged price of $63.17 per barrel and natural gas sales were 1,726 MMcf at an average unhedged price of $6.25 per Mcf, or 586 MBOE at an average unhedged price of $50.56 per BOE. When comparing the second quarter of 2007 to the second quarter of 2006, oil and gas revenues increased about 4% to $27.4 million and total costs and expenses increased about 10% to $15.3 million, which reduced operating income by about 3% to $12.1 million. Total costs and expenses increased primarily due to increases in lease operating expense, general and administrative expense, and depreciation, depletion and amortization costs. Interest expense increased about 37% to $4.3 million. Six Months Financial Results For the six months ended June 30, 2007, Parallel reported net income of $3.4 million. Included in net income was a $6.6 million pre-tax loss on derivatives, which included settlements of $5.9 million. Parallel had no derivatives classified as hedges during the six months ended June 30, 2007. For the six months ended June 30, 2006, Parallel recorded net income of $4.1 million. Included in net income for the six months ended June 30, 2006, was a $10 million pre-tax loss on derivatives, which included settlements of $2.7 million and a gain on ineffective portion of hedges of $200,000. For the six months ended June 30, 2007, Parallel's oil and natural gas sales were 543 MBbls of oil and 3,200 MMcf of natural gas, or 1,076 MBOE. During this period, the average prices the company received for its oil and natural gas on an unhedged basis were $55.56 per barrel and $6.34 per Mcf, or $46.89 per BOE. For the same period of 2006, oil sales were 566 MBbls at an average unhedged price of $60.56 per barrel and natural gas sales were 2,893 MMcf at an average unhedged price of $6.42 per Mcf, or 1,048 MBOE at an average unhedged price of $50.43 per BOE. When comparing the six months ended June 30, 2007 to the six months ended June 30, 2006, oil and gas revenues increased about 8% to $50.5 million and total costs and expenses increased about 20% to $30.1 million, which reduced operating income by about 7% to $20.4 million. Total costs and expenses increased primarily due to increases in lease operating expense, general and administrative expense, and depreciation, depletion and amortization costs. Interest expense increased about 43% to $8 million. When comparing the six months ended June 30, 2007 to the six months ended June 30, 2006, net cash provided by operating activities decreased about 14% to $34.7 million, net cash used in investing activities decreased about 29% to $80.7 million, and net cash provided by financing activities decreased about 38% to $45.6 million. Balance Sheet Review At June 30, 2007, current assets were $36.5 million, which included $5.5 million of cash and cash equivalents. Current liabilities were $55.7 million, including current derivative obligations of $17 million. Long-term liabilities were $250 million, including $209.5 million of debt and $9.1 million of derivative obligations. The borrowing base under the company's revolving credit facility was $190 million as of June 30, 2007, and outstanding borrowings under the revolving credit facility at that same date were $159.5 million. In addition, the company had $50 million outstanding under its second lien term loan facility. Effective July 31, 2007, the company issued $150 million of 10.25% senior notes due 2014. The proceeds were used to pay off the $50 million second lien term loan facility and to reduce the revolving credit facility by $93 million. As of July 31, 2007, the borrowing base under the company's revolving credit facility was $150 million, and outstanding borrowings under the revolving credit facility at that same date were $71 million. As of June 30, 2007, the company's net capitalized costs associated with its oil and gas properties and other equipment were $446.3 million. Stockholders' equity was $188.5 million. Management Comments Larry C. Oldham, Parallel's president, commented, "Our recent $150 million notes offering enhances our ability to execute our business plan. We expect our production volumes to increase during the third quarter as work-in-progress wells in the Barnett Shale and Wolfcamp are completed and brought online. As we discussed in our operations update press release today, as of August 1, we had 15 gross, or 6.17 net, wells in our two resource gas projects that were completing, awaiting completion, or shut-in awaiting pipeline connection. Additionally there were 2 wells drilling in the Barnett Shale, 2 wells drilling in the Wolfcamp, and 1 well drilling in the Permian Basin." About Parallel Petroleum Parallel Petroleum Corp. -- http://www.plll.com/-- is an independent energy company headquartered in Midland, Texas, engaged in the acquisition, exploration, development and production of oil and gas using 3-D seismic technology and advanced drilling, completion and recovery techniques. Parallel's primary areas of operation are the Permian Basin of West Texas and New Mexico, North Texas Barnett Shale, Onshore Gulf Coast of South Texas, East Texas and Utah/Colorado. * * * As reported in the Troubled Company Reporter on July 24, 2007, Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to oil and gas exploration and production company Parallel Petroleum Corp. At the same time, S&P assigned a 'B-' rating to the company's proposed $150 million senior unsecured notes due 2014. The outlook is stable. PASSARELLI SOLUTIONS: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Passarelli Solutions, Inc. 43-43 Northern Boulevard Long Island City, NY 11101 Bankruptcy Case No.: 07-44327 Type of business: The Debtor leases new and used passenger cars. Chapter 11 Petition Date: August 10, 2007 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Eric J. Snyder, Esq. Siller Wilk, L.L.P. 675 Third Avenue, 9th Floor New York, NY 10017 Tel: (212) 421-2233 Fax: (212) 752-6380 Total Assets: $2,063,320 Total Debts: $3,215,332 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ford Motor Credit cap loan; $2,593,650 Omni Plaza value of security: 333 Earle Ovington Boulevard $1,309,102 Automotive Protection Corp. $300,000 6010 Atlantic Boulevard Norcross, GA 30071 P.&A. Pellarin Associates $200,000 495 Union Avenue Middlesex, NJ 08846 E.&M. Distributors $17,667 Gasgo Petroleum, Inc. $17,649 Worldwide Express $9,874 The Korean Times $9,250 North Star Auto Center $6,808 Royal Auto Center, Inc. $4,902 Reynolds & Reynolds Co. $4,840 T.M.&T. Service $4,118 The Korea Daily $4,000 Industrial Uniform Services $3,909 Broadview Networks $3,634 Lojack Corp. $3,620 Newsday, Inc. $2,605 The Korean Times N.Y. $2,500 Auto Rich R.B. $2,489 Call Source $2,477 Dean's Auto Body $1,984 PROGRESSIVE GAMING: Posts $34.2 Mil. Net Loss in Second Qtr. 2007 ----------------------------------------------------------------- Progressive Gaming International Corporation incurred a net loss in the three months ended June 30, 2007, of about $34.2 million. In the three months ended June 30, 2006, the company incurred a net loss of $14.3 million. The company reported that system revenues, now reported as the sole component of revenues from continuing operations, rose 59% to $18.8 million for the quarter ended June 30, 2007, from $11.9 million in the same period a year ago. Pursuant to the company's intention and related agreements to divest its Table Games Division and remaining Slot Assets, these operations have been classified as discontinued operations and the company recorded a loss, net of taxes of about $29.3 million, and about $800,000, for the second quarter 2007 and second quarter 2006 periods, respectively, related to the operations and write down of the assets of these divisions. The operations from the slot and table game route along with the associated losses for the write down of the related assets are included in the discontinued operations line item of the company's statement of operations. As of June 30, 2007, the company had total assets of $150.6 million, total liabilities of $106 million, and total stockholders' equity of $44.6 million. Management's Comments Commenting on the results, Progressive Gaming International Corporation president and chief executive officer, Russel McMeekin, stated, "Reflecting our success in repositioning Progressive as a leading supplier of system-centric products, in the 2007 second quarter period we recorded year-over-year and quarterly sequential systems based revenue growth of 59% and 28%, respectively, while generating gross margins at the high end of our 2007 target. Our ongoing progress in expanding our systems business is evidenced by the installed base growth of our products. On a quarterly sequential basis, Casinolink installations rose by 5%, or about 2,800 units, reflecting growth in Asia and in European territories including in the United Kingdom and Central European markets. Table Management systems also grew an impressive 8.6%, or by about 270 units on a quarterly sequential basis. "We also continue to generate meaningful traction with placements of our CJS local and wide-area progressive/mystery jackpot system with quarterly sequential installed base growth of more than 20%, or more than 1,100 units, in the 2007 second quarter period. We expect CJS placements to accelerate further in the third and fourth quarters and that our expected installed base will meaningfully benefit the second half 2007 operating results. In July we achieved a significant milestone as CJS received approval from the technology division of the Nevada Gaming Control Board to move to field trials in the state. We are currently completing all site preparations for one multi-site trial to begin later this month, with a second multi-site trial expected to begin next month. Based on the strong existing backlog of orders for CJS, and in anticipation of a final approval for this product in Nevada, whereby we can begin to install CJS in the largest domestic slot machine market, we believe we are on track to achieve our target of 12,000 installations by the end of this year. "In addition to growing our systems installed base, a second priority for the company throughout 2007 has been on streamlining our operations and cost structure and improving our balance sheet. In July we entered into a non-binding letter of intent for the sale of our worldwide Table Game Division assets to Shuffle Master Inc. We are making progress toward completing this transaction in accordance with our mutually agreed upon closing date. In addition to the capital expected to be generated from this sale, we have other near-term opportunities that we are analyzing to restructure our balance sheet in the most optimal manner. We believe these opportunities will also provide additional liquidity to pursue long-term growth opportunities for the company's high- margin recurring revenue systems business." Progressive Gaming International Corporation's executive vice president, chief financial officer and treasurer, Heather Rollo, added, "Our 2007 second quarter operating results from continuing operations benefited from the ongoing strength in our systems business as well as cost reduction initiatives reflecting progress made in streamlining our operations. Systems revenues of $18.8 million in Q2 2007 include the recognition of $3.8 million in revenues related to Q1 2007 systems placements, which, for GAAP purposes, were deferred until the second quarter. We also recognized approximately $1.7 million of slot and table revenues which are classified in discontinued operations. In addition to these recorded revenues, there were proceeds from the sale of the slot game assets which were offset against the assets being sold and also classified as discontinued operations. Reflecting the higher level of systems based revenues in the overall mix for the second quarter, we achieved gross margin from continuing operations of 58% for the period, which is consistent with our targeted 2007 gross margin range of 54% to 58%. "We are making excellent progress in growing our systems revenues as evidenced by $33.6 million in revenue recorded in the first half of 2007 which is a 29% improvement over systems based revenues generated in first half of 2006. Gross margin improved by nearly 700 basis points in the first half of 2007 compared to the first half of 2006 and our Operating expenses (including SG&A and R&D) declined by nearly 25% for the same periods. We believe we are positioned well for strong systems growth across all product lines with the Casinolink installed base expected to grow by approximately 10% to 15% year-over-year fueled in part by initial placements related to the recent strategic alliance we entered into with Melco / Elixir; expected CJS installed base growth of more than 5,000 units in the second half of 2007; and, table game management systems installed base growth to 4,000 units by calendar year-end. Our growing systems placements are expected to benefit operating results in the second half of 2007 and future periods will benefit from the high operating margins associated with these daily recurring revenues. "With the sale of our slot business and pending sale of the table game business, we have classified our anticipated revenues of $12 million to $14 million for the full fiscal 2007 year and the associated costs from these divisions as discontinued operations. As a result of these transactions, we have been able to reduce headcount and other related costs resulting in over $7 million of annualized savings. We are now achieving annual revenues of approximately $280,000 per employee, which is in line with other technology companies and we expect this metric will continue to grow with our revenues." Webb Litigation Status Update The period for filing all post trial motions and responsive pleadings has closed. Based upon the company's review of the pleadings, the applicable law, and the strength of its arguments, the company expects that the Court will rule in the company's favor and will reverse the jury verdict. The company anticipates that oral arguments related to the post-trial motions will be heard in late 2007. The posting of any bond related to the jury verdict is stayed (on hold) unless and until the Court issues an adverse decision on the motion for new trial. In the event that the company needs to file an appeal in this matter, a supersedeas bond will need to be posted. Filing a bond is typical in appellate procedure and is not meant to be punitive; hence, the company does not anticipate that the amount of any required bond will be a material portion of the total verdict. The bond is meant to provide protection to the judgment creditor by forcing the appellant to deliberate the merits of their case before filing an appeal. The company does not expect final conclusion of these post trial matters until at least 2008. About Progressive Gaming Headquartered in Las Vegas, Nevada, Progressive Gaming International Corporation formerly Mikohn Gaming Corp. is a supplier of integrated casino management systems software and games for the gaming industry. * * * As reported in the Troubled Company Reporter on March 30, 2007, Progressive Gaming International Corp. disclosed in a regulatory filing with the Securities and Exchange Commission that the company may be forced into bankruptcy if its appeal regarding a $43.7 million judgment fails. PTS INC: June 30 Balance Sheet Upside-Down by $722,781 ------------------------------------------------------ PTS Inc.'s consolidated balance sheet at June 30, 2007, showed $1.6 million in total assets, $2.3 million in total liabilities, and $60,000 in minority interest, resulting in a $722,681 total stockholders' deficit. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $508,404 in total current assets available to pay $1.0 million in total current liabilities. The company reported a net loss of $1.1 million for the second quarter ended June 30, 2007, compared with a net loss of $350,326 for the same period ended June 30, 2007. Results for the 2006 quarter includes loss from discontinued operations of Global Links Card Services Inc. of $76,489, versus none in the 2007 quarter. Total revenue was $462,500 for the three months ended June 30, 2007, compared to $206,423 during the three months ended June 30, 2006. The increase results primarily from the new consulting agreement entered into by DAC during January 2007. Loss from continuing operations before interest and discontinued operations increased to $267,171 for the three month period ended June 30, 2007, compared to a loss $235,112 for the comparable period in 2006, mainly due to an increase in general and administrative expenses. The increase in net loss mainly reflects a charge of $762,353 to reflect the non cash change in the fair value of the company's derivative liability during the three months ended June 30, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?224f Going Concern Doubt As reported in the Troubled Company Reporter on April 18, 2007 Lynda R. Keeton CPA LLC expressed substantial doubt PTS Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. Ms. Keeton pointed to the company's limited operations and continued net losses. About PTS Inc. PTS Inc. (OTC BB: PTSH) -- http://www.ptspi.com/-- manufactures and distributes paraplegic and quadriplegic apparatus known in the market as Glove Box(TM). The company also offers consulting services for marketing production design through third party contractors. Also, through its subsidiaries, engages primarily in the sale of plastic stored value cards. The company also provides accessibility compliance consulting services. RADNET INC: Suspends $445 Million Refinancing from GE Healthcare ---------------------------------------------------------------- RadNet Inc. reported that conditions in the debt markets have necessitated that RadNet defer its previously contemplated $445 million debt refinancing. Instead, GE Healthcare Financial Services has agreed to arrange for RadNet an incremental $35 million as part of its existing credit facilities. The Incremental Facility will consist of an additional $25 million as part of its first lien Term Loan B and $10 million of additional capacity under RadNet's existing revolving line of credit. The incremental facility will be used to fund certain identified strategic initiatives and for general corporate purposes. Mark Stolper, RadNet's chief financial officer, stated, "The incremental term loan and revolver capacity will provide us additional liquidity to capitalize on opportunities we believe lie ahead." Mr. Stolper added, "The continuing deterioration of the credit markets over the last few weeks, caused by troubles in the sub-prime lending market and other factors, dictate that we are unable to achieve our original refinancing objectives at this time. In the last 30 days, many debt financings were cancelled and many of those that were completed, were completed under terms and conditions much less attractive than desired." Mr. Stolper added, "Our original refinancing transaction was an elective one, and was intended to provide us with better pricing than that of our existing credit facilities. We continue to believe we will be able to refinance our current facilities on more attractive terms in the future when the credit markets improve. However, we are very pleased that this incremental capital will provide us with the ability to accomplish our growth plans in the near term." About GE Healthcare GE Healthcare Financial Services -- http://www.gehealthcarefinance.com/-- provides capital, financial solutions, and related services for the global healthcare market. With over $16 billion of capital committed to the healthcare industry, GE Healthcare Financial Services offers a full range of capabilities from equipment financing and real estate financing to working capital lending, vendor programs, and practice acquisition financing. About RadNet Inc. RadNet Inc. (NasdaqGM: RDNT) -- http://www.radnet.com/-- provides diagnostic imaging services through the ownership and operation of freestanding, outpatient diagnostic imaging centers in the United States. Its imaging services primarily include magnetic resonance imaging or MRI, computed tomography or CT, positron emission tomography or PET, nuclear medicine, mammography, ultrasound, diagnostic radiology, or X-ray, and fluoroscopy. It also provides its services on a contract basis. RadNet Inc.'s balance sheet as of March 31, 2007, listed total assets of $396.3 million, total liabilities of $445.7, and total stockholders' deficit of $49.4 million. REDS EHP: Moody's Assigns Low-B Ratings on Three Note Classes ------------------------------------------------------------- Moody's Investors Service assigned definitive short-term and long- term ratings to the notes issued by REDS EHP Series 2007-1 Trust. The transaction is a securitisation of a portfolio of Australian motor vehicle and equipment leases originated by BOQ Equipment Finance Limited, a division of Bank of Queensland Limited. The notes are backed by a variety of lease contracts, hire purchase receivables, bills of sale and chattel mortgages. Complete Rating Action: -- P-1 to the AUD 190,000,000 Class A-1 Notes; -- Aaa to the AUD 717,500,000 Class A-2 Notes; -- A1 to the AUD 42,500,000 Class B Notes; -- Baa2 to the AUD 17,000,000 Class C Notes; -- Ba1 to the AUD 7,00,000 Class D Notes; -- Ba3 to the AUD 1,000,000 Class E Notes; -- Ba3 to the AUD 3,000,000 Class F Notes; -- The AUD 9,800,000 Class G Notes are not rated; -- The AUD12,200,000 Class H Notes are not rated. The ratings address the expected loss posed to investors by the legal final maturity. The structure allows for timely payment of interest and ultimate payment of principal with respect to the Class A-1 and Class A-2 Notes by their legal final maturity, and the ultimate payment of interest and principal with respect to the Class B, Class C, Class D, Class E and Class F Notes by the legal final maturity. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have significant effect on yield to investors. Moody's ratings are subject to revision, suspension or withdrawal at any time at our absolute discretion. The ratings are expressions of opinion and not recommendations to purchase, sell or hold securities. RELIANT PHARMA: Registers Common Stock Initial Offering with SEC ---------------------------------------------------------------- Reliant Pharmaceuticals Inc. has filed a registration statement on Form S-1 with the Securities and Exchange Commission for an initial public offering of its common stock. The registration statement contemplates that Reliant will sell newly issued common stock and that certain stockholders may sell a portion of their current holdings of Reliant's common stock. Goldman, Sachs & Co. and Merrill Lynch & Co. will act as the joint lead managers and joint book-runners for the proposed offering. The public offering will be made only by means of a prospectus which, when available, may be obtained by writing or calling one of the underwriters: Goldman, Sachs & Co. Attention: Prospectus Department 85 Broad Street New York, NY 10004 Tel: 212-902-1171 or Merrill Lynch & Co. Attention: Prospectus Department 4 World Financial Center New York, NY 10080 Tel (212) 449-1000 About Reliant Pharmaceuticals Inc. Based in Liberty Corner, New Jersey, Reliant Pharmaceuticals Inc. is a pharmaceutical company that specializes in the development, commercialization and marketing of prescription therapeutic products. Reliant currently markets four cardiovascular products in the United States and focuses on promoting its products to targeted primary care and specialty physicians, well as selected hospitals and academic centers in the United States. Reliant's sales force infrastructure is comprised of approximately 875 sales and marketing professionals nationwide. ROCKY POINT: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Rocky Point Village Corporation 2500 Rocky Point Drive Tampa, FL 33607 Bankruptcy Case No.: 07-07118 Chapter 11 Petition Date: August 11, 2007 Court: Middle District of Florida (Tampa) Debtor's Counsel: Richard J. McIntyre, Esq. The McIntyre Law Firm, P.L. 6987 East Fowler Avenue Temple Terrace, FL 33617 Tel: (813) 899-6059 Fax: (813) 899-6069 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Specialty Restaurants $574,847 Corporation 8191 East Kaleer Boulevard Anaheim, CA 92506 City of Tampa $91,274 County Center, 20th Floor 601 East Kennedy Boulevard Tampa, Florida 33602-4932 Hillsborough County $50,000 Property Appraiser 16th Floor County Center 601 East Kennedy Boulevard Tampa, Florida 33602-4932 Capri Engineering, L.L.C. $18,000 Razak Geo Technical $3,000 Engineers, Inc. Tampa Electric Company $2,174 Mobile Mini, Inc. $2,303 American Surveying, Inc. $1,500 Silcox, Kidwell & $950 Associates, Inc. Boelter Cointracts & Design, $500 L.L.C. The Wright Effect, Inc. $200 O.C.H. Environmental $205 Engineering, Inc. Rapid Blue Print Co. $29 Lifsey Trust Fund Nos. 2, 3 unknown & 4 ROUGE INDUSTRIES: Has Until September 17 to File Chapter 11 Plan ---------------------------------------------------------------- The Honorable Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware extended Rouge Industries Inc. and its debtor-affilaites' exclusive periods to: a. file a Chapter 11 plan until Sept. 17, 2007; and b. solicit acceptances of that plan until Nov. 19, 2007. As reported in the Troubled Company Reporter on July 25, 2007, Thomas F. Driscoll III, Esq., at Morris Nichols Arsht & Tunnell, said the Debtors intend to use the request for extension to finalize and file a liquidating Chapter 11 plan. The Debtors, Mr. Driscoll added, want to conclude these cases as efficiently as possible. Based in Dearborn, Michigan, Rouge Industries Inc., an integrated producer of flat-rolled steel, filed for chapter 11 protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272). Adam G. Landis, Esq., at Landis Rath & Cobb LLP and Alicia Beth Davis, Esq., at Morris Nichols Arsht & Tunnell represent the Debtors. Kurt F. Gwynne, Esq., and Richard Allen Keuler, Jr., Esq., at Reed Smith LLP serve as counsel to the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $558,131,000 in total assets and $558,131,000 in total debts. On Dec. 19, 2003, the Court approved the sale of substantially all of the Debtors' assets to SeverStal N.A. for $285.5 million. The Asset Sale closed on Jan. 30, 2005. SASKATCHEWAN WHEAT: Signs $600 Million Credit Pact with GE Capital ------------------------------------------------------------------ Saskatchewan Wheat Pool entered into a credit agreement for a $600 million senior secured revolving credit facility through a syndicate of financial institutions led by GE Capital. The three- year operating line will provide the necessary funding to support the new company's working capital requirements. The financing agreement replaces the Pool's existing $250 million line of credit and Agricore United's $550 million line of credit and may be extended at the option of the company for an additional two years. "This operating line provides the new company with the financial capacity it requires to meet the needs and deliver the value to our expanding customer base here and around the globe" said Saskatchewan Wheat Pool president and chief executive officer Mayo Schmidt. "It is one more milestone in integrating the capital structures of these two agricultural leaders." About Saskatchewan Wheat Pool Saskatchewan Wheat Pool Inc. (TSX: SWP) is Canada's leading publicly traded agri-business, with extensive operations and distribution capabilities across Western Canada, and with operations in the United States and Japan. The Pool is diversified into sales of crop inputs and services, grain handling and marketing, livestock production services, agri-food processing and financial services. These operations are complemented by value-added businesses and strategic alliances, which allow the Pool to leverage its pivotal position between Prairie farmers and destination customers. * * * As reported in the Troubled Company Reporter on May 11, 2007, Standard & Poor's Ratings Services maintained the CreditWatch listings on Saskatchewan Wheat Pool (SWP; B+/Watch Pos/--) and Agricore United (AU; BB/Watch Dev/--), following SWP's revised CDN$1.8 billion offer for AU. (The ratings on both companies were placed on CreditWatch Nov. 8, 2006.) The new proposal, under which SWP will enhance and extend its common share offer for all of AU's shares outstanding, has been deemed a "superior proposal" by AU's board relative to James Richardson International Ltd.'s April 19, 2007, proposal. As such, JRI's proposal has been terminated. SATCON TECH: June 30 Balance Sheet Upside-Down by $4 Million ------------------------------------------------------------ SatCon Technology Corporation disclosed on Aug. 9, 2007, its operating results for the quarter ended June 30, 2007. SatCon Technology Corp.'s consolidated balance sheet at June 30, 2007, showed $34.9 million in total assets, $38.9 million in total liabilities, resulting in a $4.0 million total stockholders' deficit. The company reported a net loss of $3.7 million for the second quarter ended June 30, 2007, compared with a net loss of $3.5 million for the same period a year ago. Revenues for the quarter ended June 30, 2007, were $11.7 million compared with $8.1 million in the second quarter of 2006, an increase of 31%. Revenues for the first six months totaled $20.1 million, a 27% increase over the $15.7 million in 2006. Revenues within the Power Systems Division in Canada increased by 59% to $5.2 million for the quarter compared to $3.3 million in the second quarter of 2006 for a total in the first six months of $8.8 million, a 58% increase over $5.6 million in 2006. In addition, the Applied Technology Division revenue recorded growth of over 42% to $1.8 million from $1.3 million for a total growth of over 62% to $3.6 million in 2007 from $2.2 million in 2006. Revenues in the Motors and Hybrid Electric Vehicle business was up 66% to $1.0 million compared to $600,000 in 2006 with total increases of approximately $400,000 from $1.4 to $1.8 million in 2007. This revenue growth reflects the results of the company's effort to focus on products targeted at the alternative energy and distributed power markets. Operating Losses for the second Quarter of 2007 were $3.5 million, virtually equal to the same period of 2006 with a total six-month loss of $6.5 million compared to $6.7 million in 2006. However, included in the Q2 2007 losses are approximately $1.0 million of excess costs associated with older legacy products primarily in the Power Systems Division. In addition, the company experienced increased labor costs as well as increased materials costs due to the availability of materials from the company's supplier base to meet increased demand for photovoltaic inverters and a strengthening of the Canadian dollar during the last quarter. The company continued to increase direct investment spending in R&D with a modest increase of $100,000 to $600,000 in Q1 2007 for a total of $1.3M for the first half of 2007, an increase from $200,000 in 2006, primarily to support the development of new photovoltaic products. These cost increases were partially offset by reduced SG&A expenses by $300,000 or 11% and $900,000 or 13% for the first six months, primarily due to a decrease in corporate costs related to legal and other fees, reduced payroll and other overhead costs. "This has been a strong revenue growth quarter for SatCon," said David Eisenhaure, president and chief executive officer. "As we have been predicting for some time, the Photovoltaic Inverter market opportunity is experiencing rapid growth and we have been positioned well to take advantage of the technical strength of our products." Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?225e Going Concern Doubt As reported in the Troubled Company Reporter on April 12, 2007, Vitale, Caturano and Company Ltd. expressed substantial doubt about SatCon Technology Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company incurred a net loss of $19.8 million and used $9.8 million of cash in its operating activities and as of Dec. 31, 2006, has a stockholders' deficit of $2.5 million. In addition, the company has historically incurred losses and used cash, rather than provided cash, from operations. About SatCon Technology SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- is a developer and manufacturer of electronics and motors for the Alternative Energy, Hybrid-Electric Vehicle, Grid Support, High Reliability Electronics and Advanced Power Technology markets. SHARON KINSER: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Sharon Kay Kinser P.O. Box 148 Sopchoppy, FL 32358 aka Sharon Kay Williamson dba Kinser Corporation/Harbor House Bankruptcy Case No.: 07-40416 Type of business: The Debtor owns and operates a restaurant. Chapter 11 Petition Date: August 9, 2007 Court: Northern District of Florida (Tallahassee) Debtor's Counsel: Thomas B. Woodward, Esq. P.O. Box 10058 Tallahassee, FL 32302 Tel: (850) 222-4818 Fax: (850) 561-3456 Total Assets: $2,189,402 Total Debts: $1,598,326 Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America credit card $24,097 P.O. Box 17054 Wilmington, DE 19884 Americredit automobile $14,696 801 Cherry Street, Suite 3900 Forth Worth, TX 76102 Chase credit card $13,888 800 Brooksedge Boulevard Westerville, OH 43081 Wash Mutual/Providian credit card $12,280 Gemb/Jcp charge account $6,427 Kay Jewelers miscellaneous $4,492 jewelry; value of $2,500 Gemb/Dillards charge account $3,851 Jjill/Cbsd charge account $1,858 Ugi Utilities, Inc. $1,099 Chase-Bp credit card $1,081 Chase-Bp credit card $1,507 Capital One Bank credit card $967 Mcydsnb charge account $867 Target Nb credit card $775 Bmby/Cbsd charge account $798 Gemb/Belk charge account $679 Cbcs Agriculture Penson. $640 Padgett Att. Gemb/Gap charge account $438 STATION CASINOS: June 30 Balance Sheet Upside-Down by $167.6 Mil. ----------------------------------------------------------------- Station Casinos Inc. had total assets of $3.7 billion, total liabilities of $3.9 billion, and total stockholders' deficit of $167.6 million as of June 30, 2007. The company's June 30 balance sheet also showed strained liquidity with total current assets of $195.4 million, and total current liabilities of $257 million. Long-term debt was $3.44 billion as of June 30, 2007. Total capital expenditures were $74.7 million for the second quarter. Expansion and project capital expenditures included $6.1 million for Phase III of Red Rock, $6.8 million for the expansion of Fiesta Henderson, $18.4 million for the corporate office building and $10.2 million for the purchase of land. As of June 30, 2007, the Company's debt to cash flow ratio, as defined in its bank credit facility, was 5.7 to 1. Results of Operations The company's net revenues for the second quarter ended June 30, 2007 were about $362.9 million, an increase of 6% compared to the prior year's second quarter. During the second quarter, the company incurred $1.9 million in costs to develop new gaming opportunities, primarily related to Native American gaming, $6.1 million related to costs associated with the FCP transaction noted below, $1 million of preopening expenses, $1.7 million gain on asset sales, $3.8 million in management agreement/lease termination costs and $100,000 of other non-recurring credits. Including these items, the company reported net income of $15.1 million for the second quarter 2007, as compared with net income of $26.8 million in the prior year's second quarter. Proposed Merger On Feb. 23, 2007, the company entered into a definitive merger agreement with Fertitta Colony Partners LLC, pursuant to which FCP agreed to acquire all of Station's outstanding common stock for $90 per share in cash. FCP is a new company formed by Frank J. Fertitta III, chairman and chief executive officer of Station, Lorenzo J. Fertitta, vice chairman and president of Station and Colony Capital Acquisitions, LLC, an affiliate of Colony Capital, LLC. About Station Casinos Station Casinos Inc. -- http://www.stationcasinos.com/-- (NYSE: STN) owns and operates Red Rock Casino Resort and Spa, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino, Fiesta Henderson Casino Hotel, Magic Star Casino and Gold Rush Casino in Henderson, Nevada. Station also owns a 50% interest in Green Valley Ranch Station Casino, Barley's Casino & Brewing Company and The Greens in Henderson, Nevada and a 6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages Thunder Valley Casino near Sacramento, California on behalf of the United Auburn Indian Community. * * * As reported in the Troubled Company Reporter on July 12, 2007, Standard & Poor's Ratings Services announced that its ratings for Station Casinos Inc., including the 'BB-' corporate credit rating, remain on CreditWatch with negative implications, where they were initially placed Nov. 2, 2006. S&P have determined that once potential barriers to the company's pending LBO deal have been eliminated, S&P will lower its existing ratings by one notch, bringing the corporate credit rating to 'B+'. In turn, the rating on the company's senior unsecured notes will be lowered to 'B' from 'B+' and the rating on the subordinated notes will be lowered to 'B-' from 'B'. The rating outlook is expected to be negative, reflecting credit measures that will be weak even for the 'B+' rating due to the pending LBO by Fertitta Colony Partners LLC. SYNIVERSE TECHNOLOGIES: Inks $464 Million Amended Credit Pact ------------------------------------------------------------- Syniverse Technologies Inc. entered into a $464 million amended and restated credit agreement. The agreement provides for a term loan of $112 million in aggregate principal amount, a delayed draw term loan of $160 million in aggregate principal, a Euro- denominated delayed draw term loan facility of the equivalent of $130 million, a revolving credit line of $42 million, a Euro- denominated revolving credit line of the equivalent of $20 million and a multi-currency letter of credit commitment of $15 million. Syniverse used $112 million of the total amount borrowed under the senior credit facility plus available cash on hand to repay its previous senior credit facility and to pay related transaction fees and expenses. The delayed draw term loans are intended to fund the proposed acquisition of the wireless clearing and financial settlement business of Billing Services Group, including the refinancing of existing debt of Billing Services Group, and to pay related transaction fees and expenses. Lehman Brothers Inc. and Deutsche Bank Securities Inc. acted as joint lead arrangers and joint book-running managers for the deal. Bear, Stearns & Co. Inc. and LaSalle Bank National Association acted as co-documentation agents. About Syniverse Syniverse Technologies Inc. in Tampa, Florida (NYSE: SVR) - http://www.syniverse.com/-- provides technology services for wireless telecommunications companies. Its integrated suite of services include technology interoperability services, which enable the invoicing and settlement of domestic and international wireless roaming telephone calls and wireless data events; SMS and MMS routing and translation services between carriers; and interactive video and mobile broadband solutions, prepaid applications, and roaming services. Celebrating its 20th anniversary in 2007, Syniverse has offices in major cities around the globe. Syniverse is ISO 9001:2000 certified and TL 9000 approved, adhering to the principles of customer focus and quality improvement practices. * * * As reported in the Troubled Company Reporter on June 29, 2007, Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating, along with its stable outlook, and its 'B' senior subordinated debt rating on Syniverse Technologies Inc. At the same time, Standard & Poor's assigned its 'BB' bank loan rating and '2' recovery rating to Syniverse's proposed $489 million senior secured bank facility. The bank loan rating, which is one notch above the corporate credit rating, along with the '2' recovery rating, reflect our expectation for substantial (70%-90%) recovery of principal by creditors in the event of a payment default. TARGA RESOURCES: Moody's Affirms Ba3 Credit Facility Rating ----------------------------------------------------------- Moody's Investors Service re-assigned ratings to Targa Resources, Inc.'s existing senior secured credit facilities. These ratings were withdrawn last month when ratings were assigned to Targa's proposed new credit facilities that would have taken out the existing facilities. Due to volatile market conditions, Targa has cancelled the proposed credit facilities. Ratings re-assigned include Ba3 ratings (LGD 3, 40%) on Targa's existing senior secured credit facilities comprised of a $1.25 billion term loan ($1.234 billion of principal amount outstanding as of March 31, 2007), a $250 million revolving credit facility, and a $300 million synthetic letter of credit facility. The ratings on the facilities are one notch higher than before because of the application of Moody's LGD methodology. This is primarily due to senior secured debt being a slightly smaller proportion of Targa's liability structure than before due to the repayment of a $700 million senior secured bridge term loan earlier this year. Moody's also revised the LGD point estimate on Targa's B3-rated 8.5% senior unsecured notes due 2013 to LGD 6, 90%, from LGD 6, 93%. In place of the proposed credit facilities, Targa's holding company, Targa Resources Investments, Inc., borrowed under a new $450 million credit facility to fund a planned distribution to shareholders. The Holdco facility is secured by a pledge of the stock of Targa and will not be guaranteed by Targa until the existing first lien term loan at Targa is paid in full. Thus, it is structurally subordinated to debt at Targa. Pro forma consolidated leverage, including debt at Holdco and Targa's MLP, is slightly higher than when Targa's ratings were affirmed last month because the distribution to shareholders was increased to $445 million versus the $414 million originally contemplated and no cash from Targa's balance sheet was used to fund the distribution. However, Moody's did not consider the increase in consolidated leverage significant enough to warrant a reconsideration of Targa's B1 Corporate Family Rating. The rating outlook remains negative. Targa Resources, Inc. is headquartered in Houston, Texas. THE PANTRY: Repurchase Program Shows No Effect on Moody's Ratings ----------------------------------------------------------------- Moody's stated that an announced share repurchase program by The Pantry, Inc. does not impact the company's ratings (corporate family rating of B1) or stable rating outlook. On Aug. 9, 2007, Pantry announced a share repurchase program of up to $35 million for each of fiscal 2007 and fiscal 2008, but not to exceed an aggregate of $50 million. The program authorizes the company to repurchase shares its common stock until Sept. 25, 2008 in open market or private transactions. The company intends to use excess cash flow to fund these purchases. Moody's does not expect that the share repurchase program will meaningfully impact the company's credit profile. Pantry's ratings are: -- $200 million secured revolving credit facility at Ba3 (LGD 3, 33%); -- $350 million secured term loan at Ba3 (LGD 3, 33%); -- $250 million 7.75% senior subordinated (2014) notes at B3 (LGD 5, 82%); -- $150 million 3% senior subordinated convertible (2012) notes at B3 (LGD 5, 82%); -- Corporate Family Rating at B1; -- Probability of Default Rating at B1. The Pantry, Inc, with headquarters in Sanford, North Carolina, operates 1642 convenience stores across the Southeast. Revenue for the twelve months ending June 2007 was about $6.6 billion. THORNBURG MORTGAGE: Unsteady Capital Cues S&P to Cut Rating to B ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on Thornburg Mortgage Inc. to 'B' from 'BB'. The rating was also placed on CreditWatch Negative. The rating change reflects the unsteady state of the secured financing capital markets on which Thornburg relies to fund its mortgage REIT operations. "While the company's balance sheet is comprised of high-quality assets, dislocation in pricing of all mortgage assets has restricted Thornburg's access to repo funding, and the company is facing increasing margin calls," said Standard & Poor's credit analyst Adom Rosengarten. Thornburg specializes in high-quality, prime, jumbo mortgage loans, with an average loan-to-value of 67% and 'AAA' rated securities. This abrupt and significant liquidity pullback does not seem to be abating and does not reflect the good performance of Thornburg's mortgage portfolio. Thornburg's high leverage levels, high balance of unencumbered assets, and reliance on short-term funding is further restricting access to liquidity. This has been, and is likely to continue to be a severe event for the company. With limited alternatives for financing and a challenged equity market in which to raise additional capital, the ratings could face further downward pressure. The CreditWatch placement reflects the potential for further rating actions if Thornburg fails to weather this liquidity crunch. Future rating actions will depend on Thornburg's ability to shore up funding and raise the level of equity required to manage through this cycle. If there are continued significant margin calls affecting Thornburg's funding profile and the company is unable to secure additional financing, or if asset quality deteriorates beyond expected levels, the rating could be further lowered. If Thornburg is successful in overcoming its funding and liquidity pressures, the ratings could return to higher levels. TIMKEN COMPANY: Moody's Affirms Ba1 Medium Term Notes Rating ------------------------------------------------------------ Moody's Investors Service revised Timken's ratings outlook to positive from stable. The positive outlook reflects improvements in the company's operating performance and leverage as well as Moody's view that the company's margin volatility may have been reduced as a result of the business transformation initiatives it has pursued in the past few years. At the same time, Moody's affirmed Timken's Ba1 corporate family rating and the Ba1 rating on Timken's $300 million Medium Term Notes, Series A. Moody's Ba1 ratings reflect Timken's market position as a leading producer of tapered roller and needle bearings, its well-regarded reputation and long operating history, along with its moderate leverage and reduced pension underfunding. However, the Ba1 ratings incorporate Moody's concern over the ongoing poor operating performance of its automotive segment, which comprises a significant proportion of the company's end market exposure, low operating margins, and modest free cash flow, which is due in part to elevated capital expenditures in support of growth initiatives, working capital pressures and pension contributions. The stronger credit profile of the company reflects the expansion into new industrial segments and international markets, as well as the de-leveraging efforts in large part due to the company's materially improved pension funding status having made $900 million in contributions to the plan since 2002. The company continues to pursue growth initiatives, such as its move into high growth markets, particularly, aerospace and industrial, strategic divestitures of unprofitable businesses and the expansion of global distribution channels. Outlook Actions: Issuer: The Timken Company Outlook, Changed To Positive From Stable The Timken Company, headquartered in Canton, Ohio, and founded more than 108 years ago, is a global manufacturer of engineered bearings, alloy and specialty steel components with operations in 26 countries on six continents. The company is the world's largest manufacturer of tapered roller bearings and alloy seamless mechanical steel tubing and the largest North American-based bearings manufacturer. The company operates in three business segments, Industrial (42% of revenues), Automotive (32%), and Steel (26%). For the LTM June 30, 2007 Timken generated about $4.9 billion in revenues from continuing operations. TITAN INT'L: Moody's Affirms B2 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service affirmed Titan International, Inc.'s B2 corporate family, B2 probability of default, and SGL-2 speculative grade liquidity ratings. In addition, the B3 rating on Titan's $200 million senior unsecured notes has been affirmed but the associated loss given default assessment has changed to LGD5, 71% from LGD4, 58%. The lower senior unsecured notes recovery assessment follows the capital structure change that occurred when $81 million of subordinated debt converted to equity on March 21, 2007. This conversion eliminated a significant amount of debt with priority claim junior to that of the senior unsecured notes, and thereby lowered the expected recovery of the senior notes under Moody's loss given default analysis. The B2 corporate family rating has been affirmed despite the March 2007 debt reduction because the pace of improvement in the company's operating performance and credit metrics is being constrained by the higher near-term costs associated with the ongoing business mix shift away from the agricultural tire market and toward the higher margin off-the-road market. Titan is executing a "realignment" strategy whereby its manufacturing mix is shifting away from agricultural markets (59% of first half 2007 revenues with a 7% operating margin) and toward higher margin off-the-road wheels and tires (34% of first half 2007 revenues with an 18% operating margin). However, the costs of implementing this shift has constrained the expected pace of improvement in margins and earnings. Once the company's realignment program nears completion, margins could begin to more significantly benefit from the production shift to OTR. Additionally, Titan has recently announced a plan to build production capacity to manufacture large mining tires. The company has stated that large mining tire production would start by mid 2008 and be funded from cash on hand. The decision to enter the large mining tire niche raises business risk as the company has not produced these large tires before, other players have stated their intent to increase mining tire production and mining equipment demand is very sensitive to commodity prices. Despite the B2 corporate family affirmation Moody's notes some key credit positives. The company's efforts to increase OTR sales have demonstrated good judgment by management as the greater OTR revenue mix has enabled the company to offset the degree of erosion in its performance that would have otherwise resulted from the increasing competitive pressures and rising rubber costs that are negatively affecting the agricultural tire markets. Moody's expects that high commodity prices will support strong intermediate-term demand for OTR tires. Moreover, the tire industry's currently limited capacity for producing tires for this sector should help support healthy margins. Consequently, Titan's margins and credit metrics could improve following the completion of its efforts to expand OTR tire capacity. The stable outlook reflects Moody's expectations that Titan's debt protection measures should remain consistent with a B2 Corporate Family Rating over the coming quarters. Debt protection measures should improve as the company completes its manufacturing realignment and mining tire expansion. Should the company effectively address the operating challenges associated with these initiatives during the coming quarters and begin to generate improved credit metrics there could be positive movement in its rating. This positive rating movement would be supported by EBITA/average assets in the high single digit percentages, and sustained EBIT/interest exceeding 2 times. A key ongoing risk facing Titan will be the cyclicality in its end markets. Nevertheless, Titan should be able to weather future cyclical downturns much better than in the past due to its commitment to maintain ample liquidity. The SGL-2 Speculative Grade Liquidity rating reflects Moody's view that Titan will maintain a good liquidity profile over the next 12-month period. The rating anticipates that about $119 million in revolver availability under the revolving credit facility, cash on hand of $62 million as of June 30, 2007 plus free cash flow should be sufficient to fund capital spending and operational needs over the next 12 months. Titan, headquartered in Quincy, IL is a leading manufacturer of wheels, tires and assemblies for off-highway vehicles serving the agricultural, earthmoving/construction and consumer end markets. TRANSDIGM GROUP: Buys Bruce Industries' Assets for $35 Million -------------------------------------------------------------- TransDigm Group Incorporated has acquired certain assets from Bruce Industries Inc. for approximately $35 million in cash. "Bruce has, over the last 35 years, developed a reputation as a premier supplier of highly engineered lighting solutions for the aircraft industry,” W. Nicholas Howley, chairman and CEO of TransDigm Group Incorporated stated. “The proprietary nature, established positions, and aftermarket content fit well with our overall business strategy.” About Bruce Industries Inc. Headquartered in Dayton, Nevada, Bruce Industries Inc. – http://www.bruceind.com/-- designs and manufactures specialized fluorescent lighting used in the aircraft industry. The major commercial aircraft applications include the Boeing 737, 747, 757, 767, 777 family of commercial jets; Bombardier regional jets; Challenger business jets; a broad range of Gulfstream business jets; and the Airbus A320, and A330/A340 family of commercial jets. Major customers include: Boeing, Airbus, the commercial airlines, Gulfstream, Bombardier, Honeywell and C&D. Bruce has approximately 125 employees. About TransDigm Inc. Headquartered in Cleveland, Ohio, TransDigm Group Incorporated (NYSE: TDG) - http://www.transdigm.com/-- through its wholly owned subsidiaries, including TransDigm Inc., designs, manufactures and supplies highly engineered aircraft components for use on nearly all commercial and military aircraft in service. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include ignition systems and components, gear pumps, mechanical/electro-mechanical actuators and controls, NiCad batteries/chargers, power conditioning devices, hold-open rods and locking devices, engineered connectors, engineered latches and cockpit security devices, lavatory hardware and components, specialized AC/DC electric motors and specialized valving. * * * As reported in the Troubled Company Reporter on Feb. 1, 2007, Standard & Poor's Ratings Services affirmed its 'B-' rating on TransDigm Inc.'s 7.75% subordinated notes due 2014, which are being increased $250 million, to a total of $525 million. The corporate credit rating is 'B+' and the outlook is stable. TRINITY PLACE: Case Summary & 39 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Trinity Place Child Care Centers, Inc. 9895 West Remington Place Littleton, CO 80128 Bankruptcy Case No.: 07-18862 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- T.P.S.R.E.-Lone Tree, L.L.C. 07-18857 T.P.S.R.E.-Jefferson Village, L.L.C. 07-18859 Trinity Place Schools Real Estate, 07-18860 L.L.C. T.P.S. Consulting Group, Inc. 07-18864 Trinity Place School of Jefferson 07-18865 Village, L.L.C. Type of business: The Debtor provides early childhood education and child care. See http://www.trinityplacechildcarecenters.com Chapter 11 Petition Date: August 10, 2007 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtors' Counsel: Lee M. Kutner, Esq. Jutner, Miller, Brinen, P.C. 303 East 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 Estimated Assets Estimated Debts ---------------- --------------- Trinity Place Child Care $1 Million to $1 Million to Centers, Inc. $100 Million $100 Million T.P.S.R.E.- Lone Tree, $1 Million to $1 Million to L.L.C. $100 Million $100 Million T.P.S.R.E.- Jefferson $1 Million to $1 Million to Village, L.L.C. $100 Million $100 Million Trinity Place Schools Unstated Unstated Real Estate, L.L.C. T.P.S. Consulting Group, Unstated Less than Inc. $50,000 Trinity Place School of $100,000 to Less than Jefferson Village, L.L.C. $100 Million $50,000 A. Trinity Place Child Care Centers, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of the West loan $50,000 P.O. Box 515274 Los Angeles, CA 90051 U.S. Bank loan $35,000 P.O. Box 790179 St. Louis, MO 63179-0179 Arapahoe County Tax Assessor taxes $8,821 5334 South Prince Street Littleton, CO 80201 Xcel Energy trade debt $6,073 Kaiser Permanente trade debt $5,462 Dell trade debt $2,548 City of Littleton taxes $2,533 C.I.T. Technology Financial trade debt $1,722 Services Denver Water trade debt $1,216 S-Pac trade debt $1,192 Climate Engineering trade debt $1,103 T.R.S. Recovery Systems trade debt $1,097 Department of Treasury taxes $1,092 Green Mountain Water and trade debt $1,071 Sanitation Colorado Starwalk trade debt $440 Department of Human Services trade debt $405 Arapahoe Clerk and Recorder trade debt $339 Orkin trade debt $200 U.S. Waste, L.L.C. trade debt $179 Jefferson County Department trade debt $151 B. TPSRE-Lone Tree, LLC's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ira Dury $210,725 c/o Baker & Hostetler 303 East 17th Avenue Suite 1100 Denver, CO 80203 McBride Construction trade debt $4,094 3007 Lariat Lane Colorado Springs, CO 80921 Cherry Creek Insurance trade debt $3,124 5660 Greenwood Plaza Boulevard Greenwood Village, CO 80111 Urbitecture, Inc. trade debt $2,571 Fast Signs trade debt $1,079 Xcel Energy trade debt $66 C. TPSRE-Jefferson Village, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ A.M. Davis Mercantile Co. $738 640 South 10th Street P.O. Box 72226 Lincoln, NE 68501-2226 D. Trinity Place Schools Real Estate, LLC does not have any creditors who are not insiders. E. TPS Consulting Group, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ireland Stapleton trade debt $39,193 1675 Broadway Suite 2600 Denver, CO 80202 F. Trinity Place School of Jefferson Village, LLC's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jefferson County Treasurer taxes $33,785 Department 2075 Denver, CO 80256-001 Xcel Energy trade debt $4,793 P.O. Box 9477 Minneapolis, MN 55484-9477 C.I.T. Technology Financial trade debt $986 Services, Inc. P.O. Box 550599 Jacksonville, FL 32255-0599 I.D.-Confirm trade debt $460 A.D.T. trade debt $226 U.S. Waste, L.L.C. trade debt $182 Orkin trade debt $150 Child Health Connection trade debt $124 City of Littleton trade debt $81 Denver Water trade debt $54 Ira Dury trade debt $1 US SHIPPING: Earnings Uncertainty Cues S&P's Negative CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B+' corporate credit rating, on U.S. Shipping Partners L.P. on CreditWatch with negative implications. The CreditWatch placement reflects increased uncertainty over the company's future revenue, earnings, and cash flow streams. The Edison, New Jersey- based shipping company has about $394 million of lease-adjusted debt. "The expiration of time-charter contracts in coming quarters will increase U.S. Shipping's exposure to the spot market and competitive pressures, which will likely hurt its operating performance over the near to intermediate term," said Standard & Poor's credit analyst Lisa Jenkins. "At the same time, the company's significant fleet renewal program is likely to put additional pressure on liquidity, which is already constrained by the company's master limited partnership structure." Current ratings on U.S. Shipping reflect the tanker company's limited free cash flow after partnership distributions; a very aggressive financial policy; participation in the competitive and capital-intensive shipping industry; and the modest size of its fleet of older vessels. These vessels, which face increasing competitive pressures from newer vessels, will be phased out over time because of a legislative mandate that all tankers that transport oil into U.S. ports be double-hulled by 2015. U.S. Shipping has placed an order for several new articulated tug barges, one of which has already been delivered, to replace existing capacity. In addition to the new ATB program, U.S. Shipping recently created a joint venture to finance the construction of nine double-hulled product tankers by NASSCO, a subsidiary of General Dynamics Corp. U.S. Shipping has the right to buy the new product tankers as they are built, with the first delivery expected in mid-2009. Until its fleet is replaced, U.S. Shipping is likely to face increased competitive pressures from newer vessels in the marketplace. Earnings pressures are likely to be exacerbated by higher labor costs, as the company is in the process of renegotiating contracts with its unions, which expired in the second quarter of 2007. Standard & Poor's will meet with management to discuss the company's operating outlook for the coming year and options for increasing liquidity in the wake of more uncertain operating prospects and increased capital spending requirements. The company is examining its capital structure with the goal of increasing liquidity. S&P could lower ratings if it appears that liquidity will remain constrained by competitive or investment spending pressures. VIEWPOINT CORP: Posts $5.2 Million Net Loss in Qtr. Ended June 30 ----------------------------------------------------------------- Viewpoint Corporation reported on Aug. 9, 2007, its financial results for the second quarter ended June 30, 2007. The company reported a net loss of $5.2 million and an operating loss of 2.6 million for the second quarter of 2007, compared to a net loss of $2.0 million and an operating loss of $2.0 million in the first quarter 2007, and a net loss of $2.8 million and an operating loss of $2.8 million in the second quarter 2006. Adjusted operating income ("AOI") was a loss of $1.5 million for the second quarter, as compared to an AOI loss of $1.3 million in the first quarter of 2007, and an AOI loss of $1.4 million for the second quarter of 2006. The company's net loss for the six months ended June 30, 2007, of $7.2 million was based on a loss from operations of $4.6 million, which included charges of $1.0 million for stock based compensation and $700,000 for depreciation and amortization. This compares to a net loss for the six months ended June 30, 2006, of $6.8 million, based on a loss from operations of $5.2 million, which included charges of $1.2 million for stock based compensation and $600,000 for depreciation and amortization. AOI for the first six months ended June 30, 2007, was a loss of $2.9 million, a $500,000 operating performance improvement, compared to an AOI loss of $3.4 million for the first six months ended June 30, 2006. Viewpoint reported total revenue of $3.8 million for the second quarter of 2007, a 16 percent increase as compared to $3.3 million in the first of quarter 2007 and a 33 percent decrease as compared to $5.7 million in the second quarter of 2006. Gross profit was $2.4 million for the second quarter of 2007, an increase of 2% as compared to the $2.3 million for the first quarter of 2007 and a decrease of 15% from $2.8 million for the second quarter of 2006. For the six months ended June 30, 2007, the company reported revenue of $7.2 million, compared with $9.7 million for the same period in 2006. For the six months ended June 30, 2007, gross profit decreased 7% to $4.7 million in 2007 from $5.1 million in 2006. Viewpoint's operating expenses for the six-month period ended June 30, 2007, were $9.3 million compared with $10.3 million for the six-month period ended June 30, 2006, a decrease of 10%. Patrick Vogt, president and chief executive officer, commented, "We made progress during the quarter by continuing to execute on our strategy to meet the escalating demand for Premium Rich Media from marketers, agencies and publishers. We are laying the groundwork for sustainable long-term profitability through our strategic DG Fastchannel partnership and our recent enterprise customer wins." Mr. Vogt continued, "Moving forward we will continue to focus on creating the most flexible rich media and video ad platform in the industry. With the successful build out of our capabilities, we are now in a position where we can really take advantage of the tremendous opportunities in the market. We continue to refine our business – creating additional capabilities that complement our offerings in order to accelerate our growth. As a result, we expect improvement in both revenue and operating performance in 2007 compared to 2006." Viewpoint's cash, cash equivalents, and marketable securities as of June 30, 2007, were $5.7 million. This can be compared with cash, cash equivalents, and marketable securities of $2.8 million as of March 31, 2007. At June 30, 2007, the company's consolidated balance sheet showed $30.0 million in total assets, $11.9 million in total liabilities, and $18.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2262 Going Concern Doubt As reported in the Troubled Company Reporter on March 22, 2007, PricewaterhouseCoopers LLP, in New York, expressed substantial doubt about Viewpoint Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2006, 2005, and 2004. The auditing firm pointed to the company's negative cash flow from operations, net losses since inception, and limited capital to fund future operations. During the six months ended June 30, 2007, net cash used in operations amounted to $3.2 million. As of June 30, 2007, the company had an accumulated deficit of $292.7 million. About Viewpoint Corp. Viewpoint Corp. (NasdaqGM: VWPT) -- http://www.viewpoint.com/-- is a Internet marketing technology company, offering Internet marketing and online advertising solutions through a combination of its proprietary visualization technology and a full range of campaign management services including TheStudio, Viewpoint's creative services group, Unicast, Viewpoint's online advertising group, and KeySearch, Viewpoint's search engine marketing consulting practice. The company has approximately 100 employees principally at its headquarters in New York City, with additional offices in Los Angeles and in Austin, Texas. WHEELING PITTSBURGH: Posts $41.6 Mil. Net Loss in Second Quarter ---------------------------------------------------------------- Wheeling-Pittsburgh Corporation reported on Aug. 10, 2007, its financial results for the second quarter ended June 30, 2007. Wheeling Pittsburgh Corp. reported a net loss of $41.6 million and an operating loss of $35.4 million for the second quarter ended June 30, 2007, compared with net income of $9.3 million and operating income of $19.3 million for the same period ended June 30, 2007. Steel shipments for the second quarter of 2007 totaled 684,592 tons or $682 per ton versus 667,944 tons or $717 per ton for the second quarter of 2006 (excluding non-steel product revenue). Net sales for the second quarter of 2007 totaled $467.0 million as compared to net sales of $493.9 million for the second quarter of 2006. Net sales for the second quarter of 2006 included $15.0 million from the sale of coke to the company's joint venture partner. The decrease in net sales versus the year ago quarter was due to a decrease in the average selling price of steel products sold of $35 per ton and a decrease in the sale of coke during the second quarter 2007 due to the deconsolidation of the Mountain State Carbon joint venture effective Jan. 1, 2007, offset by an increase in the volume of steel products sold. Cost of sales for the second quarter of 2007 totaled $474.3 million as compared to cost of sales of $445.4 million for the second quarter of 2006. Cost of sales for the second quarter of 2007 was reduced by an insurance recovery of $9.5 million related to a prior year claim. Cost of sales for the second quarter of 2006 included the cost of coke sold of $11.5 million and was reduced by an insurance recovery of $600,000 related to a prior year claim. Cost of sales of steel products sold during the second quarter of 2007 totaled $483.8 million, or $707 per ton versus $434.5 million or $651 per ton during the second quarter of 2006. The overall increase of $49.3 million resulted principally from a per ton increase of $56 and an increase in the volume of steel products sold. The increase in the per ton cost of steel products resulted principally from unplanned outages as well as changes in the cost of certain raw materials including scrap, pig iron and purchased slabs. The cost of coke during the second quarter of 2007 was lower than the second quarter of 2006. As a result of substantial losses to date in 2007 and the use of cash for operating expenses, principally due to higher scrap market prices, changes in vendor contracts and decreased selling prices and volume as well as for capital investments, management anticipates that the company may require additional liquidity in the foreseeable future. These losses, together with the company's earnings outlook, make it likely that the company will not be able to comply with its financial covenant under the Term Loan agreement, which becomes effective on April 1, 2008. While it has been able to obtain relief from such covenants in the past, at this time the company cannot assure that it will be able to improve its results, obtain additional financing or get relief from its Term Loan covenant. Furthermore, in connection with the amendment to the company's 10K which was filed on Aug. 10, 2007, the company reclassified $286.5 million of long-term debt to a current classification as of June 30, 2007. James P. Bouchard, chairman and chief executive officer, said, "Our second quarter results were disappointing. As we have previously indicated, results were impacted by unplanned outages of the Electric Arc Furnace in April, higher than anticipated scrap costs, as well as weaker than expected market conditions. We knew at the time of the proxy contest that Wheeling-Pitt's cost structure had to be lowered and that this would take time to accomplish. There are several actions which we could take to alleviate the liquidity situation. First and foremost, among these possible actions is the proposed merger with Esmark, which will infuse between $50 million to $200 million of fresh equity into the combined company. We expect to refinance our revolving credit facility in connection with the merger, which should provide substantial additional liquidity. The merger also brings to Wheeling Pitt the cash flow from the Esmark companies. Post merger there is also material improvement of the combined company balance sheet. The merger is proceeding as planned under all of the terms and conditions agreed to by the Boards of Wheeling Pitt and Esmark." At June 30, 2007, the company's consolidated balance sheet showed $1.085 billion in total assets, $891.5 million in total liabilities, and $194.0 million in total stockholders' equity. The company's consolidated balance sheet at June 30, 2007, also showed strained liquidity with $473.9 million in total current assets available to pay $742.2 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2263 Going Concern Doubt PricewaterhouseCoopers LLP, in Pittsburgh, expressed substantial doubt about Wheeling Pittsburgh Corp.'s ability to continue as a going concern on Aug. 9, 2007, in its report on the consolidated financial statements included it the company's 10K/A for the year ended Dec. 31, 2006. The auditing firm reported that the company has suffered losses from operations and had negative operating cash flows in the first half of 2007. About Wheeling-Pittsburgh Wheeling-Pittsburgh Corp. (NasdaqGM: WPSC) -- http://www.wpsc.com/ -- is a steel company engaged in the making, processing and fabrication of steel and steel products using both integrated and electric arc furnace technology. The company manufactures and sells hot rolled, cold rolled, galvanized, pre-painted and tin mill sheet products. The company also produces a variety of steel products including roll formed corrugated roofing, roof deck, floor deck, bridgeform and other products used primarily by the construction, highway and agricultural markets. WHOLE FOODS: Wild Oats Shares Tender Offer Expires Tomorrow ----------------------------------------------------------- Whole Foods Market Inc. has extended the expiration date for its tender offer to purchase outstanding shares of Wild Oats Markets Inc. to 5:00 p.m. tomorrow, Wednesday, Aug. 15, 2007. As of the close of business on Aug. 9, 2007, a total of 16,641,830 shares of common stock of Wild Oats, which represent approximately 55.6% of the 29,926,251 shares that were outstanding as of July 27, 2007 have been tendered and not withdrawn pursuant to the tender offer. On Feb. 21, 2007, Whole Foods Market entered into a merger agreement with Wild Oats, pursuant to which Whole Foods Market, through a wholly-owned subsidiary, has commenced a tender offer to purchase all of the outstanding shares of Wild Oats at a purchase price of $18.50 per share in cash. On June 7, 2007, the Federal Trade Commission filed a suit in the federal district court to block the proposed acquisition on antitrust grounds and seeking a temporary restraining order and preliminary injunction pending a trial on the merits. Whole Foods Market and Wild Oats consented to a temporary restraining order pending a hearing on the preliminary injunction, which concluded on Aug. 1, 2007. The parties anticipate receiving a ruling from the federal district court in mid-August. About Wild Oats Markets Headquartered in Boulder, Colorado, Wild Oats Markets Inc. -- http://www.wildoats.com/-- is a natural and organic foods retailer in North America with annual sales of approximately $1.2 billion. Wild Oats Markets was founded in Boulder, Colorado in 1987. Wild Oats Markets currently operates 110 stores in 24 states and British Columbia, Canada under four banners: Wild Oats Marketplace (nationwide), Henry's Farmers Market (Southern California), Sun Harvest (Texas), and Capers Community Market (British Columbia). About Whole Foods Market Founded in 1980 in Austin, Texas, Whole Foods Market, Inc. (NASDAQ: WFMI) -- http://www.wholefoodsmarket.com/-- is a natural and organic foods supermarket. In fiscal year 2006, the company had sales of $5.6 billion and currently has more than 190 stores in the United States, Canada, and the United Kingdom. * * * As reported in the Troubled Company Reporter on May 1, 2007, Standard & Poor's Ratings Services said that while the ratings on Whole Foods Market Inc., including the 'BBB-' corporate credit rating, currently remain on CreditWatch with negative implications, where they were placed on Feb. 22, 2007, S&P will lower the corporate credit rating to 'BB+' from 'BBB-' upon closure of its acquisition of Wild Oats Inc. At this time, ratings will also be removed from CreditWatch. The outlook will be stable. WINDHAM COMMUNITY: Moody's Places B1 Rating Under Negative Watch ---------------------------------------------------------------- Moody's Investors Service placed on Watchlist for possible downgrade Windham Community Memorial Hospital's B1 rating assigned to $15.1 million of outstanding Series C bonds issued by Connecticut Health and Educational Facilities Authority. The action reflects the hospital's very weak absolute and relative liquidity position. The hospital has a $5 million line of credit available for working capital needs that will expire Oct. 1, 2007. Failure to improve liquidity and extend the line of credit will likely result in a rating downgrade. Moody's anticipates discussions with management regarding the weak financial position within the next 90 days. WORLD HEART: Posts $4.5 Million Net Loss in Quarter Ended June 30 ----------------------------------------------------------------- World Heart Corporation reported on Aug. 8, 2007, its second quarter 2007 financial results. The net loss for the 2007 second quarter was $4.5 million, compared with a net loss of $3.9 million in the prior year's second quarter. For the six month period ended June 30, 2007, the net loss was $7.9 million, compared with a net loss of $7.3 million in the first six months of 2006. The increase in the net loss for the 2007 periods, compared with the 2006 periods, was the result of lower revenue offset partially by reduced operating expenses. Revenue for the second quarter ended June 30, 2007, was $848,594, compared with revenues of $3.0 million reported in the second quarter ended June 30, 2006. For the six month periods ended June 30, 2007, and 2006, revenues were $1.7 million and $6.3 million, respectively. The decrease in revenue resulted from the company's decision, in the fourth quarter of 2006, to discontinue the RELIANT Trial and reduce commercial activities associated with its first-generation Novacor(R) LVAS and to focus its efforts on the next-generation Levacor Rotary VAD, for which sales have not yet commenced. "Following initial clinical success in Europe last year with our Levacor VAD, we are focused on activities leading to the start of a U.S. feasibility trial with the Levacor," said Jal S. Jassawalla, president and chief executive officer of WorldHeart. "We are making excellent progress in our development activities and have had discussions with the FDA about our preclinical qualification program. Patients are currently being screened in Canada and we plan to begin a U.S. feasibility trial in late 2007 or early 2008." WorldHeart's cash and cash equivalents were $6.6 million at June 30, 2007, a decrease of $5.6 million from Dec. 31, 2006, and a decrease of $2.5 million from March 31, 2007. Selling, general and administrative expenses for the three months ended June 30, 2007, decreased $800,000, or 36%, compared with the same period in 2006. For the six month period ending June 30, 2007, selling, general and administrative expenses were 37% lower then the comparable 2006 period. The decrease is due primarily to reduced selling expenses for the Novacor LVAS product in the United States and Europe. Research and development expenses for the three months ended June 30, 2007, increased by $400,000, compared with the three months ended June 30, 2006. For the six month period of 2007, research and development expenses were $700,000 less than in the first six months of 2006. Higher clinical expenses were incurred in the first quarter of 2006 associated with the Levacor clinical implants in Europe. In addition, the company conducted development work on both the Novacor and Levacor products in the first half of 2006. Novacor development work was subsequently discontinued in the fourth quarter of 2006, with research focused on the Levacor VAD in the first half of 2007. At June 30, 2007, the company's consolidated balance sheet showed $12.3 million in total assets, $5.3 million in total liabilities, and $7.0 million in total stocholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?224c Going Concern As reported in the Troubled Company Reporter on April 5, 2007, PricewaterhouseCoopers LLP expressed substantial doubt about World Heart Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses for the years ended Dec. 31, 2006, and 2005. About World Heart Headquartered in Oakland, California, World Heart Corporation (NASDAQ: WHRT, TSX: WHT) -- http://www.worldheart.com/ -- develops mechanical circulatory support systems with broad-based next-generation technologies. The company has additional facilities in Salt Lake City, Utah and Herkenbosch, Netherlands. WORLDGATE COMM: Posts $4.6 Million Net Loss in Qtr. Ended June 30 ----------------------------------------------------------------- WorldGate Communications Inc. reported a net loss available to common stockholders of $4.6 million for the second quarter ended June 30, 2007, compared to a net loss available to common stockholders of $5.1 million for the same period ended June 30, 2006. The three months ended June 30, 2007, included a non cash charge of $1.2 million associated with amortization of the debt discount of the company's outstanding debentures offset by a $1.0 million non cash gain on derivative warrants and conversion options. The three months ended June 30, 2006, included a non cash loss of $520,000 on derivative warrants and conversion options and there was no charge for amortization of debt discount. Cash amounted to $2.7 million as of June 30, 2007, compared to $5.0 million at March 31, 2007 and $7.2 million at June 30, 2006. Revenues for the three months ended June 30, 2007, were $305,000. These revenues were comparable to the revenues achieved for the three months ended March 31, 2007, of $310,000 and increased 64% versus the revenue of $186,000 achieved for the three months ended June 30, 2006. Revenue for the six months ended June 30, 2007, was $615,000 compared to the $696,000 revenue achieved for the six month period ended June 30, 2006. The quarter results do not reflect shipments to Snap, which commenced in July 2007. The revenue for the quarter primarily reflects retail sales and associated recurring retail service revenue. There were minimal sales to service providers during the quarter. Gross margin for the three months ended June 30, 2007 includes a non cash inventory adjustment to reflect the lower of cost or market of $277,000. Operating expenses for the three months ended June 30, 2007, were $4.1 million and were 10% lower than the $4.6 million of expenses for the three months ended March 31, 2007, and comparable to the expenses of $4.1 million recorded in the quarter ended June 30, 2006. The expenses in the second quarter of 2007 included non cash charges of $226,000 from the company's adoption of the fair value recognition provisions of "SFAS" No. 123 (Revised 2004), "Share-Based Payment," and $165,000 of depreciation. For the three months ended June 30, 2006, non cash charges were $225,000 from the adoption of SFAS No. 123(R) and $184,000 for depreciation. The quarter ended June 30, 2007 also included a non cash expense of $300,000 associated with the contracting of a retail professional to augment our retail distribution efforts. "The progress we have accomplished in the past quarter has been immeasurable toward achieving success for WorldGate. We are extremely excited about our expanded relationship with Snap and the potential of this natural market for the development of video telephony. This market is a definite foundational building block for establishing video telephony and in reaching profitability for Ojo and WorldGate," said Hal Krisbergh, chairman and chief exectutive officer of the company. "In addition, we announced several distribution deals as well as technology and implementation advancements that continue to demonstrate the attraction Ojo holds for service operators," continued Mr. Krisbergh. "While we continue to make progress on the distribution and product development areas, our current challenge is to secure the funding necessary to realize the potential of Ojo and we are actively pursuing paths to achieve the required financing." At June 30, 2007, the company's consolidated financial statements showed $6.5 million in total assets, $5.4 million in total liabilities, and $1.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?224d Going Concern Doubt As reported in the Troubled Company Reporter on March 21, 2007, Marcum & Kliegman LLP, in Melville, New York, expressed substantial doubt about WorldGate Communications Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit of $247 million at Dec. 31, 2006. About WorldGate Communications Based in Trevose, Pennsylvania, WorldGate Communications Inc. (NASDAQ: WGAT) -- http://www.wgate.com/-- designs, manufactures, and distributes the Ojo line of personal video phones. Ojo personal video phones offer real-time, two-way video communications with video messaging. * Fitch Confirms 133 Transactions Previously Under Analysis ----------------------------------------------------------- This is a summary of the total rating actions taken by Fitch Ratings as of Aug. 9 on U.S. subprime RMBS transactions that were placed 'Under Analysis' on July 12, 2007. The 'Under Analysis' list of 170 transactions had heavy concentrations of bonds originated in 2005-2006 (133 transactions). 2005 & 2006 Vintage Summary: -- Transaction Reviews Completed: 127 of 133 -- Affirmations: 1189 classes (outstanding balance: $104 billion); -- Downgrades: 671 classes (outstanding balance: $12 billion). Ratings Distribution After Actions: -- 'AAA' classes: 592 (balance: $86 billion); -- All investment grade classes (including 'AAA'): 1496 (balance: $111.4 billion); -- Below investment grade classes: 364 (balance: $4.8 billion). Rating # Classes $Balance (Millions) -- 'AAA' 592 $86,301 -- 'AA+' 136 $7,006 -- 'AA' 105 $4,555 -- 'AA-' 88 $2,364 -- 'A+' 97 $2,428 -- 'A' 89 $1,947 -- 'A-' 97 $1,945 -- 'BBB+' 93 $1,605 -- 'BBB' 96 $1,574 -- 'BBB-' 103 $1,710 -- 'BB+' 65 $939 -- 'BB' 77 $1,085 -- 'BB-' 49 $611 -- 'B+' 53 $687 -- 'B' 46 $581 -- 'CCC' 74 $927 -- 'U.S. Subprime RMBS/HEL Upgrade/Downgrade Criteria' (June 12,2007); -- 'Downgrade Criteria for Recent Vintage U.S. Subprime RMBS' (Aug. 8, 2007). * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------ ------- Abraxas Petro ABP (22) 118 (4) AFC Enterprises AFCE (25) 162 4 Alaska Comm Sys ALSK (23) 562 19 Apex Silver Mine SIL (131) 1,385 146 Authentic Inc AUTH (4) 22 1 Bare Escentuals BARE (189) 184 91 Bearingpoint Inc BE (177) 1,939 166 Blount International BLT (89) 471 141 CableVision System CVC (5,064) 10,072 17 Calpine Corp CPNLQ (8,106) 18,566 (2,802) Carrols Restaurant TAST (24) 453 (28) Cell Therapeutic CTIC (101) 94 24 Centennial Comm CYCL (1,078) 1,322 20 Cheniere Energy CQP (181) 1,935 145 Choice Hotels CHH (72) 332 (33) Cincinnati Bell CBB (744) 1,953 (2) Claymont Stell PLTE (41) 155 68 Compass Minerals CMP (49) 674 139 Corel Corp. CRE (16) 261 (31) Crown Holdings CCK (90) 6,793 428 Crown Media HL CRWN (588) 749 63 CV Therapeutics CVTX (129) 308 266 Cyberonics CYBX (16) 137 (28) Dayton Superior DSUP (99) 337 95 Deluxe Corp DLX 0 1,410 (164) Denny's Corporation DENN (207) 439 (54) Domino's Pizza DPZ (1,434) 474 87 Dun & Bradstreet DNB (425) 1,418 (268) Einstein Noah Re BAGL (46) 136 (3) Emeritus Corp. ESC (111) 755 (62) Empire Resorts I NYNY (12) 71 10 Enernoc Inc ENOC (9) 30 1 Enzon Pharmaceutical ENZN (57) 355 166 Extendicare Real EXE-U (8) 1,331 146 Foamex Intl FMXI (257) 566 146 Ford Motor Co F (1,422) 287,939 (4,704) Gencorp Inc. GY (50) 1,033 52 General Motors GM (2,290) 186,527 (4,638) Graftech International GTI (4) 788 260 Healthsouth Corp. HLS (1,292) 2,402 (463) I2 Technologies ITWO (6) 195 35 IDEARC Inc IAR (8,575) 1,576 326 IMAX Corp IMX (52) 227 21 IMAX Corp IMAX (52) 227 21 Incyte Corp. INCY (120) 309 250 Indevus Pharma IDEV (75) 156 36 Intermune Inc ITMN (55) 249 195 ITC Deltacom Inc ITCD (33) 421 18 Koppers Holdings KOP (44) 699 196 Lodgenet Entertainment LNET (7) 708 24 McMoran Exploration MMR (50) 447 (1) Mediacom Comm MCCC (120) 3,624 (278) National Cinemed NCMI (585) 401 43 Neurochem Inc NRM (1) 116 79 New River Pharma NRPH (110) 152 (19) Nexstar Broadcasting NXST (80) 709 23 NPS Pharm Inc. NPSP (226) 150 (107) ON Semiconductor ONNN (118) 1,428 322 Primedia Inc PRM (426) 1,233 770 Protection One PONN (85) 441 (1) Qwest Communication Q (1,556) 20,389 (1,263) Radnet Inc. RDNT (48) 396 31 Ram Energy Resources RAME (1) 203 (8) Regal Entertainment RGC (96) 2677 (89) Resverlogix Corp RVX (2) 17 11 Riviera Holdings RIV (24) 443 28 RSC Holdings Inc RRR (129) 3,430 (202) Rural Cellular RCCC (587) 1,362 183 Sealy Corp. ZZ (145) 1,017 49 Senorx Inc SENO (4) 16 2 Sipex Corp SIPX (12) 53 7 St. John Knits Inc. SJKI (52) 213 80 Station Casinos STN (167) 3,745 (62) Stelco Inc STE (108) 2,734 726 Town Sports Int. CLUB (15) 459 (52) Unisys Corp. UIS (2) 3,832 40 Weight Watchers WTW (991) 1,046 (85) Western Union WU (86) 5,328 945 Westmoreland Coal WLB (108) 759 (55) Worldspace Inc. WRSP (1,641) 527 85 WR Grace & Co. GRA (390) 3,706 922 XM Satellite XMSR (597) 1,813 (153) ********* 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. 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