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/raid1/www/Hosts/bankrupt/TCR_Public/070925.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, September 25, 2007, Vol. 11, No. 227 Headlines AAMES MORTGAGE: Moody's Reviews Rating on 2001-4 Class B Certs. ADVA-LITE INC: Exclusive Solicitation Period Extended to Dec. 15 ALERIS INTERNATIONAL: Will Close Tennessee Plant by November 20 ALLMERICA CBO: Fitch Affirms Junk Rating on $90 Mil. Senior Notes AMNEX INC: U.S. Trustee Wants Case Converted to Chapter 7 ASAT HOLDINGS: Low Equity Prompts Nasdaq's Delisting Notice ATLANTIS PLASTICS: S&P Junks Corporate Credit Rating BCE INC: Canadian Competition Bureau Clears Teachers' Private Deal BCE INC: Shareholders Okay Acquisition by Teachers' Private BRANDYWINE REALTY: Paying $0.44/Share Cash Dividend on Oct. 19 BROOKLYN HOSPITAL: Judge Craig Confirms Amended Chapter 11 Plan CALPINE CORP: Files Third Amended Plan of Reorganization CARDIMA INC: Plans to Restate December 2006 Financial Statements CATHOLIC CHURCH: Spokane Lawyers Reduce Fees to $8.3 Million CBRE REALTY: Fitch Affirms BB Rating on $20 Mil. Class K Notes CBRL GROUP: CFO Lawrence White to Retire on February 1, 2008 CBRL GROUP: Paying $0.18/Share Quarterly Dividend on November 5 CHICAGO H&S: Hotel 71 Mezz Selling Collateral on October 3 CHIQUITA BRANDS: Fined $25 Million by U.S. Federal Court CHRYSLER LLC: Brake Problems Trigger Recall of 369,000 Vehicles CIMAREX ENERGY: Paying $0.04 per Share Dividend on December 3 CLASSICSTAR LLC: Files for Bankruptcy Protection in Kentucky CLASSICSTAR LLC: Case Summary and 20 Largest Unsecured Creditors COACH INDUSTRIES: Selling Two Units to Laurus for $7 Million COGENTRIX DELAWARE: Moody's Affirms Ba2 Credit Facility Rating COMPUCOM SYSTEMS: Prices $175MM Tender Offer of 12% Sr. Notes COPA CASINO: Moody's Withdraws B3 Corporate Family Rating COPA CASINO: S&P Withdraws B+ Corporate Credit Rating COTT CORPORATION: Low Margins Cue Moody's to Review Ratings DANA CORP: Extends Challenge Period for Waiver Fee Payments DANA CORP: Completes Sale of Coupled Products Business DRESSER-RAND GROUP: Earns $26.2 Million in Qtr. Ended June 30 EQUINIX INC: Prices Public Offering of 3.66 Mil. Common Stock FEDDERS CORP: Looking for Bidders for Planned Asset Sale ENRON CORP: District Court Rejects Citibank MegaClaims Appeal FIRST MAGNUS: Asks National Bank of Arizona to Return Funds FIRST MAGNUS: Reconstitution of Committee Membership Denied FIRST MAGNUS: Selling Construction Loans & Real Estate Assets FLEXTRONICS INT'L: Unit Wants to Buy Arima's Notebook Operations FUNCTIONAL RESTORATION: Section 341(a) Meeting Moved to October 3 GENERAL MOTORS: Failed Contract Talks Spurs UAW Work Stoppage GENERAL MOTORS: Reaches General 'VEBA Trust' Framework with UAW GENESCO INC: Files Suit Against Finish Line to Consummate Merger GEORGIA GULF: Poor Financial Profile Cues S&P to Cut Ratings GLOBAL HOME: Capital Solutions Okayed as Panel's Financial Advisor GOLF TRUST: Raymond Jones and Fred Reams Resign from the Board HARMAN INT'L: KKR and GS Capital Cancels Planned Acquisition HARMAN INT'L: Shares Drop as KKR & Goldman Cancels $8 Bil. Deal HOMEBANC CORP: $8.5 Million JPMorgan DIP Facility Gets Final Okay HOMEBANC CORP: Court Gives Final Nod on Cash Collateral Use HOMEBANC CORP: Wants Freddie Mac & JPM Servicing Deals Approved HUNT REFINING: Loan Cancellation Cues Moody's to Withdraw Ratings JARDEN CORP: Richard J. Heckmann Joins Board of Directors JENKENS & GILCHRIST: Intends to Dispose Client Files by October 15 JON FITZGERALD: Case Summary & 10 Largest Unsecured Creditors KEVIN WORMLEY: Voluntary Chapter 11 Case Summary LOCAL INSIGHT: S&P Rates $125.65 Mil. Class B Notes at BB- LNR CDO: S&P Lifts $43 Mil. Class J Notes' Rating to B+ LNR PROPERTY: S&P Raises $1.7 Billion Loan's Rating to BB MCARTHUR FOGG: Case Summary & 12 Largest Unsecured Creditors MIRANT CORP: Texas Court Confirms Mirant Lovett’s Amended Plan MORGAN STANLEY: Moody's Reviews Ratingon 2002-AM2 Class B-1 Certs. MORTGAGE LENDERS: Has Until November 5 to Remove Actions MUSICLAND HOLDING: Panel Enters Settlement with 20th Century Fox MUSICLAND HOLDING: Wants Emergence Date Extended to October 31 NASDAQ STOCK: Unit Sells 5.3 Million LSE Shares for $194 Million NATIONAL LAMPOON: Engages Weinberg & Co. as Accountant NEW CENTURY: Moody's Lowers Ratings on 14 Certificates NEW JERSEY: S&P Cuts Series 2003 and 1998 Bond's Ratings to CC NEWPAGE CORPORATION: Stora Deal Cues Moody's to Review Ratings NORTH AMERICAN: Posts $10.7 Million Net Loss in Qtr. Ended July 31 NORTHWESTERN CORP: S&P Revises Outlook to Positive from Stable NOVA CHEMICALS: Moody's Affirms Corporate Family Rating at Ba3 OFFICEMAX INC: Earns $27.4 Million in Quarter Ended June 30 OPTION ONE: Moody's Downgrades Ratings on Two Cert. Classes PAUL KIMBALL: Case Summary & Five Largest Unsecured Creditors PIERRE FOODS: Expects Default in Sr. Credit Facility Covenant RH DONNELLEY: Raises 2007 Guidance to Include Business.com RISKMETRICS GROUP: Merges All Units, Drops ISS and CFRA Labels RURAL/METRO CORP: 2007 Annual Stockholders Meeting Set on Feb. 28 RURAL/METRO CORP: Ratifies Contract with Union to Increase Pay SALEM COMMUNICATIONS: Moody's Holds Ba3 Corporate Family Rating SP NEWSPRINT: Poor Cash Flow Cues S&P's Negative CreditWatch SPX CORPORATION: Inks New $2.3 Billion Senior Credit Facility SUSSER HOLDINGS: S&P Places Corporate Credit Rating at B+ TENSAR CORP: S&P Lifts Corporate Credit Rating to B TERWIN MORTGAGE: Low Bond Levels Cue Moody's to Cut Ratings TRIGEM COMPUTER: Representative Files 2nd Section 1518(1) Report TWEETER HOME: Stipulation on NewCo's Advance of Funds Approved TWEETER HOME: Wants Plan Filing Deadline Moved to Feb. 6, 2008 VOLT INFORMATION: Fitch Holds BB Issuer Default Rating WACHOVIA BANK: Fitch Affirms Low-B Ratings on Six Cert. Classes WATERFORD GAMING: Moody's Lifts Corporate Family Rating to Ba3 WATERFORD GAMING: S&P Rates Proposed $128.5 Mil. Sr. Notes at BB- WESTWAYS FUNDING: Fitch Cuts Ratings on Five Note Classes WINN-DIXIE: Board Elects Gregory P. Josefowicz as Lead Director WINSTAR COMMS: Lucent Says Bankruptcy Court’s Decision was Wrong WR GRACE: Ninth Circuit Reinstates Libby Conspiracy Charge YUKOS OIL: Completes Yukos Finance Sale to OOO Promneftstroy YUKOS OIL: Faces Fresh RUR273 Bil. Tax Claim on Auction Proceeds * 27 Cohen & Grigsby Lawyers Included in America's Best in 2008 ********* AAMES MORTGAGE: Moody's Reviews Rating on 2001-4 Class B Certs. --------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade three certificates from two transactions, issued by Aames Mortgage Trust in 2001 and Morgan Stanley Dean Witter in 2002. The transactions are backed by first lien adjustable- and fixed-rate mortgage loans originated by Aames Financial Corporation. The three subordinate certificates are placed under review for possible downgrade because existing credit enhancement levels may be low given the current projected losses on the underlying pools. The transactions have taken significant losses causing gradual erosion of the overcollateralization. Moody's complete rating actions are: Issuer: Aames Mortgage Trust Review for Downgrade: -- Series 2001-4; Class M-2 current rating A2, under review for possible downgrade; -- Series 2001-4; Class B, current rating Ba3, under review for possible downgrade. Issuer: Morgan Stanley Dean Witter Capital I Inc. Trust Review for Downgrade: -- Series 2002-AM2; Class B-1, current rating B3, under review for possible downgrade ADVA-LITE INC: Exclusive Solicitation Period Extended to Dec. 15 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended, until Dec. 15, 2007, Adva-Lite Inc. and its debtor-affiliates' exclusive period to solicit acceptances for their joint Chapter 11 Plan of Liquidation. As reported in the Troubled Company Reporter on Sept. 12, 2007, the Debtors related to the Court that the extension is necessary due to the Debtors' continued reconciliation of claims and expenses against the estate, as well as the commencement of attempts to recover litigation claims. The liquidation analysis in the Debtors' disclosure statement estimated $592,792 would be required to pay all administrative expenses at the time of confirmation of the plan. The liquidation analysis also estimated the liability on priority tax claims would total $783,296. These estimates were made prior to the July 27, 2007 deadline for parties to file administrative expense applications and prior to the Aug. 27, 2007 government claim bar date. Presently, the Debtors estimated that administrative expenses will total about $389,150 at confirmation and allowed priority tax claims have been filed totaling about $463,622. The Debtors have been working to reduce administrative expenses and priority tax claims and to work with the Official Committee of Unsecured Creditors to incorporate the value of estimated litigation-based recoveries into the liquidation analysis. The Debtors told the Court that the U.S. Trustee for Region 3 and the Official Committee of Unsecured Creditors have no objection to this request. About Adva-Lite Inc. Headquartered in Largo, Florida, Adva-Lite Inc., together with Corvest Promotional Products Inc., and four other affiliates, sought chapter 11 protection on Feb. 28, 2007 (Bankr. D. Del. Lead Case Nos. 07-10264). The four affiliates filing separate chapter 11 petitions are Toppers LLC, CGI Inc., It's All Greek To Me Inc., and Corvest Group Inc. Adva-Lite, It's All Greek, and Toppers are subsidiaries of Corvest Promotional. Adva-Lite manufactures and markets personal lighting gizmos, writing instruments, beverageware, and tools. It's All Greek provides custom plush products. Toppers offers sports bags, totes, luggage, caps, and other business accessories. Paul S. Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors. Michael R. Nestor, Esq., Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP, is the Debtors co-counsel. Houlihan Lokey Howard & Zukin Capital, Inc. serve as financial advisor and investment banker to the Debtors. Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors while Reed Smith LLP is the Committee's Delaware counsel. Mahoney Cohen & Company, CPA P.C. is the financial advisor to the Committee. In amended schedules filed with the Court, Adva-Lite disclosed total assets of $7,033,526 and total debts of $48,897,227. ALERIS INTERNATIONAL: Will Close Tennessee Plant by November 20 --------------------------------------------------------------- Aleris International Inc. will shut down and permanently close its manufacturing facility in Dickson, Tennessee, by Nov. 20, 2007. The Dickson plant was part of Aleris's acquisition of Wabash Alloys LLC. The Dickson plant produces specification aluminum alloys, which are delivered to customers in both ingot and molten form. The plant has approximately 67 employees. Production will be transferred to other Aleris facilities. Headquartered in Beachwood, Ohio, Aleris International Inc. (NYSE: ARS) -- http://www.aleris.com/-- manufactures aluminum rolled products and extrusions, aluminum recycling and specification alloy production. The company is also a recycler of zinc and a leading U.S. manufacturer of zinc metal and value-added zinc products that include zinc oxide and zinc dust. The company operates 57 production facilities in North America, Europe, South America and Asia, and employs approximately 9,200 employees. * * * Standard & Poor's assigned Aleris International Inc. a B+ senior secured first-lien term loan rating with a '2' recovery rating. ALLMERICA CBO: Fitch Affirms Junk Rating on $90 Mil. Senior Notes ----------------------------------------------------------------- Fitch downgrades one class of notes issued by Allmerica CBO I Ltd. These rating actions are effective immediately: -- $22,226,341 senior notes downgraded to 'B/DR2' from 'BB'; -- $90,609,197 second priority senior notes remain at 'C/DR6'. Allmerica CBO is a collateralized bond obligation managed by Opus Investment Management Inc., which closed June 11, 1998. Allmerica exited its reinvestment period in June 2003 and is composed of about 69% high yield corporate bonds, 20% structured finance and 11% sovereign securities. Included in this review, Fitch discussed the current state of the portfolio with the asset manager. In addition, Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the cumulative default rates associated with the current ratings of the note liabilities. The downgrade is the result of structural features in the waterfall allowing principal collections to be used for the payment of interest on the second priority senior notes, provided that the senior coverage tests are in compliance. The senior overcollateralization ratio has been out of compliance for several years. According to the most recent Aug. 24, 2007 trustee report the senior OC test has improved to 120.74% from 111.68% at the last review on July 5, 2005, still failing the trigger of 126.5%. Additionally, the senior IC test is now passing at 149.13% from 118.50% at the last review, with a trigger of 143.70%. Once the senior coverage tests come into compliance, principal proceeds will leak to the payment of current interest due on the second priority notes regardless of the consequences to the Senior OC Test as a result of these payments. As a result of the failing coverage tests, all principal and interest proceeds have been diverted to amortize the senior notes since the last review. The senior notes have delevered a total of 92% of their original balance since close and 34% of their original balance since the last review on July 5, 2005. According to the most recent trustee report, there are $25 million of performing collateral debt securities, of which 35% mature after the deal's maturity. Allmerica CBO is no longer in the reinvestment period and can only sell credit risk, credit improved, or defaulted securities. Given the prior downgrades on the rated notes, a security can only be considered credit risk and thus sold once it has been downgraded at least one rating subcategory since being acquired. The credit quality of the portfolio has remained stable. According to the Aug. 24, 2007 trustee report the weighted average coupon has decreased to 8.12% from 8.21% at the last review. The weighted average rating factor has improved slightly to 'B' from 'B-/B'. The second priority notes have not received any payments since the last review. They have capitalized a total of $34.1 million in interest since close, and $12.3 million since the last review. The rating of the senior notes addresses the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the second priority senior notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. As a result of this analysis, Fitch has determined that the current ratings assigned to the senior notes no longer reflect the current risk to noteholders. AMNEX INC: U.S. Trustee Wants Case Converted to Chapter 7 --------------------------------------------------------- The U.S. Trustee for Region 2 asks the U.S. Bankruptcy Court for the Southern District of New York to convert the chapter 11 cases of AMNEX, Inc. and American Network Exchange, Inc., to chapter 7 liquidation proceedings. The U.S. Trustee contends that: * the Debtors failed to propose or confirm a plan during the eight years that their cases have been pending; * the Debtors are delinquent in filing their monthly operating reports; and * the Debtors are also delinquent in paying their quarterly fees to the Office of the U.S. Trustee. The Trustee says that these reasons can be cited as "cause" for the Debtors’ cases to be converted. In the alternative, the Trustee asks the Court to dismiss the Debtors’ chapter 11 cases. The Court has set a hearing at 9:30 a.m., on Oct. 17, 2007, to consider the U.S. Trustee’s request. AMNEX, Inc. and American Network Exchange, Inc., dba AMNEX, aka AMNEX Acquisition Corp., filed for chapter 11 protection on May 5, 1999 (Bankr. S.D.N.Y. Case Nos. 99-21110 and 99-21111). On May 19, 1999, the cases where transferred to Manhattan from White Plains and consolidated the cases under Case No. 09-43019. On May 10, 1999, a subsidiary, Crescent Public Communications, Inc. also filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 99-10183). Crescent’s case however wasn’t consolidated with AMNEX’s. Attorneys at Traiger & Hinckley LLP, Rosenman & Colin, LLP, and Otterbourg, Steindler, Houston & Rosen, represent the Debtors. Ravin, Sarasohn, Cook, Baumgarten, Fisch & Rosen, P.C., represented the Official Committee of Unsecured Creditors. On April 27, 2000, the Court approved Lowenstein Sandler, P.C., as substitute counsel. ASAT HOLDINGS: Low Equity Prompts Nasdaq's Delisting Notice ----------------------------------------------------------- ASAT Holdings Limited received a Nasdaq Staff Determination letter dated Sept. 17, 2007, indicating that the company's market value of listed securities has been below $35,000,000 as required for continued inclusion by Marketplace Rule 4320(e)(2)(B) and that its American Depositary Shares are, therefore, subject to delisting. The company was also notified by Nasdaq that it does not comply with the minimum stockholders' equity of $2,500,000 or net income from continuing operations of $500,000 in the completed fiscal year or in two of the last three completed fiscal years, which are also requirements for continued listing on The Nasdaq Capital Market. The company will request an appeal hearing before a Nasdaq Listing Qualifications Panel to avoid delisting and expects to have a hearing date scheduled in 30 to 45 days. During the appeal hearing process, the company's ADSs will remain listed and traded on The Nasdaq Capital Market. There can be no assurance that the Panel will grant the company's request for continued listing. If the company's ADSs are delisted from The Nasdaq Capital Market, the company expects that its ADSs will trade on the Over-the-Counter Bulletin Board market. The company has separately received a Nasdaq letter that the company's ADSs did not meet the minimum $1 per ADS requirement for continued inclusion on The Nasdaq Capital Market as set forth in Nasdaq Marketplace Rule 4310(c)(4). This requirement has not been satisfied to date, and in accordance with Marketplace Rule 4310(c)(8)(D), the company has until Jan. 28, 2008, to regain compliance with such rule. Headquartered in Pleasanton, California, ASAT Holdings Limited (Nasdaq: ASTT) -- http://www.asat.com/-- provides semiconductor package design, assembly and test services. With 18 years of experience, the company offers a definitive selection of semiconductor packages and manufacturing lines. ASAT's package portfolio includes standard and high thermal performance ball grid arrays, leadless plastic chip carriers, thin array plastic packages, system-in-package and flip chip. The company has operations in the United States, Hong Kong, China and Germany. At April 30, 2007, ASAT Holdings Limited's consolidated balance sheet showed $135.1 million in total assets, $217.7 million in total liabilities, and $5.7 million in series A redeemable convertible preferred shares, resulting in $88.3 million total stockholders' deficit. ATLANTIS PLASTICS: S&P Junks Corporate Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Atlantis Plastics Inc., including the corporate credit rating to 'CCC-' from 'CCC+'. All ratings remain on CreditWatch with negative implications, where they were placed on Aug. 1, 2007. As of June 30, 2007, the Atlanta, Georgia-based company had $206 million of debt outstanding. The original CreditWatch placement followed the company's announcement that it is in default of certain financial covenants under its secured credit facility. The company continues to work with its lenders to obtain a waiver and amendments to the credit facility. Atlantis had previously received a waiver for the Sept. 30, 2006, quarter and amendments to financial covenants for the subsequent quarters. "The downgrade reflects our heightened concerns regarding the company's negotiations with its lenders, given current difficult credit market and industry conditions," said Standard & Poor's credit analyst Anna Alemani. Atlantis' operating results and free cash flow have been under pressure because of the difficult raw material cost environment and the company's significant exposure to the industrial and housing end-markets. Standard & Poor's will continue to monitor Atlantis' efforts to obtain a waiver and amend its financial covenants and its ability to restore liquidity. S&P could lower the ratings in the very near term if appropriate amendments to bank agreements are not put in place, or if operations or liquidity deteriorate further. Atlantis, which has annual revenues of about $400 million, has a competitive position in plastic films, including stretch films and custom films (about 64% of revenues). BCE INC: Canadian Competition Bureau Clears Teachers' Private Deal ------------------------------------------------------------------ BCE Inc. has been informed by the Canadian Competition Bureau that the Bureau's review of the proposed acquisition of BCE by an investor group led by Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners Inc. and Madison Dearborn Partners, LLC, has been completed favorably. Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) -- http://www.bce.ca/-- is a communications company, providing comprehensive and innovative suite of communication services to residential and business customers in Canada. Under the Bell brand, the company's services include local, long distance and wireless phone services, high-speed and wireless Internet access, IP-broadband services, information and communications technology services (or value-added services) and direct-to-home satellite and VDSL television services. Other BCE holdings include Telesat Canada and an interest in CTVglobemedia. * * * As reported in the Troubled Company Reporter on July 5, 2007, Fitch Ratings downgraded BCE Inc.'s issuer default rating and senior unsecured debt rating to BB- from BBB+. BCE INC: Shareholders Okay Acquisition by Teachers' Private ----------------------------------------------------------- BCE Inc.'s shareholders overwhelmingly approved the plan of arrangement involving BCE and a consortium led by Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners and Madison Dearborn Partners. The arrangement involves the acquisition by the consortium of all outstanding common and preferred shares of BCE. Common shareholders will receive $42.75 per share, representing a 40% premium over the average closing price of BCE common shares for the three-month period ending on March 28, 2007, the last trading day before there was public speculation about a possible transaction involving BCE. The arrangement was approved at a Special Meeting of shareholders on Sept. 21, 2007, by more than 97% of the votes cast by holders of common and preferred shares, voting as a single class, greatly exceeding the required 66 2/3% approval. Of the total outstanding common and preferred shares, 62.5% were voted at the meeting either in person or by proxy. The closing of the transaction is subject to customary conditions, including the receipt of regulatory approvals. As reported in the Troubled Company Reporter on Sept. 13, 2007, the motion seeking a Final Order approving the proposed plan of arrangement is scheduled to be heard by the Superior Court of Quebec, sitting in the Commercial Division in and for the district of Montreal, at the Montreal Courthouse, located at 1 Notre-Dame Street East in Montreal, Quebec, in room 16.12, on Wednesday, Oct. 10, 2007, at 9:30 a.m. The transaction is expected to close in the first quarter of 2008. BCE will advise shareholders closer to the time of closing about the procedures for surrendering and receiving payment for their shares. Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) -- http://www.bce.ca/-- is a communications company, providing comprehensive and innovative suite of communication services to residential and business customers in Canada. Under the Bell brand, the company's services include local, long distance and wireless phone services, high-speed and wireless Internet access, IP-broadband services, information and communications technology services (or value-added services) and direct-to-home satellite and VDSL television services. Other BCE holdings include Telesat Canada and an interest in CTVglobemedia. * * * As reported in the Troubled Company Reporter on July 5, 2007, Fitch Ratings downgraded BCE Inc.'s issuer default rating and senior unsecured debt rating to BB- from BBB+. BRANDYWINE REALTY: Paying $0.44/Share Cash Dividend on Oct. 19 -------------------------------------------------------------- Brandywine Realty Trust's board of trustees has declared a cash dividend for the third quarter of 2007 of $0.44 per common share, payable on Oct. 19, 2007, to holders of record on Oct. 5, 2007. The board also declared dividends for the third quarter of 2007 of $0.46875 and $0.460938 for the 7.50% Series C Cumulative Redeemable Preferred Shares and 7.375% Series D Cumulative Redeemable Preferred Shares, each payable on Oct. 15, 2007, to holders of record on Sept. 30, 2007, of the Series C and Series D Preferred Shares. Headquartered in Radnor, Pennsylvania, Brandywine Realty Trust (NYSE: BDN), http://www.brandywinerealty.com/-- is one of the full-service, integrated real estate companies in the United States and is focused primarily on the ownership, management and development of class A, suburban and urban office buildings in selected markets aggregating approximately 42 million square feet. * * * Fitch assigned a 'BB+' rating on Brandywine Realty Trust's Preferred Stock. The outlook is positive. BROOKLYN HOSPITAL: Judge Craig Confirms Amended Chapter 11 Plan --------------------------------------------------------------- The Honorable Carla E. Craig of the U.S. Bankruptcy Court for the Eastern District of New York confirmed Brooklyn Hospital Center and its debtor-affiliate, Caledonian Health Center Inc.'s Second Amended Joint Chapter 11 Plan of Reorganization. Treatment of Claims Under the Plan, Administrative Claims will be paid in full. Priority Non-Tax Claims will also be paid in full, in cash, after the effective date of the Plan. At the Debtors' absolute discretion, the Dormitory Authority of the State of New York's secured claims relating to a Loan Agreement dated April 29, 1998 and a Loan Agreement dated March 25, 1999, will either receive cash equal to the claims or have the claims reinstated. On the Effective Date, holders of Other Secured Claim will either: (a) have the legal, equitable and contractual rights to their claims remain unaltered; (b) regain the collateral securing their claim; or (c) have their claim reinstated. General unsecured creditors will receive a pro rata share of the cash for unsecured claims and a pro rata share of the proceeds of the Creditor Trust Assets. Holders of Allowed Full Insurance MedMal Claims against the Debtors will receive cash solely from the proceeds of the insurance policies issued to the Debtors pursuant to the insurance program developed by and between the Debtors and the Combined Coordinating Council, Inc., CCC Insurance Corp. and CCC Insurance Company, Limited. Holders of Limited Insurance MedMal Claims on the other hand, will receive a pro rata share of the cash allotted for its class. Intercompany Claims will be deemed cancelled and extinguished. A full-text copy of Brooklyn Hospital's 2nd Amended Chapter 11 Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=070918222328 Headquartered in Brooklyn, New York, The Brooklyn Hospital Center -- http://www.tbh.org/-- provides a variety of inpatient and outpatient services and education programs to improve the well being of its community. The Debtor, together with Caledonian Health Center, Inc., filed for chapter 11 protection on Sept. 30, 2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman, Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP represent the Debtors in their restructuring efforts. Glenn B. Rice, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. Mark Dominick Alvarez at Alvarez & Marsal, LLC, serves as the Committee's financial advisor. When the Debtors filed for protection from their creditors, they listed $233,000,000 in total assets and $337,000,000 in total debts. CALPINE CORP: Files Third Amended Plan of Reorganization -------------------------------------------------------- Calpine Corporation and certain of its subsidiaries have filed a third Amended Plan of Reorganization and related Disclosure Statement with the United States Bankruptcy Court for the Southern District of New York. The Amended Plan generally maintains all key terms provided under Calpine's previously filed Plans, and the Disclosure Statement has been amended to address certain objections to the Debtors' motion to approve the Disclosure Statement, which is set to be heard by the U.S. Bankruptcy Court on Sept. 25, 2007. Calpine remains on track to have the Amended Plan confirmed during the Fourth Quarter 2007. As reported in the Troubled Company Reporter on Aug. 28, 2007, assuming Calpine's Amended Plan is confirmed by Dec. 31, 2007 and subject to the assumptions set forth in the Disclosure Statement, Calpine estimates that the reorganized Calpine will have a midpoint reorganization value of $21.7 billion (reorganization value is equal to total enterprise value plus estimated distributable cash). At emergence, Calpine estimates that its total enterprise value will be between $19.2 billion to $21.3 billion, with a midpoint of $20.3 billion, and estimates that distributable cash will be approximately $1.4 billion. Allowed claims are anticipated to range from $20.3 billion to $22.0 billion after completion of Calpine's claims objection, reconciliation, and resolution process. Under this range of potential allowed claims, general unsecured creditors will receive from 95% to 100% of their allowed claims. For existing holders of allowed interests (primarily holders of existing Calpine common stock) and holders of allowed subordinated equity securities claims, Calpine currently estimates that their return would be approximately $1.94 per existing share of Calpine common stock (calculated assuming the midpoint of the reorganization value). Because disputed claims and the total enterprise value of Calpine upon its emergence have not yet been finally adjudicated, no assurances can be given that actual recoveries to creditors and interest holders will not be materially higher or lower. Calpine's Amended Plan and Disclosure Statement are available at http://www.kccllc.net/calpine/ About Calpine Corporation Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Disclosure Statement has been reset to Sept. 25, 2007. CARDIMA INC: Plans to Restate December 2006 Financial Statements ---------------------------------------------------------------- In response to the Securities and Exchange Commission's comment letter dated June 22, 2007, Cardima Inc. intends to restate its Dec. 31, 2006 financial statements. After further research by the company, the loan financing with Apix that was completed in February 2006 should be treated as a debt extinguishment in the first quarter of 2006. As a result, an additional liability of $400,000 was accrued and is reflected on the restated March and June 30, 2006 financial statements that were included in footnote 1 to the company's quarterly report on Form 10-QSB for the quarter ended June 30, 2007. Also about $1,000,000 in amortized fees previously recognized in the three months ended June 30, 2006 were accelerated to the quarter ended March 31, 2006. Headquartered in Fremont, California, Cardima Inc. (OTC BB: CRDM.OB) -- http://www.cardima.com/-- has developed the PATHFINDER(R) series of diagnostic catheters, the REVELATION(R) series ablation system and the Surgical Ablation System for the diagnosis and treatment of tachycardias. The REVELATION(R) series with the INTELLITEMP energy management system was developed for the treatment of atrial fibrillation (AF) originating in the pulmonary veins of the heart and received CE mark approval in Europe. The Surgical Ablation System (SAS) with an INTELLITEMP received a 510(K) approval in the U.S. by the FDA. The PATHFINDER and the REVELATION family of devices are intended for use in the Electro-physiology (EP) market and the Surgical Ablation System (SAS) for use in the surgical market. Cardima Inc.'s consolidated balance sheet at June 30, 2007, showed $3 million in total assets and $18.3 million in total liabilities, resulting in a $15.3 million total stockholders' deficit. Going Concern Doubt Marc Lumer & Company, in San Francisco, expressed substantial doubt about Cardima 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 recurring losses from operations. CATHOLIC CHURCH: Spokane Lawyers Reduce Fees to $8.3 Million ------------------------------------------------------------ Professionals in the Diocese of Spokane's Chapter 11 case consented to a 5% reduction of their legal bills producing an extra $400,000 for abuse victims. The agreed reduction brings down the total amount of fees to roughly $8,300,000, says The Spokesman-Review. The Diocese and the attorneys in five firms signed the agreement on September 17, 2007. The U.S. Trustee's Office, and Foster Pepper PLLC, which represents 85 tort claimants, also signed the agreement. The professionals, which initially sought more than $10,000,000 for services ranging from legal advice to accounting work and appraisals, voluntarily agreed to reduce their total fees in these amounts: Paine Hamblen Coffin Brooke & Miller LLP $185,715 Gordon, Murray, Tilden, LLP $19,451 Pachulski Stang Ziehl & Jones LLP $118,593 Esposito, George & Campbell, PLLC $22,241 Riddell Williams P.S. $185,715 Once approved by Judge Patricia Williams of the U.S. Bankruptcy Court for the Eastern District of Washington, the agreement would end the legal fees fight, which is one of the last remaining issues in the Spokane Diocese's Chapter 11 case. The court-appointed trustee, Gloria Nagler, Esq., will receive about $37,000,000 by an October 1 fund deadline, and another $10,000,000 by years end, Shaun Cross, Esq., counsel from Paine Hamblen told The Spokesman-Review. Judge Gregg W. Zive, retired chief bankruptcy judge of the U.S. Bankruptcy Court for the District of Nevada and the mediator of the Diocese's bankruptcy case, has approved the agreement and recommends it for reconsideration by Judge Williams at the time of the final hearing on the professionals' fee applications. As a result, the settlement conference with Judge Zive scheduled for September 20, 2007, in Reno, Nevada, was canceled. The parties have requested Judge Williams to move the final hearing on the fee applications from Oct. 23, 2007, to Oct. 1, 2007. About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's 2nd Amended Joint Plan. That plan became effective on May 31, 2007. CBRE REALTY: Fitch Affirms BB Rating on $20 Mil. Class K Notes -------------------------------------------------------------- Fitch affirms all classes of CBRE Realty Finance CDO 2006-1, Ltd as: -- $375,000,000 class A-1 floating-rate notes at 'AAA'; -- $33,000,000 class A-2 floating-rate notes at 'AAA'; -- $34,500,000 class B floating-rate notes at 'AA'; -- $15,000,000 class C floating-rate notes at 'A+'; -- $13,500,000 class D floating-rate notes at 'A+'; -- $9,000,000 class E floating-rate notes at 'A-'; -- $10,500,000 class F floating-rate notes at 'A-'; -- $13,500,000 class G floating-rate notes at 'BBB+'; -- $4,500,000 class H floating-rate notes at 'BBB+'; -- $24,000,000 class J floating-rate notes at 'BBB-'; -- $20,250,000 class K fixed rate notes at 'BB'. Deal Summary CBRE Realty Finance CDO 2006-1, Ltd. (CBRE 2006-1) is a $600,000,000 revolving commercial real estate cash flow collateralized debt obligation that closed on March 28, 2006. As of the Aug. 21, 2007 trustee report and based on Fitch categorizations, the CDO was substantially invested as: i. commercial mortgage whole loans/A-notes (51.1%), ii. mezzanine debt (19.9%), iii. B-notes (10.3%), iv. CMBS (17.9%) and v. cash (0.8%). The CDO is also permitted to invest in CDOs of commercial real estate loans, senior secured REIT debt, real estate bank loans, and credit tenant lease loans. The portfolio is selected and monitored by CBRE Realty Finance Management LLC. CBRE 2006-1 has a five-year reinvestment period during which, if all reinvestment criteria are satisfied, principal proceeds may be used to invest in substitute collateral. The reinvestment period ends in April 2011. During the reinvestment period if the collateral manager cannot identify substitute collateral, at the discretion of the collateral manager, the notes may be redeemed either pro-rata, if certain criteria are met, or otherwise sequentially. Following the reinvestment period, interest and principal payments will be made to all classes of notes on a sequential basis, beginning with the class A notes. Discretionary trading during the reinvestment period is limited to 10% of the net outstanding collateral balance per annum. Performance Summary As of the August 2007 trustee report, the Fitch poolwide expected loss is 25.875%, compared to the covenant of 31.625%. The PEL was 21% at last review and 23.50% at closing. The current cushion of 5.75% provides below average reinvestment flexibility to the manager. Since the last review, the CDO has added six new loans and one new CMBS bond which together replaced five loans and two CMBS bonds. Overall, the credit metrics of the securities have been maintained with a weighted average rating factor of 'BB+/BB'. Although the loans remaining in the portfolio have improved as their business plans were executed and the properties approach stabilization, the recently added loans are in the beginning stages of their business plans. The main drivers for the increase in the PEL are: i. the addition of a mezzanine interest in a construction project; ii. more transitional higher leveraged whole loans; and iii. more subordinate debt. Additionally, Fitch increased the expected loss of a B-note secured by Manhattan House, a New York City condominium conversion. Fitch increased this loan's expected loss to reflect the litigation between the sponsorship and the depletion of the interest reserve. A positive development since the last review has been the repurchase by the issuer of a Fitch Loan of Concern. In March 2007, a condo conversion loan, which was noted as having slow sales, was bought out from the CDO at par plus accrued. The sponsor was overextended on other projects and had been unable to make loan payments. The CDO was kept current by another entity of CBRE for the months of January and February 2007. The weighted average spread has increased since last review, to 3.77% from 3.51%. The weighted average coupon has also increased since last review to 7.10% from 6.8%. Both the WAS and WAC remain above their respective covenants. The weighted average life of loans and CMBS has decreased since last review to 3.9 years from 4.7 years, below the covenant of 5 years. The average weighted life of 3.9 years implies the loans will fully turnover during the reinvestment period. The overcollateralization and interest coverage ratios of classes A through G remain stable; each class is above its covenant, as of the August 2007 trustee report. Collateral Analysis The pool consists of 81.3% CRE loans, 17.9% CMBS, and 0.8% cash. Fitch and the asset manager includes any future funding obligation within its classification of the assets. Currently, $7.1 million of future funding obligations exist within the CDO. The CDO collateral continues to be weighted more heavily towards whole loans and A-notes (51.1%), however, exposure to subordinate debt has increased. Subordinate debt generally carries higher expected losses than whole loans/A-notes. The credit metrics of the deal have worsened, as measured by the overall stressed debt service coverage ratio and loan to value. Since last review, stressed DSCR has decreased to 1.07x from 1.14x and stressed LTV has increased to 112.6% from 101.2%. The Fitch Loan Diversity Index has worsened slightly as the portfolio has become more concentrated since the last review (to 342 from 329). The pool is considered to have average diversity relative to other CRE CDOs. The CDO is in compliance with all its reinvestment covenants. Since the last review and based on Fitch categorizations, the largest percent of more operator-intensive assets are still hotels; however the portfolio's exposure to this property type has declined to 8.7% from 15.9%. Although the condominium conversion exposure has decreased since close (3.5% from 5.2%), one of the Fitch Loans of Concern is B-note secured by Manhattan House. The office property type still remains the largest percentage (38.7%) of the loan portfolio. Rating Definitions The ratings of the class A, B and C notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class D, E, F, G, H, I, J, and K notes address the likelihood that investors will receive ultimate interest and deferred interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. Upgrades during the reinvestment period are unlikely given that the pool could still migrate to the modeled PEL. The Fitch PEL is a measure of the hypothetical loss inherent in the pool at the 'AA' stress environment before taking into account the structural feature of the CDO liabilities. Fitch PEL encompasses all loan, property, and poolwide characteristics modeled by Fitch. Fitch will continue to monitor and review this transaction and will issue an updated Snapshot report after each committeed review. The surveillance team will conduct a review whenever there is about 15% change in the collateral composition or semi- annually. CBRL GROUP: CFO Lawrence White to Retire on February 1, 2008 ------------------------------------------------------------ Lawrence E. White will retire as CBRL Group Inc.'s senior vice president and chief financial officer, effective Feb. 1, 2008, and that a search for a successor would begin. "I am extremely proud of our accomplishments during the past several years and especially of Larry's contributions," Michael A. Woodhouse, chairman and chief executive officer, said. "We are very fortunate to have had him on the CBRL team while we went through our turnaround and most recently, through our very successful recapitalization initiatives and divestiture of our Logan's Roadhouse business last year. He will definitely be missed. We are launching a nationwide search for a successor and expect to have someone on board by the time Larry retires. The company noted that it has an 18-month consulting arrangement with White in order to ensure a smooth transition." "In my eight years here, this company and its executive team have consistently delivered on the vision Mike set forth when he became COO and subsequently, chairman and CEO," Mr. White said. "We have a superb brand, a powerful position nationally and in our 41-state region and solid management teams in both the finance and the senior executive leadership. I wish Mike and the senior management team all the best in achieving new heights as they continue our mission of Pleasing People. I am also pleased to offer my continuing assistance through the transition, but I am looking forward to starting this new chapter in my life." Headquartered in Lebanon, Tennessee, CBRL Group Inc. (NASDAQ: CBRL) -- http://www.cbrlgroup.com/-- operates 564 Cracker Barrel Old Country Store(R) restaurants and gift shops located in 41 states. * * * As reported in the Troubled Company Reporter on June 20, 2007, Moody's Investors Service revised the ratings outlook of CBRL Group Inc. to negative from stable. In addition, Moody's affirmed the company's Ba2 corporate family rating and Ba2 senior secured rating (LGD3, 36%). CBRL GROUP: Paying $0.18/Share Quarterly Dividend on November 5 --------------------------------------------------------------- CBRL Group Inc.'s board of directors has increased the company's quarterly dividend by 29%, declaring a regular quarterly dividend of $0.18 per share, an increase from the previous quarterly dividend of $0.14 per share. The dividend is payable on Nov. 5, 2007, to shareholders of record on Oct. 19, 2007. The board has also approved a stock repurchase program for up to 1,000,000 shares of its outstanding shares of common stock. There is no expiration date on the repurchase authorization and repurchases may be made from time to time through open market purchases at management's discretion, including through implementation of share repurchase plans pursuant to Rule 10b5-1 as promulgated by the Securities and Exchange Commission. Headquartered in Lebanon, Tennessee, CBRL Group Inc. (NASDAQ: CBRL) -- http://www.cbrlgroup.com/-- operates 564 Cracker Barrel Old Country Store)R) restaurants and gift shops located in 41 states. * * * As reported in the Troubled Company Reporter on June 20, 2007, Moody's Investors Service revised the ratings outlook of CBRL Group Inc. to negative from stable. In addition, Moody's affirmed the company's Ba2 corporate family rating and Ba2 senior secured rating (LGD3, 36%). CHICAGO H&S: Hotel 71 Mezz Selling Collateral on October 3 ---------------------------------------------------------- A secured lender will be selling its collateral securing the obligation owed to it by Chicago H&S Senior Investors LLC. Hotel 71 Mezz Lender LLC's collateral consists of 100% of Chicago H&S Senior Investors LLC's limited liability company interest in Chicago H&S Hotel Property LLC. Chicago H&S Hotel Property LLC is believed to be the owner of a fee simple title to a premises located at 71 East Wacker Drive, in Chicago, Illinois, commonly known as Hotel 71. Public sale of the collateral will be on Oct. 3, 2007, 10:30 a.m., at the offices of Akin Gump Strauss Hauer & Feld LLP, Conference Room 22N, 22nd Floor, No. 590 Madison Avenue, in New York City. Headquartered in Chicago, Illinois, Chicago H&S Senior Investors LLC filed a chapter 11 petition on March 2, 2007 (Bankr. N.D. Ill. Case No. 07-03783). Ronald Peterson, Esq., at Jenner & Block represents the Debtor in its restructuring efforts. When the company sought protection from its creditors, it listed assets and debts of $1 million to $100 million. CHIQUITA BRANDS: Fined $25 Million by U.S. Federal Court -------------------------------------------------------- The U.S. Federal Court has ordered Chiquita Brands International to pay $25 million in fines for paying millions of dollars to Colombian terrorist groups from 1997 to 2004, Agence France- Presse reports. Agence France notes that Chiquita Brands pleaded guilty to paying some $1.7 million to Colombian paramilitary group United Self-Defense Committees of Colombia. Chiquita Brands explained to the Business Courier of Cincinnati that the payments were made by a former unit due to threats to the safety of workers. According to Agence France, the Honorable Royce Lamberth has authorized an accord between Chiquita Brands and the US government in March 2007 that spared company officials. Agence France relates that the prosecution has agreed not to name or prosecute Chiquita Brands executives who were involved in paying the terrorist groups. The Business Courier notes that the U.S. Department of Justice decided not to file charges against 10 Chiquita Brands executives for allegedly facilitating the bribes. Meanwhile, Chiquita Brands still faces a civil lawsuit filed in the district court of New Jersey in July 2007 by families of the terrorists' victims, Agence France says. The complainants are seeking for unspecified damages. They claimed that Chiquita Brands funded and armed terrorist organizations to maintain control of Colombian banana growing regions. Agence France notes that a class action lawsuit could result in damages being awarded to each victim of any terrorist group paid by Chiquita Brands. The firm could pay as much as tens of millions of dollars. The Associated Press relates that Chiquita Brands was placed on probation for five years. Chiquita Brands told the Business Courier that it cooperated with the federal probe. Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide, including Belgium, Columbia, Germany, Panama, Philippines, among others. * * * The company continues to carry Moody's Investors Service Ratings' B3 corporate family rating with a negative outlook. Furthermore, Standard & Poor's Ratings Services placed the company's B corporate credit rating under CreditWatch with negative implications. CHRYSLER LLC: Brake Problems Trigger Recall of 369,000 Vehicles --------------------------------------------------------------- Chrysler LLC is recalling 296,550 sport utility vehicles following reports of problems with brake systems and door latches and locks, Reuters states. Chrysler has revealed that a glitch in an electronic control unit could cause a delay in braking when the vehicles are driving uphill. Affected vehicles include Jeep Grand Cherokee and Jeep Commander SUVs for the 2006 and 2007 model years and the 2007 Jeep Wrangler and Dodge Nitro, Reuters relates. "It's a very rare occurrence," Chrysler Spokesman Max Gates said, Reuters notes. "But we have had reports of drivers experiencing problems when they take their foot off the accelerator." When drivers in one of the affected vehicles stop accelerating up a hill, that can trigger a momentary loss of braking power for a second or two, Mr. Gates explains. Chrysler will notify the owners of the SUVs affected by the recall this month and offer free repair work as well, the report says. Chrysler is also recalling about 72,333 2008 Chrysler Sebring and Dodge Avenger sedans because of a potential problem with a cable connected to the front door latches in the vehicles, Reuters reveals. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Aug. 8, 2007, Standard & Poor's Ratings Services revised its loan and recovery ratings on Chrysler LLC's (B/Negative/--) $10 billion senior secured first-lien term loan facility due 2013, following various changes to terms and conditions prior to closing. The $10 billion first-lien term loan now consists of a $5 billion "first-out" tranche and a $5 billion "second-out" tranche, so the aggregate amount of first-lien debt remains unchanged. Accordingly, S&P assigned a 'BB-' rating to the $5 billion "first- out" first-lien term loan tranche. This rating, two notches above the corporate credit rating of 'B' on Chrysler LLC, and the '1' recovery rating indicate S&P's expectation for very high recovery in the event of payment default. S&P also assigned a 'B' rating to the $5 billion "second-out" first-lien term loan tranche. This rating, the same as the corporate credit rating, and the '3' recovery rating indicate S&P's expectation for a meaningful recovery in the event of payment default. Moody's Investors Service has affirmed Chrysler Automotive LLC's B3 Corporate Family Rating, and the Caa1 rating of the company's $2 billion senior secured, second lien term loan in connection with Monday's closing of DaimlerChrysler AG's sale of a majority interest of Chrysler Group to Cerberus Capital Management LLC. CIMAREX ENERGY: Paying $0.04 per Share Dividend on December 3 ------------------------------------------------------------- The board of directors of Cimarex Energy Co. has declared a regular cash dividend on its common stock of 4 cents-per-share. The dividend is payable on Dec. 3, 2007 to stockholders of record on Nov. 15, 2007. Headquartered in Denver, Cimarex Energy Co. (NYSE:XEC) -- http://www.cimarex.com/-- is an independent oil and gas exploration and production company with principal operations in the Mid-Continent, Gulf Coast, Permian Basin of West Texas and New Mexico and Gulf of Mexico areas of the U.S. * * * As reported in the Troubled Company Reporter on April 16, 2007, Moody's assigned a 'B1' note rating to Cimarex Energy's $300 million senior unsecured 10 year note offering. At the same time, Moody's affirmed XEC's existing 'Ba3' corporate family rating, 'Ba3' Probability of Default Rating, and 'B1' senior unsecured note rating. Under Moody's Loss Given Default debt notching methodology, the two note issues are rated 'B1' (LGD 5; 70%). CLASSICSTAR LLC: Files for Bankruptcy Protection in Kentucky ------------------------------------------------------------ ClassicStar LLC, on Sept. 14, 2007, filed for protection under Chapter 11 with the U.S. Bankruptcy Court for the Eastern District of Kentucky. The company, as well as its affiliate, ClassicStar Farms LLC, and parent company GeoStar, currently faces seven lawsuits in five states, Beth Musgrave of the Herald Leader in Lexington, Kentucky reported. The suit, filed by investors in the company’s mare lease program, alleged that the company operated a scheme that instead of delivering big profits and tax breaks, the company diverted the money and faced problems with the Internal Revenue Services, the report adds. Citing James W. Gardner, Esq., at Henry Watz Gardner Sellars & Gardner, PLLC, the company’s bankruptcy counsel, Ms. Musgrave relates that the company filed for bankruptcy due to the litigation and in order to resolve the claims. Court documents show that unsecured creditors have claims totaling an aggregate $69,708,624. Based in Lexington, Kentucky, ClassicStar, LLC, operates as a thoroughbred horse breeder. The company also leases horses and rents out the reproductive systems of select thoroughbred mares. CLASSICSTAR LLC: Case Summary and 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: ClassicStar, LLC P.O. Box 910178 Lexington, KY 40591 Bankruptcy Case No.: 07-51786 Type of business: The company operates as a thoroughbred horse breeder. The company also leases horses and rents out the reproductive systems of select thoroughbred mares. Chapter 11 Petition Date: September 14, 2007 Court: Eastern District of Kentucky (Lexington) Judge: William S. Howard Debtor's Counsel: James W. Gardner, Esq. Henry Watz Gardner Sellars & Gardner, PLLC 401 West Main Street, Suite 314 Victorian Square Lexington, KY 40507 Tel: (859) 253-1320 Fax: (859) 255-8316 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor’s 20 largest unsecured creditors. Entity Nature of Claim Claim Amount ------ --------------- ------------ Leo Hertzog Litigation Claim $9,906,733 Two Walnut Grove Drive Client (Jean Horsham, PA 19044 Herzog & J&L Canterbury Farms, LLC) (2003) (2004) Lewis Teffeau Client (Linda $7,026,282 PMB #12 - 168 Crown Bay, Teffeau & Seasong Suite 310 Farms, LLC) (2003) St. Thomas, VI 00801-9375 Gregory R. Raifman Litigation Claim $3,400,000 268 Lasalle Avenue (Susan Raifman & Oakland, CA 94610 Gekko Holdings, LLC) (2003) Greg Minor Litigation Claim $3,351,506 10808 Emeral Chase Drive Client (Stephanie Orlando, FL 32836 Minor & Premier Thoroughbreds, LLC) (2003) Jaswinder Grover Litigation Claim $3,165,132 917 Trophy Hills Drive Client (Monica Las Vegas, NV 89134 Grover) (2003) Randy Robinson Client (Diana $2,850,000 9430 Northwest Kaiser Road Robinson & Kaiser Portland, OR 92731 Farms, LLC) (2002) Uri Halfon Client (Oli Halfon & $2,618,922 618 Maple Drive Su-Sim, LLC) Beverly Hills, CA 90210 (2001)(2002)(2003) Russell Taylor Client (Betsy Taylor $2,377,582 3183 Chipping Wood Court & Trustees of the Alpharetta, GA 30004 Russell C. Taylor Revocable Trust) (2002) Tom Morello Client (Stanwyck $2,014,000 51 Stanwyk Road Glen Farms, LLC) Mount Laurel, NJ 08054 (2005) Robert Hamrick Client (Molly $1,800,000 1500 Castlewall Street Hamrick, Tri-Quinn Las Vegas, NV 89117 Thoroughbreds, LLC) (2005) John Bristol Client (Karen $1,663,173 3608 East Honeycomb Road Bristol & Genesis Salt Lake City, UT 84121 Breeders, LLC) (2002) Duane Shaw Litigation Claim $1,600,000 1559 River Oaks Drive Client (Marchelle Sandy, UT 84093 Shaw & Dumar Horses, LLC) (2003) AA-J Breeding LLC Client (Joseph $1,460,838 1801 E. Parkcourt Place Fleishon) (2001) Suite D-200 Santa Ana, CA 92701 Bill Romanowski Client (Julie $1,372,819 390 Hampton Road Romanowski & Piedmont, CA 94611 Romanowski Thoroughbreds, LLC) (2003) John Hales Litigation Claim $1,200,000 3726 Beechglen Drive Client (Marilyn La Crescenta, CA 91214 Hales & Beechglen Farms LLC) (2005) Thomas Lukat Client (Lena Lukat $1,145,474 11700 Twin Creeks Drive & Twin Creeks, Ft. Pierce, FL 34945 LLC) (2003) Peter VanWickler Client (Bent Rock $900,792 2070 Crabtree Lane Farms, LLC) (2002) Greenwood Village, CO 80121 Louis Kuffel Client (Kennebrook $884,967 2496 Crestmont Place West Farms & Mellon Seattle, WA 98199 Patch, Inc. & Nancy Spinks) (2003) Tom Fairbanks Litigation Claim $800,000 13941 - 219th Avenue NE Client Debra Woodinville, WA 98072 Fairbanks & (Gunshy Thoroughbreds, LLC) (2002) Derby Stakes, LLC Client (Joseph $798,293 1801 East Parkcourt Place Fleishon) (2002) Suite D-200 Santa Ana, CA 92701 COACH INDUSTRIES: Selling Two Units to Laurus for $7 Million ------------------------------------------------------------ Coach Industries Group Inc. is selling its operating division Corporate Development Services Inc. and its subsidiary SubContracting Concepts Inc. to Laurus Master Funds Ltd. Coach Industries' bankruptcy filing with the U.S. Bankruptcy Court for the Northern District of New York included a Sale and Purchase agreement with Laurus, secured creditor, to purchase CDS and its subsidiary SCI. The purchase price for the sale will be an amount equal to $7,082,456. Payment of the consideration will be in the form of cancellation of $6,832,456 in accrued obligations owing to Laurus together with a cash payment of the $250,000 balance. This bid by Laurus is in excess of what Laurus is owed and will satisfy the secured position. Robert L. Lefebvre, Coach chief executive officer commented, "We believe this transaction was necessary given the mounting debt CIGI had, along with the fact that efforts to secure additional capital and financing were unsuccessful." He continued, "Laurus has been very supportive with us over the last year and a half as we tried to secure additional capital." The offer made by Laurus must be approved by the Bankruptcy Court before it is finalized, subject to higher and better bids in accordance with the bankruptcy code. Laurus is a two billion dollar fund and they intend to continue the operations of SCI with its current management as a privately held company without any interruptions. Mr. Lefebvre states "With the backing of Laurus and the continuance of the operations, we believe it puts CDS and SCI in a more solid position and eliminates any financial concerns for the company." About Coach Industries Glens Falls, New York-based Coach Industries Group Inc. is a holding company focused on providing independent contractor settlement to courier operators and their drivers. The Debtor filed for Chapter 11 bankruptcy protection on Sept. 20, 2007 (Bankr. N.D. NY Case No. 07-12516). Richard L. Weisz, Esq. at Hodgson Russ, L.L.P. represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it disclosed total assets of $11,438,693 and total debts of $175,451,040. COGENTRIX DELAWARE: Moody's Affirms Ba2 Credit Facility Rating -------------------------------------------------------------- Moody's Investors Service affirmed its Ba2 rating assigned to the senior secured credit facilities of Cogentrix Delaware Holdings Inc. The rating outlook is stable. The rating affirmation takes into account the recent announcement that Cogentrix Energy Inc. (CEI: Ba2 Corporate Family Rating), the parent of CDHI, entered into an agreement to sell 80% of CDHI's ownership interest in 14 power plants to a third party. This transaction is subject to customary closing conditions, including receipt of regulatory approvals, and is expected to close by the end of the calendar year. CDHI's senior secured credit facilities contain fairly restrictive limitations on asset sales and, in order to consummate the transaction, proceeds from the sale are expected to be used to repay CDHI's senior secured credit facilities in full. The facilities would then be terminated and the ratings withdrawn. Moody's however would expect to maintain CDHI's rating at its current level should the transaction not be completed. CEI is expected to remain an affiliate of The Goldman Sachs Group Inc. (Aa3 senior unsecured). Consequently, the proposed transaction is not expected to have any implication on the current unconditional guarantee provided by Goldman Sachs to the estimated $355 million 8.75% Senior Notes due Oct. 15, 2008 of CEI. These senior notes remain rated Aa3. CEI is headquartered in Charlotte, North Carolina, and is the parent company of CDHI. COMPUCOM SYSTEMS: Prices $175MM Tender Offer of 12% Sr. Notes ------------------------------------------------------------- CompuCom Systems Inc. has determined the consideration to be paid for the tender offer and consent solicitation for any and all of its outstanding $175,000,000 aggregate principal amount of its 12% Senior Notes due 2014 (CUSIP Nos. 204780 AA 8, U20377 AA 2 and 204780 AB 6), and that it has received the required consents from holders of its 12% Notes to amend the indenture governing such 12% Notes. In addition, CHR Intermediate Holding Corporation, the parent of CompuCom, in connection with its tender offer and consent solicitation for any and all of its outstanding $150,000,000 aggregate principal amount of Senior Floating Rate Toggle Notes due 2013 (CUSIP Nos. 12544G AA 0 and U17046 AA 8), has received the required consents from holders of its Floating Rate Notes to amend the indenture governing such Floating Rate Notes. The total consideration to be paid to holders of the 12% Notes who validly tendered 12% Notes and delivered consents prior to the expiration of the consent solicitation on Sept. 21, 2007, will be $1,231.05 per $1,000 principal amount of the 12% Notes. The total consideration includes a consent payment of $30 per $1,000 principal amount of 12% Notes. In addition, CompuCom will pay accrued and unpaid interest to, the applicable settlement date. The initial settlement date for the 12% Notes validly tendered and accepted for payment prior to the expiration of the consent solicitation on Sept. 21, 2007, is expected to be Sept. 28, 2007, provided that the conditions to the 12% Notes Tender Offer and Consent Solicitation have been satisfied or waived by CompuCom as of such expected initial settlement date. The total consideration for the 12% Notes was determined as of 2:00 p.m., New York City time, on Sept. 21, 2007, by reference to a fixed spread of 50 basis points above the bid side yield on the 4.75% U.S. Treasury Note due October 15, 2010. As of 5:00 p.m., New York City time, on Sept. 21, 2007, holders of 100% of the outstanding aggregate principal amount of the 12% Notes had tendered their 12% Notes and delivered consents to the proposed amendments to the 12% Notes Indenture. Any 12% Notes tendered and consents delivered prior to the 12% Notes Consent Time may no longer be withdrawn or revoked. The consent solicitation with respect to the Floating Rate Notes expired at 5:00 p.m., New York City time, on Sept. 21, 2007 as well. At that time, holders of 100% of the outstanding aggregate principal amount of the Floating Rate Notes had tendered their Floating Rate Notes and delivered consents to the proposed amendments to the Floating Rate Notes Indenture. Any Floating Rate Notes tendered and consents delivered prior to the Floating Rate Notes Consent Time may no longer be withdrawn or revoked. CompuCom and CHR Intermediate each intend to enter into a supplemental indenture with respect to the 12% Notes Indenture and the Floating Rate Notes Indenture, at which time the applicable proposed amendments described in the Offer to Purchase and Consent Solicitation Statement dated Sept. 10, 2007, will become effective. The proposed amendments to be effected by each supplemental indenture will eliminate substantially all of the restrictive covenants and certain events of default, well as amend certain other provisions and waive the obligation to make change of control offers, contained in the applicable Indenture. The proposed amendments to the 12% Notes Indenture will not become operative, unless and until the 12% Notes are accepted for purchase pursuant to the terms of the 12% Notes Tender Offer and Consent Solicitation, and the proposed amendments to the Floating Rate Notes Indenture will not become operative unless and until the Floating Rate Notes are accepted for purchase pursuant to the terms of the Floating Rate Notes Tender Offer and Consent Solicitation. The Tender Offers and Consent Solicitations are being conducted in connection with the acquisition by IIM Acquisition Corp., an affiliate of Court Square Capital Partners, of all of the outstanding stock of CHR Holding Corporation, an affiliate of Platinum Equity LLC. CHR Holding Corporation is the indirect parent company of CompuCom and the direct parent company of CHR Intermediate. The Tender Offers for the 12% Notes and the Floating Rate Notes will expire at 12:00 midnight, New York City time, on Oct. 5, 2007, unless extended or earlier terminated by CompuCom or CHR Intermediate, as applicable. The Tender Offers and Consent Solicitations are subject to the satisfaction or waiver by CompuCom or CHR Intermediate, of certain customary market and other conditions, including, the Acquisition having occurred. The Offer to Purchase and Consent Solicitation Statement, dated Sept. 10, 2007, and the related Consent and Letter of Transmittal set forth all of the conditions to CompuCom's obligation to accept for purchase and pay for any properly tendered and not properly withdrawn 12% Notes, and CHR Intermediate's obligation to accept for purchase and pay for any properly tendered and not properly withdrawn Floating Rate Notes. CompuCom reserves the right to terminate, extend or amend the tender offer or the consent solicitation with respect to the 12% Notes if any condition of the tender offer or the consent solicitation with respect to the 12% Notes is not satisfied or waived by CompuCom, or otherwise in its sole discretion, and CHR Intermediate reserves the right to terminate, extend or amend the tender offer or the consent solicitation with respect to the Floating Rate Notes if any condition of the tender offer or the consent solicitation with respect to the Floating Rate Notes is not satisfied or waived by CHR Intermediate, or otherwise in its sole discretion. CompuCom and CHR Intermediate have engaged Bear, Stearns & Co. Inc. to act as the exclusive dealer manager in connection with both of the tender offers and consent solicitations. Questions regarding either of the tender offers or consent solicitations may be directed to Bear, Stearns & Co. Inc., care of the Global Liability Management Group at (877) 696- BEAR (US toll-free) and (212) 272-5112 (collect). Copies the complete terms and conditions of the tender offer and consent solicitation and the related Consent and Letter of Transmittal may be obtained from D.F. King & Co., Inc., the information agent for both of the tender offers and consent solicitations, at (800) 290-6426 (US toll free) and (212) 269-5550 (collect). The Bank of New York, the trustee under the 12% Notes Indenture and the Floating Rate Notes Indenture, is acting as the depositary for both of the tender offers and consent solicitations, and can be reached at (212) 298-1915. About Compucom Systems Inc. Headquartered in Dallas, Texas, Compucom Systems Inc. -- http://www.compucom.com/-- together with its subsidiaries, helps companies plan, implement and manage multi-vendor, industry- standard computing environments. The company's portfolio of service and product offerings help clients reduce the costs, complexities, obstacles and risks associated with new technology adoption and acquisition, operational transition and ongoing management of their information systems. The company markets its service and product offerings primarily through national sales force and service personnel. The company's clients include Fortune 1000 and medium-size businesses; federal, state and local governments; technology providers and system integrators. The company's business consists of two operating segments, Service and Product. * * * As reported in the Troubled Company Reporter on July 19, 2007, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on CompuCom Systems Inc., and removed it from CreditWatch where it was placed July 6, 2007. The outlook is stable. At the same time, S&P assigned a 'BB' bank loan rating to the company's proposed $190 million, seven-year term loan B, two notches above the corporate credit rating, with a recovery rating of '1', indicating an expectation for very high (90%-100%) recovery in the event of a payment default. S&P also assigned a 'B-' rating to its proposed $210 million, 10.5%, eight- year senior subordinated notes. Moody's Investors Service assigned CompuCom Systems Inc. a corporate family rating of B2 and stable outlook. COPA CASINO: Moody's Withdraws B3 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service withdrew all ratings for Copa Casino of Mississippi LLC for business reasons. The company refinanced these facilities. These ratings were withdrawn: -- Corporate Family Rating of B3; -- Probability of Default Rating of Caa1; -- Senior Secured Revolving Credit Faclity of B3 (LGD-3, 34%); -- Senior Secured Term Loan of B3 (LGD-3, 34%). CCM is a privately held company. CCM owns about 73% of Gulfside Casino Partnership d/b/a Island View Casino Resort (the former Grand Casino Gulfport) located in Gulfport, Mississippi. The other 27% of Gulfside is owned by Gulfside Casino Inc. Both GCI and CCM are owned by the project sponsors, Terry Green and Rick Carter. COPA CASINO: S&P Withdraws B+ Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including the 'B+' corporate credit rating, on Copa Casino of Mississippi LLC at the company's request. COTT CORPORATION: Low Margins Cue Moody's to Review Ratings ----------------------------------------------------------- Moody's Investors Service placed the ratings for Cott Corporation under review for possible downgrade following the announcement that it expects 2007 margins and earnings to be lower than previous guidance. The LGD rates are also subject to change. The rating action reflects the potential for lower margins and cash flow as a result of the weaker-than-expected carbonated soft drink volumes, higher than expected promotional activity from national brands, and the adverse effects of higher input costs which are not being sufficiently offset by the company's many cost cutting initiatives. Moody's last downgraded Cott's ratings in early 2006. These ratings were placed on review for possible downgrade: Cott Corporation -- Ba3 corporate family rating and Ba3 probability of default rating Cott Beverages, Inc. -- B1 rating on the $275 million 8% senior subordinated notes, due 2011 The review for possible downgrade will focus on the impact that the above pressures will have on the company's operating profit, cash flow and debt protection measures going forward, as well as the prospects for the company's restructuring initiatives over the last year and a half to compensate for these business challenges. There have been a number of setbacks to the planned turnaround including additional restructuring charges, slower than expected new product introductions and a voluntary recall of some product in the UK. Therefore the company is currently performing at the lower end of Moody's range of expectations at the time of the last downgrade. Moody's expects sufficient internally generated liquidity to cover cash needs and good availability under the revolver over the next 12 months, although Moody's believes that covenant compliance could be somewhat tight at the end of fourth quarter of 2007. The review will examine Cott's turnaround prospects and timing, its ongoing business and financial strategy as well as its medium-term liquidity. Headquartered in Toronto, Ontario, Cott Corporation is the world's largest retailer-brand, soft drink supplier with a leading position in take-home carbonate soft drink markets in the US, Canada, and the UK. For the latest twelve months ended June 2007, revenue was about $1.8 billion. DANA CORP: Extends Challenge Period for Waiver Fee Payments ----------------------------------------------------------- Dana Corp. and its debtor-affiliates, the Official Committee of Unsecured Creditors, and the Ad Hoc Committee of Dana Noteholders agree, in a stipulation approved by the U.S. Bankruptcy Court for the Southern District of New York, that the Challenge Period for the Committees to contest all liens and claims relative to, and the payment of, the Waiver Fee, as defined in the Final DIP Order, is extended through and including the earlier of the date that is 100 days after: (i) any of the Debtors, the Committees, the Receivables Facility Agents sends a written notice to the other parties setting the last day of the Challenge Period on the 100th day in accordance with the Stipulation; and (ii) the date on which the adequacy of any disclosure statement filed in the Debtors' cases is approved by the Court. The date of the Order approving the adequacy of the Disclosure Statement will be the Investigation Commencement Date. The date by which the Prepetition Agent, the Pre-Petition Lenders, the Credit Card Issuers and the Debtors may serve a written response, objection or motion with respect to the subpoenas served pursuant to the Rule 2004 Orders is extended to the 30th day after the Investigation Commencement Date. Subject to and without waiving any of the rights reserved in the preceding sentence, to the extent that documents have not already been produced, document production pursuant to the Subpoenas will commence, on a rolling basis, on the 31st day after the Investigation Commencement Date and will conclude on the 50th day after the Investigation Commencement Date. About Dana Corp. Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. The Court has set a hearing on Oct. 23, 2007, to consider the adequacy of the Disclosure Statement explaining the Debtors' Plan. (Dana Corporation Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Completes Sale of Coupled Products Business ------------------------------------------------------ Dana Corporation has completed the sale of its North American coupled products business to Coupled Products LLC, a wholly owned subsidiary of Wanxiang (USA) Holdings Corporation. Dana expects to record an after-tax loss of approximately $44 million in the third quarter of 2007 in connection with this transaction. The sale substantially concludes the overall divestiture of Dana's fluid products business. Last month, the company closed the sale of its North American fluid products hose and tubing operations to Orhan Holding, A.S. Dana previously sold its European fluid products hose and tubing operations to Orhan in July 2007. "The completion of this divestiture marks another important step in Dana's efforts to concentrate our resources on the core products and competencies that are the foundation for our future growth," Dana Chairman and CEO Mike Burns said. "We wish the people of the coupled products business the very best as they move forward with Wanxiang." The coupled products plants and/or assets involved in the Wanxiang transaction are located in San Luis Potosi, Mexico; and Columbia City, Indiana; Pensacola, Florida; Rochester Hills, Michigan; and Upper Sandusky and Wharton, Ohio. The coupled products operations manufacture power-assisted steering products; heating, ventilation, and air conditioning under-engine products; and brake products. The operations employ approximately 2,050 people and reported consolidated revenues of approximately $200 million in 2006. About Dana Corp. Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non- Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. The Court has set a hearing on Oct. 23, 2007, to consider the adequacy of the Disclosure Statement explaining the Debtors' Plan. DRESSER-RAND GROUP: Earns $26.2 Million in Qtr. Ended June 30 ------------------------------------------------------------- Dresser-Rand Group Inc. reported net income of $26.2 million for the second quarter ended June 30, 2007. This compares to a net income of $10.7 million for the second quarter 2006. Second quarter 2007 income included a provision for litigation and related interest of $2.6 million after-tax and a charge of $1.5 million after-tax related to a change in an accounting estimate for workers' compensation. Total revenues for the second quarter 2007 of $441.2 million increased $17.2 million or 4.0% compared to $424.0 million for the second quarter 2006. Operating income for the second quarter 2007 was $50.1 million. This compares to operating income of $27.2 million for the second quarter 2006 which included $16.8 million for stock-based compensation expense for exit units. Second quarter 2007 operating income increased from the year ago quarter due to higher pricing and productivity improvements. Vincent R. Volpe, Jr., president and chief executive officer of Dresser-Rand, said, "The improvements in our second quarter 2007 results over last year were somewhat tempered by the litigation provision and a change in accounting estimate. The impact of these two items was approximately $0.05 per diluted share. Additionally, changes in procurement processes and a delay in the budget appropriations by certain of our national oil company clients resulted in lower than expected aftermarket bookings and revenues for the period." Bookings for the second quarter 2007 were $659.2 million, which was $225.1 million or 52.0% higher than the second quarter 2006. The backlog at the end of June 2007 was a record $1.61 billion or 59.0% higher than the backlog at the end of June 2006 of $1.01 billion. At June 30, 2007, the company's consolidated balance sheet showed $1.77 billion in total liabilities, $1.07 bilion in total liabilities, and $697.1 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?23a4 Liquidity and Capital Resources As of June 30, 2007, cash and cash equivalents totaled $160.8 million and borrowing availability under the $350.0 million revolving credit portion of the company's senior credit facility was $147.5 million, as $202.5 million was used for outstanding letters of credit. In first six months of 2007, cash provided by operating activities was $136.2 million, which compared to $6.9 million for the corresponding period in 2006. The increase of $129.3 million in net cash provided by operating activities was principally from changes in working capital. In the first six months of 2007, capital expenditures totaled $8.6 million and the company prepaid $110.1 million of its outstanding indebtedness under its senior secured credit facility. As of June 30, 2007, total debt was $396.9 million and total debt net of cash and cash equivalents was approximately $236.1 million. Litigation Provision In the second quarter, the company and Maersk Oil UK Limited reached a full and final settlement resulting in an additional total charge of approximately $4.2 million ($2.6 million after-tax) for damages, interest and claimant's costs. The company had previously reported that it planned to dispute the amount of costs claimed by Maersk, but on further review of the facts and circumstances, it decided to settle the matter. The litigation with Maersk Oil UK Limited resulted from alleged defects in compressors manufactured at a Dresser-Rand facility that discontinued producing compressors in December 1998. Change in Accounting Estimate The company recorded a pre-tax charge of $2.3 million ($1.5 million after-tax) for a change in accounting estimate related to accrued liabilities for workers' compensation. The charge for workers' compensation resulted from payment information recently provided to the company by Ingersoll Rand, its former parent company. Outlook Demand for rotating equipment and aftermarket parts and services continues to be strong but aftermarket bookings and revenues continue to be adversely, but temporarily, impacted by changes in the procurement process approval cycle and a delay in the budget appropriations for certain of the company's national oil company customers. The backlog of orders has continued to increase to record levels. At June 30, 2007, 68.0% of the backlog of $1.61 billion is scheduled to ship in 2008 and 2009. The company continues to believe that its 2007 operating income will be in the range of $250.0 to $270.0 million and its third quarter 2007 operating income will be in the range of 25.0% to 27.0% of the total year. About Dresser-Rand Group Headquartered in Houston, Dresser-Rand Group Inc. (NYSE: DRC) -- http://www.dresser-rand.com/-- is among the largest suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical, and process industries. The company operates manufacturing facilities in the United States, France, Germany, Norway and India, and maintains a network of 26 service and support centers covering more than 140 countries. * * * As reported in the Troubled Company Reporter on Sept. 6, 2007, Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to the $500.0 million senior secured revolving credit facility due 2012 of Dresser-Rand Group Inc. (BB- /Stable/--). EQUINIX INC: Prices Public Offering of 3.66 Mil. Common Stock ------------------------------------------------------------- Equinix Inc. has entered into an agreement to sell 3,662,556 shares of its common stock in an underwritten offering at a price to the public of $84.05 per share. Equinix has granted the underwriters an option to purchase up to an additional 549,383 shares of Equinix common stock on the same terms and conditions to cover over-allotments, if any. Equinix also disclosed that concurrent with its agreement to sell shares of common stock, that it has entered into an agreement to sell $350,000,000 aggregate principal amount of 3.00% convertible subordinated notes due 2014. Equinix has granted the underwriters an option to purchase up to an additional $45,986,000 aggregate principal amount of notes on the same terms and conditions to cover over-allotments, if any. The notes are convertible by holders into shares of Equinix's common stock at an initial base conversion rate of 7.4360 shares of common stock per $1,000 principal amount of notes, subject to adjustment in certain circumstances, which represents an initial base conversion price of approximately $134.48 per share. This represents a 60% premium to the last reported sale price of Equinix's common stock on the NASDAQ Global Select Market on Sept. 20, 2007. In addition, if at the time of conversion the applicable stock price of Equinix's common stock exceeds the base conversion price, the conversion rate will be increased by up to an additional 4.4616 shares of common stock per $1,000 principal amount of notes, as determined pursuant to a specified formula. The common stock offering and convertible subordinated note offering are being conducted as separate public offerings, however, the closing of each offering is conditioned on the concurrent closing of the other. Equinix intends to use the net proceeds from the offerings to fund its acquisition of IXEurope plc, the closing of which was disclosed on Sept. 14, 2007, and use any remaining net proceeds for capital expenditures, acquisitions or general corporate purposes. Citi is acting as the sole book-running manager of the offerings. Credit Suisse, Jefferies & Company and UBS Investment Bank are acting as co-managers of the common stock offering and Credit Suisse, Jefferies & Company, UBS Investment Bank and Barclays Capital are acting as co-managers of the convertible subordinated note offering. The offerings of securities may be made only by means of a prospectus. Copies of the prospectuses can be obtained from: Citi Brooklyn Army Terminal 140 58th Street, 8th Floor Brooklyn, NY 11220 Tel (718) 765-6732 Fax (718) 765-6734 About Equinix Inc. Headquartered in Foster City, California, Equinix Inc. (NASDAQ:EQIX) -- http://www.equinix.com/-- is a provider of network-neutral data centers and Internet exchange services for enterprises, content companies, systems integrators and network services providers. Through its Internet Business Exchange hubs in 10 markets in the United States and Asia Pacific, customers can interconnect with each other for traffic exchange requirements. Its services include colocation, interconnection and managed information technology infrastructure services. Colocation services include cabinets, power, operations space and storage space for Equinix\u2019s customers\u2019 colocation needs. Interconnection services include cross connects and switch ports on the Equinix Exchange service. Managed IT infrastructure services allow customers to use Equinix\u2019s telecommunications capabilities and IBX hubs. * * * As reported in the Troubled Company Reporter on Sept. 18, 2007, Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Equinix Inc. S&P also assigned a 'CCC+' rating to the company's $250 million of convertible subordinated notes due 2012 and proposed $300 million of convertible subordinated notes due 2014. The outlook is positive. FEDDERS CORP: Looking for Bidders for Planned Asset Sale -------------------------------------------------------- Fedders Corp. will be filing a proposed procedure this December for the sale of its assets, Steven Church of Bloomberg News reports, citing company lawyer, Norman L. Pernick, Esq. According to Mr. Pernick, the Debtor told the U.S. Bankruptcy Court for the District of Delaware that it will be looking for a stalking horse bidder for the assets pursuant to the terms of a proposed bankruptcy loan, which states that the company will submit a sale motion by December. Earlier, Bill Rochelle of Bloomberg News reported that the Official Committee of Unsecured Creditors opposed the $79 million in postpetition financing provided to Fedders by a group including Goldman Sachs Credit Partners LP and Bank of America NA. According to that report, the Committee called the loan "outrageously expensive" arguing that it costs 14 percent over the London interbank offered rate for the term loan and LIBOR plus 5 percent for the revolving credit. The Committee also argued that the terms of the loan permit calling a default any time, give the lenders "absolute discretion" to direct the reorganization, and turn the Chapter 11 case into a "sham," the source relates. Last month, Fedders obtained interim Court approval to borrow under the financing agreement. Headquartered in Liberty Corner, New Jersey and founded in 1896, Fedders Corporation (OTC: FJCC) -- http://www.fedders.com/-- manufactures air treatment products, including air conditioners, furnaces, air cleaners and humidifiers for residential, commercial and industrial markets. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No.: 07-11182). Its Debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. ENRON CORP: District Court Rejects Citibank MegaClaims Appeal ------------------------------------------------------------- Enron Creditors Recovery Corp., formerly Enron Corp., disclosed a decision of the U.S. District Court, Southern District of New York to reject an appeal by Springfield Associates, thereby sending the case back to the U.S. Bankruptcy Court in New York. Significantly, the Court expressly reaffirmed that "the general principle of assignment law -- that an assignee stands in the shoes of the assignor and subject to all equities against the assignor -- applies to assignments of bankruptcy claims." The decision clears the way for a trial in what is known as the MegaClaims case to determine whether Citibank will be held accountable for its role in the collapse and insolvency of Enron. "The District Court has eliminated the last hurdle in moving forward with the Citibank MegaClaims trial," John Ray III, Enron Creditors Recovery Corp. President and Chairman of the Board said. "Enron Creditor Recovery Corp. has dedicated the necessary resources to ensure the public trial brings the causes of the Enron collapse to light so that money can be returned to the hands of innocent parties." The MegaClaims suit brought by Enron Creditors Recovery Corp. against ten U.S. banks alleges their significant involvement in the fraudulent accounting activities that led to the energy trader's collapse. Thus far, eight of the ten banks named in the suit have settled their claims, contributing to Enron Creditors Recovery Corp.'s return of more than $11 billion to creditors. Enron Creditors Recovery Corp.'s outstanding claim against Citi seeks billions more for those who suffered financial losses as a result of the bankruptcy. About Enron Corporation Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. FIRST MAGNUS: Asks National Bank of Arizona to Return Funds ----------------------------------------------------------- First Magnus Financial Corporation seeks the U.S. Bankruptcy Court for the District of Arizona's authority to compel the National Bank of Arizona to: * turn over to the Debtor all funds deposited in nine separate bank accounts of the Debtor located at NBA; * complete and accurate accounting of the funds; and * find NBA to have willfully violated Section 362 of the Bankruptcy Code for failure to comply with the Debtor's demand for turnover of funds. James E. Cross, Esq., at Osborn Maledon, P.A., in Phoenix, Arizona, says that the Debtor supplied written and verbal notice to NBA on August 19, 2007, requesting to close the accounts and wire transfer to Alliance Bank the balance of all funds. The bank accounts are: a) First Magnus Financial Corporation DBA Charter Funding, Account #0010077693 b) First Magnus Capital, Inc., Account #0016107486 c) First Magnus Tips Trust, Account #0010109034 d) First Magnus Capital Checking, Account #0010106976 e) First Magnus Lender Operations, Account #0010098478 f) MIPS, Account #0010081860 g) First Magnus Financial Corp. DBA CRG Valuation, Account #0010077706 h) First Magnus Money Market, Account #16097054 i) First Magnus Retail Trust, Account #16098951 Mr. Cross says that the Debtor acknowledges that NBA has a claimed right of set-off to the funds in certain of the accounts and that it owes NBA a prepetition unsecured obligation. Mr. Cross, however, contends that there was no monetary default existing on the obligation at the time the Debtor requested to close its accounts. Mr. Cross adds that the Debtor disputes NBA's right to a prepetition set-off but it does not seek to address the issue at this time. Mr. Cross relates that NBA has acknowledged that it collected and deposited approximately $641,000 postpetition funds to the accounts for the benefit of the Debtor. Mr. Cross further relates that NBA's counsel provided a spreadsheet listing a rudimentary accounting of the funds applied as part of the offset and funds on deposit. He, however, claims that it is not as detailed and informative as the actual records maintained and utilized by NBA. Mr. Cross further claims that the Debtor has also seen a discrepancy as regards the accounting, however, NBA did not provide an explanation and it refused to produce the actual bank records supporting the data in the spreadsheet. Mr. Cross further relates that after receiving the accounting, the Debtor provided a stipulated form of order for the turnover of the postpetition funds. However, NBA declined to sign the order and demanded that there be a court order authorizing and approving the turnover. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP is the proposed counsel for the Debtor.When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expires on Dec. 19, 2007. (First Magnus Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST MAGNUS: Reconstitution of Committee Membership Denied ----------------------------------------------------------- The Hon. James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona refused to reconstitute the membership of the Official Committee of Unsecured Creditors appointed in First Magnus Financial Corporation's Chapter 11 case to include WNS America Inc. Judge Marlar ruled that WNS failed to introduce evidence showing that the Committee does not adequately represent the interests of creditors. As reported in the Troubled Company Reporter on Sept. 11, 2007, the Committee argued that WNS did not met the relevant legal standards for showing why the Committee's membership should be amended. According to the Committee, WNS' reasons are not sufficient grounds for its inclusion to the Committee. Following the United States Trustee for the District of Arizona's appointment of five Creditors Committee members, WNS asked the Court that it be included in the Creditors Committee. WNS noted that that it was listed by the Debtor on its list of 20 largest unsecured creditors, as the holder of the second largest unsecured claims amounting to approximately $2,800,000. WNS added that its general counsel Robert E. Michael, Esq., Robert E. Michael & Associates, PLLC, in New York, is very knowledgeable about securitization issues and finance and could assist the Committee understand and analyze the issues likely to be raised in this case through the participation of WNS on the Committee. WNS said that it wasn't appointed by the U.S. Trustee to the Committee because the Debtor's parent First Magnus Capital, owns approximately 1% of the shares of WNS. WNS, however, pointed out that the U.S. Trustee has not explained why this would render WNS unwilling or unable to perform its fiduciary obligation to protect the interests of unsecured creditors. Representing the Creditors Committee, Michael D. Warner, Esq., at Warner Stevens, LLP, in Forth Worth, Texas, contended that the Committee is presently comprised of a cross-section of the Debtor's creditors and adequately represents the interest of various types of unsecured creditors. Mr. Warner pointed out that WNS' particular interest -- as a loan servicer -- is already represented by Aurora Loan Services. The fact that WNS holds a large claim is irrelevant, Mr. Warner said. He noted that the existing Committee is well-organized and cohesive. The Creditors' Committee members and their contact information are: 1) Vanguard Legato Group Attn: Timothy Thomas 2202 N. First St. San Jose, CA 95131 Tel: (408) 325-3225 Fax: (408) 516-5304 2) National Bank of Arizona Attn: Kenneth Goldstein 6001 N. 24th Street San Jose, CA 95131 Tel: (602) 212-5447 Fax: (602) 287-0722 3) Hilton & Myers Advertising, Inc. Attn: Douglas S. Myers 3350 N. Country Club Tucson, AZ 85716 Tel: (520) 881-4550 ext. 274 Fax: (520) 881-4696 4) Aurora Loan Services, LLC Attn: Justin Balser 10350 Perk Meadows Drive Littleton, CO 80124 Tel: (720) 945-3000 Fax: (720) 945-3081 5) Pyro Brand Development, LLC Attn: John Beitter 8750 N. Central Expressway, STE 1050 Dallas, TX 75231 Tel: (214) 891-5700 Fax: (214) 891-5289 Ilene J. Lashinsky, United States Trustee for Region 14, advises the Court that Kenneth Goldstein is the designated contact member for National Bank of Arizona, replacing Matthew R.K. Waterman. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP is the proposed counsel for the Debtor.When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expires on Dec. 19, 2007. (First Magnus Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST MAGNUS: Selling Construction Loans & Real Estate Assets ------------------------------------------------------------- First Magnus Financial Corporation has asked the U.S. Bankruptcy Court for the District of Arizona for authority to sell certain construction loans and real estate owned assets to Summit Investment Management LLC or any qualified bidder. According to court documents, the Debtor intends to dispose of the construction loans amount to $8,483,760, whose borrowers are currently in default, as well as certain real estates the Debtor acquired in connection with the foreclosures on loans. The Arizona Daily Star says the loans are worth roughly $10,700,000. The assets would be sold at a discount. Summit has proposed to acquire the assets for $6,413,000, free and clear of all liens, claims and encumbrances, and subject to certain warranties and representations by the Debtor. The Debtor held an auction September 19, 2007, to maximize the realizable value of the assets. Competing bids were due September 18. Among other things, bidders were required to enclose $325,000 as minimum deposit. The Debtor has asked the Court to consider approval of the sale immediately after the auction. Results of the auction and the Sale Hearing, if any, weren't available as of press time. As part of the Purchase Agreement, Summit would assume and perform on time all the Debtor's obligations under the construction loans. The Debtor has sent notice of the proposed sale, a copy of the request to sell the assets and the due date for bids, and the proposed time and date of the auction to Summit and other parties-in-interest that have or may be identified as potential bidders. Information relevant to the assets for evaluation by parties-in-interest have been made available to bidders who have executed a valid nondisclosure statement; specific information will be provided after execution of the agreements. James P.S. Leshaw, Esq., at Greenberg Traurig, P.A. in Miami, Florida, says the Debtor needs to act on the assets fast. There's a risk of deterioration in the value of the assets as credit markets tighten, Mr. Leshaw explains. First Magnus has agreed to pay Summit a $100,000 break-up fee in the event it consummates the sale with another bidder at the auction, according to Inside Tucson Business. Summit is also prepared to extend a $5,000,000 bailout financing to the Debtor, Inside Tucson Business says. The loan would incur 7% fixed interest or prime plus 10% interest, Inside Tucson Business relates. The loan terms also include a $75,000 due diligence fee, a $5,000 monthly audit fee, and a $500,000 carve- out for professional fees and liquidation damages fees, according to Inside Tucson Business' Joe Pangburn. If no alternative bidder would show up, Summit has offered to remove the initial 7% interest, Mr. Pangburn says. This would save the Debtor roughly $350,000. At a hearing on September 14, Judge Marlar was adamant against the break-up fee and wants Summit to remove the fee, Mr. Pangburn reports. Summit is represented in the Debtor's case by Scott Rutsky, Esq., at Proskauer Rose in New York. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP is the proposed counsel for the Debtor.When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expires on Dec. 19, 2007. (First Magnus Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FLEXTRONICS INT'L: Unit Wants to Buy Arima's Notebook Operations ---------------------------------------------------------------- Flextronics International Ltd.'s unit, Flextronics Computing Sales and Marketing (L) Ltd., and Arima Computer Corporation signed a binding Letter of Intent where Arima will sell its notebook computer and server related business, operation and assets owned by Arima and Arima Computer JiangSu, Arima's subsidiary to Flextronics. The assets intended for sale include Arima's facilities at Wu- Jiang, as well as the entire stockholding of Arima's wholly owned subsidiaries Arima Computer (U.K.) Ltd., Arima Computer (Texas) Corporation , Arima Computer (California) Corporation and Arima Computer (Japan) Corporation. The transaction price is $59.5 million (NT$1,963 million) over the book value of the disposed assets at closing. As of June 30, 2007, the book value of the relevant assets were about $132 million (NT$4,356 million). The definitive sale and purchase agreement is expected to be executed within 45 days. Afterwards, Arima will immediately call a shareholders meeting to seek approval of the transaction. Flextronics will apply for the Investment Commission's approval according to applicable laws. The parties will proceed to close the deal on a date to be further agreed by both parties after Flextronics receives the approval from the Investment Commission. Arima indicates that the transaction will safeguard all affected Arima employees' interests. Flextronics intends to offer positions to substantially all of Arima's employees of the notebook and server business. Flextronics will also offer employee benefit and base compensation that are substantially similar in the aggregate to those provided by Arima. Moreover, the existing relationships between Arima and suppliers, customers and banks will remain unchanged. Prior to the closing of this transaction, Arima will continue to operate its business in the ordinary course. About Arima Computer Headquartered in Taipei, Taiwan, Arima Computer Corp. (TPE: 2381) -- http://www.arima.com.tw/-- designs, manufactures and distributes notebook computers and peripherals, as well as related components. The notebook computers are manufactured for individuals, offices, schools, plants and families. During the year ended Dec. 31, 2006, the company obtained about 84% and 16% of its total revenue from notebook computers and related components, respectively. The company distributes its products in the domestic market and to overseas markets, including the rest of Asia, the Americas and Europe. In 2006, about 98% of the company's total revenue was from overseas markets. About Flextronics International Headquartered in Singapore, Flextronics International Ltd. (NasdaqGS: FLEX) -- http://www.flextronics.com/-- is an Electronics Manufacturing Services provider focused on delivering design, engineering and manufacturing services to automotive, computing, consumer digital, industrial, infrastructure, medical and mobile OEMs. Flextronics helps customers design, build, ship, and service electronics products through a network of facilities in over 30 countries on four continents. * * * As reported in the Troubled Company Reporter on Sept. 21, 2007, Moody's Investors Service assigned a provisional (P)Ba1 rating to Flextronics International Ltd.'s proposed $2.5 billion unsecured term loan that will be used to finance the cash consideration portion of the pending acquisition of Solectron Corporation. This provisional rating assumes a corporate family rating of Ba1. In addition, the rating for the proposed term loan reflect both the overall probability of default of the company, to which Moody's assumes a PDR of Ba1, and a loss given default of LGD 4. All of the company's ratings remain under review for possible downgrade pending consummation of the company's merger with Solectron, which is expected to close in October 2007. It is likely that if the transaction closes as contemplated, the CFR will be affirmed at Ba1. FUNCTIONAL RESTORATION: Section 341(a) Meeting Moved to October 3 ----------------------------------------------------------------- The United States Trustee for Region 21 will continue the meeting of Functional Restoration Medical Center Inc.'s creditors on Oct. 3, 2007, 9:00 a.m., at 21051 Warner Center Lane, Room 105, in Woodlands Hills, California. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Based in Encino, California, Functional Restoration Medical Center, Inc., is the second largest owner and operator of MRI centers in Southern California. The Debtor filed for chapter 11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No. 06-10306). Daniel A. Lev, Esq., at SulmeyerKupetz, represented the Debtor in its restructuring efforts. David K. Gottlieb was appointed as the Chapter 11 trustee. When the Debtor filed for protection from its creditors, its estimated assets and debts between $10 million and $50 million. On Feb. 28, 2007, the Court converted the Debtor's case to a chapter 7 liquidation proceeding. Mr. Gottlieb was appointed as the chapter 7 trustee. Steven T. Gubner, Esq., at Ezra Brutzkus & Gubner, represents the Trustee. GENERAL MOTORS: Failed Contract Talks Spurs UAW Work Stoppage ------------------------------------------------------------- More than 73,000 United Auto Workers union members throughout the United States went on strike against General Motors Corp. yesterday after the two failed to agree on a new labor contract. UAW President Ron Gettelfinger said that UAW members rallied over job security, economic issues, benefits for active workers and winning investment in future products. GM disclosed that it is disappointed in the union's decision to call a national strike, insisting that bargaining involves complex, difficult issues that affect the job security of its U.S. work force and the long-term viability of the company. However, GM is fully committed to working with the UAW to develop solutions together to address the competitive challenges facing the company. GM related that it will continue focusing its efforts on reaching an agreement as soon as possible. Pickets will remain outside GM plants until a contract is reached, Mr. Gettelfinger said before heading back to the bargaining table with UAW Vice President Cal Rapson, who directs the union’s GM Department, and the national committee. “We stand ready 24 hours a day, seven days a week to go back to the bargaining table,” Mr. Gettelfinger, flanked by the UAW GM National Negotiating Committee. Mr. Gettelfinger said it was significant that the union gave GM a nine-day contract extension, the longest in UAW history to avoid a strike, a drastic step no one on the union side wanted. “We were pushed into a strike and that’s where we are at,” Mr. Gettelfinger added. In recent years, UAW members have done their part by working with the company on issues such as the corporate restructuring, the attrition plan, the Delphi bankruptcy, the 2005 health care agreement and numerous quality, productivity and health and safety issues. Workers gave up a 3% general wage increase in 2006 and cost of living allowances. “We’ve met and solved all of GM’s problems since 2003,” Mr. Gettelfinger added. “We’ve worked with General Motors on every issue that came before them. We’ve done a lot of things to help that company. There comes a point in time when you have to draw the line in the sand.” The UAW leader added that the strike had nothing to do with the much-discussed union-controlled health care trust fund Voluntary Employee Benefit Association (VEBA) for retirees, which is a permissible but not mandatory subject of bargaining. Job security, economics and benefits for active members remain critical issues for UAW members at GM. “It’s become apparent to us that as much as workers give, they cannot give enough,” Mr. Gettelfinger said. “As much as executives get, they cannot get enough.” About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on May 28, 2007, Standard & Poor's Ratings Services placed General Motors Corp.'s corporate credit rating at B/Negative/B-3. At the same time, Moody's Investors Service affirmed GM's B3 Corporate Family Rating and B3 Probability of Default Rating, and maintained its SGL-3 Speculative Grade Liquidity Rating. The rating outlook remains negative, according to Moody's. GENERAL MOTORS: Reaches General 'VEBA Trust' Framework with UAW --------------------------------------------------------------- General Motors Corp. and the United Auto Workers union have agreed on a general framework, over the weekend, creating a union- controlled health care trust fund, known as the Voluntary Employees Beneficiary Association or VEBA, various sources report citing people familiar with the talks. As reported in the Troubled Company Reporter on Sept. 19, 2007, GM, Ford Motor Co. and Chrysler LLC are believed to be pushing to finance the health care fund at no more than 70 cents on the dollar, which would create a trust fund in excess of $60 billion, making it one of the largest investment funds in the country. The trust fund is expected to cut about $95 billion from the car makers' retiree costs. Papers relate that in a letter to UAW members on Friday, UAW President Ron Gettelfinger and his top GM negotiator, Cal Rapson, wrote that the bargainers were "continuing to make progress; however, we are pushing to accelerate the negotiating pace at all levels. It is our desire to reach an agreement without a strike, and we have demonstrated this by staying at the bargaining table up to this point. Nevertheless, we are contining to evaluate our options on an hour-by-hour basis and we want to assure you that our efforts to reach an agreement in this manner should in no way be construed as removing any of our options." As previously reported, GM and the UAW tentatively ceased VEBA fund negotiations on Thursday, after they couldn't agree on how much money GM would provide. Instead, the parties discussed other issues such as wage cuts for active employees, higher co-pays for active workers, cutting back on overtime, outsourcing of jobs not on the assembly line and lower second-tier wages for new hires. According to contract proposals, new hires would also get lesser health care benefits than current employees and won't get the pensions as current workers. The UAW is negotiating on behalf of 73,000 members who work for GM and 340,000 retirees and surviving spouses. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on May 28, 2007, Standard & Poor's Ratings Services placed General Motors Corp.'s corporate credit rating at B/Negative/B-3. At the same time, Moody's Investors Service affirmed GM's B3 Corporate Family Rating and B3 Probability of Default Rating, and maintained its SGL-3 Speculative Grade Liquidity Rating. The rating outlook remains negative, according to Moody's. GENESCO INC: Files Suit Against Finish Line to Consummate Merger ---------------------------------------------------------------- Genesco Inc. has filed suit in Chancery Court in Nashville, Tennessee, seeking an order requiring The Finish Line, Inc. to consummate its merger with Genesco and to enforce The Finish Line's rights against UBS under the Commitment Letter for financing the transaction. Commenting on the filing, Genesco Chairman and Chief Executive Officer Hal N. Pennington said, "No more delays by The Finish Line and UBS; no more reservation of rights; no more bankers' putting their pencils down. We want a court of competent jurisdiction to enforce our rights under the Merger Agreement and for The Finish Line and UBS to live up to their obligations." "We have launched this litigation in an effort to speed consummation of the merger and to force impartial review of the aspersions that The Finish Line and its bankers have cast on Genesco's business and reputation," Mr. Pennington continued. "I, along with other members of the management team and our Board of Directors, are proud to be the stewards of a company that is a leader and innovator in its industry with a rich history dating to 1924. I am proud to be the leader of a group of employees who have helped build a wonderful business for the benefit of our shareholders." "Our Board of Directors stands united in this call for The Finish Line and UBS to perform their obligations and pay our shareholders $54.50 per share in cash," Robert V. Dale, the presiding independent director of Genesco's Board of Directors, said. "Our Board, our management team and our advisors are confident that the steps we are taking are in the best interests of our shareholders." "Commencing litigation is always a difficult decision, but continued delay by The Finish Line and UBS is simply not acceptable," Mr. Pennington concluded. "Accordingly, we are seeking expedited hearings on all of our claims. I caution our shareholders and employees that there will likely be claims made back against Genesco. When they come, we will be ready." About Finish Line Headquartered in Indianapolis, Indiana, The Finish Line Inc. (Nasdaq: FINL) -- http://www.finishline.com/-- is a mall-based specialty retailer operating under the Finish Line, Man Alive and Paiva brand names. The company currently operates 697 Finish Line stores in 47 states and online, 95 Man Alive stores in 19 states and online and 15 Paiva stores in 10 states and online. About Genesco Inc. Based in Nashville, Tennessee, Genesco Inc. (NYSE: GCO) -- http://www.genesco.com/-- is a specialty retailer of footwear, headwear and accessories in more than 1,900 retail stores in the U.S. and Canada, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Zone, Cap Factory, Head Quarters and Cap Connection. The company also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers. * * * As reported in the Troubled Company Reporter on June 4, 2007, Standard & Poor's Ratings Services said that its ratings on specialty Genesco Inc. remain on CreditWatch with developing implications, following the announcement that it has rejected Foot Locker Inc.'s conditional bid to acquire Genesco for approximately $1.3 billion ($51.00 per share)in cash. In April 2007, S&P placed its ratings, including the 'BB-' corporate credit rating, on Genesco Inc. on CreditWatch with developing implications after Foot Locker launched its bid for Genesco. The Foot Locker deal also prompted Moody's Investors Service to place the ratings of Genesco on review for possible downgrade. Affected ratings include the company's "Ba3" corporate family rating. GEORGIA GULF: Poor Financial Profile Cues S&P to Cut Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Georgia Gulf Corp., including its corporate credit rating to 'B' from 'B+'. The outlook is negative. As of June 30, 2007, Georgia Gulf had about $1.7 billion in debt (adjusted for capitalized operating leases and for the securitized sale of receivables). Atlanta, Georgia-based Georgia Gulf is an integrated producer of chlorovinyl products, PVC building and home improvement products, and aromatic chemicals with combined annual revenue as of June 30, 2007, of slightly over $3 billion, pro forma for the acquisition of Royal Group Technologies Ltd. In October 2006, Georgia Gulf acquired Royal Group for about $1.6 billion. "The downgrade reflects the deterioration of Georgia Gulf's financial profile because of challenging operating conditions after the Royal Group acquisition," said Standard & Poor's credit analyst Paul Kurias. This acquisition stretched the financial profile just prior to the onset of a downturn in the company's key business lines. With challenging market conditions for vinyl resins and building material products likely to extend into 2008, S&P now believes that Georgia Gulf will be hard pressed to improve credit quality to levels appropriate at the previous ratings within the next two years. Although PVC price increases contributed to a sequential improvement in earnings in the second quarter 2007 from a very weak first quarter, higher input costs and challenging conditions have acted as a constraint to a more meaningful recovery in cash flow measures. Expected capacity additions in the PVC sector in 2008 are likely to add further pressure to operating results, particularly if the new residential construction market continues to remain weak, or broader economic conditions deteriorate. The ratings on Georgia Gulf reflect risks associated with the integration of the large Royal acquisition, cyclical and highly competitive end markets, and a highly leveraged financial profile. GLOBAL HOME: Capital Solutions Okayed as Panel's Financial Advisor ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave the Official Committee of Unsecured Creditors appointed in Global Home Products LLC and its debtor-affiliates' Chapter 11 cases, permission to retain Capital Solutions Group Ltd. as its financial advisor. As reported in the Troubled Company Reporter on Aug. 24, 2007, Capital Solutions is expected to: a) review and analyze the financial information of the Debtors; b) monitor and analyze the Debtors operations, cash expenditures, court filing, proposed employee bonus programs, business plans and projected cash requirements; c) attend Committee meetings, Bankruptcy Court hearings and participate in matters the committee may request; d) review and analyze proposed transactions for which the Debtors seek Court approval; e) assist in the valuation and corporate finance with respect to the asset sale and portfolio valuation matters as required; f) prepare the going concern sale and liquidation value analysis of the estates assets; g) review reports of the Debtors' business and its operations; h) analyze prepetition property, liabilities and financial condition of the Debtors, and the transfers to and accounts with and among Debtors' affiliates; i) review and analyze plan of reorganization proposed by the Debtors or any party and assist in the negotiations of the plan in behalf of the committee; j) support for any out proceeding necessary or appropriate to maximize the recovery by the Committee's constituents; and k) provide services the Committee may require in relation to the case proceedings. Susan L. Storey, managing director of Capital Solutions told the Court of the firm's hourly compensation: Designations Hourly Rates ------------- ------------ Managing Director $450 Associates $150-$250 Ms. Storey assured the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Westerville, Ohio, Global Home Products LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl & Jones LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at Pepper Hamilton LLP represent the Official Committee of Unsecured Creditors. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. GOLF TRUST: Raymond Jones and Fred Reams Resign from the Board -------------------------------------------------------------- Raymond V. Jones and Fred R. Reams have resigned from the board of directors of Golf Trust of America Inc. effective Sept. 13, 2007 and Sept. 19, 2007. On Sept. 17, 2007, the board of directors has appointed Michael C. Pearce to fill Mr. Jones's unexpired term. Mr. Pearce will serve until the next annual meeting of stockholders of the company, until his successor is duly elected and qualified, or until his death, resignation or removal, in accordance with the company's Articles and Bylaws. "Speaking on behalf of the board of directors, we wish to thank Ray and Fred for their more than ten years of exemplary service to Golf Trust and its stockholders," W. Bradley Blair, II, chief executive officer, president and chairman of the board commented. "We wish them well in their future endeavors." Headquartered in Charleston, South Carolina, Golf Trust of America Inc. (AMEX:GTA) -- http://www.golftrust.com/-- was formerly a real estate investment trust but is now engaged in the liquidation of its interests in golf courses in the United States pursuant to a plan of liquidation approved by its stockholders. The company owns two properties (6 eighteen-hole equivalent golf courses). As of June 30, 2007, the company has $11.5 million net assets in liquidation. HARMAN INT'L: KKR and GS Capital Cancels Planned Acquisition ------------------------------------------------------------ Harman International Industries, Incorporated disclosed in a regulatory filing last week that it was informed that Kohlberg Kravis Roberts & Co. L.P. and GS Capital Partners VI Fund, L.P. no longer intend to complete their acquisition of Harman by a company formed by investment funds affiliated with or sponsored by KKR and GSCP. KKR and GSCP have informed Harman that they believe that a material adverse change in Harman's business has occurred, that Harman has breached the merger agreement and that they are not obligated to complete the merger. Harman disagrees that a material adverse change has occurred or that it has breached the merger agreement. The Merger Pact As reported in the Troubled Company Reporter on May 1, 2007, Harman International Industries Incorporated entered into an Agreement and Plan of Merger with KHI Parent Inc. and its wholly owned subsidiary KHI Merger Sub Inc. KHI Parent Inc., a company formed by investment funds affiliated with KKR and GS Capital Partners VI Fund, L.P. and its related funds, which are sponsored by Goldman Sachs. The merger agreement provides for the merger of KHI Merger Sub Inc. into Hartman, with Hartman surviving the merger as a wholly owned subsidiary of KHI Parent. Hartman had anticipated completing the transaction during the fourth quarter of this calendar year. Headquartered in Washington, D.C., Harman International Industries Inc. (NYSE: HAR) -- http://www.harman.com/-- makes audio systems through auto manufacturers, including DaimlerChrysler, Toyota/Lexus, and General Motors. Also the company makes audio equipment, like studio monitors, amplifiers, microphones, and mixing consoles for recording studios, cinemas, touring performers, and others. * * * Standard & Poor's Ratings Services, on April 2007, lowered the company's corporate credit rating to BB- and placed it under CreditWatch with negative implications. HARMAN INT'L: Shares Drop as KKR & Goldman Cancels $8 Bil. Deal --------------------------------------------------------------- Harman International Industries Inc.'s shares dropped by as much as 24% to $85 per share on Friday's trading at the New York Stock Exchange, various sources say. The plunge was due to Kohlberg Kravis Roberts & Co. and GS Capital Partners canceling their proposal to buy the company for $8 billion, reports add. Headquartered in Washington, D.C., Harman International Industries Inc. (NYSE: HAR) -- http://www.harman.com/-- makes audio systems through auto manufacturers, including DaimlerChrysler, Toyota/Lexus, and General Motors. Also the company makes audio equipment, like studio monitors, amplifiers, microphones, and mixing consoles for recording studios, cinemas, touring performers, and others. * * * Standard & Poor's Ratings Services, on April 2007, lowered the company's corporate credit rating to BB- and placed it under CreditWatch with negative implications. HOMEBANC CORP: $8.5 Million JPMorgan DIP Facility Gets Final Okay ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized, on a final basis, HomeBanc Mortgage Corporation and its debtor- affiliates to borrow money up to an aggregate principal amount of $8,500,000, plus interest, fees and other expenses from JPMorgan Chase Bank NA, as administrative agent for the debtor-in- possession lenders. The money will be used solely for the purposes permitted under the loan agreement, for working capital purposes of the Debtors, and other sales of the Debtors' businesses, in each case solely in the amounts stated in the budget. The Carve Out will not exceed (x) the sum of the amount of any professional compensation or reimbursement of expenses incurred by the Debtors or the Creditors Committee's professionals in compliance with the Budget and unpaid at the time of the occurrence of an event of default, to the extent allowed by the Court, and (y) $450,000, which amount may be used after the occurrence and during the continuance of an Event of Default to pay any fees or expenses incurred by the Debtors and any statutory committees appointed in the Debtors' Chapter 11 cases. Except to the extent of the Carve Out, upon entry of an order approving the Servicing Asset Sale, no expenses of administration of the Cases or any future proceeding that may result therefrom, including liquidation in bankruptcy, will be charged against or recovered from the Collateral without prior written consent of the DIP Agent or the Prepetition Agent, both capacities held by JPMorgan Chase Bank, as the case may be. No consent will be implied from any other action, in action, or acquiescence by the Agent, DIP Lenders, Prepetition Agent or the Prepetition Secured Lenders. The Court rules that as security for the payment of the adequate protection obligations, the Prepetition Agent is granted a replacement security interest in and lien upon the Collateral, and proceeds thereof, subject and subordinate only to the DIP Liens and any liens on the Collateral to which the DIP Liens are junior, and the Carve Out. All intercompany loans and administrative expense or other priority given thereto will be junior and subordinate in all respects to the Adequate Protection obligations. Except as expressly provided in the order or the DIP Documents, the DIP Liens, superpriority claims, the Adequate Protection liens, and all other rights and remedies of the Agent, the Prepetition Agent, DIP Lenders and the Prepetition Secured Lenders granted will survive and will not be modified, impaired or discharged by an order converting any of the Chapter 11 cases to a case under Chapter 7, dismissing any of the Chapter 11 cases, terminating of the joint administration of the Cases or by any other act or omission, or entry of an order confirming a plan of reorganization in any of the cases. The Debtors have waived any discharge as to any remaining DIP obligations and the waiver is approved. No liens, claims, interests, rights or remedies granted pursuant to the terms of the final order will attach to or impair any rights of First Charter Bank, if any, under the terms of certain participation agreements with HomeBank Mortgage Corporation, or attach to or impair the Loans, Collateral, Loan Documents or the Collections. The servicing rights with respect to the Loans are not transferred or affected in any way by the final order. Committee, JPMorgan Resolve Loan Disputes Prior to the Court's final ruling on the matter, the Official Committee of Unsecured Creditors tentatively resolved its remaining issues with JPMorgan and was able to negotiate certain modifications to the terms and the requisites of the $8,500,000 credit facility. The DIP Lenders have agreed: -- that certain of the smaller line items in the Budget will be aggregated for purposes of determining any variance from the Budget; -- that the contemplated wind-down budget will not be limited to amounts incurred through November 30, 2007. The Creditors Committee, Debtors and Lenders will agree on an appropriate wind-down budget to be submitted with the order approving the sale of the Debtors' Servicing Business; -- to increase the post-default Carve Out to $450,000; -- to clarify that any payments made to the Prepetition Secured Lenders should be subject to further judicial review, if it is ultimately determined that they are not entitled to payments because, among others, the Lenders are undersecured; -- that the proposed Section 506(c) of the Bankruptcy Code waiver will only be effective upon entry of the Sale Order, including approval of the wind-down budget; -- to limit the waiver and release provisions contained in the order to take actions taken prior to entry of the Final DIP Order. Any release will be subject to the Creditors Committee's investigation rights; and -- that a mechanism for the valuation of the mortgage pools that serve as the Prepetition Secured Lenders' collateral will be formulated and approved as part of the Sale Order. About HomeBanc Mortgage Corp. Headquartered in Atlanta, Ga., HomeBanc Mortgage Corporation -- http://www.homebanc.com/-- is a mortgage banking company focused on originating primarily prime purchase money residential mortgage loans in the Southeast United States. HomeBanc Mortgage together with five affiliates filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079 through 07-11084). Joel A. Waite, Esq., at Young, Conaway, Stargatt & Taylor was selected by the Debtors to represent them in these cases. The Debtors' financial condition as of June 30, 2007, showed total assets of $5,100,000,000 and total liabilities of $4,900,000,000. The Debtors' exclusive period to file a plan ends on Dec. 7, 2007. (HomeBanc Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). HOMEBANC CORP: Court Gives Final Nod on Cash Collateral Use ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave HomeBanc Mortgage Corporation and its debtor-affiliates authority, on a final basis, to use the cash derived from operating their loan servicing business, which is claimed as collateral by their prepetition lenders. The Debtor will use the funds to pay for expenses stated in a 16- week budget, a projected cash flow statement as of Aug. 23, 2007, for the periods August 13, through Nov. 26, 2007. A copy of that budget is available for free at http://researcharchives.com/t/s?2336 The Court ruled that the Debtors' right to use the Cash Collateral will terminate automatically upon the termination date, which is the earliest to occur of (i) the date which is 25 days following the date of entry of the Interim Order, if the Final Order has not been entered by the Court on or before that date, (ii) maturity date on November 30, 2007, (iii) confirmation date of a plan, (iv) date of receipt of proceeds of the servicing asset sale, and (v) the acceleration of the Loans and the termination of the total commitment. If the termination date occurs because of the Servicing Asset sale, the Prepetition Agent will have the right to allow the Debtors to continue to use Cash Collateral. Headquartered in Atlanta, Ga., HomeBanc Mortgage Corporation -- http://www.homebanc.com/-- is a mortgage banking company focused on originating primarily prime purchase money residential mortgage loans in the Southeast United States. HomeBanc Mortgage together with five affiliates filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079 through 07-11084). Joel A. Waite, Esq., at Young, Conaway, Stargatt & Taylor was selected by the Debtors to represent them in these cases. The Debtors' financial condition as of June 30, 2007, showed total assets of $5,100,000,000 and total liabilities of $4,900,000,000. The Debtors' exclusive period to file a plan ends on Dec. 7, 2007. (HomeBanc Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). HOMEBANC CORP: Wants Freddie Mac & JPM Servicing Deals Approved --------------------------------------------------------------- HomeBanc Mortgage Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve two stipulations between and among JPMorgan Chase Bank, N.A., Federal Home Loan Mortgage Corporation, and HomeBanc Mortgage Corporation regarding: (i) the interim transfer of servicing of Freddie Mac's loans; and (ii) the sale of the servicing of Freddie Mac's loans. The Debtors are borrowers from certain prepetition lenders under a master repurchase agreement (i) between, among others, JPMorgan, as administrative agent, various buyers and certain of the Debtors, as sellers, dated October 31, 2006, as amended; and (ii) between JPMorgan, as Buyer, and certain of the Debtors, as sellers, dated January 23, 2007, as amended. JPMorgan and the Debtors are also parties to a loan and security agreement among JPMorgan, as administrative agent, various lenders and certain of the Debtors, as borrowers, dated November 17, 2006. The Servicing Loan Agreement provides for a $75,000,000 committed facility to provide the Debtors with working capital. As of Aug. 9, 2007, JPMorgan asserts that around $67,600,000 in principal amount, plus interest, fees and expenses, is outstanding under the Servicing Loan Agreement. To secure their obligations under the Servicing Loan Agreement, the Borrowers granted JPMorgan, for the benefit of the Servicing Lenders, a security interest -- Servicing Security Interest -- in all collateral, which includes rights in certain of the Borrowers' servicing contracts, subject and subordinate only to the interests of Freddie Mac. The Debtors has obtained the Court's approval to borrow $8,500,000 from certain of the Servicing Lenders to be used to finance expenses should the cash collateral and the Debtors' other resources prove inadequate, on terms set forth in documents governing the financing. On September 13, the Court authorized the Debtors to implement an expedient bidding and auctions procedure. Pursuant to the Sale Procedures Order, parties seeking to bid on the Servicing Business are required to submit bids no later than October 2. Thereafter, the Debtors, in consultation with representatives of their various stakeholders, will conduct an auction of the Servicing Business on October 9. The hearing to consider the sale of the Servicing Business is set for October 16. To further facilitate the sale process approved by the Sale Procedures Order, the Court also approved the Debtors' entry into a subservicing agreement whereby JPMorgan will subservice a significant loan portfolio -- approximately $16,000,000,000 -- currently serviced by the Debtors. The Debtors expect that the JPM Subservicing Agreement will further stabilize the Debtors' Servicing Business as a whole through the sale process. Disputes Before the Debtors' bankruptcy filing, the HBMC was a Freddie Mac seller/servicer. As of Aug. 9, 2007, HBMC serviced 7,101 Freddie Mac loans with an aggregate original principal loan balance of $1,370,405,809. The Debtor, Freddie Mac and JPMorgan are parties to a certain acknowledgement agreement executed on December 1, 2006, pursuant to which Freddie Mac consented to the grant of the Servicing Security Interest to JPMorgan, and the parties set forth certain rights and obligations with respect thereto, including the rights and obligations of the parties in connection with the transfer of the Freddie Mac Servicing. Freddie Mac has asserted that pursuant to its Single-Family Seller/Servicer Guide and effective August 7, 2007, the Debtors' eligibility to sell mortgages to and service mortgages for Freddie Mac was terminated with "cause". The Debtor disputes the validity of the asserted Termination. On August 8, 2007, Freddie Mac secured possession of the Debtors' custodia account funds related to the Freddie Mac Loans in the amount of $6,059,361 for principal and interest -- P&I Funds -- and $13,101,448 for taxes and insurance -- T&I Escrows. Without access to the T&I Escrows, HBMC is unable to make required real estate tax, insurance and other applicable impound fund payments for the Freddie Mac Loans. >From August 7 to Aug. 9, 2007, Freddie Mac demanded and sought to obtain files, including all electronic documentation of any kind relating to the Freddie Mac Loans, which were being held in the custody of the Debtor. Freddie Mac maintains that HBMC has no right, title, claim or interest in and to any of the Servicing, the revenues related to the Servicing, or the Servicing transfer proceeds, if any and if applicable, and further assert that any Servicing, revenues, Servicing Transfer Proceeds or Surplus Proceeds are not property of the estate. The Debtor disputes the position taken by Freddie Mac as to the Termination, the Debtors' rights to the Servicing and related revenues. HBMC further disputes that the Servicing or related revenues are not property of the estate, or that the automatic stay is inapplicable thereto. Interim Servicing and Sale Stipulations According to Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, the Debtors' entry into the Stipulations will furthe the same goals as the Sale Procedures Order and the JPM Subservicing Agreement, and create uniformity as the Debtors move through the sale process. The Interim Servicing Stipulation contemplates that the Freddie Mac Servicing Rights will be transferred to JPMorgan for servicing pending completion of the sale process. The Sale Stipulation contemplates that (i) the Freddie Mac Servicing Rights will be sold in tandem with the rest of the Servicing Business at the Auction, and (ii) the parties will be authorized to consummate a sale of the Freddie Mac Servicing Rights to the bidder or bidders selected at the Auction without further hearing or Court order. Rights in tandem with the sale process of the Freddie Mac Servicing Rights will result in a greater return to the estates than segregating the processes, Mr. Barry says. The Stipulations will not only preserve the value of a portion of the Debtors' Servicing Business, but are sensible in light of the recent Court-approved sale procedures and JPM Subservicing Agreement, he asserts. To avoid expensive and protracted litigation and the furthe deterioration of the value of the Servicing, the parties have negotiated in good faith and wish to compromise and settle the controversies between them. The salient terms of the Interim Servicing Stipulation are: a) HBMC will turn over the Freddie Mac Files to JPMorgan. JPMorgan agrees to take possession of the Freddie Mac Files and to service the Freddie Mac Loans on an interim basis pending the conduct, conclusion and closing of a sale of the Freddie mac Servicing to be conducted under and pursuant to the Acknowledgement Agreement and Sale Stipulation; b) The Debtor agrees to account for and turn over to JPMorgan any payments it received in connection with the Freddie Mac Loans on and subsequent to the Termination Date that have not previously been turned over to Freddie Mac. HBMC and JPMorgan will send letters to the borrowers on the Freddie Mac Loans informing them that they should thereafter make their monthly mortgage payments to JPMorgan, but any payments already made will be forwarded by HBMC to JPMorgan and credited to their account; c) JPMorgan agrees to provide, pursuant to an interim servicing agreement to be agreed upon between JPMorgan and Freddie Mac, interim servicing for the Freddie Mac Loans until the time as a permanent servicing transfer is accomplished. Freddie Mac and JPMorgan will promptly provide the Debtor with a copy of the pricing information under the Freddie Mac Servicing Agreement. The pricing of the servicing with respect to the Freddie Mac Interim Servicing Agreement will be no greater in the aggregate than the pricing of the servicing with respect to the Mortgage Loan Subservicing Agreement being entered into by the Debtor and JPMorgan. With the exception of Freddie Mac's servicing transfer costs, the Freddie Mac Interim Servicing Agreement will not form the basis for any additional claims against the Debtor; d) The Debtor agrees to cooperate fully with Freddie Mac and JPMorgan in effectuating the Interim Servicing Transfer to JPMorgan by performing certain additional acts, including P&I Account reconciliation, T&I Account reconciliation, forwarding recorded documents, and other reasonably necessary actions requested by Freddie Mac or JPMorgan; e) Contemporaneously with the Interim Servicing Transfer, Freddie Mac will reimburse the Debtors for any and all unreimbursed advances of whatever type previously made on behalf of the Freddie Mac Loans. Upon execution of the Interim Servicing Stipulation, Freddie Mac will reimburse the Debtor from the T&I Escrows for all amounts paid by Debtor to borowers as a return of their escrow balances, upon the payment of their loans in full, which amounts the Debtor advanced because the T&I Escrows had been swept and were not available to the Debtor; f) Following execution of the Interim Servicing Stipulation through and including the date of the Interim Service Transfer to JPMorgan, the Debtor will povide Freddie Mac with a detailed list of all necessary tax and insurance payments as the payments come due, whereupon Freddie Mac will on a daily basis, transfer to the Debtor fom the T&I Escrows the applicable amounts needed to pay required real estate taxes, insurance and other applicable impound fund amounts on account of the loans covered by the T&I Escrows; and g) Freddie Mac will assume all liabilities with respect to any loss incurred by the Debtor arising out of pecuniary losses of the borrowers of the Freddie Mac Loans serviced by the Debtor, as a result of Freddie Mac having swept the T&I Escrows and the Debtor's failure to make timely required real estate tax, insurance and other applicable impount fund payments. Mr. Barry discloses that the provisions of the Sale Stipulation include: a) The Debtor and JPMorgan acknowledge and agree that Freddie Mac has a first priority right of payment from the Servicing Transfer Proceeds generated by the Auction sale. The total amount of Freddie Mac's claims and Freddie Mac's Servicing Transfer Costs to be deducted from the Servicing Tranfer Proceeds will be determined by Freddie Mac as of the date of the Permanent Servicing Transfer in accordance with the Acknowledgement Agreement; b) On the condition and to the extent that Freddie Mac has reimbursed the Debtor or JPMorgan for any and all advances made on behalf of the Freddie Mac Loans. As of August 31, 2007, Freddie Mac estimates its Claims to be $1,932,881, and the Servicing Transfer Costs to be $33,228; c) Without Freddie Mac or the Administrative Agent conceidng that the Debtor's consent is necessary, the Debtor agrees that a Servicing Transfer with assumption of warranties through an auction sale conducted by MountainView Servicing Group, LLC, is acceptable to the Debtor and JPMorgan; d) MountainView will be engaged as a broker by the Debtors pursuant to a brokerage agreement. The Auction Sale will be conducted as promptly as practicable in a commercially reasonable manner, consistent with and as permitted by the Acknowledgement Agreement and pursuant to the Court's order on the Sale Stipulation, in order to effect the Permanent Servicing Transfer with Assumptions and Warranties; e) The Debtor, JPMorgan and Freddie Mac undertake to ensure that the Auction Sale is conducted in a commercially reasonable manner for mortgage servicing rights and seek to generate the maximum amount of surplus proceeds; f) The Debtor and JPMorgan acknowledge and agree that the Permanent Servicing Transfer will be accomplished from the Interim Servicer pursuant to the Acknowledgement Agreement and in accordance with the Servicing Transfer procedures; the transferre of the Servicing must meet the eligibility and performance requirements set forth in the Guide and the Acknowledgement Agreement in order to be acceptable for Freddie Mac; it is the intention of Freddie Mac and JPMorgan to effect a Servicing Transfer With Assumption of Warranties; provided, however, if the transfer of Servicing can only be effected by a Servicing Transfer Without Assumption of Warranties, there will be no Surplus Proceeds available to be paid to JPMorgan or the Debtor. JPMorgan will have up to 180 days to implement a Servicing Transfer With Assumption of Warranties and JPMorgan's rights under Section 8(d)(2) are preserved; g) The Debtor, JPMorgan and Freddie Mac acknowledge and agree that provided there is a Servicing Transfer With Assumption of Warranties, and sufficient Servicer Transfer Proceeds are generated by the Auction Sale to pay the Freddie Mac Claims and the Freddie Mac Servicing Transfer Costs in full, then the claims and costs will be paid from the Servicing Transfer Proceeds, and that thereafter any Surplus Proceeds will be paid to JPMorgan, for application in accordance with the August 30, 2007 interim DIP order and if applicable thereafter to the Debtor; and h) Thereafter Freddie Mac will not assert any additional claims or liabilities against the Debtor's estate arising out of or related to the Termination or any obligations of Debtor to Freddie Mac under the Guide or the Acknowledgement Agreement, and provided that Freddie mac has reimbursed the Debtor for all amounts required to be paid pursuant to the Sale Stipulation and Interim Servicing Stipulation, the Debtor agrees not to assert any claims against Freddie Mac arising out of or related in any way to the Surplus Proceeds. About HomeBanc Mortgage Corp. Headquartered in Atlanta, Ga., HomeBanc Mortgage Corporation -- http://www.homebanc.com/-- is a mortgage banking company focused on originating primarily prime purchase money residential mortgage loans in the Southeast United States. HomeBanc Mortgage together with five affiliates filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079 through 07-11084). Joel A. Waite, Esq., at Young, Conaway, Stargatt & Taylor was selected by the Debtors to represent them in these cases. The Debtors' financial condition as of June 30, 2007, showed total assets of $5,100,000,000 and total liabilities of $4,900,000,000. The Debtors' exclusive period to file a plan ends on Dec. 7, 2007. (HomeBanc Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). HUNT REFINING: Loan Cancellation Cues Moody's to Withdraw Ratings ----------------------------------------------------------------- Moody's withdrew its ratings for Hunt Refining Company due to the cancellation of the syndication of the credit facilities rated on July 24,2007. Following the cancellation of the facilities, HRC has no rated debt at this time. The ratings being withdrawn are: B2 corporate family rating, a B2 probability of default rating, and the B1 (LGD 3; 40%) rating for $760 million of first lien credit facilities which were supposed to be comprised of: 1. a $130 million revolving tranche A construction facility with a term option, 2. a $200 million term loan B, 3. a $200 million delayed draw term loan B, 4. a $100 million pre-funded letter of credit facility (Synthetic L/C Facility), and 5. a $130 million revolving credit facility. Hunt Refining is a wholly-owned subsidiary of Hunt Consolidated Inc. and is headquartered in Tuscaloosa, Alabama. JARDEN CORP: Richard J. Heckmann Joins Board of Directors --------------------------------------------------------- Richard J. Heckmann was appointed to the Jarden Corporation's board of directors in accordance with the provisions of the Agreement and Plan of Merger, dated as of April 24, 2007, pursuant to which Jarden acquired K2 Inc. The acquisition of K2 Inc. was completed on Aug. 8, 2007. "We are delighted to have Dick join our board of directors," Martin E. Franklin, chairman and chief executive officer of Jarden Corporation, stated. "His appointment will bring added expertise to our board from his years of experience in building strong niche brands. We look forward to Dick's assistance in continuing to grow our business." Mr. Heckmann, age 63, was the chairman and chief executive officer of Heckmann Corporation since May 2007. From February 2007 to August 2007, Mr. Heckmann was the executive chairman of K2, and from April 2000, to August 2007, he was the Chairman of the board of directors of K2. He served as the chief executive officer of K2 from October 2002, through February 2007. Mr. Heckmann served as a director of MPS Group Inc. from April 2003, through March 2004, Philadelphia Suburban Corporation from August 2000, through February 2002, United Rentals Inc. from October 1997, through May 2002, Waste Management Inc. from January 1994 through January 1999 and Station Casinos Inc. from April 1999, through March 2001. Mr. Heckmann retired as chairman of Vivendi Water, an international water products group of Vivendi S.A. in June 2001. Mr. Heckmann was chairman, president and chief executive officer of U.S. Filter Corporation from 1990 to 1999. He has served as the associate administrator for finance and investment of the Small Business Administration in Washington, DC and was the founder and chairman of the board of Tower Scientific Corporation. In addition, Charles R. Kaye has resigned as a director. Mr. Kaye, who is co-president of the global private equity firm Warburg Pincus LLC, had been a director since February 2005. "We will miss the invaluable guidance that Chip has brought to our company during his tenure on our board, Mr. Franklin said. "We have benefited greatly from his financial sophistication and expertise, especially in the areas of mergers and acquisitions." About Jarden Corporation Headquartered in Rye, New York, Jarden Corporation (NYSE: JAH) -- http://www.jarden.com/-- manufactures and distributes niche consumer products used in and around the home. The company's primary segments include Consumer Solutions, Branded Consumables, and Outdoor. * * * As reported in the Troubled Company Reporter on July 31, 2007, Standard & Poor's Ratings Services affirmed its bank loan and recovery ratings on Jarden Corp.'s (B+/Stable) senior secured financing in light of its planned $700 million add-on to its existing $975 million senior secured term loan B. JENKENS & GILCHRIST: Intends to Dispose Client Files by October 15 ------------------------------------------------------------------ Jenkens & Gilchrist LLP has served notice that as part of its dissolution which became effective on March 31, 2007, the law firm intends to dispose of all physical and electronic client files in its possession. Those wishing to claim and retrieve a client file may do so by by corresponding to Jenkens & Gilchrist with your contact information not later then Oct. 15, 2007: Jenkens & Gilchrist LLC Attn: Records P.O. Box 130479, Dallas Texas 75313 or: e-mail record@jenkens.com Jenkens & Gilchrist will destroy those files for which no request is received by Oct. 15, 2007. About Jenkens & Gilchrist Jenkens & Gilchrist -- http://www.jenkens.com/-- was prior to March 31, 2007, a full-service law firm providing legal services to businesses and individuals with U.S. and international operations from offices in Austin, Chicago, Dallas, Houston, Los Angeles, New York, Pasadena, San Antonio, and Washington, D.C. The dissolution of Jenkens & Gilchrist followed a probe by the Internal Revenue Service into the law firm's involvement in abetting tax evasion by clients and promoting criminal tax shelters to high-net-worth individuals, for which the law firm was penalized a total of $76.0 million. JON FITZGERALD: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Jon P. Fitzgerald Theresa Fitzgerald 800 Eaglenook Way Ospray, FL 34229 Bankruptcy Case No.: 07-08746 Chapter 11 Petition Date: September 23, 2007 Court: Middle District of Florida (Tampa) Debtor's Counsel: Paul DeCailly, Esq. DeCailly PLC 3111 West Martin Luther King Boulevard Suite 100 Tampa, FL 33607 Tel: (813) 286-2909 Fax: (734) 222-9835 Total Assets: $784,678 Total Debts: $1,361,623 Debtor's List of its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tempur-Pedic Pending Lawsuit $1,000,000 Internations, Inc. Warner, Smith & Harris P.O. Box 1626 Fort Smith, AR 72902 Priscilla Fitzgerald Personal Guarantee $40,000 5 Voke Street North Reading, MA 01864 Carlton Fields Legal Fees $12,000 Corporate Center Three 4221 West Boy Scout Boulevard Suite 1000 Tampa, FL 33607 Pender Newkirk & Company, LLP Litigation Expenses $1,681 Capital One Bank Credit Card $810 OSI Collection Collection Medical $484 Professional Adjustment Co. Collection Medical $422 Merchants Association Collection Medical $204 Collection Gulf Coast Collection Collection Medical $65 KEVIN WORMLEY: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Kevin John Wormley 3413 Inglewood Boulevard Los Angeles, CA 90066 Bankruptcy Case No.: 07-18326 Chapter 11 Petition Date: September 21, 2007 Court: Central District Of California (Los Angeles) Judge: Alan M. Ahart Debtor's Counsel: Robert P. Goe, Esq. Goe & Forsythe, LLP 660 Newport Center Drive, Suite 320 Newport Beach, CA 92660 Tel: (949) 467-3780 Fax: (949) 721-0409 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. LOCAL INSIGHT: S&P Rates $125.65 Mil. Class B Notes at BB- ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Local Insight Media Finance LLC's $667.65 million fixed-rate senior and subordinated notes. The preliminary ratings are based on information as of Sept. 21, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- An analysis of the cash flow related to Local Insight Media Finance LLC, ACS Media Finance LLC, and CBD Media Finance LLC's businesses and interests in the related contacts and rights; -- The securitization's legal structure; and -- Local Insight Media LLC's servicing ability. The notes will be repaid primarily from cash flows generated from existing and future agreements associated with the Alaska (ACS Media Finance LLC) and Cincinnati (CBD Media Finance LLC) businesses and certain other revenues, accounts, agreements, and intellectual property securing the transaction. The class A-1 and A-2 notes benefit from an irrevocable and unconditional surety policy provided by Ambac Assurance Corp. (Ambac; 'AAA'). The class B notes are subordinated to the class A-1 and A-2 notes and do not benefit from a surety policy. The class A-1 and A-2 notes received investment-grade Standard & Poor's underlying ratings. Preliminary Ratings Assigned Local Insight Media Finance LLC Class Rating Amount ----- ------ ------------ A-1* AAA N/A A-2 AAA 542,000,000 B BB- 125,650,000 * Class A-1 is a variable funding note. The preliminary rating is based on the surety policy provided by Ambac. N/A - Not applicable. LNR CDO: S&P Lifts $43 Mil. Class J Notes' Rating to B+ ------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class B, C-FX, C-FL, D-FX, D-FL, E-FX, E-FL, F-FX, F-FL, G, H, and J notes issued by LNR CDO 2003-1 Ltd., an arbitrage CDO of ABS transaction collateralized entirely by CMBS debt obligations, and removed them from CreditWatch with positive implications. At the same time, S&P affirmed the 'AAA' rating on the class A notes due to the level of overcollateralization available to support the notes. The raised ratings reflect factors that have positively affected the credit enhancement available to support the notes, including an improvement in the overall credit quality of the assets in the collateral pool since the transaction was originated in July 2003. The weighted average rating of the assets in the collateral has increased to 'BB' from 'B+' at closing. Ratings raised and removed from creditwatch positive: LNR CDO 2003-1 Ltd. Rating ------ Class To From Balance ----- -- ---- ---------- B AAA AA/Watch Pos 78,184,000 C-FX AA A/Watch Pos 9,860,000 C-FL AA A/Watch Pos 34,000,000 D-FX AA- A-/Watch Pos 40,766,000 D-FL AA- A-/Watch Pos 5,000,000 E-FX A BBB/Watch Pos 41,626,000 E-FL A BBB/Watch Pos 48,000,000 F-FX BBB+ BBB/Watch Pos 44,724,000 F-FL BBB+ BBB/Watch Pos 6,000,000 G BBB BBB-/Watch Pos 12,204,000 H BB+ BB/Watch Pos 30,511,000 J B+ B/Watch Pos 43,478,000 Rating affirmed: LNR CDO 2003-1 Ltd. Class Rating Balance ----- ------ ---------- A AAA 99,160,000 LNR PROPERTY: S&P Raises $1.7 Billion Loan's Rating to BB --------------------------------------------------------- Standard & Poor's Ratings Services upgraded LNR Property Corp.'s (B+/Stable/--) $1.7 billion senior secured credit facility to 'BB' from 'B+', as part of S&P's continued rollout of recovery analyses. S&P assigned the facility a recovery rating of '1', resulting in an issue rating two notches above the corporate credit rating. The recovery rating is based on a discrete asset analysis. S&P's hypothetical bankruptcy scenario assumes a fully drawn revolving credit facility and a certain level of losses on CMBS and other assets due to possible market disruptions. To determine collateral value, S&P haircuts the value of the assets securing the senior facility in the simulated default year. "Based on this analysis, the projected value of the collateral provides for a very high level of expected recovery in the event of a payment default," said Standard & Poor's credit analyst Andrew T. Sharp. MCARTHUR FOGG: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Mcarthur Fogg 13803 Dawn Whistle Way Bowie, MD 20721 Bankruptcy Case No.: 07-19187 Chapter 11 Petition Date: September 21, 2007 Court: District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Ronald B. Greene, Esq. Goren Wolff & Orenstein 9500 Annapolis Road Suite B-5 Lanham, MD 20706 Tel: (301) 577-1300 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deere Credit Services $4,020 8402 Excelsior Drive Madison, WI 53717 Citibank USA Credit Card $3,009 P.O. Box 6003 Hagerstown, MD 21747 Drs. Mininberg and Medical Bill $2,775 Fechter, P.A. 10301 Georgia Avenue Suite 105-a Silver Spring, MD 20902 Capital One Bank Credit Card $2,545 AMEX Credit Card $2,540 Maryland Open MRI Medical Bill $1,865 Shell Oil/Citibank Credit Card $685 Cross Country Bank Credit Card $336 GEMB/LOWES Credit Card $180 Diagnostic Imaging, LLC Medical Bill $123 HSBC NV Credit Card $90 First National Credit Card $1 Bank of America MIRANT CORP: Texas Court Confirms Mirant Lovett’s Amended Plan -------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Texas - Fort Worth Division confirmed Mirant Lovett LLC's Amended Chapter 11 Plan of Reorganization on September 19, 2007, after finding that the Plan satisfies the 13 statutory requirements under Section 1129(a) of the Bankruptcy Code. On Mirant Lovett's behalf, Jeff P. Prostok, Esq., at Forshey & Prostok LLP, in Fort Worth, Texas, stepped Judge Lynn through the Section 1129(a) requirements necessary to confirm the proposed Plan: 1. The Mirant Lovett Plan complies with the applicable provisions of the Bankruptcy Code thereby satisfying Section 1129(a)(1). Under the Lovett Plan, each class of Claims and Equity Interests contains only Claims or Equity Interests that are substantially similar to the other Claims or Equity Interests within the class. Valid business, legal, and factual reasons exist for the separate classification of each of the Classes of Claims and Equity Interests created under the Supplemental Plan, and the Classes do not unfairly discriminate between or among holders of Claims and Equity Interests. 2. Mirant Lovett has complied with all previous orders of the Court regarding solicitation of the Lovett Plan. Mirant Lovett has also complied with the Bankruptcy Code, the Bankruptcy Rules and other applicable law with respect to solicitation. Accordingly, the Mirant Lovett have complied with Section 1129(a)(2). 3. Mirant Lovett has proposed the Lovett Plan in good faith. As the Lovett Plan is the result of extensive, arm's- length and good faith negotiations, it provides fundamental fairness to all creditors and equity interest holders. The Lovett Plan also provides Mirant Lovett's creditors and equity interest holders with the best possible recovery under the circumstances. Accordingly, the Lovett Plan satisfies the requirements of Section 1129(a)(3). 4. Pursuant to the Lovett Plan, each Professional Person who holds or asserts a Fee Claim is required to file with the Bankruptcy Court, and serve on all parties required to receive notice, a Fee Application within 45 days after the effective date of the Lovett Plan. This provision is sufficient to comply with Section 1129(a)(4). 5. The Lovett Plan satisfies the requirements of Section 1129(a)(5), because it sets forth the identities of Mirant Lovett's directors as of the Lovett Plan Effective Date. The directors of Mirant Lovett are highly qualified and their appointment is clearly consistent with the interests of Mirant Lovett and with public policy. 6. The Lovett Plan does not provide for the change of any rate that is within the jurisdiction of any governmental regulatory commission after the occurrence of the Lovett Plan Effective Date. Therefore, the provisions of Section 1129(a)(6) are inapplicable. 7. The Plan satisfies Section 1129(a)(7) because the "best interests" test is satisfied with respect to all impaired classes of Claims and Equity Interests. Recoveries to impaired classes under the Lovett Plan greatly exceed the amounts the parties would receive in a liquidation. 8. Class 1 Taxing Jurisdiction Settlement Claims, Class 3 Equity Interests, and the Class 5 Priority Claims are not impaired under the Lovett Plan, and, therefore, are deemed to have accepted the Lovett Plan. Mirant Lovett submits that all impaired Unsecured Classes and Convenience Classes votes received have accepted the Lovett Plan. Therefore, the Lovett Plan complies with Section 1129(a)(8). 9. Under the Plan, the treatment of Allowed Administrative Claims, New York DIP Claims, Priority Claims, and Tax Claims satisfies the requirements of Section 1129(a)(9). 10. The Lovett Plan satisfies Section 1129(a)(10) because among other things, Class 2 Unsecured Claims Against Mirant Lovett, and Class 4 Convenience Claims are impaired and voted to accept the Lovett Plan, without including any acceptance of the Lovett Plan by insiders on account of Intercompany Claims or otherwise. 11. For purposes of determining whether the Lovett Plan satisfies the feasibility standard, Mirant Lovett has analyzed its ability to fulfill its obligations under the Lovett Plan. Mirant Lovett asserts that based on projections and evidence provided to the Court, the Lovett Plan is feasible; they will have sufficient cash flow to meet their obligations under the Lovett Plan. Thus, Section 1129(a)(11) is satisfied. 12. The Lovett Plan incorporates by reference provisions of the confirmed Joint Chapter 11 Plan of Reorganization filed by the New Mirant Entities, which provides for the payment of all statutory fees by Mirant Lovett on or before the Lovett Plan Effective Date, thereby satisfying Section 1129(a)(12). 13. Mirant Lovett is not obligated to provide retiree benefits and, thus, Section 1129(a)(13) is inapplicable. Judge Lynn also found that the Plan complies with Section 1123(a) on the basis that: -- it designates classes of claims as required by Section 1123(a)(1); -- it specifies which classes of Claims and Equity Interests are not impaired and sets forth the treatment for the classes as required by Sections 1123(a)(2) and (3); -- it provides for the same treatment for each Claim or interest within a particular class as required by Section 1123(a)(4); -- it provides for adequate means of implementation as required by Section 1123(a)(5); and -- it contains only provisions that are consistent with the interests of creditors and equity securities holders as required by Section 1123(a)(7). In addition, the Lovett Plan provides for (i) the rejection, assumption and assumption and assignment of executory contracts, and (ii) an "intercompany settlement," which resolves intercompany claims pursuant to a settlement and compromise. Mr. Prostok stated that the Intercompany Settlement does not affect the status of Mirant lovett as separate legal entities; change the organizational structure of Mirant Lovett; constitute a change of control of Mirant Lovett for any purpose; and cause a merger or consolidation of any legal entities, nor cause the transfer of any assets. Under its Plan, Mirant Lovett continue to exist as separate legal entities. Moreover, Judge Lynn authorized Mirant Lovett to take all limited liability company actions necessary or appropriate to implement and consummate all the provisions of the Lovett Plan. Judge Lynn ruled that the stay contemplated by Rule 3020(e) of the Federal Rules of Bankruptcy Procedure will terminate on September 28, 2007, at 4:00 p.m. (prevailing Central time). On the Plan effective date, Mirant Lovett may operate its business and use, acquire and dispose of its assets free of any restrictions of the Bankruptcy Code. Mirant Corporation, as the Court-approved Disbursing Agent, will have all the powers, rights, duties and protections afforded the Disbursing Agent under the Lovett Plan, and is authorized by the Court to make the required Lovett Plan distributions specified under the Lovett Plan on the relevant distriution date. Settlements Each of the New York Settlement, the 2007 Tax Agreement and the 2007 Amended Consent Decree is incorporated in the Confirmation Order, and will be fully enforceable against Mirant Lovett. Mirant Lovett will provide for the payment, by no later than the Lovett Plan Effective Date, of any tax amount, accrued interest or change that may be due and owing the Tax Jurisdictions as of September 19. Special Provisions On Governmental Entities Notwithstanding any provision to the contrary in the Lovett Plan or the Confirmation Order, any liability of any entity or individual relating to any pending violation of, or relating to, the State Pollutant Discharge Elimination System water permit program, solid and hazardous waste program, and air program for the Lovett facility generating station, will not be subject to discharge under the Lovett Plan or Confirmation Order, to the extent the liability is asserted by the State of New York, its subdivisions, or the United States. Nothing in the Lovett Plan or Confirmation Order will adversely affect the rights and remedies of the State of New York under environmental laws with respect to Mirant Lovett, including State of New York v. Mirant New York, Inc. and Mirant Lovett, LLC No. 03 CV 4326 -- the New York Actions. Upon the Effective date, the New York Actions will survive the bankruptcy case and may be adjudicated and enforced in the tribunals in New York with jurisdiction over the New York Actions. Judge Lynn ordered, however, that nothing will allow the state of New York to pursue prepetition monetary claims, and Court approval must first be obtained for any allowance of an administrative expense. Objections to the Lovett Plan not otherwise withdrawn, resolved or otherwise disposed of, are overruled and denied in their entirety. About Mirant Corp. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant's investments in the Caribbean include three integrated utilities and assets in Jamaica, Grand Bahama, Trinidad and Tobago and Curacao. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. On March 7, 2007, the Court entered a final decree closing 46 Mirant cases. Mirant NY-Gen LLC, Mirant Bowline LLC, Mirant Lovett LLC, Mirant New York Inc., and Hudson Valley Gas Corporation, were not included. On Feb. 15, 2007, Mirant NY-Gen filed its Chapter 11 Plan of Reorganization and on Feb. 22 filed a Disclosure Statement explaining that Plan. The Court approved the adequacy of Mirant NY-Gen's Disclosure Statement on March 22, 2007, and confirmed the Amended Plan on May 7, 2007. Mirant NY-Gen emerged from chapter 11 on May 7, 2007. On July 13, 2007, Mirant Lovett filed its Chapter 11 Plan of Reorganization. (Mirant Bankruptcy News, Issue No. 130; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) * * * The ratings of Mirant Corp. (Issuer Default Rating of 'B+') and its subsidiaries remain on Fitch's Rating Watch Negative following the company's plans to pursue alternative strategic options including a possible purchase of Mirant by a third party. MORGAN STANLEY: Moody's Reviews Ratingon 2002-AM2 Class B-1 Certs. ------------------------------------------------------------------ Moody's Investors Service placed under review for possible downgrade three certificates from two transactions, issued by Aames Mortgage Trust in 2001 and Morgan Stanley Dean Witter in 2002. The transactions are backed by first lien adjustable- and fixed-rate mortgage loans originated by Aames Financial Corporation. The three subordinate certificates are placed under review for possible downgrade because existing credit enhancement levels may be low given the current projected losses on the underlying pools. The transactions have taken significant losses causing gradual erosion of the overcollateralization. Moody's complete rating actions are: Issuer: Aames Mortgage Trust Review for Downgrade: -- Series 2001-4; Class M-2 current rating A2, under review for possible downgrade; -- Series 2001-4; Class B, current rating Ba3, under review for possible downgrade. Issuer: Morgan Stanley Dean Witter Capital I Inc. Trust Review for Downgrade: -- Series 2002-AM2; Class B-1, current rating B3, under review for possible downgrade MORTGAGE LENDERS: Has Until November 5 to Remove Actions -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extends the time within which Mortgage Lenders Network USA, Inc., may remove civil actions (i) pending as of its bankruptcy filing to Nov. 5, 2007, and (ii) initiated postpetition to: (i) the later of November 5, 2007; or (ii) the shorter of: (a) 30 days after receipt of the initial pleading; or (b) 30 days after receipt of the summons if the initial pleading has been filed with the Court but not served with the summons. As reported in the Troubled Company Reporter on Aug. 15, 2007, the Debtor asked the Court to hold that the Prepetition Removal Deadline apply to all matters specified in Rules 9027(a)(2)(A), (B) and (C), and that the Postpetition Removal Deadline apply to all matters specified in Rule 9027(a)(3). Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, said it was prudent for the Debtor to seek an extension of the period to file notices of removal to protect its right to remove the Actions. Since filing for bankruptcy, the Debtor has been constantly and persistently occupied with matters of immediate importance to its Chapter 11 case, Ms. Jones notes. From the Petition Date to the present, the Debtor has focused its efforts on the orderly wind down of its business and the sale of its assets for the benefit of its creditors. Hence, the Debtor has not had an opportunity to appropriately review Actions to determine whether there are any that may need to be removed. Ms. Jones contended that the Extension sought will afford the Debtor the opportunity necessary to make fully-informed decisions concerning removal of any Action and will assure that the Debtor does not forfeit valuable rights under Section 1452. Furthermore, the rights of the Debtor's adversaries will not be prejudiced by the Extension because any party to an Action that is removed may seek to have it remanded to the state court pursuant to Section 1452(b), Ms. Jones adds. The Debtor believe its request is reasonable and practical in light of the present posture of its bankruptcy case. Middletown, Conn.-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- is a privately held company offering a full range of Alt-A/Non-Conforming and Conforming loan products through its retail and wholesale channels. The company filed for chapter 11 protection on Feb. 5, 2007 (Bankr. D. Del. Case No. 07-10146). Pachulski Stang Ziehl Young Jones & Weintraub LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Debtor's exclusive period to file a chapter 11 plan expires on Oct. 3, 2007. (Mortgage Lenders Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/ or 215/945-7000). MUSICLAND HOLDING: Panel Enters Settlement with 20th Century Fox ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Musicland Holding Corp. and its debtor-affiliates has agreed to settle its: (i) adversary proceeding against Twentieth Century Fox Home Entertainment LLC, formerly known as Twentieth Century Fox Home Entertainment, Inc.; and (ii) objection to 20th Century Fox's $30,729,276 claim, for a cash payment of $589,000 and an allowed secured Fox Claim in the reconciled amount of $28,636,687. Both parties have agreed to release each other against any and all claims, causes of action, rights, liens, demands, obligations and liabilities of any kind or nature. The Debtors and the Informal Committee of Secured Trade Vendors have consented to the Settlement. Mark T. Power, Esq., at Hahn & Hessen LLP, in New York, notes that the Committee considered the claims and defenses asserted by Century Fox and has determined that there was substantial risk in continuing litigation. In making that determination, the Committee conducted its own evaluation of the potential defenses to its claims as well as investigating the defenses raised by Century Fox, Mr. Power says. In particular, the Committee concluded that a majority of the alleged preferential transfers were subject to an ordinary course of business defense as they were paid either (a) within 58-73 days of invoices, which appeared to be the ordinary course of business prior to the preference period or (b) between two days before, or four days after due date, which was also the ordinary course of business prior to the preference period. Furthermore, the Committee concluded that even if a few transfers were not made in the ordinary course of business, Century Fox had a strong new value defense based on its being owed over $15,000,000. The Committee, in consultation with the Debtors and the Informal Committee, also concluded, among other things, that an allowed claim of $28,636,687 was consistent with the Debtors' books and records. Accordingly, the Committee believes the settlement with Century Fox is reasonable as it would result in (a) the estates' receipt of $589,000 without the need for costly and time-consuming litigation in which there was substantial risk to the estates, and (b) the fixing of the Fox Claim. About Musicland Holding Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. At March 31, 2007, the Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation with the Court. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. The hearing to consider confirmation of the Amended Plan has been adjourned to Sept. 27, 2007. (Musicland Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MUSICLAND HOLDING: Wants Emergence Date Extended to October 31 -------------------------------------------------------------- Musicland Holding Corp. and its debtor-affiliates, the Official Committee of Unsecured Creditors and the current members of the Informal Committee of Secured Trade Vendors further agree that the deadline set under the Debtors' Second Amended Plan for: (a) the Confirmation Order to become a Final Order is extended until September 30, 2007; and (b) occurrence of the Effective Date is extended until October 31, 2007. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. At March 31, 2007, the Debtors disclosed $20,121,000 in total assets and $321,546,000 in total liabilities. On May 12, 2006, the Debtors filed their Joint Plan of Liquidation with the Court. On Sept. 14, 2006, they filed an amended Plan and a Second Amended Plan on Oct. 13, 2006. The Court approved the adequacy of the Amended Disclosure Statement on Oct. 13, 2006. The hearing to consider confirmation of the Amended Plan has been adjourned to Sept. 27, 2007. (Musicland Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NASDAQ STOCK: Unit Sells 5.3 Million LSE Shares for $194 Million ---------------------------------------------------------------- The Nasdaq Stock Market, Inc. disclosed the disposal by its wholly owned subsidiary Nightingale Acquisition Limited of 5,324,529 shares in the London Stock Exchange Group plc through a market book-built sale process at a price of GBP18 per share. The aggregate sale value of transaction is GBP95.8 million or $194 million. This sale represents the balance of the NASDAQ group interests in LSE shares held following the disposal of 56 million shares reported on Sept. 20, 2007. As previously reported, last month, Nasdaq's Board of Directors authorized the company to explore alternatives to divest its LSE stake (61.3 million shares) after Nasdaq failed in its bid to takeover LSE. LSE shareholders rejected Nasdaq's $5.3 billion bid on Feb. 10, 2007. Headquartered in New York City, The Nasdaq Stock Market Inc. (Nasdaq: NDAQ) -- http://www.nasdaq.com/-- is an electronic equity securities market in the United States with about 3,200 companies. * * * In February 2007, Moody's Investors Service placed The NASDAQ Stock Market Inc.'s long-term corporate family rating at Ba3 with a negative outlook. In November 2006, Standard & Poor's rated the company's long-term local and foreign issuer credits at BB with a stable outlook. Both ratings still apply to date. NATIONAL LAMPOON: Engages Weinberg & Co. as Accountant ------------------------------------------------------ Stonefield Josephson Inc., the independent accountant who had been engaged by National Lampoon, Inc. as principal accountant to audit the company's consolidated financial statements, was dismissed effective Aug. 31, 2007. On Aug. 27, 2007, the company's audit committee approved the engagement of Weinberg & Company P.A. as the company's new principal independent accountant to audit the company's consolidated financial statements for the year ending July 31, 2007. The decision to change the company's independent accountant from Stonefield Josephson Inc. to Weinberg & Company P.A. was approved by the audit committee of our board of directors. The report of Stonefield Josephson Inc. on the company's financial statements as of and for the years ended July 31, 2006 and July 31, 2005 did not contain an adverse opinion, or a disclaimer of opinion, however the report issued on the financial statements for the year ended July 31, 2006 was modified as to the company's ability to continue as a going concern. During the periods ended July 31, 2006 and July 31, 2005 and the interim period from Aug. 1, 2006 through the date of dismissal, the company did not have any disagreements with Stonefield Josephson Inc. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Stonefield Josephson Inc., would have caused it to make a reference to the subject matter of the disagreements in connection with its reports. Prior to engaging Weinberg & Company P.A., the company had not consulted Weinberg & Company P.A. regarding the application of accounting principles to a specified transaction, completed or proposed, or the type of audit opinion that might be rendered on the company's financial statements. About National Lampoon Based in West Hollywood, California, National Lampoon Inc. (AMEX: NLN) -- http://www.nationallampoon.com/-- a media and entertainment company, engages in the creation and distribution of comedic content. The company licenses the National Lampoon brand, as well as content from its library for use in movies, television programming, live events, radio broadcasts, recordings, electronic games, live events, and other consumer products. Going Concern Doubt Stonefield Josephson Inc., in Los Angeles, California, expressed substantial doubt about National Lampoon Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended July 31, 2006. The auditing firm pointed to the company's net loss and negative working capital. NEW CENTURY: Moody's Lowers Ratings on 14 Certificates ------------------------------------------------------ Moody's Investors Service upgraded 6 certificates and downgraded 14 certificates issued in 2004 and backed by loans originated by New Century Mortgage Corporation. The loan pools consist primarily of subprime fixed and adjustable rate mortgage loans. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The upgrades are based on the strong build up of credit enhancement. The downgrades are based on current and projected pipeline losses compared to the available levels of enhancement. Complete rating actions are: Upgrades: Issuer: GSAA Trust 2004-NC1 -- Class M-1, upgraded to Aa1 from Aa2; -- Class M-2, upgraded to Aa3 from A2; -- Class B-1, upgraded to A3 from Baa2; Issuer: New Century Home Equity Loan Trust, Series 2004-2 -- Class M-1, upgraded to Aaa from Aa1; -- Class M-2, upgraded to Aa1 from Aa2; -- Class M-3, upgraded to Aa2 from Aa3; Downgrades: Issuer: Asset Backed Securities Corporation Home Equity Loan Trust 2004-HE1 -- Class M-6, downgraded to Ba2 from Baa3; Issuer: Asset Backed Securities Corporation Home Equity Loan Trust 2004-HE2 -- Class M-6, downgraded to Ba2 from Baa3; Issuer: Carrington Mortgage Loan Trust, Series 2004-NC1 -- Class M-3, downgraded to Baa2 from A3; -- Class M-4, downgraded to Ba2 from Baa1; -- Class M-5, downgraded to B2 from Baa2; -- Class M-6, downgraded to B3 from Baa3; Issuer: GSAMP Trust 2004-NC1 -- Class B-3, downgraded to Ba1 from Baa3; Issuer: Morgan Stanley ABS Capital I Inc. Trust 2004-NC1 -- Class B-3, downgraded to B1 from Baa3; Issuer: Morgan Stanley ABS Capital I Inc. Trust 2004-NC4 -- Class B-3, downgraded to Ba1 from Baa3; -- Class B-4, downgraded to B2 from Ba1; Issuer: Morgan Stanley ABS Capital I Inc. Trust 2004-NC6 -- Class B-3, downgraded to Ba1 from Baa3; Issuer: New Century Home Equity Loan Trust, Series 2004-1 -- Class M-6, downgraded to Ba1 from Baa3; Issuer: New Century Home Equity Loan Trust, Series 2004-3 -- Class M-9, downgraded to Ba1 from Baa3; Issuer: Securitized Asset Backed Receivables LLC Trust 2004-NC1 -- Class B-3, downgraded to Ba2 from Baa3. NEW JERSEY: S&P Cuts Series 2003 and 1998 Bond's Ratings to CC --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on New Jersey Health Care Facilities Financing Authority's series 2003 and 1998 bonds, issued for Pascack Valley Hospital, to 'CC' from 'CCC', reflecting management's recently announced plans to file for bankruptcy and close the hospital by the end of 2007, as well as the continued precipitous decline in financial performance and liquidity in 2006 and through the year-to-date period. The outlook is negative. "The negative outlook reflects Pascack's lack of financial viability as a stand-alone hospital, and its vulnerability to a payment default," said Standard & Poor's credit analyst Charlene Butterfield. "The rating could be lowered to 'C' upon filing of the bankruptcy petition, and will be lowered to 'D' when and if Pascack fails to make a monthly payment to the bond trustee on time and in full." Management has given its employees a 60-day notice of termination; closure and bankruptcy proceedings are expected to occur by Dec. 31, 2007. Despite the plans for bankruptcy and closure, Pascack has continued to make timely monthly payments to the trustee for the purposes of bondholder repayment, and remains current on debt service repayment. Standard & Poor's will continue to monitor the timeliness of the monthly payments for notice of default. Pascack recorded an $8.2 million loss through the seven months of 2007 ended July 31, or a negative 10.6% margin. As a result of the weak finances, unrestricted cash reserves plummeted to a thin $3.2 million, equal to eight days' cash on hand at July 31, 2007. Pascack Valley Hospital is located in Westwood, New Jersey, an affluent suburb of Bergen County. The 280-bed hospital is the smallest of five acute-care providers in a highly competitive county. The lowered rating affects about $78 million in rated debt. NEWPAGE CORPORATION: Stora Deal Cues Moody's to Review Ratings -------------------------------------------------------------- Moody's Investors Service placed the ratings of NewPage Corporation under review for possible downgrade following the company's announcement that it has signed a definitive agreement to acquire Stora Enso's paper manufacturing operations in North America. Under the terms of the agreement, Stora Enso will receive about $1.5 billion in cash, a $200 million note, and a 19.9% equity interest in the new company. NewPage received committed financing to support the transaction and will also assume net liabilities of about $450 million, consisting primarily of pension obligations. The transaction, which is subject to regulatory approvals, is expected to close in the first quarter of 2008. With the incurrence of the incremental indebtedness and excluding synergies, Moody's preliminary estimates indicate that the combined company will be more leveraged than the existing NewPage. The review will focus on the proposed capital structure of the combined company, the integration process, and the anticipated operating and financial performance of the combined company, including the potential for cost synergies. The review will assess the combined company's business prospects, cash flow, liquidity arrangements and management, and is expected to be completed within 60 to 90 days. Ratings on review for possible downgrade: -- Corporate Family Rating at B1 -- Senior Secured Term Loan at Ba2 (LGD 2, 25%) -- Second Lien Notes at B2 (LGD 5, 73%) -- Senior Subordinated Notes at B3 (LGD 6, 94%) NewPage Corporation, headquartered in Miamisburg, Ohio, is a leading U.S. producer of coated papers in North America. The company currently produces coated papers in sheets and rolls through four integrated pulp and paper manufacturing mills with a combined annual capacity of about 2.2 million tons. NORTH AMERICAN: Posts $10.7 Million Net Loss in Qtr. Ended July 31 ------------------------------------------------------------------ North American Scientific Inc. disclosed Friday its financial results for the fiscal third quarter ended July 31, 2007. For the third quarter of fiscal 2007, the company reported a net loss from continuing operations of approximately $3.0 million and a net loss of $10.7 million, including the discontinued operations of the NOMOS(R) Radiation Oncology business. This compares with a net loss from continuing operations of $2.5 million and a net loss, including discontinued operations, of $4.6 million for the fiscal third quarter ended July 31, 2006. For the third quarter of fiscal 2007, the company reported revenues from continuing operations of approximately $3.4 million compared with revenues of $3.2 million for the third quarter of fiscal 2006. The increase in revenues from the prior year was due to a 17.0% increase in sales of the company's brachytherapy seeds and accessories, partially offset by a 14.0% decrease in non- therapeutic product sales. The increase in the net loss from continuing operations was primarily due to decreased gross profit of $200,000 related to higher material usage costs, and a $300,000 increase in operating expenses resulting from increased spending in selling and marketing expense and R&D expense, both related to the ClearPath device. "During the fiscal third quarter we achieved our eighth consecutive quarter of year-over-year growth in our Radiation Sources business, and in our fiscal year-to-date our Radiation Sources business has grown 21% over the prior year," said John B. Rush, president and chief executive officer of North American Scientific. "Over the past two years, we have continued to steadily increase our brachytherapy product sales and we believe market dynamics and our strong relationships with our customers will support future growth. While our gross profit margin in the third quarter was impacted by increased radioisotope material spoilage costs, we do not expect these costs to continue in the future. We expect gross profit margins to improve over time as we increase sales, particularly as we ramp up sales of our ClearPath(TM) breast brachytherapy devices. "Regarding ClearPath, we continue to execute our strategic launch plan that includes working closely with key medical opinion leaders as we prepare for full commercialization," continued Mr. Rush. "The first step in this process will begin with our initial clinical experiences in a few targeted medical centers, which we expect to complete before the end of fiscal 2007. During the fourth quarter of fiscal 2007, we intend to continue to spearhead a number of development and marketing activities that will support our commercial launch and generate additional mindshare among healthcare professionals. Our full commercialization plan also includes the introduction and launch of a second generation for our ClearPath-HDR device that will further increase functionality and ease-of-use for radiation oncologists. Finally, we are also finalizing the design for our low-dose rate treatment device, ClearPath-CR(TM) and we would expect to have a product ready for commercialization in the beginning of fiscal 2008. "As previously announced we have divested our NOMOS(R) Radiation Oncology business, and we are now reporting that business as a discontinued operation," continued Mr. Rush. "This transaction significantly reduces our cash burn, and therefore represents an important milestone for the company as we restructure and drive the organization towards financial health. The next step in this process involves completing an equity financing to fund operations and the launch of the ClearPath product line for breast brachytherapy. We have experienced strong interest in the investment opportunity, and we believe we will complete an equity financing in the very near future. We are excited about the progress we have made in the last quarter, and look forward to continued execution as a more focused entity." At July 31, 2007, the company's consolidated balance sheet showed $11.3 million in total assets, $10.5 million in total liabilities, and $753,000 in total stockholders' equity. The company's consolidated balance sheet at July 31, 2007, further showed strained liquidity with $10.0 million in total current assets available to pay $10.5 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended July 31, 2007, are available for free at http://researcharchives.com/t/s?23a6 Liquidity and Capital Resources At the end of the third quarter of fiscal 2007, the company had $1.8 million in cash and cash equivalents, compared with $9.3 million at the end of fiscal year 2006. During the third quarter of fiscal 2007, the company used $1.6 million in cash for operating activities, compared with $7.1 million in the first two quarters of fiscal 2007 combined. As of July 31, 2007 the company had borrowed $1.4 million on its bank credit line. The company currently has approximately $500,000 remaining borrowing capacity under its existing credit line, which is based on the balance of NASI accounts receivable and subject to certain milestones. The existing credit line expires and all amounts outstanding thereunder become due on Oct. 3, 2007. The company is currently discussing the extension of the credit line with its bank. In addition, the company is in discussions with another financial firm regarding the establishment of a subordinated debt facility. Default in Tangible Net Worth Covenant Waived Due to the $6.7 million impairment charge resulting from the sale of the NOMOS Radiation Oncology business, as well as the losses experienced by the discontinued NOMOS operations and the company's continuing operations, the company’s tangible net worth as of July 31, 2007, of $600,000 is in default of the $2.0 million tangible net worth covenant in its Loan and Security Agreement, as amended, with its bank. The bank has agreed to forbear the default, until such time as it determines in its discretion to cease such forbearance. In addition, the company’s stockholders' equity as of July 31, 2007, did not meet the $10.0 million stockholders' equity requirement for continued listing on the Nasdaq Global Market. Due to the company’s non-compliance, the company expects that The Nasdaq Stock Market will send the company a notice that the company's stock is subject to delisting from the The Nasdaq Global Market. Jim Klingler, chief financial officer, added, "Although we are considering a variety of financing alternatives, including a subordinated debt facility, we believe that the company will need to raise equity in the near term to assure we have adequate capital to support our continuing operations and the launch of ClearPath. Our goal is to access enough additional financial resources to allow us to reach profitability without having to turn to the financial markets again. We believe that our focus on serving the large and growing addressable market opportunities that are emerging in radiation therapy will support our efforts to reach our goals." Nine Months Financial Results For the first nine months of fiscal 2007, the company reported revenues from continuing operations of approximately $11.1 million compared with revenues of $9.2 million for the first nine months of fiscal 2006. The increase from the prior year was due to a 21.0% increase in sales of brachytherapy seeds and accessories, and an 18.0% increase in sales of non-therapeutic products. The net loss from continuing operations for the first nine months of 2007 was $7.4 million, compared with the net loss from continuing operations for the first nine months of fiscal 2006 of $6.6 million. The increase in the net loss from continuing operations was primarily due to $1.4 million in increased spending for selling and marketing expense and R&D expense, both primarily related to the ClearPath device, which was partially offset by increased gross profit of $800,000 resulting from increased sales. About North American Headquartered in Chatsworth, Calif., North American Scientific Inc. (NasdaqGM: NASI)-- http:www.nasmedical.com/ -- provides radiation therapy products in the fight against cancer. Its products provide physicians with tools for the treatment of various types of cancers. They include Prospera(R) brachytherapy seeds and SurTRAK(TM) needles and strands used primarily in the treatment of prostate cancer. In addition the company plans to commercialize its ClearPath(TM) multi-channel catheter breast brachytherapy devices in 2007, which are the only devices approved for both high dose and continuous release, or low dose, radiation treatments. The devices are designed to provide flexible, precise dose conformance and an innovative delivery system that is intended to offer the more advanced form of brachytherapy for the treatment of breast cancer. NORTHWESTERN CORP: S&P Revises Outlook to Positive from Stable -------------------------------------------------------------- On Sept. 21, 2007, Standard & Poor's Ratings Services revised its outlook to positive from stable and affirmed its 'BB+' long-term corporate credit rating on electric and natural gas utility Northwestern Corp. "The outlook revision reflects the steady improvement in the company's financial profile," said Standard & Poor's credit analyst Antonio Bettinelli. This, coupled with a renewed focus on regulated utility operations after the termination by Babcock & Brown Infrastructure Ltd. of its $2.2 billion acquisition of NorthWestern and expectations of future favorable regulatory orders, could lead to the company's ratings being raised in the next 12 to 18 months. Sioux Falls, S.D.-based NorthWestern had $733 million of total debt, including long-term capital leases, as of June 30, 2007. The positive outlook reflects the potential for higher ratings commensurate with continued improvement in the financial profile from expected cash flow, prudent financial management, and adequate and timely rate relief for capital-spending projects over the next several years. Upward credit momentum could be stymied by lower expected cash flows and credit metrics, which would likely result in a stable outlook at current ratings. NOVA CHEMICALS: Moody's Affirms Corporate Family Rating at Ba3 -------------------------------------------------------------- Moody's Investors Service confirmed NOVA Chemicals Corporation's Ba3 corporate family rating and senior unsecured debt ratings following regulatory approval for the expansion of its styrenics joint venture and the belief that low olefin feedstock costs could allow the company to meaningfully reduce debt over the next 12-18 months. Moody's also affirmed the company's SGL-3 rating. Given the uncertainty in the company ability to meaningfully reduce debt, the rating outlook will remain negative until net balance sheet debt declines below $1.5 billion. This concludes the review which began on Feb. 1, 2007. The ratings confirmation reflects the expectation that NOVA will be able to generate over $700 million of EBITDA in 2007 and that Alberta ethane prices will remain low relative to Gulf Coast prices and other crude oil-based feedstocks through 2008, especially during the second and third calendar quarters. This should provide NOVA with the opportunity to de-lever its balance sheet and reduce net debt to roughly $1.5 billion by the end of 2007 and get it well below $1.5 billion in 2008. The expanded styrenics joint venture with INEOS, including the contractual arrangement with Sterling Chemical, will enable NOVA to minimize its exposure to a business that has been a cash drain and a credit negative over much of the past decade. Furthermore, given the likelihood of additional US styrene capacity rationalization (Dow and Chevron Phillips venture), Moody's believes that the INEOS NOVA joint venture may not require additional funding. The combination of these factors should improve NOVA's credit metrics over the cycle and allow the company to maintain its Ba3 corporate family rating. NOVA needs to reduce its balance sheet debt as it has roughly $1.2 billion of debt maturities over the next five years and a large portion of this debt may have to be refinanced during unfavorable conditions in the global olefin/polyolefin markets. The negative outlook reflects the inherent uncertainty surrounding the company's earnings and cash flow, as well as its ability to reduce debt over the next 12-16 months. The company is effectively a single product commodity producer whose financial performance can be greatly impacted by exogenous events. The company's quarterly financial performance over the past two and a half years, arguably the strongest part of the current up-cycle in olefins, has been very volatile due to feedstock prices, uneven market demand and several unplanned production outages. Moody's would likely move the outlook to stable as net debt falls below $1.5 billion and the company continues to benefit from low feedstock prices. Conversely, Moody's could reassess the appropriateness of the Ba3 rating if NOVA is unable to reduce debt as expected over the next year or if the company's trailing four quarter EBITDA falls below $450 million. Nova Chemicals Company, headquartered in Calgary, Alberta, Canada, is a leading producer of ethylene and polyethylene. The company plans to contribute the vast majority of its remaining styrene, polystyrene, and expanded polystyrene assets to expand the INEOS NOVA 50/50 joint venture. Nova will retain its Performance Styrenics business, which has sales of roughly $400 million. NOVA reported revenues of $6.5 billion for the LTM ending June 30, 2007. OFFICEMAX INC: Earns $27.4 Million in Quarter Ended June 30 ----------------------------------------------------------- OfficeMax Incorporated reported net income of $27.4 million for the second quarter ended June 30, 2007, compared with net income of $27.4 million in the second quarter of 2006. Net income increased approximately 20.0% in the second quarter of 2007 from net income of $23.0 million in the second quarter of 2006, excluding a $9.2 million credit from an adjustment to the reserve for the additional consideration agreement that was entered into in connection with the October 2004 sale of the company's paper, forest products and timberland assets. Sales for the second quarter of 2007 increased 4.5% to $2.13 billion from $2.04 billion for the second quarter of 2006. "Our results for the second quarter showed progress in many areas, but aspects of our businesses remain opportunities for improvement," said Sam Duncan, chairman and chief executive officer OfficeMax. "In our Contract segment, operating margin contracted from lower-margin sales in spite of the benefit of some expense leverage. In our Retail segment, positive same store sales, expanded gross margins and cost containment delivered operating income margin improvement." OfficeMax generated $120.9 million of cash from operations in the second quarter of 2007, an increase of $41.9 million from the second quarter of 2006. OfficeMax invested $31.3 million for capital expenditures in the second quarter of 2007 compared to $23.7 million in the second quarter of 2006. As of June 30, 2007, OfficeMax reported total debt of $391.5 million excluding the timber securitization notes, and cash and cash equivalents of $220.6 million. At June 30, 2007, the company's consolidated balance sheet showed $6.03 billion in total asssets, $3.89 billion in total liabilities, $32.0 million in minority interest, and $2.10 billion 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?23aa About OfficeMax(R) Incorporated Headquartered in Naperville, Illinois, OfficeMax Incorporated formerly known as Boise Cascade Corporation (NYSE: OMX) -- http://www.officemaxsolutions.com/-- provides office supplies and paper, print and document services, technology products and solutions and furniture to large, medium and small businesses and consumers. Its customers are served by more than 36,000 associates through direct sales, catalogs, the Internet and retail stores. Its segments include OfficeMax, Contract; OfficeMax, Retail, and Corporate and Other. It distributes a line of items for the office, including office supplies and paper, technology products and solutions and office furniture through the OfficeMax, Contract segment. OfficeMax, Retail is a retail distributor of office supplies and paper, print and document services, technology products and solutions, and office furniture. Boise Building Solutions is a producer of plywood, lumber and particleboard. Boise Paper Solutions manufactures and sells uncoated free sheet papers, containerboard, corrugated containers, newsprint and market. * * * As reported in the Troubled Company Reporter on Aug. 22, 2007, Standard & Poor's Ratings Services revised the outlook for OfficeMax Inc. to positive from stable. At the same time, S&P affirmed the ratings on the company, including the 'B+' corporate credit rating. OPTION ONE: Moody's Downgrades Ratings on Two Cert. Classes ----------------------------------------------------------- Moody's Investors Service downgraded two certificates issued in 2004 and backed by subprime loans originated by Option One Mortgage Corp. The current credit enhancement provided by subordination, overcollateralization and excess spread is low relative to the projected pipeline loss. Complete rating actions are: Issuer: Asset Backed Securities Corporation Home Equity Loan Trust 2004-HE3 -- Class M-6, downgraded to Ba1 from Baa3; -- Class M-7, downgraded to B2 from Ba1. PAUL KIMBALL: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Paul Wayne Kimball dba Kimball/BattermanLLC SecurityStorage dba Kimball Oil Inc. dba B & K Ventures LLC 2223 Duncan Newton, KS 67114 Bankruptcy Case No.: 07-12276 Chapter 11 Petition Date: September 21, 2007 Court: District of Kansas (Wichita) Judge: Robert E. Nugent Debtor's Counsel: J. Michael Morris, Esq. Klenda Mitchell Austerman & Zuercher LLC 301 North Main, Suite 1600 Wichita, KS 67202 Tel: (316) 267-0331 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's List of its Five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ BP America Inc. $700,000 Attn: Frank Hernandez 3333 Warrenville Road, Suite 8056 Warrenville, IL 60555 Small Business Administration $350,000 Attn: Wayne Symmonds 603 Lincoln Emporia, KS 66801 GM Card $17,516 Customer Center P.O. Box 80082 Salinas, CA 93912-0082 AARP Rewards/Chase $9,108 Zaroco Inc. $1 PIERRE FOODS: Expects Default in Sr. Credit Facility Covenant ------------------------------------------------------------- Pierre Foods Inc. expects to be in default of the Consolidated Leverage Ratio covenant in its senior credit facility as of the end of its second quarter ended Sept. 1, 2007. Although the company is finalizing its financial results for the quarter, it is working with lenders under the credit facility to obtain a waiver and an amendment to the agreement. Notwithstanding solid year-over-year revenue growth, the company's second quarter results were impacted by increased raw material prices, certain one-time expenses associated with the integration of its acquisition of Zartic and lower yields at certain of its manufacturing facilities. In addition to adopting several operational initiatives in the second quarter that are geared towards improving future operating profitability, the company has also implemented price increases, the impact of which are expected to be realized in the second half of its current fiscal year and in future periods. The company does not believe that this covenant default impacts its ability to operate its business in the ordinary course. About Pierre Foods Headquartered in Cincinnati, Ohio, Pierre Foods Inc. -- http://www.pierrefoods.com/-- manufactures and markets high- quality, differentiated processed food solutions. Pierre produces a line of fully cooked beef, pork, poultry, bakery goods and convenience sandwiches. The company offers comprehensive food solutions to its customers, including proprietary product development, special ingredients and recipes, as well as custom packaging and marketing programs. * * * Pierre Foods Inc. carries Moody's Investors Service' B1 corporate family rating and Ba3 bank credit facilities rating. The company's $125 million senior subordinated notes, maturing 2012 also carries Moody's B3 rating. The rating outlook is stable. RH DONNELLEY: Raises 2007 Guidance to Include Business.com ---------------------------------------------------------- R.H. Donnelley Corporation updated its financial guidance for 2007 to reflect recent sales trends and its Business.com acquisition, which closed on Aug. 23, 2007. Including the Business.com acquisition, the company now expects 2007 pro forma advertising sales growth to be in the range of flat to positive 1%. Excluding the impact of the acquisition, the company now expects that 2007 advertising sales growth would have been in the range of minus 1 percent to flat -- versus previous guidance of modestly positive growth. R.H. Donnelley also affirms its previous guidance for EBITDA and free cash flow on the same basis. "Notwithstanding challenges in some of our major metro markets and the housing sector in Nevada and Florida, the inclusion of Business.com adds 100 basis points to ad sales performance this year." said Steven M. Blondy, executive vice president and chief financial officer for R.H. Donnelley. "We also expect to deliver strong EBITDA and free cash flow on plan. We're confident in the strength of our diversified business and our growth prospects, particularly with our new search marketing products and Business.com." Business.com Financials This table highlights Business.com's audited 2006 financial results and estimated stand-alone 2007 results. Year 2006 Actual Year 2007 Estimate ---------------- ------------------ Net revenue $31 million $57 million EBITDA $2 million $12 million R. H. Donnelley 2007 Outlook Absent the Business.com acquisition, the company affirms its previous guidance for EBITDA and free cash flow. Year 2007 Revised 2007 Updated 2007 Outlook Outlook Before Including on 7/26/07 Impact of Impact of Acquisition Acquisition ---------- -------------- ------------ Net revenue $2.67 billion $2.66 billion $2.68 billion EBITDA $1.44 billion $1.44 billion $1.44 billion Cash Flow $615 million $615 million $600 million Net debt $9.5 billion $9.5 billion $9.8 billion Net debt, excluding fair value adjustment, reflects $328 million borrowed to finance the cash portion of the Business.com transaction. Business.com founder and chief executive officer, Jake Winebaum, has been appointed president of R.H. Donnelley's interactive unit (RHDi), which now includes DexKnows.com(TM), Dex Search Marketing, LocalLaunch!, Business.com, Work.com and the Business.com Advertising Network. About Business.com Business.com is a business search engine company and pay-per-click advertising network. Founded in 1999, Business.com was recently named to the Inc. 500 and BtoB Magazine Media Power 50. The company's investment partners include Benchmark Capital, Institutional Venture Partners, Evercore Partners, Reed Business Information, and McGraw-Hill. About R.H. Donnelley Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp., (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * As reported in the Troubled Company Reporter on Sept. 21, 2007, Standard & Poor's Ratings Services assigned its 'B' rating to R.H. Donnelley Corp.'s proposed $650 million senior notes due 2017. The corporate credit rating on RHD is 'BB-', and the rating outlook is stable. At the same time, Moody's Investors Service assigned a B3 rating to R.H. Donnelley Corporation's proposed $1 billion senior unsecured notes and affirmed its B1 Corporate Family rating. RISKMETRICS GROUP: Merges All Units, Drops ISS and CFRA Labels -------------------------------------------------------------- RiskMetrics Group Holdings LLC dropped the label of its newly acquired unit, Institutional Shareholder Services, from its brands and merged all of its business operations bearing a uniform RiskMetrics label in a restructuring effort, reporters at Pension & Investment says. The company, according to P&I, renamed ISS as its Governance Services Unit and will transfer the contents of ISS Web site at the company's main site. On the other hand, P&I further relates, the Center for Financial Research and Analysis, which the company bought in August, is now named Financial Research and Analysis Services. Spokeswoman Sarah Cohn, the P&I relates, has assured the public that there are no employees affected by the restructuring. About RiskMetrics Group New York City-based RiskMetrics Group Holdings LLC -- http://www.riskmetrics.com/-- provides in risk management, corporate governance and financial research & analysis. ISS Governance Services has more than 20 years of experience in proxy voting and corporate governance matters. With coverage of over 38,000 shareholder meetings across 100 markets, ISS delivers corporate governance solutions to enhance interaction between shareholders and companies helping shareholders manage risk and drive value. * * * As reported in the Troubled Company Reporter on Sept. 24, 2007, Standard & Poor's Ratings Services placed its ratings on RiskMetrics Group Holdings LLC, including the 'B' corporate credit rating, on CreditWatch with positive implications. The CreditWatch action follows the company's recently proposed IPO of up to $200 million. RURAL/METRO CORP: 2007 Annual Stockholders Meeting Set on Feb. 28 ----------------------------------------------------------------- Rural/Metro Corporation disclosed that its 2007 Annual Meeting of Stockholders would be held at 3 p.m., Thursday, Feb. 28, 2008 at the company's headquarters in Scottsdale, Arizona. The meeting date will accommodate the time needed for the company to complete its current year-end review and historical financial statements, file its Annual Report on Form 10-K for the fiscal year ended June 30, 2007, and distribute proxy materials to stockholders. As reported in yesterday’s Troubled Company Reporter, the company delayed the filing of its Annual Report on Form 10-K for the fiscal year ended June 30, 2007. The company said it needed to complete the restatement of its financial statements related to financial reporting for income taxes, deferred rent, and other items. The company's Board of Directors also will include a proposal at the 2007 Annual Meeting requesting stockholder approval of an equity-based compensation plan, which management believes will further align the company and its stockholders. In order to reduce costs, the company will utilize the additional time to finalize the remaining details of the plan structure, and submit the proposal to shareholders at the annual meeting rather than hold a special meeting of stockholders on a different date. Additionally, the company's Board of Directors has extended an invitation to Accipiter Capital Management, LLC, a significant stockholder of the company, to meet with the Board at its next regularly scheduled meeting in December 2007. About Rural/Metro Rural/Metro Corporation -- http://www.ruralmetro.com/-- (Nasdaq:RURL) provides emergency and non-emergency medical transportation, fire protection, and other safety services in 23 states and approximately 400 communities throughout the United States. * * * As reported in the Troubled Company Reporter on Sept. 21, 2007,( Standard & Poor's Ratings Services revised its outlook on Scottsdale, Arizona-based medical transport services provider Rural/Metro Corp. to negative from stable. S&P also affirmed the ratings on Rural/Metro, including the 'B' corporate credit rating. The outlook revision reflects S&P's increased concern with the company's limited liquidity. In particular, S&P are concerned with tight financial covenants under the senior secured credit agreement, specifically the maximum leverage ratio step- down to 4.5x on Dec. 31, 2007. RURAL/METRO CORP: Ratifies Contract with Union to Increase Pay -------------------------------------------------------------- Rural/Metro Corp. ratified a contract with the Service Employees International Union Local 200 that seeks to increase pay by 10%, with further increases over the next three years, Tom Adams of the Rochester Business Journal reports citing a statement from union representatives. The agreement, approved in sometime this month, also calls for a "substantial bonus," if the city of Rochester renews its agreement with the company, Mr. Adams adds. The company has provided emergency medical services to Rochester since 1988 and its current contract is set to expire on Oct. 1, 2008. The city’s six-year contract with Rural/Metro, including two one- year optional renewals, expires Oct. 1, 2008. About Rural/Metro Rural/Metro Corporation -- http://www.ruralmetro.com/-- (Nasdaq:RURL) provides emergency and non-emergency medical transportation, fire protection, and other safety services in 23 states and approximately 400 communities throughout the United States. * * * As reported in the Troubled Company Reporter on Sept. 21, 2007,( Standard & Poor's Ratings Services revised its outlook on Scottsdale, Arizona-based medical transport services provider Rural/Metro Corp. to negative from stable. S&P also affirmed the ratings on Rural/Metro, including the 'B' corporate credit rating. The outlook revision reflects S&P's increased concern with the company's limited liquidity. In particular, S&P are concerned with tight financial covenants under the senior secured credit agreement, specifically the maximum leverage ratio step- down to 4.5x on Dec. 31, 2007. SALEM COMMUNICATIONS: Moody's Holds Ba3 Corporate Family Rating --------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 corporate family rating and B2 senior subordinated notes rating of Salem Communications Holding Corporation. The outlook was changed to negative from stable reflecting Moody's belief that the company has a tightening cushion vis-a-vis its covenants under the bank credit facility. The rating details are: Outlook Actions: Issuer: Salem Communications Holding Corporation -- Outlook, Changed To Negative From Stable Salem's Ba3 corporate family rating and negative outlook reflect high debt to EBITDA leverage, standing at 6.1x as of June 30, 2007, narrowing bank covenant compliance margins, minimal free cash flow to debt and lower EBITDA margins versus peers mainly due to spending associated with the company's "development stage" stations and the news talk stations. The rating also reflects recent weakness experienced by Salem in certain markets and advertising categories. In addition, the rating incorporates the risks related to cross media-competition faced by radio for audience and advertising spending and Moody's belief that radio is a mature industry with modest growth prospects. The ratings are supported by the value of the company's geographically diversified station portfolio, presence in the top 25 markets, leading position in the religious format niche and lack of significant competition within the format, and the stability of the revenue stream from its block advertising sales. Salem Communications Holding Corporation, headquartered in Camarillo, California, is a religious programming radio broadcaster, which, upon the close of all announced transactions, will own and operate 97 radio stations, including 61 stations in 23 of the nation's top 25 markets. The company also owns a variety of internet properties providing Christian content and online streaming, and is also a publisher of Christian-themed magazines. The company posted revenues of about $231 million for the trailing twelve months ended June 30, 2007. SP NEWSPRINT: Poor Cash Flow Cues S&P's Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services revised the CreditWatch implications to negative from developing on all of its ratings, including the 'BB-' corporate credit rating on Atlanta, Georgia- based SP Newsprint Co. "The revision is based on the significant deterioration in the company's earnings and cash flow due to continued challenging newsprint market conditions as well as higher input costs," said Standard & Poor's credit analyst Andy Sookram. "As a result, the company's credit measures have weakened. With our expectations that credit measures on a rolling-12-month basis are likely to worsen in the near term because pricing continues to deteriorate, we are concerned about the company's ability to meet the financial covenants under its bank loan agreement." The adjusted debt to EBITDA ratio was 2.9x at June 30, 2007, compared with 2.2x at March 31, 2007. The ratings were initially placed on CreditWatch on May 17, 2007, following the company's announcement that it is exploring strategic alternatives, including the possible sale of the company. Since the CreditWatch listing, there has been no new information regarding the sale. "We will continue to monitor developments regarding a potential transaction and resolve our CreditWatch listing when sufficient information is available," Mr. Sookram said. "If a transaction does not occur, we are likely to lower the ratings." SPX CORPORATION: Inks New $2.3 Billion Senior Credit Facility ------------------------------------------------------------- SPX Corporation entered into new syndicated senior secured credit facilities in an aggregate amount of $2.3 billion. The new committed credit facilities are designed to support the company's global growth and increase the company's financial flexibility. The new facilities comprise these: -- a five year term loan facility in an aggregate principal amount of $750 million, -- a five year global revolving credit facility, available for loans in Euro, Sterling and other currencies, in an aggregate principal amount up to the equivalent of $200 million, -- a five year domestic revolving credit facility, available for loans and letters of credit, in an aggregate principal amount of up to $400 million, and -- a five year foreign credit instrument facility, available for performance letters of credit and guarantees, in an aggregate principal amount in various currencies up to the equivalent of up to $950 million. SPX may also seek additional commitments for incremental term loan facilities or increases in commitments in respect of the global revolving credit facility, the domestic revolving credit facility and/or the foreign credit instrument facility by up to an aggregate principal amount of $400 million without the need for consent from the existing lenders. Patrick J. O'Leary, executive vice president and chief financial officer said, "These new credit facilities provide SPX with the increased financial capacity to support the continued strong growth in our core businesses, while also increasing our financial flexibility to support our future global growth strategy." The new committed facilities replace the existing senior secured credit facilities of SPX, which have been terminated. The Bank of America N.A., is administrative agent, Deutsche Bank AG Deutschlandegeschaft Branch, are foreign trade facility agent, Banc of America Securities LLC and Deutsche Bank AG Deutschlandegeschaft Branch, are joint lead arrangers and Banc of America Securities LLC, Deutsche Bank AG Deutschlandegeschaft Branch and J.P. Morgan Securities Inc. are joint book managers. About SPX Corp Headquartered in Charlotte, North Carolina, SPX Corporation (NYSE:SPW) -- http://www.spx.com/-- is a global multi-industry manufacturing company. It provides flow technology, test and measurement products and services, thermal equipment and services, and industrial products and services. Its infrastructure-related products and services include wet and dry cooling systems, thermal service and repair work, heat exchangers and power transformers into the global power market. It has four business segments: Flow Technology, Test and Measurement, and Thermal Equipment and Services, and Industrial Products and Services. * * * As of Sept. 24, 2007, the company carries Moody's Ba1 long-term corporate family rating, bank loan debt rating, and probability of default rating, and Ba2 senior unsecured debt rating. The outlook is stable. Standard Poor's rates the company's long-term foreign and local issuer credits at BB+. The outlook is stable. Fitch also places the company's long-term issuer default rating, bank loan debt rating, and senior unsecured debt rating at BB+. The outlook is positive. SUSSER HOLDINGS: S&P Places Corporate Credit Rating at B+ --------------------------------------------------------- Standard & Poor's Rating Services placed its 'B+' corporate credit and senior unsecured ratings on Corpus Cristi, Texas-based Susser Holdings LLC on CreditWatch with negative implications following the company's announcement it intends to acquire Town & Country Food Stores for $361 million in an all-cash transaction. "The acquisition of Town & Country," said Standard & Poor's credit analyst John Thieroff, "is expected to strengthen Susser's business risk profile by diminishing geographic concentration, expanding the company's operations into attractive, contiguous markets, and providing additional scale." However, the transaction is likely to increase Susser's lease-adjusted debt leverage to about 5.5x-perhaps higher, levels that are high for current ratings. The acquisition is expected to close within 60 to 90 days. S&P plans to meet with management during this period to examine in detail the positive attributes of the transaction to be better able to weigh them against the added debt burden. S&P expects to resolve the CreditWatch listing concurrently with the closing of the acquisition. TENSAR CORP: S&P Lifts Corporate Credit Rating to B --------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Atlanta, Georgia-based Tensar Corp., to 'B' from 'B-' and raised its other ratings on the company. The ratings remain on CreditWatch with positive implications, where they were placed on Aug. 29, 2007, following the company's S-1 filing with the SEC for an IPO of up to $201 million. Tensar will use the expected proceeds to pay down debt. Tensar had total debt, adjusted for operating leases, of about $405 million at June 30, 2007. "The upgrade reflects improvements in the company's business risk profile as a result of greater penetration of the earth stabilization and erosion control markets, which has led to higher sales and earnings," saod Standard & Poor's credit analyst Sean McWhorter. "We expect that credit measures, exclusive of the pending IPO, would strengthen in the near term to levels consistent with the higher rating, including debt to EBITDA of about 6x. We also expect the company's earnings to benefit from the positive long-term trends in highway and infrastructure spending." Tensar primarily converts polyethylene and polypropylene materials into structural products that stabilize soil, provide building and roadway foundation support, and control erosion. "The CreditWatch listing indicates that we could raise the corporate credit rating further if the IPO is completed as detailed in the S-1 filing, although any potential upgrade would be limited to one notch," Mr. McWhorter said. "The upgrade would be predicated on a significant reduction in debt leverage, which, pro forma for the transaction, we estimate could be in the 4.5x area by the end of 2007, and on expected material improvements in earnings and cash flow in the near term." TERWIN MORTGAGE: Low Bond Levels Cue Moody's to Cut Ratings ----------------------------------------------------------- Moody's Investors Service downgraded seven classes of certificates from two Terwin Mortgage Trust deals issued in 2003. The transactions are backed primarily by first lien adjustable- and fixed-rate mortgage loans with a small fraction of fixed-rate second lien mortgage loans. The deals have witnessed a material decline in enhancement in recent months due to stepdown and losses. The certificates are being downgraded based on the fact that the bonds' current credit enhancement levels, including excess spread, are too low compared to the current projected loss numbers for the current rating levels. The complete rating actions are: Issuer: Terwin Mortgage Trust, Series TMTS 2003-6HE -- Cl. M-3, Downgraded to Baa2 from A3; -- Cl. M-4, Downgraded to Ba3 from Baa1; -- Cl. M-5, Downgraded to B3 from Baa2; -- Cl. M-6, Downgraded to Caa1 from Baa3; Issuer: Terwin Mortgage Trust, Series TMTS 2003-8HE -- Cl. B-1, Downgraded to Ba1 from Baa1; -- Cl. B-2, Downgraded to B2 from Baa2; -- Cl. B-3, Downgraded to Caa1 from Baa3. TRIGEM COMPUTER: Representative Files 2nd Section 1518(1) Report ---------------------------------------------------------------- Charles D. Axelrod, Esq., at Stutman Treister & Glatt PC, in Los Angeles, California, on behalf of Il-Hwan Park, the foreign representative for TriGem Computer, Inc., delivered to the U.S. Bankruptcy Court for the Central District of California a status report pursuant to Section 1518(1) of Chapter 15 of the Bankruptcy Code. Mr. Axelrod relates that TriGem executed in July and August 2007 a memorandum of understanding and an investment agreement with Celrun Co. Ltd., with respect to Celrun's acquisition of TriGem's business. TriGem will meet with Celrun and another bidder in October 2007. TriGem may file an amendment to its confirmed reorganization plan, which will require approval of the reorganization court in the Republic of Korea. TriGem's reorganization plan calls for the sale of the company's assets through a merger and acquisition type transaction. Mr. Axelrod relates that the plan, confirmed by the Korean Bankruptcy Court in January 2006, needed to be implemented. Otherwise, Mr. Park as the Foreign Representative must submit a revised plan to creditors for their approval and then to the Korean Bankruptcy Court for confirmation. If the revised plan is not approved nor confirmed, Trigem would automatically be put into a liquidation case. TriGem's first attempt to sell its business in 2006 was unsuccessful. Human & Technology Co., emerged as the sole bidder at that time, but the Suwon District Court, Bankruptcy Division, in South Korea, canceled the whole bidding process after the offer was found to be below market price. Human & Technology initially agreed to acquire TriGem's assets for KRW170,000,000,000 or US$177,000,000. Human & Technology noted that it would bring the price down should it find after due diligence that KRW30,000,000,000 of receivables from TriGem's subsidiaries would be difficult to collect. It also rejected demands to guarantee employment. The Korean Court previously estimated TriGem's value at KRW200,000,000,000 to KRW250,000,000,000 -- $209,000,000 to $261,000,000. Human & Technology's reduced final offer for TriGem's assets was not disclosed for confidentiality reasons. TriGem again tested the market in June 2007. The company received four letters of intent to acquire its business and two parties ultimately tendered bids by the deadline. Celrun, which develops and manufactures digitial Internet set-top box solutions, was declared preferred bidder. Celrun offered to buy Trigem for up to KRW120,000,000,000 or $129,400,000, according to Reuters. Mr. Axelrod also reports that claims aggregating under KRW33,000,000,000 were paid off under the terms of TriGem's confirmed plan. Additional claims will be paid and shares of new equity will be issued if and when approval of the Plan amendment is obtained from two-thirds of all creditors, including three- quarters of creditors, with liens or other encumbrances against TriGem's property, as well as the Korean Bankruptcy Court. Celrun was established in 1999 and is headquartered in Seoul, Korea. It has a market capital of KRW15,700,000,000. Celrun owns 22.3% of the global IP set-top box market, according to information on its Web site. Section 1518(1) provides that, from the time of filing the petition for recognition of a foreign proceeding, the foreign representative will file with the court promptly a notice concerning any substantial change in the status of the foreign proceeding or the status of the foreign representative's appointment. The Section 1518(1) report was filed pursuant to the U.S. Court's directive. Judge Donovan required TriGem's U.S. counsel to either file a status report or stipulate to the closing of the Chapter 15 case. Mr. Axelrod says the report was filed over an abundance of caution since the pending foreign proceeding "has merely progressed rather than having experienced a change in its status." Headquartered in Ansan City, Kyunggi-Do, Korea, TriGem Computer Inc. -- http://www.trigem.com/-- manufactures desktop PCs, notebook PCs, LCD monitors, printers, scanners, other computer peripherals, and PIDs and supplies over four million PCs a year to clients all over the world. Il-Hwan Park, the Foreign Representative, filed a chapter 15 petition on Nov. 3, 2005 (Bankr. C.D. Calif. Case No. 05-50052). Charles D. Axelrod, Esq., at Stutman Treister & Glatt, P.C., represents the Foreign Representative in the United States. TriGem America Corporation, an affiliate of the Debtor, filed for chapter 11 protection on June 3, 2005 (Bankr. C.D. Calif. Case No. 05-13972). TriGem Texas, Inc., another affiliate of the Debtor, also filed for chapter 11 protection on June 8, 2005 (Bankr. C.D. Calif. Case No. 05-14047). (TriGem Bankruptcy News, Issue No. 11 Bankruptcy Creditors' Service, Inc., 215/945-7000). TWEETER HOME: Stipulation on NewCo's Advance of Funds Approved -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved Tweeter Home Entertainment Group Inc. and its debtor-affiliates' stipulation with Tweeter Newco LLC regarding advances for certain lease payments, employee payments, insurance, and related matters, pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure. Tweeter Newco is an entity formed by Schultze Asset Management LLC, which purchased substantially all of the Debtors' assets, under an Amended and Restated Asset Purchase Agreement dated as of June 26, 2007. When the Sale closed on July 13, 2007, the Debtors and Tweeter Newco entered into a Transition Services Agreement containing certain agreements,including the transitioning of the Debtors' employees to Tweeter Newco, the wind-down of the Debtors' estates, and other post-closing matters. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom, LLP, in Wilmington, Delaware, told the Court that certain issues had arisen under the Agreements. Underlying Issues in the TSA and APA Under the Transition Services Agreement, Tweeter Newco agreed to use commercially reasonable efforts to provide employees to the Debtors' chief liquidation officer, in connection with the wind- down of their estates, as long as it did not impose an unreasonable burden on Tweeter Newco, and at no cost to the Debtors. Mr. Galardi related that on August 17, 2007, Tweeter Newco had notified the Debtors that it intended to lay off certain corporate employees as it no longer required their services. Tweeter Newco will reimburse the Debtors for any costs the Debtors incurred under the WARN Act, which required that the laid-off employees be provided with notices. Subsequent to sending the WARN Notices through the Debtors, Tweeter Newco requested the Debtors to rescind the layoff of 20 employees, and indicated that it may ask the Debtors to rescind certain additional employees included in the August Layoffs. The Debtors agreed, provided that Tweeter Newco will: (a) fund a WARN Notice Reserve; (b) waive, and indemnify the Debtors from, any claims that may arise out of rescinding the August WARN Notices. Mr. Galardi stated that apart from the employment issues, Tweeter Newco represented that it will designate certain nonresidential real property leases for assumption and assignment by Sept. 18, 2007. The Debtors asked for security for Tweeter Newco's obligations to pay any cure amounts in connection with those leases. Furthermore, the Debtors agreed to ask the Court for additional time to assume or reject non-residential leases under Section 365(d)(4), which will extend Tweeter Newco's Designation Deadline, in exchange for certain terms, Mr. Galardi adds. Stipulation Between the Debtors and Tweeter Newco The salient terms and conditions of the Stipulation Regarding Advances for Lease Cures, Employee Payments, Insurance and Related Matters are: (a) The Debtors will file the Section 365(d)(4) Motion on or before September 13, 2007 and seek a hearing on October 1. (b) Tweeter Newco will pay the Debtors $220,000. (c) Tweeter Newco will pay the premium for the renewal of the insurance policy of the Debtors' current directors and officers, not exceeding $531,000. (d) Tweeter Newco will fund: -- the Cure Reserve for $1,875,000; -- the WARN Notice Reserve for $800,000; -- the Purchaser Professional Fee Reserve for the initial amount of $200,000, subject to replenishment; and -- the Administrative Services Reserve for $450,000. (e) If Tweeter Newco fails to designate or assume at least 75 leases by September 18, the funds remaining in the Cure reserve after the payment of all designated and Court- approved cure amounts will become the Debtors' property. (f) Tweeter Newco has agreed to indemnify the Debtors from any claims that may arise out of the August Layoffs and the rescinding of the August WARN Notices. Mr. Galardi said the Stipulation is in the best interests of the Debtors, their creditors, and other parties-in-interest. It entitles the Debtors security in the event that Tweeter Newco is unable to pay its obligations under the APA or the TSA. McGill's Objection McGill Development, Limited Partnership, No. 3 had objected to the stipulation, arguing that any escrow established by the agreement should contain sufficient funds to pay McGill a $42,245 cure amount for a lease with New England Audio Co., Inc. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case No: 07-10787 through 07-10796). Gregg M. Galardi, Esq. and Mark L. Desgrosseilliers, Esq. at Skadden, Arps, Slate, Meagher & Flom, L.L.P. represent the Debtors in their restructuring efforts. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan expires on Oct. 9, 2007. Tweeter Bankruptcy News, Issue No. 11, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). TWEETER HOME: Wants Plan Filing Deadline Moved to Feb. 6, 2008 -------------------------------------------------------------- Tweeter Home Entertainment Group Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend the periods within which they have the exclusive right to file and solicit acceptances of a plan of reorganization. Specifically, the Debtors seek to extend the Plan Filing Period to February 6, 2008, or 120 days after the expiration of the current deadline, and the Solicitation Period to April 7, 2008, or 61 days after the expiration of the proposed extension of the current Plan Filing Period. Section 1121 provides for an initial 120-day period after the Petition Date within which the Debtors have the exclusive right to file a plan or plans in their cases; and an initial 180-day period after the Petition Date within which the Debtors have the exclusive right to solicit and obtain acceptances of any plans. Under Section 1121(d), the Court can extend the Exclusive Periods for "cause" at the request of a party-in-interest. However, the initial 120-day Filing Period may not be extended beyond the date that is 18 months after the Petition Date. The initial 1804-day Solicitation Period may not be extended beyond the date that is 20 months after the bankruptcy filing. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom, LLP, in Wilmington, Delaware, states that prior to and after the Petition Date, the Debtors marketed their assets in an effort to maximize the value of their estates. Mr. Galardi relates that the Debtors and their professionals spent substantial time and effort in consummating the sale of substantially all of the Debtors assets to Tweeter Newco, LLC, as well as addressing the demands of other parties-in-interest and complying with disclosure requirements imposed on debtors-in- possession. Since the Closing Date, the Debtors have assumed and assigned numerous contracts to Tweeter Newco and resolved certain disputed issues relating to the purchase. However, Mr. Galardi maintains that additional time is required to develop and negotiate plans of liquidation and a disclosure statement. Moreover, Mr. Galardi says that the Debtors have recently sought to establish a General Claims Bar Date and Initial Administrative Claims Bar Date, and subsequently require additional time to review and analyze those claims asserted against their estates. In regard to the substantial efforts of the Debtors and their professionals since the Petition Date, Mr. Galardi believes that the request to extend the Exclusive Periods is modest, and will provide the Debtors and their advisors the opportunity to fully evaluate the post-sale financial circumstances and maximize the value for all parties-in-interest. The Court will convene a hearing on October 9, 2007, at 9:30 a.m., to consider the Debtors' request. Objections to the extension of the Exclusive Periods is due on October 2. By application of Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedures of the United States Bankruptcy Court for the District of Delaware, the Debtors' Exclusive Periods are automatically extended until the conclusion of that hearing. Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case No: 07-10787 through 07-10796). Gregg M. Galardi, Esq. and Mark L. Desgrosseilliers, Esq. at Skadden, Arps, Slate, Meagher & Flom, L.L.P. represent the Debtors in their restructuring efforts. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Debtors' exclusive period to file a plan expires on Oct. 9, 2007. Tweeter Bankruptcy News, Issue No. 11, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). VOLT INFORMATION: Fitch Holds BB Issuer Default Rating ------------------------------------------------------ Fitch Ratings took these actions on Volt Information Sciences Inc: -- Issuer Default Rating rating affirmed at 'BB'; -- $40 million senior secured revolving credit facility affirmed at 'BBB-'; -- Secured 8.2% $12.9 million term loan is assigned a rating of 'BBB-' Fitch has also assigned an IDR of 'BB' to Volt Delta Resources, Inc, a wholly-owned subsidiary of Volt, and a 'BBB-' rating to Volt Delta's $100 million senior secured credit facility. The rating outlook for all ratings is stable. Volt's ratings reflect its ability to maintain solid coverage and leverage metrics and relatively stable operating performance in recent years, while continuing to diversify its sources of operating income away from the staffing services segment, largely through acquisitions in the computer systems area. The staffing services segment, which constitutes about 84% of revenue, provided 54% of total segment operating profit for the first nine months of 2007. Volt's operating EBITDA margins have been in the 3.2% to 4% range from 2004 to 2006 as well as the latest twelve months ending July 29, 2007. Leverage, as measured by total adjusted debt to EBITDAR, was 3x for the LTM ended July 29, 2007. Total adjusted debt includes borrowings on the company's accounts receivable securitization program, which is its primary source of funding, as well as rents capitalized at eight times. At year-end 2006 and on July 29, 2007, the company had $110 million and $90 million, respectively, outstanding on the accounts receivable securitization program. Credit concerns reflect competition in the staffing services segment, the exposure of this segment to the business cycle, and the relatively low margins in the segment. Fitch notes that even in periods of material declines in the staffing business revenue, the company is able to maintain a modest level of operating profitability at the bottom of the cycle through the management of its costs. Volt is also able to maintain adequate liquidity during downturns in the business cycle as its accounts receivable liquidate. The revenue concentration with certain clients, coupled with the short-term nature of most contracts, is a concern which is mitigated by the long-term relationship with key clients and high quality nature of these customers. Fitch expects the company to continue to invest in the non-staffing areas, and to maintain conservative financial policies. In September 2007, Volt completed the acquisition of LSSi Corp, which had been announced in June 2007. To complete the merger, a subsidiary of Volt Delta merged with LSSi to form a newly merged entity, LSSi Data. Total consideration of the merger was about $70 million in cash and is subject to final adjustment based on the working capital of LSSi as of the closing date. LSSi's operations are complementary to the existing Volt Delta business as it develops and markets national databases of telephone listings, primarily to enterprise customers, whereas Volt primarily provides a range of directory and information solutions services to a variety of telecommunications operators. Liquidity is provided by unrestricted cash balances of $24 million as of July 29, 2007, and the company's $200 million accounts receivable securitization program that expires in April 2009. The securitization program has $90 million outstanding as of July 29, 2007, and provides the company with its main source of liquidity. Additional liquidity is provided by two senior secured revolving credit facilities. Volt has a $40 million facility which expires in April 2008, and was undrawn as of July 29, 2007. A facility at Volt Delta was increased in August 2007 to $100 million from $70 million and is in place until December 2009. The increase in the facility was prompted by the company's acquisition of LSSi Corp.; Volt Delta subsequently borrowed $55 million under the facility to finance the transaction. As of July 29, 2007, there was $20.6 million outstanding on the Volt Delta facility. The Volt revolving credit facility requires the maintenance of certain accounts receivable in excess of borrowings and is guaranteed by five subsidiaries of the company. The main financial covenants include a minimum coverage ratio as defined by EBIT/(interest expense plus securitization expense) of 1.25x and a maximum debt to capitalization ratio of 45%. During the LTM ended July 29, 2007, the company's coverage ratio as determined in accordance with the bank agreement was 7.14x, and the debt/capitalization ratio was about 28%. The amended Volt Delta facility requires total debt to EBITDA to be 2x or less, and the fixed charge coverage ratio can be no less than 2.5x; with both ratios as defined in the documentation. As of July 29, 2007, the company's short-term debt was about $24.9 million, and consisted of $24.4 million in bank borrowings and $0.5 million of maturing long term debt. The $12.4 million balance of long-term debt represented a term real estate loan that amortizes until 2021. The company repurchased about $23 million in common stock in the first nine months of fiscal 2007. WACHOVIA BANK: Fitch Affirms Low-B Ratings on Six Cert. Classes --------------------------------------------------------------- Fitch affirms Wachovia Bank Commercial Mortgage Trust Commercial Mortgage pass-through certificates series 2006-C25 as: -- $28.2 million class A-1 at 'AAA'; -- $122.4 million class A-2 at 'AAA'; -- $57.7 million class A-3 at 'AAA'; -- $50 million class A-PB1 at 'AAA'; -- $75.8 million class A-PB2 at 'AAA'; -- $723.7 million class A-4 at 'AAA'; -- $500 million class A-5 at 'AAA'; -- $334.3 million class A-1A at 'AAA'; -- $286.2 million class A-M at 'AAA'; -- $218.3 million class A-J at 'AAA'; -- Interest only class at 'AAA'; -- $10.7 million class B at 'AA+'; -- $35.8 million class C at 'AA'; -- $32.2 million class D at 'AA-'; -- $17.9 million class E at 'A+'; -- $32.2 million class F at 'A'; -- $32.2 million class G at 'A-'; -- $32.2 million class H at 'BBB+'; -- $32.2 million class J at 'BBB' -- $32.2 million class K at 'BBB-'; -- $10.7 million class L at 'BB+'; -- $10.7 million class M at 'BB'; -- $10.7 million class N at 'BB-'; -- $7.2 million class O at 'B+'; -- $7.2 million class P at 'B'; -- $7.2 million class Q at 'B-'; Fitch does not rate the $42.9 million class S. The affirmations reflect the pool's stable performance and minimal paydown since issuance. As of the September 2007 distribution date, the pool has paid down 3.9% to $2.75 billion from $2.86 billion at issuance. Currently three loans (5.7%) maintain investment grade credit assessments; one credit assessed loan, the EDS Building, has paid in full. The largest credit assessed loan is the Westfield Gateway (3.4%), a 518,744 square foot anchored retail center in Lincoln, Nebraska. June 2007 total physical occupancy was 93.5%, compared to issuance at 94.1%. The second largest credit assessed loan, the Paramount Building (1.4%), an office/retail property in New York City, reported occupancy at 91% in June 2007 compared to 94% at issuance. The third loan, the Wyndham Hotel Greenspoint (1.2%) is a full-service hotel in Houston, Texas; June 2007 occupancy was 89%, compared to issuance at 88%. WATERFORD GAMING: Moody's Lifts Corporate Family Rating to Ba3 -------------------------------------------------------------- Moody's Investors Service raised Waterford Gaming LLC's and Waterford Gaming Finance Corp.'s corporate family rating and existing senior note rating to Ba3 from B1 and assigned a Ba3 rating to its proposed $128.5 million senior notes due 2014. Moody's also raised the company's probability of default rating to Ba2 from Ba3. The rating outlook is stable. Proceeds from the new notes will be used to repay the company's existing $101.1 million senior notes due 2012 that are currently outstanding, pay a $26.5 million dividend to the Waterford Group, and pay related fees and premiums. The Ba3 rating on the existing senior notes will be withdrawn once the refinancing closes. The upgrade to Ba3 from B1 recognizes Waterford's improved credit metrics and demonstrated ability to reduce debt. Debt/EBITDA for the latest 12-month period ended June 30, 2007 was 3.3x. Although pro forma leverage based on the proposed refinancing will increase Debt/EBITDA to about 3.8x, leverage is expected to drop each and every year going forward to the point where the bonds could be repaid in full several years before the new senior notes mature in 2014. The ratings continue to acknowledge Waterford's limited scope. The company derives substantially all of its revenues from its partnership interest in Trading Cove Associates. TCA receives a revenue-based quarterly relinquishment fee equal to 5% of the gross revenues of the Mohegan Sun casino which is owned by the Mohegan Tribal Gaming Authority (Ba1/stable). These fee payments are the only source of cash used to service the company's outstanding debt. The higher rating is further supported by the continued growth and favorable competitive profile and outlook of the Mohegan Sun casino. The stable outlook takes into account that a significant amount of new gaming supply is not expected in the New England area within the next few years. Additionally, the outlook recognizes the restrictions contained in the senior note indenture that subject Waterford to a 100% mandatory excess cash sweep mechanism, prohibit the company from issuing any additional debt, and do not allow restricted payments other than tax distributions and the repurchase of the senior notes. Moody's prior rating action on Waterford occurred on Sep. 5, 2006 when its ratings and stable outlook were affirmed. Waterford is a special purpose company formed solely for the purpose of holding its 50% partnership interest, as a general partner, in TCA, a Connecticut general partnership and the manager (until Jan. 1, 2000) and developer of the Mohegan Sun casino located in Uncasville, CT. Waterford derives substantially all revenues from its partnership interest. TCA receives a revenue- based quarterly relinquishment fee equal to 5% of the gross- revenues of the Mohegan Sun casino. The Mohegan Sun casino is owned and operated by the Mohegan Tribal Gaming Authority (Ba1/stable). WATERFORD GAMING: S&P Rates Proposed $128.5 Mil. Sr. Notes at BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to the proposed $128.5 million senior unsecured notes due September 2014 to be issued by Waterford Gaming LLC and its wholly owned subsidiary, Waterford Gaming Finance Corp. These securities will be privately placed under Rule 144A of the Securities Act of 1933. Proceeds will be used primarily to refinance existing debt and distribute cash to the parent company, Waterford Group. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating. The outlook is stable. Pro forma for this offering, Waterford Gaming will have $128.5 million in total debt outstanding. "The ratings on Waterford Gaming reflect the stable revenue stream from the operations of the successful Mohegan Sun Casino," said Standard & Poor's credit analyst Craig Parmelee. "Partially offsetting this is Waterford Gaming's high debt level and its reliance on a single property for its cash flow." The Mohegan Sun is operated by the Connecticut-based Mohegan Tribal Gaming Authority (MTGA; BB-/Stable/--). Waterford Gaming is a wholly owned subsidiary of Waterford Group LLC. Since Waterford Gaming is not a bankruptcy remote entity, the ratings for this company also take into consideration the credit quality of its parent. WESTWAYS FUNDING: Fitch Cuts Ratings on Five Note Classes --------------------------------------------------------- Fitch downgraded three classes of notes from Westways Funding X LTD. These rating actions are the result of Fitch's review process and are effective immediately: -- $30,000,000 class C downgraded to 'CCC' from 'A'; -- $10,000,000 class LC loan interests downgraded to 'CCC' from 'A'; -- $30,000,000 class D downgraded to 'C/DR5' from 'BB-'; -- $10,000,000 class LD loan interests downgraded to 'C/DR5' from 'BB-'; -- $77,230,000 income notes downgraded to 'C/DR6' from 'CCC'. Classes C and LC remain on Rating Watch Negative, along with the notes listed below: -- $30,000,000 class B 'AA'; -- $10,000,000 class LB loan interests 'AA'. This transaction is a mortgage market value collateralized debt obligation managed by TCW Asset Management Co. The transaction had violated overcollateralization tests and its asset portfolio is in the process of being liquidated. The asset portfolio consists of floating-rate 'AAA' or agency collateral with over half of the portfolio having been in agency securities. Losses incurred during the liquidation process have increased the risk that the class C and LC notes may not be paid in full. It is likely that class D and LD will incur a significant loss and class income notes will suffer a complete loss. The action is the latest in a series of negative actions on Westways Funding X in recent weeks. -- 'Fitch Downgrades & Places on Watch Negative Notes of Westways Funding VI through XI' (Aug. 31); -- 'Fitch Downgrades & Places on Rtg Watch Negative Notes of Westways Funding VI through XI' (Sept. 10). WINN-DIXIE: Board Elects Gregory P. Josefowicz as Lead Director --------------------------------------------------------------- Gregory P. Josefowicz has been elected Lead Director by the independent members of the Board of Directors of Winn-Dixie Stores, Inc. Winn-Dixie emerged from bankruptcy in November of 2006 with a new slate of eight independent directors and new Governance Principles that anticipated the selection of a Lead Director in September of 2007. Mr. Josefowicz is the former President, Chief Executive Officer and Chairman of the Board of Directors of Borders Group, Inc., the national book, movies and music retail company. In addition to serving on the Winn-Dixie Board, he is a director of Ryerson, Inc., Telephone and Data Systems, Inc., and PetSmart, Inc., where he serves as the Lead Director. "Since joining the Winn-Dixie Board last November, Greg Josefowicz has exhibited leadership on our Board and among our independent directors and been a valued advisor to me and other members of our senior management team,” Winn-Dixie Chairman, Chief Executive Officer and President Peter Lynch said. “His considerable experience in retailing, together with his strong insights and leadership skills, make him an outstanding choice for the important position of Lead Director. I look forward to working closely with Greg and the other directors as we continue to pursue our multi-year turnaround plan." About Winn-Dixie Based in Jacksonville, Florida, Winn-Dixie Stores Inc. (Nasdaq: WINN) -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9, 2006. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. WINSTAR COMMS: Lucent Says Bankruptcy Court’s Decision was Wrong ---------------------------------------------------------------- Lucent Technologies, Inc., asks the U.S. Court of Appeals for the Third Circuit to reverse a ruling by the U.S. District Court for the District of Delaware on its dispute with Winstar Communications, Inc. The District Court affirmed judgment by the U.S. Bankruptcy Court for the District of Delaware without extensive analysis, Craig T. Goldblatt, Esq., at Wilmer Cutler Pickering Hale and Dorr, LLP, in Washington, D.C., says. According to Mr. Goldblatt, the Bankruptcy Court made the fundamental error of allowing its distaste for Lucent's actions to override its obligation to apply governing law. Winstar Lawsuit District Judge Joseph J. Farnan affirmed in April 2007 in all respects the U.S. Bankruptcy Court for the District of Delaware's December 2005 judgment: -- awarding $243,930,742, plus interest to Winstar on account of preferential and other claims; and -- subordinating Lucent Technologies' claim against Winstar to the claims of all creditors and certain equity holders, and transferring to the estate any lien or claim held by Lucent on Winstar's assets. Judge Farnan said the Bankruptcy Court correctly concluded that Lucent was a Winstar insider and that the parties' relationship was more than a mere debtor-creditor relationship conducted at arm's-length. According to Judge Farnan, Lucent is a "person in control of the debtor" in that Lucent controlled Winstar's purchasing decisions to inflate its own revenue, even when Winstar neither needed Lucent equipment or services. After filing for Chapter 11 bankruptcy protection in 2001, Winstar sued Lucent for billions of dollars, asserting that Lucent had breached the parties' contracts. The case was later converted to Chapter 7, and Christine Shubert, the trustee appointed to oversee the liquidation of the Winstar estate, took over the action and asserted an additional claim against Lucent to recover preferential payment Winstar made prior to the bankruptcy. Bankruptcy Judge Joel B. Rosenthal held that Winstar's roughly $188,200,000 payment to Lucent from the proceeds of a loan from Siemens AG was avoidable as a preference on the ground that Lucent "controlled" Winstar, and was thus an "insider" for whom the bankruptcy preference period extended to one year. The Bankruptcy Court rejected the arguments that the proceeds of the payment were "earmarked" for Lucent and that Lucent provided substantial new value after receiving the payments. The Chapter 7 Trustee also received an award for more than $62,000,000 on the breach of contract claim. The Bankruptcy Court held that Lucent, by failing in the past to require strict compliance with certain terms of the parties' contract, had thereby agreed to a permanent modification of the contract. The Bankruptcy Court also concluded that Lucent's secured and unsecured claims against the estate, totaling more than $700,000,000, should be subordinated not only to claims of other creditors but also to the equity interests of Winstar's preferred shareholders. The District Court affirmed the ruling without oral argument, Mr. Goldblatt says. All Wrong The Chapter 7 Trustee's case focused heavily on allegations of corporate misconduct that she leveled against Lucent, Mr. Goldblatt tells the Third Circuit. Neither the preference statute nor state contract law, however, is intended to provide a remedy for the misconduct, which is addressed by other federal and state statutes and common law, Mr. Goldblatt contends. In favoring the Chapter 7 Trustee, the Bankruptcy Court lost sight of that fact, Mr. Goldblatt says. Mr. Goldblatt contends that Lucent was not an "insider," either as a "person in control" or under the catch-all "non-statutory insider" category. Under the governing legal standard, a commercial creditor must exercise actual managerial control over the debtor's day-to-day business affairs to be an insider, Mr. Goldblatt explains. None of the Bankruptcy Court's findings permitted the conclusion that that "control" existed, Mr. Goldblatt points out. "[The Bankruptcy Court's] legal conclusion that Lucent was an insider was driven by its finding that certain transactions that Lucent engaged in with Winstar were improper," Mr. Goldblatt says. Lucent exercised some form of financial leverage over Winstar, according to Mr. Goldblatt. The vigorous enforcement of contractual rights does not transform a creditor into an insider, Mr. Goldblatt says. Mr. Goldblatt also argues that no voidable preferential transfer took place. Because the proceeds of the Siemens loan were specifically "earmarked" for Lucent under its agreement with Winstar, Lucent received Siemens' funds, not Winstar's. Lucent simply traded places with Siemens, in a transaction that had no effect on the bankruptcy estate at all, Mr. Goldblatt says. Mr. Goldblatt contends that Lucent provided roughly $90,000,000 in unsecured loans and other new value to Winstar. Under the Bankruptcy Code, any preference judgment must be reduced by the amount of that new value. But neither the Bankruptcy Court nor the District Court even addressed Lucent's arguments. The Bankruptcy Court also erroneously treated Lucent's previous temporary, quarter-by-quarter waiver of compliance with the "Task Order" requirement as an agreement to modify its subcontract with Winstar Wireless, Inc., Mr. Goldblatt asserts. The Subcontract did not obligate Lucent to pay Wireless for services unless they were performed pursuant to a Lucent-issued "Task Order." The Subcontract expressly provides that it could be modified only in writing, he explains. Even if the Subcontract had been modified, Lucent did not breach it. The record is clear that no exchange of purchase orders and invoices -- the conduct that allegedly replaced the requirement of a formal Task Order -- preceded the alleged breach, Mr. Goldblatt notes. The pass-through transaction did not take place in March 2001. The evidence on which the Bankruptcy Court relied was a request by Winstar -- which was not a party to the Subcontract -- that Lucent lend it money under their credit agreement. The draw request, Mr. Goldblatt says, was entirely separate from any obligation on Lucent's part to pay Wireless for services, and thus Lucent's refusal of the request cannot have been a breach of the allegedly modified terms of the Subcontract. The Bankruptcy and District Courts also erred in concluding that Lucent lacked -- or had waived -- the right to try the Subcontract claim to a jury in an Article III court, according to Mr. Goldblatt. In subordinating Lucent's claims against Winstar's bankruptcy estate, the Bankruptcy Court and the District Court ignored the well-established principle that equitable subordination is a remedial rather than a punitive doctrine. They also failed to satisfy the requirement that subordination be tailored to identifiable harm to creditors caused by Lucent's conduct. Both Courts went so far as to subordinate Lucent's debt claims to the interests of certain equity holders, in plain contravention of the unambiguous text of the Bankruptcy Code, Mr. Goldblatt adds. Effective November 30, 2006, Lucent, through merger, became a wholly owned subsidiary of Alcatel Lucent, a societe anonyme organized under the laws of the Republic of France. In December, Lucent became a wholly owned subsidiary of Alcatel USA, Inc., a private Delaware corporation that is itself an indirect wholly owned subsidiary of Alcatel Lucent. The common shares of Alcatel Lucent trade publicly. Lucent has posted a $306,000,000 letter of credit to secure judgment on the appeal. In a stipulation approved by the Bankruptcy Court, Lucent and the Winstar Trustee have agreed that Lucent will amend the Letter of Credit to increase the amount to $318,904,554, if the Appeal has not been resolved by April 30, 2008. Afterwards, the Letter of Credit will be increased by $12,162,515 annually until the Appeal has been resolved. Lower Courts Gone Astray, Law Professors Say Robert K. Rasmussen, Dean and Carl Mason Franklin Chair in Law, Gould School of Law at the University of Southern California in Los Angeles; G. Marcus Cole, Professor of Law, Stanford Law School in Stanford; and Edward R. Morrison, Professor of Law, Columbia Law School in New York concur that the District Court erred in holding that Lucent was a Winstar "insider." The Bankruptcy Court and the District Court "went astray," the Law Professors state. Public companies, like Winstar, are controlled by their officers and directors, not by their lenders and contract partners. Public companies seek to further their own interests, not those of unrelated enterprises, the Law Professors note in a brief of amici curiae filed with the Third Circuit. Creditors have a legal right to be paid, the Law Professors explain. Accordingly, creditors can exercise any contractual provision or economic power at their disposal when they seek to collect on a valid debt. In addition, each creditor uses the arsenal of tactics at its disposal to enhance its chances of recovering what it is owed. Creditors with substantial contractual or economic leverage routinely present debtors with a set of what the debtor views as unpalatable choices, the Professors note. It is common for a debtor to face the choice of paying its debt -- tough action for a financially distressed business -- or having the creditor impair the ability of the business to operate in the future. The Professors explain that the Bankruptcy Code provides two basic categories of "insiders": -- the "per se" insiders consists of the statute's list of relationships that will categorically render a creditor an insider of the debtor; and -- the "non-statutory" insiders consists of those who while not falling on the list of per se insiders nevertheless should be treated as being insiders. Neither path can support a finding that Lucent was an insider of Winstar, the Professors argue. Lucent was not a per se insider of Winstar, the Professors say. Per se insiders have formal legal power to make decisions on behalf of the corporation. They have the power to bind the corporation. "When the question is framed in terms of who was actually running Winstar and setting its policy, the inescapable conclusion is that it was the officers and directors of that company, and not the employees of Lucent," the Professors say. Lucent also was not a non-statutory insider of Winstar. When ascertaining whether a creditor is a non-statutory insider, the court should focus on whether that creditor has a relationship with the debtor that allows the creditor to ensure that those making the decisions for the debtor place the creditor's interest ahead of the debtor's, the Professors maintain. "Winstar was guided by its own self interest at every turn; it was not guided by affinity for Lucent," the Professors state. Winstar agreed to certain transactions that benefited Lucent to further its long-term relationship with Lucent, the Professors point out. The Law Professors teach corporate law and bankruptcy law. The Law Professors note that they have a deep and abiding interest in the proper administration and interpretation of the Bankruptcy Code as it applies to corporations. The Professors also point out that Third Circuit law governs a substantial number of bankruptcy cases involving publicly held companies. The Third Circuit's decisions are of "substantial interest to bankruptcy practitioners and bankruptcy scholars alike," the Professors note. About Winstar Communications Based in New York, New York, Winstar Communications, Inc., provides broadband services to business customers. The company and its debtor-affiliates filed for chapter 11 protection on April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462). The Debtors obtained the court's approval converting their case to a chapter 7 liquidation proceeding in January 2002. Christine C. Shubert serves as the Debtors' chapter 7 trustee. When the Debtors filed for bankruptcy, they listed $4,975,437,068 in total assets and $4,994,467,530 in total debts. (Winstar Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WR GRACE: Ninth Circuit Reinstates Libby Conspiracy Charge ---------------------------------------------------------- A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit reversed certain district court pre-trial rulings against W.R. Grace & Co. and six of the company's former executives on the alleged poisoning of Libby, Montana residents. Particularly, the Honorable Betty Fletcher reinstated a conspiracy charge initiated by the U.S. Government against the Grace Defendants in relation to Grace's former vermiculite operations in the town of Libby. >From 1963 to 1992, Grace mined a rich supply of vermiculite ore outside Libby. Libby residents subsequently complained of serious health problems in relation to Grace's vermiculite operations. In response, the Government obtained an indictment in 2005, charging Grace and seven of its executives with criminal conduct arising from Grace's Libby operations. The indictment accused the Grace Defendants of: (1) conspiracy to violate environmental laws and obstruct federal agency proceedings; (2) violations of the federal Clean Air Act; and (3) obstruction of justice. Among the named defendants are: * William McCaig, former manager of operations at the Libby mine; * Robert Walsh and Robert Bettacchi, former presidents of Grace's Construction Products Division; * Jack Wolter, ex-general manager of the Construction Products Division; * Henry Eschenbach, a former director of health and safety at Grace; and * Mario Favorito, a former legal counsel for Grace. Alan Stringer, also a named defendant in the Libby case, died in February 2007. He used to be a Grace general operations manager in Libby. In March 2006, the Defendants asserted that the Government failed to allege a requisite overt act before the statute of limitations ran in November 2004, and sought dismissal of the knowing endangerment object of the conspiracy charge. The U.S. District Court for the District of Montana preliminarily dismissed as time barred the knowing endangerment object of the the conspiracy charge. Shortly thereafter, the Government obtained a superseding indictment, which had certain amendments but was essentially similar to the original indictment. In July 2006, the District Court again dismissed a portion of the Government's allegations, asserting conspiracy to knowingly endanger residents of the Libby area and others in violation of the Clean Air Act, of the new indictment. In August 2006, District Court Judge Molloy granted a request by the Defendants to exclude as evidence sample results that included minerals that do not constitute asbestos under the Clean Air Act. The Government appealed the District Court rulings to the Ninth Circuit. As a result, the District Court trial has been delayed pending resolution of the appeals. Upon review, Judge Fletcher found that the District Court erred in dismissing the knowing endangerment object in the original indictment. "[T]he parties do not dispute that the original indictment was timely filed. The district court's holding that the indictment was time-barred referred only to its failure to allege the necessary overt acts in the original indictment -- a flaw that can be cured through reindictment under [18 U.S.C. Section] 3288." The Ninth Circuit noted that Section 3288 extends the statute of limitations by six months to allow the prosecution a second opportunity to do what it failed to do in the beginning: namely, file an indictment free of legal defects. The Ninth Circuit held that a reading of Section 3288 does not, as the District Court suggests, "require a defendant to remain subject to an indefinite threat of prosecution, held open beyond the statute of limitations period, while he and the court wait for the government to finish tinkering with the indictment." Judge Fletcher pointed out that Section 3288: (1) eliminates the incentive for criminal defendants to move for dismissal of an indictment at the end of the statute of limitations, thereby winning dismissal at a time when the government cannot re-indict; and (2) subjects defendants to the threat of prosecution for six months after the dismissal of the original indictment and only if the government has timely filed an indictment charging the exact same crimes based on approximately the same facts. Accordingly, Judge Fletcher reinstated the knowing endangerment object of the conspiracy charge in the superseding indictment. With regards to Congress' use of the term "asbestos" to identify a hazardous air pollutant, the Government contended that a statute may have two definitions for one term -- one definition civil and one criminal. The Government also argued that the definition of asbestos applicable to the Clean Air Act's criminal knowing endangerment provision covers the minerals involved in the present case. "We agree on both points," Judge Fletcher opined. The Defendants had actual notice of the risks from the fibrous content of the asbestiform minerals in their products, the Ninth Circuit held. "It is clear that defendants knew or should have known that their mining, milling, and distribution activities risked the release of asbestos into the ambient air." Thus, Judge Fletcher held that the District Court erred in concluding that ambiguity exists simply because of the existence of two oversight structures -- a civil regulatory structure and a criminal enforcement provision -- that use different definitions of the term "asbestos." In addition, Judge Fletcher held that the District Court improperly limited the term "asbestos" to the six minerals covered by the civil regulations. Asbestos is adequately defined as a term and need not include mineral-by-mineral classifications to provide notice of its hazardous nature, particularly to these knowledgeable defendants, Judge Fletcher said. Accordingly, the Ninth Circuit reversed the order limiting evidence to that fitting within the civil regulations. The Ninth Circuit also granted the Government's request for a writ of mandamus, and held that Grace cannot avail itself at trial of the affirmative defense articulated in 42 U.S.C. Section 7413(c)(5)(A). In relevant part, Section 7413(c)(5)(A) states that the release of certain pollutant on which "the Administrator has set an emissions standard" will not constitute a violation under that provision. On the other hand, Judge Fletcher affirmed the exclusion of certain studies -- (1) EPA indoor air studies, (2) a report of the Agency for Toxic Substances and Disease Registry based on a medical screening study of Libby residents, and (3) the results of the screening study published as an article in a peer-reviewed journal (Peipins Publication) -- in the Libby case, but reversed the District Court's decision to exclusion those studies as bases underlying an expert's opinion or testimony. Judge Fletcher also granted the Defendants' request to strike certain documents included in the Government's reply brief to the Ninth Circuit. The panel that reviewed the Government's appeal is composed of Ninth Circuit Judges Betty B. Fletcher, Harry Pregerson and Warren J. Ferguson. The U.S. Bankruptcy Court for the District of Delaware previously granted Grace's request to advance legal and defense costs to the Named Officer Defendants, subject to a reimbursement obligation if it is later determined that the Former Officer did not meet the standards for indemnification set forth under the appropriate state corporate law. In a filing with the Securities and Exchange Commission, Grace reported that for the six months ended June 30, 2007 and 2006, respectively, total expense for Grace and the Former Officer totaled $6.3 million and $27.2 million. Grace is unable to assess whether the indictment, or any conviction resulting from it, will have a material adverse effect on the results of its operations or financial condition or affect its bankruptcy proceedings, the company noted in the SEC filing. With the current ruling on its Appeal, Grace's shares fell 5.5% to $25.39 in the New York Stock Exchange composite trading, Bloomberg reports. A copy of the 36-page Ninth Circuit Ruling is available for free at http://ResearchArchives.com/t/s?23a8 About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Anderson Kill & Olick, P.C., represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C. Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. At Dec. 31, 2006, the W.R. Grace's balance sheet showed total assets of $3,620,400,000 and total debts of $4,189,100,000. (W.R. Grace Bankruptcy News, Issue No. 139; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). YUKOS OIL: Completes Yukos Finance Sale to OOO Promneftstroy ------------------------------------------------------------ OOO Promneftstroy took legal control of Yukos Finance N.V. from OAO Yukos Oil Co. after signing a notary act formalizing the transfer of the finance unit's shares to the former, Itar-Tass reports. As reported in the TCR-Europe on Sept. 13, 2007, Promneftstroy has fully paid for 242,399 shares of Yukos Finance after it won the auction to acquire the stake for RUR7.838 billion. Yukos Finance carried a RUR7,598,361,000 starting price and a RUR40 million bid increment. The winning bidder must deposit RUR1,519,672,200 as initial payment. According to Itar-Tass, the parties have notified Yukos Finance and a Dutch court of the completion of the sale. The parties have also instructed Yukos Finance to make relevant changes in its register of shareholders. Yukos Finance's main assets include: -- a 49% stake in Transpetrol, worth between US$100 million and US$200 million; and -- proceeds from a 54% stake in Lithuanian refinery Mazeikiu Nafta AB, worth almost US$1.5 billion. About Yukos Oil Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for Chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days later, the Russian Government sold its main production unit Yugansk to a little-known firm Baikalfinansgroup for US$9.35 billion, as payment for US$27.5 billion in tax arrears for 2000- 2003. Yugansk eventually was bought by state-owned Rosneft, which is now claiming more than US$12 billion from Yukos. On March 10, 2006, a 14-bank consortium led by Societe Generale filed a bankruptcy suit in the Moscow Arbitration Court in an attempt to recover the remainder of a US$1 billion debt under outstanding loan agreements. The banks, however, sold the claim to Rosneft, prompting the Court to replace them with the state- owned oil company as plaintiff. On April 13, 2006, court-appointed external manager Eduard Rebgun filed a chapter 15 petition in the U.S. Bankruptcy Court for the Southern District of New York (Bankr. S.D.N.Y. Case No. 06-0775), in an attempt to halt the sale of Yukos' 53.7% ownership interest in Lithuanian AB Mazeikiu Nafta. On May 26, 2006, Yukos signed a $1.49 billion Share Sale and Purchase Agreement with PKN Orlen S.A., Poland's largest oil refiner, for its Mazeikiu ownership stake. The move was made a day after the Manhattan Court lifted an order barring Yukos from selling its controlling stake in the Lithuanian oil refinery. On Aug. 1, 2006, the Hon. Pavel Markov of the Moscow Arbitration Court upheld creditors' vote to liquidate OAO Yukos Oil Co. and declared what was once Russia's biggest oil firm bankrupt. YUKOS OIL: Faces Fresh RUR273 Bil. Tax Claim on Auction Proceeds ---------------------------------------------------------------- Russia's Federal Tax Service has asked the Moscow Arbitration Court to order the payment of around RUR273 billion in taxes from OAO Yukos Oil Co., various reports say. According to Bloomberg News, the regulator is seeking tax on the proceeds from the recent Yukos auction and on the company's operating income. Eduard Rebgun, Yukos' bankruptcy receiver, had estimated the company's latest tax bill at RUR216.4 billion, Interfax News reports. The court will hear the case on Oct. 8, 2007. Nikolai Lashkevich, Mr. Rebgun's spokesman, commented to Bloomberg News that should the court rules in favor of the Tax Service, Yukos may not have sufficient funds to repay its other creditors. According to Interfax News, Yukos earned RUR829.99 billion from the auction and used RUR402.6 billion to repay major creditors. "The recent announcement of tax charges increases the risks of zero pay-off to Yukos' minority equity investors," Deutsche Bank analysts Pavel Kushnir and Olga Danilenko was quoted by Bloomberg News as saying. About Yukos Oil Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for Chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days later, the Russian Government sold its main production unit Yugansk to a little-known firm Baikalfinansgroup for US$9.35 billion, as payment for US$27.5 billion in tax arrears for 2000- 2003. Yugansk eventually was bought by state-owned Rosneft, which is now claiming more than US$12 billion from Yukos. On March 10, 2006, a 14-bank consortium led by Societe Generale filed a bankruptcy suit in the Moscow Arbitration Court in an attempt to recover the remainder of a US$1 billion debt under outstanding loan agreements. The banks, however, sold the claim to Rosneft, prompting the Court to replace them with the state- owned oil company as plaintiff. On April 13, 2006, court-appointed external manager Eduard Rebgun filed a chapter 15 petition in the U.S. Bankruptcy Court for the Southern District of New York (Bankr. S.D.N.Y. Case No. 06-0775), in an attempt to halt the sale of Yukos' 53.7% ownership interest in Lithuanian AB Mazeikiu Nafta. On May 26, 2006, Yukos signed a US$1.49 billion Share Sale and Purchase Agreement with PKN Orlen S.A., Poland's largest oil refiner, for its Mazeikiu ownership stake. The move was made a day after the Manhattan Court lifted an order barring Yukos from selling its controlling stake in the Lithuanian oil refinery. On Aug. 1, 2006, the Hon. Pavel Markov of the Moscow Arbitration Court upheld creditors' vote to liquidate OAO Yukos Oil Co. and declared what was once Russia's biggest oil firm bankrupt. * 27 Cohen & Grigsby Lawyers Included in America's Best in 2008 --------------------------------------------------------------- Cohen & Grigsby's 27 attorneys will be included in Best Lawyers in America(R) 2008. This year's honorees are: * Alternative Dispute Resolution: James B. Brown * Commercial Litigation: Larry K. Elliott, Richard R. Nelson II, Jeffrey P. Ward * Corporate Law: Charles C. Cohen, James D. Chiafullo, Jack W. Elliott, Hugh W. Nevin, Jr. * Immigration Law: John S. Brendel, Lawrence M. Lebowitz * Intellectual Property Law: Thomas C. Wettach * International Trade and Finance Law: V. Susanne Cook * Labor and Employment Law: Ronald J. Andrykovitch, Cathy Bissoon, Robert B. Cottington, E. Donald Ladov, John E. Lyncheski, Robert F. Prorok * Mergers & Acquisitions Law: Jack W. Elliott * Non-Profit/Charities Law: Christopher F. Farrell * Public Finance Law: Charles R. Brodbeck * Real Estate Law: Charles R. Brodbeck, Thad D. Kirkpatrick, Michael H. Syme, William R. Taxay * Tax Law: Christopher F. Farrell, Hugh W. Nevin, Jr. * Technology Law: David J. Kalson * Trusts and Estates: R. Michael Daniel, Christopher F. Farrell, C. Eric Pfeil, Jonathan M. Schmerling These Cohen & Grigsby attorneys have appeared on the Best Lawyers(R) list for ten years or longer: * Charles C. Cohen * R. Michael Daniel * Lawrence M. Lebowitz * John E. Lyncheski * Hugh W. Nevin, Jr. Considered to be the respected peer-review publication in the legal profession, Best Lawyers(R) conducts confidential surveys that enable attorneys to review their professional peers. The annual reference guide lists more than 29,000 attorneys in the United States in 78 different specialties and covers all 50 states and the District of Columbia. The Best Lawyers in America is based on more than two million detailed evaluations of lawyers by other lawyers. About Cohen & Grigsby Headquartered in Pittsburgh, Pennsylvania, Cohen & Grigsby P.C. -- http://www.cohenlaw.com/-- offers legal services to private and publicly held businesses, nonprofits, multinational corporations, individuals and emerging companies. It has experience in bankruptcy, business, tax, employee benefits, estates, trusts, immigration, intellectual property, international business, litigation, labor and employment, and real estate. The firm has offices in Naples, Florida and Bonita Springs, Florida. ********* 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, Joseph C. Martirez, Sheena R. Jusay, and Peter A. Chapman, Editors. Copyright 2007. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***