/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070927.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, September 27, 2007, Vol. 11, No. 229 Headlines ACE SECURITIES: Poor Performance Cues S&P's Ratings Downgrade ADVENTURE PARKS: Amusement Parks Sold for $51.3 Million AIRBORNE HEALTH: S&P Holds Developing Watch on Covenant Violations AMERICAN CAMSHAFT: Court Converts Case to Chapter 7 AMERICAN CAPITAL: Earns $788 Million in Quarter Ended June 30 AMERICAN HOME: Court Approves WL Ross "Stalking Horse" Bidder AMERIRESOURCE TECH: BizAuctions Achieves Record Revenues in August AVADO BRANDS: Anticipates Nov. 14 Auction Sale of Assets BEAR STEARNS: S&P Assigns Default Ratings on Four Classes BEAR STEARNS: Sufficient Credit Prompts S&P to Affirm Ratings BIOMENT INC: LVB Acquisition Merger Deal Completed BIOMET INC: Moody's Puts Corporate Family Rating at B2 BLACKBOARD INC: Loan Repayment Cues S&P to Lift Rating to BB BRAVO! BRANDS: Voluntary Chapter 7 Case Summary BROOKLYN NAVY: Fitch Holds Senior Debt Rating at BB C-BASS MORTGAGE: S&P Affirms 'BB+' Rating on Class B-4 Certs. CARBIZ INC: J. Halloran Promoted to Vice President of Finance CHRISTOPHER LILLIE: Case Summary & 20 Largest Unsecured Creditors CLEAR CHANNEL: Stockholders Approve THL/Bain Capital Merger Deal CLEAR CHANNEL: Fitch Expects to Cut Issuer Default Rating to B COACH INDUSTRIES: Court Approves Hodgson Russ as Counsel COACH INDUSTRIES: Section 341(a) Meeting Scheduled for October 15 CWABS ASSET: S&P Junks Rating on Class M-6 Certificates CWABS INC: S&P Cuts Rating on 2004-4 Class B Loans to B DAVITA INC: Improved Metrics Cue Fitch to Upgrade Ratings DELTA AIR: Wants Final Decree Entered Closing 17 Cases ECHOSTAR COMM: Board Advises Spin-off of Infrastructure Assets ECHOSTAR COMM: Inks Deal to Purchase Sling Media for $380 Mil. EMTA HOLDINGS: June 30 Balance Sheet Upside-Down by $3.5 Million ENCHANCED MORTGAGE: Moody's Junks Rating on $20MM Class A-3 Notes FFMLT TRUST: S&P Junks Rating on Class B-3 and Removes Watch FIRST FRANKLIN: S&P Lowers Ratings on Five Loan Classes FORD MOTOR: Four Firms Still On Track to Buy Jaguar & Land Rover FREMONT GENERAL: In Talks with Ford on Revised Investment Terms FREMONT HOME: S&P Downgrades Rating on Class SL-M2 to B from AA GENERAL MOTORS: Inks Tentative Pact on New Labor Contract with UAW GENERAL MOTORS: Canada Plants Reopened Owe to Tentative UAW Pact GSAMP TRUST: S&P Affirms BB+ Rating on Class B-4 Certificates GSAMP TRUST: S&P Lowers Ratings on Two Classes to B+ from BB+ HOME EQUITY: Poor Performance Cues S&P to Lower Ratings HOME EQUITY: S&P Cuts Rating on Class M-8 to B+ from BB+ ILLINOIS FINANCE: High Vacancy Rates Cue Moody's to Cut Ratings KANSAS CITY SOUTHERN: Improved Liquidity Cues S&P to Lift Rating LEINER HEALTH: Moody's Lowers Corporate Family Rating to Caa3 LONG BEACH: Credit Enhancement Reduction Cues S&P to Cut Ratings LONG BEACH: S&P Assigns Default Ratings on Two Loan Classes MADISON PARK: S&P Puts Preliminary BB Rating on Class E Notes MAGNA INTERNATIONAL: Buys 11.9 Mil. Class A Shares for $1.1 Bil. MARCAL PAPER: DOJ Supports $3 Mil. EPA Settlement Agreement MASTR ASSET: S&P Puts Low-B Ratings on Two Classes MASTR SECOND: S&P Puts Default Rating on Class M-6 Certificates MERIDIAN AUTO: Wants Final Decree Entered Closing Chapter 11 Cases MERIDIAN AUTOMOTIVE: Files Final Report on Fees Paid MERRILL LYNCH: S&P Slashes Ratings on Two Certs. Series to BB- MGM MIRAGE: Infinity World Extends Tender Offer to October 5 NOMURA ASSET: Poor Performance Cues S&P's Default Rating NTELOS HOLDINGS: Quadrangle Capital to Acquire CVC's Stake NUTRITIONAL SOURCING: Court OKs FTI as Panel's Financial Advisor NUTRITIONAL SOURCING: Court Okays Skadden Arps as Panel's Counsel OGLEBAY NORTON: Harbinger Won't Extend Tender Offer for Shares ORLANDO CITYPLACE: Holding Public Sale of Assets on November 29 PATMAN DRILLING: Case Summary & 20 Largest Unsecured Creditors PIERRE FOODS: Covenant Violation Cues S&P to Cut Rating to B PMA CAPITAL: Good Performance Cues Fitch to Lift Ratings RADNOR HOLDINGS: Court Extends Solicitation Period to January 14 RAIT CRE: Fitch Affirms BB Rating on $35 Mil. Class J Notes RANGE RESOURCES: Moody's Lifts Corporate Family Rating to Ba2 RED HAT: Earns $18.2 Million in Second Quarter Ended Aug. 31 SACO I: S&P Lowers Ratings on 26 Classes of Securities SANMINA-SCI: S&P Affirms Ratings and Revises Outlook to Negative SOLUTIA INC: Poised to Emerge After Chapter 11 Settlement SOUTHAVEN POWER: Has Until December 12 to File Chapter 11 Plan STANDARD PACIFIC: S&P Rates $100MM Sr. Subordinated Notes at B+ STRUCTURED ASSET: S&P Junks Ratings on Three Loan Classes SUB SURFACE: Completes Acquisition of USM Capital's Unit SUB SURFACE: Obtains $400,000 Add-Up Funding from U.S. Microbics SUB SURFACE: Renews $1 Million Credit Line with Pilgrim Bank TCW SELECT: S&P Holds BB- Ratings on Three Notes TERWIN MORTGAGE: Poor Performance Cues S&P to Lower Ratings TEKTRONIX INC: Earns $20.1 Million in First Quarter Ended Sept. 1 TRANSNATIONAL FIN'L: July 31 Balance Sheet Upside-Down by $3.9 Mil TXU CORP: Commences Tender Offering for $2.3BB of Debt Securities UNITED SITE: Poor Financial Performance Cues Moody's B3 Rating VENTURE IX: S&P Assigns Preliminary BB Rating on Class E Notes VONAGE HOLDINGS: Intends to Appeal $69.5 Million Sprint Verdict VONAGE HOLDINGS: Appellate Court Upholds Ruling on Two Patents WARNER CHILCOTT: Moody's Lifts Corporate Family Rating to B1 WENDY'S INTERNATIONAL: Fidelity Joins Three Others in Bidding WESTWAYS FUNDING: Fitch Takes Rating Actions on Various Classes WHOLE FOODS: Board Declares Dividend of $0.18 Per Share WHOLE FOODS: Capers Outlet to Shut Down on October 27 WICKES INC: Disclosure Statement Hearing Scheduled on October 17 XILLIX TECHONOGIES: Completes Plan of Compromise and Arrangement * Fried Frank London Office Names Sheena McCaffrey as Partner * Stephen B. Ravin Joins Forman Holt as Named Member * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ACE SECURITIES: Poor Performance Cues S&P's Ratings Downgrade ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes from Ace Securities Corp. Home Equity Loan Trust Series 2006-SL2. The downgrades reflect the poor performance of the collateral pool. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete write-down of the overcollateralization for this deal, as well as $6.88 million in principal write-downs to class B-1. As a result, S&P lowered the rating on class B-1 to 'D'. As of the September 2007 distribution period, total delinquencies were 25.73%, with severe delinquencies of 16.03%. Although it is 17 months seasoned, the transaction has approximately 11.43% in cumulative realized losses to date. The outstanding pool factor is 62.82%. Subordination, overcollateralization, and excess interest cash flows provide credit support for this transaction. The collateral consists of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Ace Securities Corp. Home Equity Loan Trust Series 2006-SL2 Rating ------ Series Class To From ------ ----- -- ---- 2006-SL2 M-1 AA AA+ 2006-SL2 M-5 CCC B 2006-SL2 B-1 D CCC ADVENTURE PARKS: Amusement Parks Sold for $51.3 Million ------------------------------------------------------- Adventure Parks Group LLC's two amusement parks were sold Tuesday at an auction approved by the U.S. Bankruptcy Court for the Middle District of Georgia, John Chambliss of The Ledger in Florida reports. According to the report, Cypress Gardens Adventure Park, located at Winter Haven, Florida, was sold to Land South Holdings for $16.8 million. Wild Adventures in Valdosta, Georgia, meanwhile was sold to Missouri-based Herschend Family Entertainment for $34.5 million. The Ledger relates that there were no other bidders for the two parks, citing the Debtors' counsel Ward Stone, Jr., Esq., at Stone & Baxter, LLP. Former Cypress Gardens skier William Beach was originally expected to bid for Cypress Gardens but backed out at the last minute, the report adds. A hearing to approve the sale is scheduled today, The Ledger discloses. Based in Valdosta, Georgia, Adventure Parks Group LLC is the holding company of Wild Adventures and Cypress Gardens. Wild Adventures operates an amusement park in Valdosta, Georgia, while Cypress operates an amusement park in Winter Haven, Florida. The company, along with Wild Adventures and Cypress Gardens, filed for chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case Nos. 06-70659 through 06-70661). George H. McCallum, Esq., James P. Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represent the Debtors. Mark J. Wolfson, Esq., at Foley & Lardner LLP and James C. Frenzel, Esq., at James C. Frenzel P.C. in Georgia represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. AIRBORNE HEALTH: S&P Holds Developing Watch on Covenant Violations ------------------------------------------------------------------ Standard & Poor's Ratings Services said that the ratings on Airborne Health Inc., including the 'CCC+' corporate credit rating, remain on CreditWatch with developing implications. The ratings were originally placed on CreditWatch on Sept. 19, 2007, following the company's announcement that it was in violation of its total leverage and interest coverage covenants under its bank credit agreement as of its fiscal 2008 first quarter, because of weaker-than-expected operating performance and additional expenses. As a result, Airborne did not have access to its $20 million revolving credit facility. Subsequently, on Sept. 21, 2007, the company secured a waiver which allows it access to its revolver, extends its ability to issue letters of credit and file its fiscal year-end April 30, 2007, audited financial statements, and extends its excess cash flow payment date to Oct. 22, 2007. "We will continue to monitor the company's liquidity, as well as its efforts to secure an amendment, and will discuss its financial plans with management before resolving the CreditWatch," said Standard & Poor's credit analyst Bea Chiem. When Airborne is able to secure an amendment (which is expected over the near term) and receive expected appropriate cushion on its financial covenants, Standard & Poor's will raise its ratings on the company by one notch to 'B-'. "Any further upward ratings revisions beyond 'B-' are unlikely over the near term until the company is able to improve operating performance," said Ms. Chiem. AMERICAN CAMSHAFT: Court Converts Case to Chapter 7 --------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan converted American Camshaft Specialties Inc.'s Chapter 11 case to one under Chapter 7, Bill Rochelle of Bloomberg News reports. Early this month, the Court gave the Debtor until September 21 to explain why its case shouldn't be converted. The Debtor had failed to file a chapter 11 plan by the August 7 deadline. Although it asked for an extension to its exclusive plan-filing period to August 31, it later withdrew that request. The Official Committee of Unsecured Creditors, in July 2007, had asked for the conversion citing that the sale of the Debtor's machinery and equipment to Hilco Industrial LLC for $5.5 million wasn't enough to reorganize its business. American Camshaft Specialties Inc. is located at the southwest corner of M-45 and U.S. 31, includes two plants -- ACS Grand Haven, which is solely owned by Asimco Technologies, and a joint venture between Nippon Piston Ring and ACS Inc. Asimco Technologies -- http://www.asimco.com/-- is headquartered in Beijing, China, and produces a wide range of power train, chassis and diesel fuel injection products for light duty and commercial vehicle applications. Asimco assembles semi-fully finished cast, steel and assembled camshafts. Aside from its U.S. operations, Asimco has 18 manufacturing facilities and 52 sales offices in China and one regional office in Europe and Japan. Asimco's major customers are automotive-based, such as DaimlerChrysler, Ford, GM, Cummins and CAT. American Camshaft and three other U.S. affiliates filed for chapter 11 protection on Dec. 9, 2006 (Bankr. E.D. Mich. Lead Case No. 06-58298). Christopher A. Grosman, Esq., and Robert A. Weisberg, Esq., at Carson Fischer, P.L.C., represent the Debtors. Lawyers at Schafer and Weiner PLLC represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors they listed estimated assets and debts between $10 million and $50 million. AMERICAN CAPITAL: Earns $788 Million in Quarter Ended June 30 ------------------------------------------------------------- American Capital Strategies Ltd. reported net earnings of $788 million, on total operating income of $326 million, for the second quarter ended June 30, 2007. This compares to net earnings of $290 million, on total operating income of $212 million, for the second quarter of 2006. In the second quarter of 2007, American Capital received $32 million of revenue related to its wholly-owned asset management portfolio company, American Capital LLC. This is a 256% increase in third-party fund management revenues over the second quarter of 2006. For the quarter, net portfolio appreciation and realized gains totaled $584 million compared to $165 million for the second quarter of 2006. Of this total, $493 million is related to appreciation in its asset management portfolio company, American Capital LLC, driven substantially from the deconsolidation of the European Capital management company. "This is a great time to be one of the best capitalized financial institutions in the world," said Malon Wilkus, American Capital chairman, president and chief executive officer. "With less than one-to-one debt to equity, American Capital has huge competitive advantages in this new credit environment. With our One Stop Buyout(TM) and one stop financing, we fund transactions that are impossible for some of our competitors to close. With demonstrated access to capital in these market conditions, we are taking advantage of lower multiples, wider spreads and better terms to generate outstanding risk adjusted returns for our shareholders." "We have outperformed the S&P 500 in each of the ten calendar years since our IPO, including the last recession, with the exception of our first full year as a public company," said Malon Wilkus. "We've done this by growing our dividend at a 13% compound annual growth rate and providing a 22% total return to our shareholders over the past ten years. The current credit and economic environment is ideal for us to continue this exceptional performance." Balance Sheet At June 30, 2007, the company's consolidated balance sheet showed $12.15 billion in total assets, $5.68 billion in total liabilities, and $6.47 billion in total shareholders' 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?23b7 New Investments Totals $4.6 Billion In the second quarter of 2007, American Capital invested $3.5 billion of capital and received $1.0 billion of proceeds from realizations of portfolio investments. In addition, American Capital funds under management invested an additional $1.1 billion, for a total of $4.6 billion of new investments in the second quarter of 2007. Completes $1 Billion Equity Offering and Raises $492 Million in Ninth on Balance Sheet Securitization In the second quarter of 2007, American Capital completed a $1 billion equity offering at $45.05 per share, which was 1.5x book value. Also during the second quarter of 2007, American Capital raised $492 million through its ninth on balance sheet term securitization and increased its capacity under its unsecured revolving credit facility by $665 million and increased the term to five years. European Capital Initial Public Offering During the second quarter of 2007, European Capital completed an initial public offering of 14.6 million shares, including the full exercise of the over-allotment option granted to the underwriters, at a price of EUR9.84 per share, for gross proceeds of approximately EUR144 million. Prior to the IPO, American Capital exercised its warrant to purchase 18.75 million shares of European Capital for an exercise price of EUR9.50 per share, or EUR178 million. Subsequent to the IPO, American Capital owns 65% of European Capital with a cost basis of $905 million and fair value of $1.0 billion. European Capital is managed by European Capital Financial Services Limited. ECFS was a direct wholly-owned operating subsidiary, which was consolidated by American Capital in accordance with generally accepted accounting principles prior to the IPO of European Capital. Deconsolidation of European Capital During the second quarter of 2007, American Capital formed a parent holding company, American Capital LLC, to own all American Capital owned third party fund managers. Accordingly, American Capital transferred the ownership of ECFS and its two other wholly-owned fund managers to American Capital LLC subsequent to the IPO of European Capital. About American Capital Headquartered in Bethesda, Maryland American Capital Strategies Ltd. (NasdaqGS: ACAS) -- http://www.americancapital.com/-- is one the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers. American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies. * * * As reported in the Troubled Company Reporter on July 11, 2007, Moody's Investors Service assigned a Baa2 rating to American Capital Strategies, Ltd. $500 million combined debt offering. In addition, Moody's assigned a (P)Baa2 senior, unsecured and a (P)Ba1 preferred stock rating to ACAS's $5 billion shelf registration. The ratings outlook is stable. AMERICAN HOME: Court Approves WL Ross "Stalking Horse" Bidder ------------------------------------------------------------- American Home Investment Corp. disclosed yesterday that the U.S. Bankruptcy Court for the District of Delaware approved an entity sponsored by WL Ross & Company LLC as the stalking horse bidder for American Home's mortgage servicing platform and mortgage servicing rights. The purchase price payable under the stalking horse agreement is based on a formula, tied primarily to the principal amount of unpaid loan balances under servicing contracts and outstanding servicing advances as of the closing date. American Home estimates, based on current account balances and certain other assumptions, that the total purchase price would be approximately $500 million. The motion was supported by the Official Committee of Unsecured Creditors and the administrative agent for the pre-petition lending syndicate for American Home's servicing operation. With the Court approval, American Home is now soliciting competing proposals for the sale of its mortgage servicing business by Oct. 2, 2007, to be considered at an auction scheduled for Oct. 5, 2007. An objective of American Homes through the sales process is to provide a seamless transition of mortgage servicing to homeowners while its servicing operations are transferred to new ownership. Notwithstanding the value which may be realized in the proposed sale of the mortgage servicing assets and mortgage servicing platform, as previously disclosed, the company does not believe that the sale of its assets in the chapter 11 process will enable it to pay its creditors in full or that there will be any funds remaining for distribution to its equity securityholders. Based in Melville, New York, American Home Mortgage Investment Corp. (OTC:AHMIQ) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Lead Case No. 07-11047). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. AMERIRESOURCE TECH: BizAuctions Achieves Record Revenues in August ------------------------------------------------------------------ AmeriResource Technologies Inc. disclosed Tuesday that its subsidiary, BizAuctions Inc., achieved record revenue for the month of August. "BizAuctions' sales have continued to grow steady and strong," noted chief executive officer Delmar Janovec. "The month of August showed record revenue with a substantial increase over previous monthly sales." "Management is pleased with BizAuctions' revenue growth since inception, especially over the last several months. Although the company is not profitable at this time, this growth is indicative of the tremendous opportunity before us as we work to build a major operation and have a significant impact on corporate America," Janovec concluded. The company did not release BizAuctions Inc.'s revenue figures for August, 2007, but says it will be include this information in the financial statements for the quarter ended Sept. 30, 2007. The company disclosed that BizAuctions' revenues have increased substantially over the last several quarters: Quarter Ended Revenue ------------- -------- 9/30/06 $192,097 12/31/06 $223,123 3/31/07 $326,906 6/30/07 $438,764 BizAuctions Inc. (Other OTC: BZCN.PK) is a provider of commercial eBay liquidation services for excess inventory, overstock items, and returns. Clients have included some of the nation's leading retail names. About Ameriresource Technologies Headquartered in Las Vegas, AmeriResource Technologies Inc. (OTC BB: AMREE.OB) -- http://www.ameriresourcetechnologies.com/-- operates online auction drop-off locations that provide the general public to sell items on eBay. It provides software design and product development for businesses that sells items on eBay. AmeriResource also offers software and hardware system, and self- serve system called Point of Sales, which offers integrated system, including restaurant management tools/menus that offer various reports for inventory and labor control. The company was incorporated in 1989 as KLH Engineering Group Inc. and changed its name to AmeriResource Technologies Inc. in 1996. At June 30, 2007, AmeriResource Technologies Inc.'s consolidated balance sheet showed $1.2 million in total assets and $2.4 million in total liabilities, resulting in a $1.2 million total stockholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2007, De Joya Griffith & Company LLP, in Las Vegas, expressed substantial doubt about AmeriResource Technologies Inc.'s ability to continue as a going concern after auditing the company's financial statement as of the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations, negative working capital, and negative cash flows from operations. AVADO BRANDS: Anticipates Nov. 14 Auction Sale of Assets -------------------------------------------------------- Avado Brands Inc. intends to ask the U.S. Bankruptcy Court for the District of Delaware for permission to set up procedures for the sale of its assets, Bill Rochelle of Bloomberg News reports. Although no buyer is under contract, Bloomberg says the Debtor is looking forward to a Nov. 14, 2007 auction sale of its assets. The Debtor proposes that bids be due by Nov. 7. The Debtor also proposes that a hearing to consider the results of the sale be held on Nov. 20. As reported in the Troubled Company Reporter on Sept 6, 2007, Avado disclosed that it plans to use the Chapter 11 process to complete an orderly sale of the company's assets, via section 363 of the Bankruptcy Code. Madison, Georgia-based Avado Brands, Inc., aka Applesouth, -- http://www.avado.com/-- operates about 120 casual dining restaurants under the banners Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery. The restaurants are located in 22 states in the U.S. As of Sept. 5, 2007, the Debtors employed about 9,970 people. For the year ended July 31, 2007, the Debtors generated about $227.8 million in revenues and a negative EBITDA of $7.8 million. The Debtor filed for chapter 11 protection on Feb. 4, 2004 (Bankr. N.D. Tex. Case No. 04-1555). On April 26, 2005, Judge Steven Felsenthal confirmed Avado's Modified Plan of Reorganization and that Plan became effective on May 19, 2005. On Sept. 5, 2007, Avado filed a voluntary chapter 22 petition (Bankr. D. Del. Case No. 07-11276) to complete an orderly sale of its assets, via Section 363 of the Bankruptcy Code. About 10 of Avado's affiliates also filed for bankruptcy protection on the same date (Bankr. D. Del. Case Nos. 07-11277 through 07-11286). Klee, Tuchin, Bogdanoff & Stern LLP represents the Debtors in their latest restructuring efforts. Donald J. Detweiler, Esq. and Sandra G.M. Selzer, Esq. at Greenberg Traurig, LLP serves as the Debtors' local counsel. In their second filing, the Debtors disclosed estimated assets and debts between $1 million to $100 million. BEAR STEARNS: S&P Assigns Default Ratings on Four Classes --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on eight classes from Bear Stearns Mortgage Funding Trust 2006-SL1. The downgrades reflect the poor performance of the collateral pool. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete write-down of the overcollateralization for this deal. In addition, the entire principal balances of classes B-2, B-3, and B-4, and approximately $39,093 of the principal balance of class B-1, have been written down. As of the September 2007 distribution period, total delinquencies were 15.54% and severe delinquencies were 9.34%. Although the transaction is 13 months seasoned, it has experienced approximately 9.28% in cumulative realized losses to date. The outstanding pool factor is 64.63%. Subordination, O/C, and excess interest cash flows provide credit support for this transaction. The collateral consists of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Bear Stearns Mortgage Funding Trust 2006-SL1 Rating ------ Class To From ----- -- ---- M-2 A AA M-3 BBB- A- M-4 B+ BB+ M-5 CCC B B-1 D CCC B-2 D CCC B-3 D CCC B-4 D CCC BEAR STEARNS: Sufficient Credit Prompts S&P to Affirm Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of mortgage-backed securities issued from Bear Stearns Asset Backed Securities I Trust 2004-BO1. Concurrently, S&P affirmed its ratings on the remaining eight classes from the transaction, and on all seven classes from Bear Stearns Asset Backed Securities I Trust 2004-HE10. The downgrades of classes M-4 and M-5 from series 2004-BO1 reflect a reduction in credit enhancement as a result of monthly realized losses. Monthly realized losses have consistently exceeded excess interest during the past 12 months. As of the August remittance date, the average monthly loss was $3,882,926 over the past 12 months, while excess spread averaged $1,603,176 each month for the same period. Cumulative losses have more than doubled over the past year, rising to 5.69% from 2.55%. Forty-four percent of the original pool balance remains outstanding. Originally, 20% of the loans in series 2004-BO1 were second-liens. Currently, 13% of the mortgage pool is second-lien loans. Approximately 4% of the original mortgage pool backing series 2004-HE10 was made of second-lien loans. Currently, second-lien collateral makes up 3% of the mortgage pool. The affirmations reflect sufficient credit enhancement for the current ratings. The classes with affirmed ratings have actual and projected credit support percentages that are in line with their original levels. Series 2004-HE10 has experienced only 0.99% in cumulative realized losses and 18% of its original pool balance remains outstanding. Subordination, overcollateralization, and excess spread provide credit support for both transactions. The collateral originally consisted primarily of adjustable- and fixed-rate, conventional, closed-end subprime mortgage loans. Ratings Lowered Bear Stearns Asset Backed Securities I Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-BO1 M-4 A AA+ 2004-BO1 M-5 BBB AA+ Ratings Affirmed Bear Stearns Asset Backed Securities I Trust Series Class Rating ------ ----- ------ 2004-BO1 I-A-1, I-A-2 AAA 2004-BO1 I-A-3, II-A-1 AAA 2004-BO1 II-A-2, M-1, M-2 AAA 2004-BO1 M-3 AAA 2004-BO1 M-2, M-3 AA+ 2004-BO1 M-6 BB 2004-BO1 M-7 B 2004-BO1 M-8 B- 2004-BO1 M-9-A, M-9-B CCC 2004-HE10 M-1 AA 2004-HE10 M-2 A 2004-HE10 M-3 A- 2004-HE10 M-4 BBB+ 2004-HE10 M-5 BBB 2004-HE10 M-6 BBB- 2004-HE10 M-7 BB+ BIOMENT INC: LVB Acquisition Merger Deal Completed -------------------------------------------------- Biomet, Inc. disclosed Tuesday the completion of its merger with LVB Acquisition Merger Sub, Inc., a wholly-owned subsidiary of LVB Acquisition, Inc. LVB Acquisition, Inc. is indirectly owned by investment partnerships directly or indirectly advised or managed by The Blackstone Group L.P., Goldman Sachs & Co., Kohlberg Kravis Roberts & Co. L.P. and TPG Capital. Pursuant to the merger, Biomet shareholders (other than LVB Acquisition Merger Sub, Inc. or LVB Acquisition, Inc.) will receive $46.00 in cash, without interest and less any required withholding taxes, for each outstanding Biomet common share. As a result of the merger, Biomet common shares ceased trading on NASDAQ at market close on September 25, 2007, and will no longer be listed. Shareholders of Biomet who are the holders of record of Biomet stock certificates will receive instructions and a letter of transmittal by mail from American Stock Transfer & Trust Company, the paying agent for the merger, concerning how and where to forward their certificates for payment. For shares held in "street name" by a broker, bank or other nominee, shareholders will not need to take any action to have shares converted into cash, as this will be done by the broker, bank or other nominee. Questions about the deposit of merger proceeds should be directed to the appropriate broker, bank or other nominee. About Biomet Biomet, Inc. and its subsidiaries design, manufacture, and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy. Biomet's product portfolio encompasses reconstructive products, including orthopedic joint replacement devices, bone cements and accessories, autologous therapies and dental reconstructive implants; fixation products, including electrical bone growth stimulators, internal and external orthopedic fixation BIOMET INC: Moody's Puts Corporate Family Rating at B2 ------------------------------------------------------ Moody's Investors Service assigned final debt ratings to Biomet Inc. (B2 Corporate Family Rating) in conjunction with the close of the leveraged buy-out transaction by a consortium of equity sponsors. The rating outlook is negative. There is no change from the provisional debt ratings that had previously been assigned. The provisional (P)B2 CFR reflected uncertainty about the final terms of the transaction. Moody's notes that subsequent to the assignment of provisional ratings in May 2007, higher interest rates and a revolver draw of about $130 million (raising incremental debt by about $80 million) have reduced Biomet's flexibility within the B2 rating. Also, as a result, the company's Speculative Grade Liquidity rating has been changed to an SGL-3 from an SGL-2, which was assigned in conjunction with the provisional ratings. Diana Lee, a Senior Credit Officer at Moody's said, "Higher borrowing costs and the need to use the revolver eliminate any cushion that may have been available to the company. As a result, performance below expectations will have greater potential to trigger a downgrade." Ratings assigned with a negative outlook: Biomet, Inc. -- Corporate Family Rating at B2 -- $350 Million Asset backed revolver at Ba2, (LGD2, 13%) -- $400 Million Secured cash flow revolver at B1, (LGD3, 36%) -- $3.547 Billion Secured term loan at B1, (LGD3, 36%) -- $775 Million Unsecured senior notes or bridge loan at B3, (LGD4, 63%) -- $775 Million Unsecured PIK option notes or bridge loan at B3, (LGD4, 63%) -- $1.015 Billion Unsecured subordinated notes or bridge loan at Caa1, (LGD6, 93%) -- PDR at B2 Rating changed: -- Speculative grade liquidity rating: SGL-3 from SGL-2 Moody's believes that Biomet's very high leverage and weak financial strength and financial policy ratios - some of which are positioned in the "Caa" category - are a key credit risk. In particular, interest coverage is negligible and the company's ability to repay a significant portion of its debt with cash flow is extremely limited. While there are no financial covenants in the revolving bank agreements, there is material adverse change representation and warranty language. The presence of external liquidity sources as well as equity sponsors that have committed significant capital (of about $5.4 billion) lower the likelihood of default for the near term, and should provide management more time to improve free cash flow. The B2 CFR also considers the company's size and the fairly stable nature of the orthopedic industry, which is expected to continue to benefit from steady demand. As a result, Moody's believes that the B2 CFR is appropriate even though leverage (estimated at about 9 times pro forma Debt/EBITDA based on year end May 31, 2007 financial statements) and coverage measures (estimated at 1.1 times pro forma EBITA/interest) are more consistent with lower ratings. The rating outlook is negative, reflecting Biomet's weak position in the B2 category due primarily to Moody's concerns regarding the high level of debt. Moody's believes that the company will need to see operating improvements as well as grow at industry rates in order to meaningfully de-leverage over the next 12-24 months. Biomet's SGL-3 rating reflects weak free cash flow, balanced by substantial external liquidity. Following the initial draw, Biomet is expected to have about $620 million of capacity under two secured bank revolvers. Biomet Inc, based in Warsaw, Indiana, is one of the leading manufacturers of orthopedic implants, specializing in reconstructive devices. BLACKBOARD INC: Loan Repayment Cues S&P to Lift Rating to BB ------------------------------------------------------------ Standard & Poor's Ratings Services raised its bank loan rating on Washington, D.C.-based Blackboard Inc.'s $10 million senior secured credit facility to 'BB' from 'B+', following the repayment of the outstanding first-lien term loan. The revolving credit facility is rated 'BB', two notches higher than the corporate credit rating on the company, with a recovery rating of '1', indicating the expectation for very high (90%-100%) recovery in the event of a payment default or bankruptcy. The corporate credit rating remains at 'B+'. Standard & Poor's also assigned its 'B-' rating to the company's $165 million senior convertible notes. "The rating reflects the company's narrow business profile, fragmented and competitive market place, and rapid growth," said Standard & Poor's credit analyst David Tsui. "These factors are offset partially by a strengthening position in a growing niche software market and a significant base of recurring business." Blackboard's target market primarily is the 6,400 North American higher education institutions, and secondarily, K-12 institutions and international educational institutions. Blackboard has a leading position in the niche course management software market. Although the company benefits from high renewal rates and moderately high switching costs, the market is highly fragmented, and entry from resource-intensive competitors or open-source software could be a risk. Financial leverage is moderate for the rating, with total adjusted debt to EBITDA of 4x as of June 30, 2007, following the issuance of $165 million senior convertible notes in June. The company is acquisitive, having already acquired five companies since 1997, with the acquisition of WebCT for $154 million being the largest to date. BRAVO! BRANDS: Voluntary Chapter 7 Case Summary ----------------------------------------------- Debtor: Bravo! Brands, Inc. fka China Peregrine Food Corporation fka China Premium Food Corporation fka Bravo! Foods International Corporation 11300 U.S. Highway 1 Suite 400 North Palm Beach, FL 33408 Bankruptcy Case No.: 07-17840 Type of business: Formerly known as Bravo Foods International Corp., the Debtor markets branded flavored milk products and flavor ingredients. See http://www.bravobrands.com Chapter 7 Petition Date: September 21, 2007 Court: Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Eric A. Rosen, Esq. 2925 P.G.A. Boulevard Suite 103 Palm Beach Gardens, FL 33410 Quarterly Financial Condition as of March 2007: Total Assets: $7,600,000 Total Debts: $50,320,000 The Debtor did not file a list of its largest unsecured creditors. BROOKLYN NAVY: Fitch Holds Senior Debt Rating at BB --------------------------------------------------- Fitch Ratings affirmed Brooklyn Navy Yard Cogeneration Partners' senior debt rating at 'BB'. The rating action applies to the $81 million of taxable debt issued by BNY and the $304 million of tax-exempt debt issued by the New York City Industrial Development Agency on behalf of BNY. BNY owns a nominal 286MW cogeneration facility that delivers its output primarily to Consolidated Edison of New York under a long term energy services agreement. Under the ESA, ConEd purchases essentially the entire output of the facility in the form of electricity and steam. Electrical deliveries are proportionately greater in the summer and steam deliveries are proportionately greater in the winter. BNY's senior debt obligations are payable in April and October. In recent years, coverage of the April payments averages 1.3x, and 0.9x for the October payment. Technical issues have historically reduced energy deliveries and prevented the project from achieving capacity requirements under the ESA. Fitch expects that repairs undertaken in 2005, for which BNY incurred $30 million of additional senior indebtedness, have returned the project to operational form. Financial results have shown improvement as well, as coverage was about 1.2x for the October 2006 payment and 1.4x for the April 2007 payment. However, future improvements in cash flow may be offset by additional natural gas taxes levied by the New York State Department of Taxation and Finance, which BNY estimates will be between $4 million and $6 million annually. Despite disputing the applicability of the tax law, BNY began paying the taxes as of June 2007. BNY and NYSDTF are in the preliminary stages of negotiating the tax, and Fitch does not expect an imminent resolution. The current rating action incorporates the assumption the natural gas tax will be an ongoing expense in the order of magnitude indicated. However, Fitch recognizes additional rating action may be required depending on the actual size of the tax and the ultimate resolution of the dispute. C-BASS MORTGAGE: S&P Affirms 'BB+' Rating on Class B-4 Certs. ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 10 classes of C-Bass mortgage loan asset-backed certificates from 2004-CB4 Trust. The affirmations reflect sufficient credit enhancement for the current ratings. The classes with affirmed ratings have actual and projected credit support percentages that are in line with their original levels. Ratings Affirmed 2004-CB4 Trust C-Bass mortgage loan asset-backed certificates 2004-CB4 Series Class Rating ------ ----- ------ 2004-CB4 A-4, A-5, A-6 AAA 2004-CB4 M-1 AA+ 2004-CB4 M-2 A+ 2004-CB4 M-3 A 2004-CB4 B-1 BBB+ 2004-CB4 B-2 BBB 2004-CB4 B-3 BBB- 2004-CB4 B-4 BB+ CARBIZ INC: J. Halloran Promoted to Vice President of Finance ------------------------------------------------------------- Carl Ritter, chief executive officer CarBiz Inc. disclosed the promotion of Jennifer Halloran to vice president of finance. Mrs. Halloran previously served as controller at CarBiz, where she has been employed since 2000 in accounting, human resource administration and administrative operations. In this position Jennifer's responsibilities will increase to handling the reporting functions for the SEC. Before joining CarBiz, she served as general manager for a national food service company. "We recognize the quality leadership Jennifer Halloran has brought to CarBiz and her promotion will help position us for future growth," said Stan Heintz, chief financial officer of CarBiz. About CarBiz Inc. Headquartered in Sarasota, Fla., CarBiz Inc. (OTC BB: CBZFF.OB) -- http://www.carbiz.com/-- provides software, training and consulting solutions to the United States automotive industry. CarBiz's suite of business solutions includes dealer software products focused on the "buy-here pay-here", sub-prime finance and automotive accounting markets. CarBiz also operates "buy-here pay-here" dealerships in Florida through its CarBiz Auto Credit division that are wholly-owned or joint venture companies. Going Concern Doubt Christopher, Smith, Leonard, Bristow & Stanell P.A., in Sarasota, Fla., expressed substantial doubt about Carbiz Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Jan. 31, 2007, and 2006. The auditing frim pointed to the company's recurring losses from operations and net capital deficiency. At April 30, 2007, the company's balance sheet showed total assets of $1,922,316, total liabilities of $5,611,745, and minority interest of $212,264, resulting in a total stockholders' deficit of $3,901,693. CHRISTOPHER LILLIE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Christopher Sean Lillie Cheyra Alejandra Lillie fka Cheyra Garcia 13 Via Conocido San Clemente, CA 92673 Bankruptcy Case No.: 07-13049 Type of business: The Debtors own and operate Prestige Lending Group, which is engaged in mortgage lending, commercial investment and banking. They also own and operate C.&C. Logistic Device Corp., which sells electronics in wholesale. Chapter 11 Petition Date: September 25, 2007 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Andrew S. Bisom, Esq. 695 Town Center Drive, Suite 700 Costa Mesa, CA 92626 Tel: (714) 245-8800 Total Assets: $4,717,280 Total Debts: $4,435,503 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wilshire Credit Corp. $880,000 P.O. Box 7195 Pasadena, CA 91109-7195 Fremont Investment & Loan Mortgage $219,543 P.O. Box 25100 Value of security: Santa Ana CA. 92799-5100 $900,000.00 Law Offices of Joseph $117,195 Graziano 18757 Burbank Boulevard, Suite 300 Tarzana, CA 91356 Wells Fargo Bank Guarantor $74,019 Allied Resources II, L.L.C. Trade Creditor $49,536 B.M.W. Bank of North America Value of security: $48,867 $37,000 Bank of America Guarantor $39,042 Orange County Credit Union Value of security: $38,614 $35,000.00 Citi Cards Credit Card Purchases $19,513 A.A.A. Financial Services Credit Card Purchases $18,111 Mendelson Law Group $11,373 Joseph Steven & Association $11,000 American Express Guarantor $10,982 Wells Fargo Bank Guarantor $10,492 C.H.R.L.2, L.L.C. Trade Creditor $10,000 Discover Credit Card Purchases $9,629 U.S.C.B. $9,451 Discover Card Credit Card Purchases $8,183 Citi Cards Credit Card Purchases $8,121 G.E. Money Bank Credit Card Purchases $3,500 CLEAR CHANNEL: Stockholders Approve THL/Bain Capital Merger Deal ---------------------------------------------------------------- Clear Channel Communications, Inc., disclosed that based on a preliminary vote count, Clear Channel shareholders approved the adoption of the merger agreement with a group led by T.H. Lee Partners, L.P. and Bain Capital Partners, LLC. The transaction remains subject to requisite regulatory approvals and customary closing conditions. At a special meeting of shareholders held on September 25, Tuesday, the number of shares voted in favor of the transaction represented more than 73% of the total shares outstanding and entitled to vote at the meeting. The preliminary tabulation indicates that approximately 98% of the shares voted were cast in favor of the transaction. "We are pleased with the outcome of [Tues]day's vote," said Mark Mays, Chief Executive Officer of Clear Channel. "On behalf of Clear Channel's Board of Directors, I want to thank our shareholders and hard-working employees for their support throughout this process. We look forward to completing this transaction with T.H. Lee and Bain as quickly as possible." On May 18, 2007, Clear Channel entered into a second amendment to its merger agreement with a private equity group co-led by Thomas H. Lee Partners, L.P. and Bain Capital Partners, LLC. Under the terms of the merger agreement, as amended, Clear Channel shareholders will receive $39.20 in cash for each share they own plus additional per share consideration, if any, if the closing of the merger occurs after December 31, 2007. This is an increase from the previous cash consideration of $39.00 per share. As an alternative to receiving the $39.20 per share cash consideration, Clear Channel's unaffiliated shareholders were offered the opportunity on a purely voluntary basis to exchange some or all of their shares of Clear Channel common stock on a one-for-one basis for shares of Class A common stock in the new corporation formed by the private equity group to acquire Clear Channel (subject to aggregate and individual caps), plus the additional per share consideration, if any. At the meeting, all proxy cards and ballots were turned over to the independent inspector of elections, Mellon Investor Services, LLC, for final tabulation and certification. About Thomas H. Lee Partners Thomas H. Lee Partners, L.P. -- http://www.thl.com/-- is one of the oldest and most successful private equity investment firms in the United States. Since its founding in 1974, THL has become the preeminent growth buyout firm, raising approximately $20 billion of equity capital and investing in more than 100 businesses with an aggregate purchase price of more than $125 billion and generating superior returns for its investors and partners. Notable transactions sponsored by the firm include Houghton Mifflin, National Waterworks, Univision, The Nielsen Company, West Corporation, Fidelity National Information Services, Dunkin Brands, Fisher Scientific, Experian and ProSiebenSat.1 Media. About Bain Capital Partners Bain Capital Partners, LLC -- http://www.baincapital.com/-- is a global private investment firm that manages several pools of capital including private equity, high-yield assets, mezzanine capital and public equity with more than $40 billion in assets under management. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in over 230 companies around the world, including investments in a broad range of companies such as Burger King, HCA, Warner Chilcott, Toys "R”"Us, AMC Entertainment, Sensata Technologies, Burlington Coat Factory and ProSiebenSat1 Media. Headquartered in Boston, Bain Capital has offices in New York, London, Munich, Tokyo, Hong Kong and Shanghai. About Clear Channel Communications Clear Channel Communications, Inc. -- http://www.clearchannel.com/ -- (NYSE: CCU) is a global media and entertainment company specializing in "gone-from-home" entertainment and information services for local communities and premiere opportunities for advertisers. Based in San Antonio, Texas, the company's businesses include radio, television and outdoor displays. CLEAR CHANNEL: Fitch Expects to Cut Issuer Default Rating to B -------------------------------------------------------------- In line with previous guidance, Fitch Ratings expects to downgrade Clear Channel Communications Inc.'s Issuer Default Rating to 'B' from 'BB-'. The rating outlook is expected to be stable. Existing ratings remain on rating watch negative pending the closing of the transaction and review of final documentation. The expected rating action reflects the announcement by the company that shareholder's have approved the acquisition of the company by a group led by Thomas H. Lee Partners, L.P. and Bain Capital Partners LLC. Given the information currently available, including current valuation and financing commitments, Fitch believes that the IDR will be 'B'. Fitch expects pro forma leverage and interest coverage to about 9x and 1.5x, respectively, after taking into account estimated proceeds from planned asset sales. The stability of the company's traditional outdoor business, the strong un-levered free cash flow dynamics of its radio business, and growth prospects from digital initiatives support the expected rating and outlook. Operating concerns include continued pressured industry trends in traditional radio broadcasting. The company has stated that at least a majority in principal amount of the 7.65% senior notes due 2010 and the 8% AMFM senior notes due 2008 will be redeemed. Publicly disclosed information to this point is not adequate for Fitch to estimate where the remaining $5 billion of existing unsecured bonds will fall within the capital structure. Subject to standard carve-outs, existing bonds have a limitation on mortgages covenant that restricts liens upon the equity or debt of a subsidiary, as well as liens upon any principal property in the United States. The Indenture does not appear to limit subsidiary guarantees. Depending on the placement of the existing bonds, Fitch expects the secured debt to be rated with 0 to 1 notches up from the IDR and the new unsecured debt to be rated 1 to 2 notches below the IDR. Any debt structurally subordinate to the new unsecured debt would be notched down accordingly. COACH INDUSTRIES: Court Approves Hodgson Russ as Counsel -------------------------------------------------------- The United States Bankruptcy Court for the Northern District of New York gave Coach Industries Group Inc. authority to employ Hodgson Russ LLP as its bankruptcy counsel. As the Debtor's attorney, the firm is expected to: a. evaluate various claims and offsets; b. prepare disclosure statement and Chapter 11 plan; c. recover voidable transfers, if any; d. attend 341 hearing and valuation hearing, if any; e. negotiate and litigate with secured creditors; and f. apply for sale under Section 363 of the Bankruptcy Code. The Debtor tells the Court that it paid the firm a $50,000 retainer fee. Richard L. Weisz, Esq., a partner of the firm, will bill $300 per hour for this engagement. Mr. Weisz assures the Court that the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Weisz can be reached at: Richard L. Weisz, Esq. Hodgson Russ LLP 677 Broadway, Suite 301 Albany, New York 12207 Tel: (518) 465-2333 Fax: (518) 465-1567 http://www.hodgsonruss.com/ 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.N.Y. Case No. 07-12516). When the Debtor filed for bankruptcy, it disclosed total assets of $11,438,693 and total debts of $175,451,040. COACH INDUSTRIES: Section 341(a) Meeting Scheduled for October 15 ----------------------------------------------------------------- The United States Trustee for Region 2 will convene a hearing of creditors of Coach Industries Inc. on Oct. 15, 2007, 1:00 p.m., at Hearing Room 101, Ground Floor, No. 74 Chapel Street, in Albany, New York. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. 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 office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. 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.N.Y. Case No. 07-12516). When the Debtor filed for bankruptcy, it disclosed total assets of $11,438,693 and total debts of $175,451,040. CWABS ASSET: S&P Junks Rating on Class M-6 Certificates ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on seven classes from CWABS Asset Backed Certificates Trust 2006-SPS1. The downgrades reflect the poor performance of the collateral pool. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete write-down of the overcollateralization for this deal. In addition, the principal balances for classes M-9 and B have been written down to zero, whereas class M-8 realized a principal write-down of approximately $1.42 million. As of the September 2007 distribution period, total delinquencies were 15.97%, and severe delinquencies were 7.42%. Although the transaction is 14 months seasoned, it has approximately 15.16% in cumulative realized losses to date. The outstanding pool factor is 68.99%. Subordination, O/C, and excess interest cash flows provide credit support for this transaction. The collateral consists of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered CWABS Asset Backed Certificates Trust 2006-SPS1 Rating ------ Series Class To From ------ ----- -- ---- 2006-SPS1 M-3 A AA 2006-SPS1 M-4 BBB- A- 2006-SPS1 M-5 B+ BB+ 2006-SPS1 M-6 CCC B 2006-SPS1 M-8 D CCC 2006-SPS1 M-9 D CCC 2006-SPS1 B D CCC CWABS INC: S&P Cuts Rating on 2004-4 Class B Loans to B ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of mortgage-backed securities from CWABS Inc.'s series 2004-4. Concurrently, S&P affirmed its ratings on the remaining 10 classes from this transaction. The downgrades of classes M-7 and B reflect a reduction in credit enhancement resulting from monthly realized losses as well as a high amount of severe delinquencies (90-plus days, foreclosures, and REOs). As of the August remittance date, monthly realized losses had exceeded excess interest during five of the past six months. The average monthly loss was $896,250 over the past six months, while excess spread averaged $440,586 for the same period. There is $32,532,273 in severe delinquencies, compared with $6,988,091 in overcollateralization. Overcollateralization is currently 0.39% of the original pool balance, 11 basis points below its target. The affirmations reflect sufficient credit enhancement for the current ratings. The classes with affirmed ratings have actual and projected credit support percentages that are in line with their original levels. Subordination, overcollateralization, and excess spread provide credit support for this transaction. The collateral for this transaction consists primarily of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered CWABS Inc. Rating ------ Series Class To From ------ ----- -- ---- 2004-4 M-7 BBB A- 2004-4 B B BB Ratings Affirmed CWABS Inc. Series Class Rating ------ ----- 2004-4 1-A, 2-A, 3-A-2 AAA 2004-4 A AAA 2004-4 M-1, M-2 AA+ 2004-4 M-3, M-4 AA 2004-4 M-5 AA- 2004-4 M-6 A DAVITA INC: Improved Metrics Cue Fitch to Upgrade Ratings --------------------------------------------------------- Fitch Ratings upgraded DaVita, Inc.'s ratings as: -- Issuer Default Rating to 'BB-' from 'B+'; -- Bank credit facility to 'BB+' from 'BB/RR2'; -- Senior subordinated notes to 'B' from 'B-/RR6'; -- Senior unsecured notes to 'BB-' from 'B/RR5'; The rating outlook is stable. In accordance with Fitch's published methodology, the recovery ratings on all issues of DaVita will no longer be published. The ratings actions apply to about $3.7 billion of debt outstanding as of June 30, 2007. The ratings reflect DaVita's improved financial and operating metrics partially offset by continued industry pressures. DaVita's key credit metrics continue to improve significantly. Leverage has declined to 3.62x for the last 12 months ended June 30, 2007 from 6.85x at the end of 2005. This reduction was driven by both a decrease in debt (total debt reduced to approximately $3.7 billion from $4.2 billion) and an increase in EBITDA (increased to $1,024 million from $607 million). DaVita also benefits from strong, consistent cash flows (free cash flow for the LTM ended June 30, 2007 was about $249 million) and relatively low fixed costs and maintenance capital expenditures. Although Fitch believes profitability will be pressured over the next few years due largely to managed care pricing and the reimbursement and usage of pharmaceuticals, leverage is expected to remain consistent with the 'BB-' rating category. DaVita continues to demonstrate strong operating performance. Operating EBITDA for the first half of 2007 was about $530 million, almost $100 million more than during the first half of 2006 when it was about $445 million. Furthermore, the second quarter marked the sixth consecutive quarter of EBITDA margin improvement. DaVita has also demonstrated steady organic growth (non-acquired treatment growth was 4.6% for the second quarter of 2007). Fitch believes this rate of growth is above-market and indicates that DaVita has not been distracted by its integration of DVA Renal Healthcare Inc. (formerly known as Gambro Healthcare Inc.). The fundamental strength of DaVita's operations and recent positive trends should help mitigate the impact of growing industry pressures. As Fitch has noted in the past, the use and reimbursement of pharmaceuticals used in dialysis, particularly the anemia drug Epogen, has come under increased scrutiny. Fitch estimates that EPO represents about 20%-25% of DaVita's overall revenues and a greater portion of the company's EBITDA. Thus any changes in reimbursement or usage could have a material negative impact on the company. Fitch notes that an FDA panel met Sept. 11 to discuss possible label changes for dialysis patients. The panel decided not to set an upper target for Hemoglobin levels, which could have led to further reductions in EPO usage. The FDA is not obligated to follow the recommendations of the panel but generally does so. In addition, the House recently passed an extension to the Children's Health Insurance Program, which proposed reimbursement changes for dialysis which could negatively impact DaVita and other providers in the industry. Recommendations in the bill include introducing a bundled payment system for dialysis and pharmaceuticals, reducing EPO payments to 'large' dialysis providers, and extending the Medicare Secondary Payor provision from 30 to 42 months. Fitch believes that the MSP provision would most likely have a positive impact on DaVita and the impact of the bundling system could be negative or positive, depending on the terms of the bundling. Although it now appears that the final CHIP bill will exclude the above-mentioned Medicare provisions, Fitch will watch closely for the introduction of separate legislation to address these issues. At June 30, 2007, DaVita had about $3.7 billion in outstanding debt, including about $1.9 billion in term loans under its secured credit facility, $900 million of 6.625% senior notes due 2013, and $850 million of 7.25% senior subordinated notes due 2015. Liquidity comprised $397 million in cash on hand as well as $200 million in availability on its secured revolving credit facility, net of $50 million in outstanding letters of credit. Fitch believes DaVita may allocate more cash to fund investments and/or return value to shareholders, and that pre-payments on its credit facility, if any, will be to a lesser extent than in the past. DELTA AIR: Wants Final Decree Entered Closing 17 Cases ------------------------------------------------------ Pursuant to Section 350(a) of the Bankruptcy Code and Rule 3022 of the Federal Rules of Bankruptcy Procedure, Delta Airlines, Inc., asks the U.S. Court to issue a final decree closing the Chapter 11 cases of 17 reorganized debtor-affiliates, effective Sept. 28, 2007: Debtor Case No. ------ -------- ASA Holdings, Inc. 05-17946 Comair Holdings, LLC 05-17931 Comair Services, Inc. 05-17935 Crown Rooms, Inc. 05-17922 DAL Aircraft Trading, Inc. 05-17941 DAL Global Services, LLC 05-17928 DAL Moscow, Inc. 05-17937 Delta Airelite Business Jets, Inc. 05-17942 Delta Benefits Management, Inc. 05-17945 Delta Connection Academy, Inc. 05-17926 Delta Corporate Identity, Inc. 05-17939 Delta Loyalty Management Services, LLC 05-17932 Delta Technology, LLc 05-17927 Delta Ventures III, LLc 05-17936 Epsilon Trading, LLC 05-17943 Kappa Capital Management, Inc. 05-17947 Song, LLC 05-17921 Bankruptcy Rule 3022 provides that after an estate is fully administered in a chapter 11 reorganization case, the court, on its own motion or on motion of a party in interest, shall enter a final decree closing the case. The Advisory Note to Bankruptcy Rule 3022 directs courts to apply six factors to determine whether a bankruptcy case has been "fully administered." Timothy E. Graulich, Esq., at Davis, Polk & Wardwell, in New York, tells the Court that the 17 estates meet each of the six factors: (1) The Court's Order on April 25, 2007 confirming the Reorganized Debtors' Plan is final; notwithstanding it being subjected to a single appeal restricted to the narrow question of the scope of exculpation clauses in the Plan that are applicable to UMB Bank, N.A.; (2) Delta has established reserves of stock that will be distributed to the Creditors of Delta and Comair, Inc. which do not implicate the Fully Administered Cases; (3) Delta has distributed and transferred the cash, stock, notes and other property, to be disbursed following the confirmation of the Plan; (4) Pursuant to the Plan, the Reorganized Debtors have assumed management of the reorganized estates, with the election of a new Board of Directors; (5) One interim distribution to Creditors has been made and one to be contemplated in November 2007. The distributions are not being made out of the assets of the Fully Administered Cases' estates; and (6) All pending motions, contested matters, and adversary proceedings will be resolved using the pools of assets established by the Plan, and will not affect the Fully Administered Cases. Mr. Graulich adds that the 17 reorganized debtor-affiliates' cases are inactive and that the Debtors' bankruptcy cases are substantively limited to Delta and Comair. In addition, the closing will be cost-effective. Since there will be no remaining administration required with respect to the Fully Administered Cases, no U.S. Trustee fees will be incurred. The request is frequently granted in large bankruptcy cases where only a few of the cases need to remain open for purposes of administering the estate, Mr. Graulich notes. Pursuant to 28 U.S.C. Section 1930(a)(6), a debtor in a chapter 11 case must pay the U.S. Trustee a quarterly payment for each bankruptcy case that it administers. Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 2007, the Court confirmed the Debtors' plan. (Delta Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 16, 2007, Fitch Ratings has initiated coverage of Delta Air Lines Inc. with the assignment of these debt ratings: issuer default rating 'B'; First-lien senior secured credit facilities 'BB/RR1'; and Second-lien secured credit facility (Term Loan B) 'B/RR4' As reported in the Troubled Company Reporter on May 2, 2007, Standard & Poor's Ratings Services raised its ratings on Delta Air Lines Inc. (B/Stable/--), including raising the corporate credit rating to 'B', with a stable outlook, from 'D', following the airline's emergence from Chapter 11 bankruptcy proceedings. ECHOSTAR COMM: Board Advises Spin-off of Infrastructure Assets -------------------------------------------------------------- The board of directors of EchoStar Communications Corporation has directed to pursue possible separation of its businesses into two distinct publicly traded companies. EchoStar submitted a request to the Internal Revenue Service for a ruling as to the tax-free nature of the transaction. Under the proposed plan, EchoStar's U.S. consumer pay-TV business would continue to operate as the DISH Network(R). Most of the company's other technology and infrastructure assets would be spun-off in a transaction intended to be tax-free to EchoStar and its shareholders. Upon completion of the spin-off transaction, the shareholders of EchoStar would have separate pro rata ownership interests in each company. "We believe separation of our consumer-based and wholesale businesses could unlock additional value," Charlie Ergen, chairman and chief executive officer of EchoStar, said. "Each company would be able to separately pursue the strategies that best suit its respective long-term interests. The spin-off transaction would also allow employee incentives to be tied to their respective company's performance, and improve opportunities to effectively develop and finance expansion plans." The transaction would be transparent to DISH Network's over 13.585 million U.S. DBS customers. Installation, customer service, billing and other consumer services would continue to be operated by DISH Network, together with most satellites and spectrum used to support that subscriber base. Mr. Ergen would continue to serve as chairman and CEO of DISH Network, and would fill the same roles with the spun-off company. The spin-off assets would include EchoStar's: -- set top box design and manufacturing business; -- international operations; and -- assets used to provide fixed satellite services to third parties, together with satellites, uplink centers and spectrum licenses not considered core to DISH Network's subscriber business. The spin-off is subject to certain conditions, including, final approval by EchoStar's board of directors of the transaction, effectiveness of a securities registration statement, confirmation that the spin-off will qualify as a tax-free transaction for EchoStar and its shareholders and receipt of regulatory and other necessary approvals. Final terms and timing of the transaction have not yet been determined. About EchoStar Communications Based in Englewood, Colorado, EchoStar Communications Corporation (Nasdaq: DISH) -- http://www.echostar.com/-- serves more than 13.4 million satellite TV customers through its DISH Network(TM), a pay-TV provider in the country since 2000. DISH Network's services include hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. EchoStar has been into satellite TV equipment sales and support for more than 25 years. * * * Moody's Investors Service assigned a Ba2 Probability of Default rating to Echostar Communications Corp. on September 2006. Fitch Ratings assigned a BB- Long-term Issuer Default Rating to Echostar Communications Corp. on October 2005. Both ratings still hold to date. ECHOSTAR COMM: Inks Deal to Purchase Sling Media for $380 Mil. -------------------------------------------------------------- EchoStar Communications Corporation has agreed to acquire Sling Media Inc. The transaction values Sling Media at approximately $380 million and is payable in cash and EchoStar options. The transaction is subject to customary closing conditions, and is expected to close in the fourth quarter of 2007. "As an early investor in Sling Media, EchoStar has been pleased with the progress and commitment the company has made establishing Sling Media and the Slingbox as powerful and beloved digital media brands," Charlie Ergen, CEO and co-founder of EchoStar, said. "With the mobile lifestyle, EchoStar's acquisition of Sling Media will allow us to offer innovative and convenient ways for our customers to enjoy their programming on more displays and locations, including TVs, computers and mobile phones, both inside and outside of the home. This combination paves the way for the development of a host of new innovative products and services for our subscribers, new digital media consumers and strategic partners," Mr. Ergen continued. "We are psyched to make this statement," Blake Krikorian, co- founder, chairman and CEO of Sling Media, said. "We have worked closely with EchoStar for more than two years, and have come to realize that both companies have similar entrepreneurial cultures and mutual dedication and passion for creating empowering experiences that benefit the consumer and the media industry. By combining strategies, resources and technologies with EchoStar, Sling Media will be able to rapidly expand our open multi-platform product offerings, not only for DISH Network subscribers, but for digital media enthusiasts around the globe." About Sling Media Headquartered in San Mateo, California, Sling Media Inc. -- http://www.slingmedia.com/-- is an innovator in the digital lifestyle space. The company has introduced the Slingbox(TM) and SlingPlayer(TM) software. Sling Media's product line is distributed in over 5,000 retail stores in 11 countries. The group also fosters and manages relationships with content creators and owners. The company, which was founded in 2004, has received funding from Allen & Company, Goldman Sachs, Doll Capital Management, Echostar Communications, Liberty Media, Mobius Venture Capital, and The Hearst Corporation. About EchoStar Communications Headquartered in Englewood, Colorado, EchoStar Communications Corporation (Nasdaq: DISH) -- http://www.echostar.com/-- serves more than 13.4 million satellite TV customers through its DISH Network(TM), a pay-TV provider in the country since 2000. DISH Network's services include hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. EchoStar has been into satellite TV equipment sales and support for more than 25 years. * * * Moody's Investors Service assigned a Ba2 Probability of Default rating to Echostar Communications Corp. on September 2006. Fitch Ratings assigned a BB- Long-term Issuer Default Rating to Echostar Communications Corp. on October 2005. Both ratings still hold to date. EMTA HOLDINGS: June 30 Balance Sheet Upside-Down by $3.5 Million ---------------------------------------------------------------- Emta Holdings Inc. reported total assets of $3.5 million and total liabilities of $7.0 million at June 30, 2007, resulting in a $3.5 million total stockholders' deficit. This compares with a total stockholders' deficit of $2.8 million at March 31, 2007. The company's consolidated balance sheet at June 30, 2007, further showed strained liquidity with $792,562 in total current liabilities available to pay $7.0 million in total current liabilities. The company incurred a net loss of $832,808 for the first quarter ended June 30, 2007, compared with a $14.3 million net loss reported for the first quarter of fiscal 2007. Results for the first quarter of fiscal 2007 included a $14.0 million expense in conjunction with the curing of the default on the convertible notes. The company granted the lender 5,000,000 warrants at an exercise price of $2.50 per share. No comparable amount was recorded during the three months ended June 30, 2007. Net sales for the three months ended June 30, 2007 were $666,724, an increase of $149,471, or 29.0%, from the three months ended June 30, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?23b5 Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 20, 2007, Semple, Marchall & Cooper LLP in Phoenix, Ariz., expressed substantial doubt about EMTA Holidngs Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm said that the company has significant operating losses and negative working capital. About EMTA Holdings Headquartered in Scottsdale, Ariz., EMTA Holdings Inc. (OTC BB: EMHD) -- http://www.emtacorp.com/-- is a holding company currently engaged in providing innovative solutions to conserve energy usage, particularly for petroleum-based fuels. ENCHANCED MORTGAGE: Moody's Junks Rating on $20MM Class A-3 Notes ----------------------------------------------------------------- Moody's Investors Service took actions on notes issued by Enhanced Mortgage-Backed Securities Fund III and Enhanced Mortgage-Backed Securities Fund IV transactions. According to Moody's, Enhanced Mortgage-Backed Securities Funds are market value CDOs backed by highly rated mortgaged backed securities. The rating actions reflect the current stressful market conditions, the deterioration of the market value of the collateral pool and the transactions' structures including liquidation parameters. Moody's noted that while the underlying assets remain highly rated, the unprecedented illiquidity in the market for mortgage backed securities has created a high level of uncertainty around the valuation of the assets, which makes it difficult to assess the probability of the manager achieving certain prices as indicated by the recent liquidation of market value CDO deals with similar structures. Complete rating actions are: Enhanced Mortgage-backed Securities Fund III: -- $14,000,000 Class A-2 Senior Subordinated Notes due August 2008; Prior Rating: A2 Current Rating: A2 on review for possible downgrade -- $20,000,000 Class A-3 Subordinated Notes due August 2008 Prior Rating: Baa2 Current Rating: Ba3 on review for possible downgrade Enhanced Mortgage-backed Securities Fund IV: -- $130,000,000 Class A-1 Senior Notes due February 2011; Prior Rating: Aaa Current Rating: Aaa on review for possible downgrade -- $14,000,000 Class A-2 Senior Subordinated Notes due February 2011; Prior Rating: A2 Current Rating: Ba2 on review for possible downgrade -- $20,000,000 Class A-3 Subordinated Notes due February 2011 Prior Rating: Baa2 Current Rating: Caa2 on review for possible downgrade FFMLT TRUST: S&P Junks Rating on Class B-3 and Removes Watch ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on four classes of mortgage-backed securities issued by FFMLT Trust 2004- FF3. Concurrently, S&P affirmed its ratings on the remaining three classes from this transaction. The downgrades of classes M-4, B-1, B-2, and B-3 reflect an increasing amount of real estate owned collateral and a reduction in credit enhancement as a result of monthly realized losses. Monthly realized losses have consistently exceeded excess interest during the past six months. As of the August remittance date, the average monthly loss was $983,052 during the past six months, while excess spread averaged $366,600 each month for the same period. At the same time, the dollar amount of loans that are now REO has steadily increased over the past year, increasing to $12,603,000 from approximately $7,818,000. Severe delinquencies make up 14.67% of the current pool balance. Overcollateralization is currently 0.25% of the original pool balance, 25 basis points below its target. The affirmations reflect sufficient credit enhancement for the current ratings. The classes with affirmed ratings have actual and projected credit support that is in line with the original levels. Subordination, overcollateralization, and excess spread provide credit support for this transaction. The collateral for this transaction consists primarily of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered FFMLT Trust 2004-FF3 Rating ------ Class To From ----- -- ---- M-4 BBB+ A- B-1 BB BBB+ Ratings Lowered and Removed from Creditwatch Negative FFMLT Trust 2004-FF3 Rating ------ Class To From ----- -- ---- B-2 B BBB/Watch Neg B-3 CCC BB+/Watch Neg Ratings Affirmed FFMLT Trust 2004-FF3 Class Rating ----- ------ M-1 AA+ M-2 A+ M-3 A FIRST FRANKLIN: S&P Lowers Ratings on Five Loan Classes ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on five classes from First Franklin Mortgage Loan Trust 2006-FFB. The downgrades reflect the poor performance of the collateral pool. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete write-down of the overcollateralization for this deal, as well as approximately $29.26 million in write-downs to the class B-2 principal balance. As a result, we lowered the rating on class B- 2 to 'D'. As of the September 2007 distribution period, total delinquencies were 13.19% and severe delinquencies were 6.06%. Although the transaction is only nine months seasoned, it has experienced approximately 7.30% in cumulative realized losses to date. The outstanding pool factor is 85.71%. Subordination, O/C, and excess interest cash flows provide credit support for this transaction. The collateral consists of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered First Franklin Mortgage Loan Trust 2006-FFB Rating ------ Series Class To From ------ ----- -- ---- 2006-FFB M-7 BB+ BBB+ 2006-FFB M-8 B BB+ 2006-FFB M-9 CCC B 2006-FFB B-1 CCC B 2006-FFB B-2 D CCC FORD MOTOR: Four Firms Still On Track to Buy Jaguar & Land Rover ---------------------------------------------------------------- Ford Motor Co.'s Jaguar and Land Rover still has four potential buyers left after two Indian firms, Mahindra & Mahindra and Cerberus, quit the buying race, Reuters reports, citing sources familiar with the matter. The four remaining suitors, according to Reuters' sources, are One Equity Partners, Ripplewood, Tata Motors and TPG, but these firms are yet to complete the due diligence. The Troubled Company Reporter said June 13, 2007, that Ford employed help from investment banks including Goldman Sachs, HSBC and Morgan Stanley to explore the sale of its two British luxury brands, which had lost $12.6 billion last year. In August, an International Herald Tribune report said Ford's financial and legal advisers have begun preparing information to facilitate due diligence for potential bidders of the two marques as Ford hopes to reach a tentative deal by the end of September. Ford expects to finalize the sale deal by December or the early stages of Fiscal Year 2008, Lewis Booth, EVP of Ford's European units, said, according to Breaking News.ie. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on July 30, 2007, Moody's Investors Service said that the performance of Ford Motor Company's global automotive operations for the second quarter of 2007 was significantly stronger than the previous year and better than street expectations. However, Moody's explained that the company continues to face significant competitive and financial challenges, and the rating agency expects that Ford's credit metrics and rate of cash consumption will likely remain consistent with no higher than a B3 corporate family rating level into 2008. According to the rating agency, Ford's corporate family rating is currently a B3 with a negative outlook. The rating is pressured by the shift in consumer preference from high margin trucks and SUVs, and by the need for a new 2007 UAW contract that provides meaningful relief from high health care costs and burdensome work rules, Moody's relates. In June 2007, S&P raised the Issue Rating on Ford's senior secured credit facilities to B+ from B. FREMONT GENERAL: In Talks with Ford on Revised Investment Terms --------------------------------------------------------------- Fremont General Corporation said it has been advised by Mr. Gerald J. Ford that, in light of certain developments pertaining to the company, he is not prepared to consummate the transactions contemplated by an investment agreement entered into on May 21, 2007 among the company, Fremont Investment & Loan, and an entity controlled by Mr. Ford on the terms stated in that agreement. Shares of the company were off 19% at $4.15 on Wednesday following the news, The Wall Street Journal relates. According to the company, the Investment Agreement provides for the acquisition by an investor group led by Mr. Ford of a combination of approximately $80 million in exchangeable non- cumulative preferred stock of FIL and warrants to acquire additional common stock of Fremont General. Fremont General said that, while it does not necessarily agree with the factual positions taken by Mr. Ford, it is in discussions with Mr. Ford concerning revised terms under which an entity controlled by Mr. Ford would proceed with an $80 million investment in exchangeable preferred stock of FIL and receive warrants to acquire additional common stock of the company. The company said that there can be no assurances as to whether or when the parties may reach an agreement with respect to revised transaction terms. Fremont General also said it expects to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2006, which will include audited financial statements for such period, and its Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2007 and June 30, 2007, in mid-October. About Gerald J. Ford Over the past 30 years, Gerald J. Ford has acquired, consolidated and sold more than 40 financial institutions and financial services companies, including mortgage lenders and depository institutions. Mr. Ford was chairman and Chief Executive Officer of Golden State Bancorp Inc. from 1994 through 2002 when Fremont General was sold to Citigroup for $5.8 billion. About Fremont General Headquartered in Santa Monica, California, Fremont General Corporation (NYSE: FMT) -- http://www.fremontgeneral.com/-- doing business primarily through its wholly owned industrial bank, Fremont Investment & Loan, is a financial services holding company. * * * As reported in the Troubled Company Reporter on Aug. 29, 2007, Moody's Investors Service downgraded its ratings on Fremont General Corporation (senior to Caa2 from B3) including its lead subsidiary, Fremont Investment and Loan (deposits to B2 from B1). The Bank Financial Strength Rating of Fremont Investment and Loan was affirmed at E+. The rating on the preferred stock issued by Fremont General Financing I was lowered to Ca from Caa2. The downgrades, according to Moody's, are a response to low capital levels at the bank and increased uncertainty that the holding company can meet its obligations. FREMONT HOME: S&P Downgrades Rating on Class SL-M2 to B from AA --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes from Fremont Home Loan Trust 2006-B. The downgrades reflect the poor performance of collateral pool 2 of this transaction, which is backed by 30-year second-lien mortgages. Monthly net losses for this pool have continued to exceed monthly excess cash flow by a large amount and resulted in a write-down to class SL-M7. While this pool is seasoned 12 months, SL-M7 is the fourth class to default. As of the August 2007 distribution period, total delinquencies were 21.89%, with 11.88% categorized as severely delinquent. Loan group 2 has approximately 14.43% in cumulative realized losses. Additionally, this pool has experienced monthly average losses of approximately $6.14 million over the past six distribution periods, and it has a pool factor of 71.58%. Credit support for this transaction is provided by subordination, overcollateralization, and excess interest cash flow. The collateral for this pool consists of 30-year, adjustable- and fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Fremont Home Loan Trust 2006-B Rating ------ Class To From ----- -- ---- SL-A A AAA SL-M1 BB+ AA+ SL-M2 B AA SL-M3 CCC AA- SL-M4 CCC B SL-M7 D CCC GENERAL MOTORS: Inks Tentative Pact on New Labor Contract with UAW ------------------------------------------------------------------ General Motors and the United Auto Workers union have reached a tentative agreement on a new national labor contract, covering approximately 74,000 represented employees. The agreement is subject to UAW member ratification. The tentative agreement includes a memorandum of understanding to establish an independent retiree health care trust, as well as other changes to the national agreement. Following ratification, implementation of the memorandum of understanding is subject to approval by the courts, and satisfactory review of accounting treatment with the Securities and Exchange Commission. "There's no question this was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship," said Rick Wagoner, GM Chairman and CEO. "I'd like to thank UAW President Ron Gettelfinger, UAW Vice President Cal Rapson and their bargaining team for their leadership and hard work in negotiating the agreement." The national agreement paves the way for GM to significantly improve its manufacturing competitiveness, providing the basis for maintaining and strengthening its core manufacturing base in the United States. "This agreement helps us close the fundamental competitive gaps that exist in our business," Wagoner said. "The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments." 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 yesterday's Troubled Company Reporter, Moody's Investors Service is maintaining its current ratings of General Motors Corporation -- B3 Corporate Family, Caa1 senior unsecured and Ba3 senior secured, and Negative Outlook following the announcement of a strike against the company by the United Auto Workers Union. Following the decision of the United Auto Workers union to go out on strike against General Motors Corp., Fitch Ratings placed General Motors Corporation's 'B' issuer default rating, 'BB/RR1' senior secured debt rating; and 'B-/RR5' senior unsecured debt rating on Rating Watch Negative. GENERAL MOTORS: Canada Plants Reopened Owe to Tentative UAW Pact ---------------------------------------------------------------- General Motors Corp.'s Canada plants reopened Wednesday as a result of the company's tentative agreement with the United Auto Workers union, Reuters reports citing GM Canada public relations director Stew Low. As reported in yesterday's Troubled Company Reporter, the automaker's Car Plant 1 and Car Plant 2 in Oshawa, Ontario closed Tuesday while its transmission plant in Windsor, Ontario closed Monday. 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 yesterday's Troubled Company Reporter, Moody's Investors Service is maintaining its current ratings of General Motors Corporation -- B3 Corporate Family, Caa1 senior unsecured and Ba3 senior secured, and Negative Outlook following the announcement of a strike against the company by the United Auto Workers Union. Following the decision of the United Auto Workers union to go out on strike against General Motors Corp., Fitch Ratings placed General Motors Corporation's 'B' issuer default rating, 'BB/RR1' senior secured debt rating; and 'B-/RR5' senior unsecured debt rating on Rating Watch Negative. GSAMP TRUST: S&P Affirms BB+ Rating on Class B-4 Certificates ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 11 classes from GSAMP Trust 2004-HE2. The affirmations reflect sufficient credit enhancement for the current ratings. The classes with affirmed ratings have actual and projected credit support percentages that are in line with their original levels. Ratings Affirmed GSAMP Trust 2004-HE2 Series Class Rating ------ ----- ------ 2004-HE2 A-1, A-2, A-3C AAA 2004-HE2 M-1 AA 2004-HE2 M-2 AA- 2004-HE2 M-3 A 2004-HE2 M-4 A- 2004-HE2 B-1 BBB+ 2004-HE2 B-2 BBB 2004-HE2 B-3 BBB- 2004-HE2 B-4 BB+ GSAMP TRUST: S&P Lowers Ratings on Two Classes to B+ from BB+ ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 14 classes from four series of asset-backed securities issued by GSAMP Trust. The downgrades reflect the poor performance of the collateral pools. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in complete principal write- downs to the overcollateralization for these deals. Consequently, classes B-1, M-4, M-4, and M-7 from GSAMP 2006-S2, 2006-S3, 2006- S5, and 2006-S6, respectively, have incurred principal write- downs. As of the August 2007 distribution period, total delinquencies ranged from 11.54% (series 2006-S6) to 19.92% (series 2006-S5), and cumulative realized losses ranged from 3.61% (series 2006-S6) to 18.06% (series 2006-S3). Seasoning for these transactions ranges from nine months to 16 months, and these series have outstanding pool factors of approximately 66.40% or less. Subordination, O/C, and excess interest cash flows provide credit support for these transactions. The collateral consists of 30- year, fixed-rate, closed-end, second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered GSAMP Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-S2 M-6 CCC B 2006-S2 B-1 D CCC 2006-S3 M-2 CCC B 2006-S3 M-4 D CCC 2006-S5 A-1 BBB+ AA 2006-S5 A-2 BBB+ AA 2006-S5 M-1 B+ BB+ 2006-S5 M-2 CCC B 2006-S5 M-4 D CCC 2006-S6 M-2 A+ AA- 2006-S6 M-3 BBB- A- 2006-S6 M-4 B+ BB+ 2006-S6 M-5 CCC B 2006-S6 M-7 D CCC HOME EQUITY: Poor Performance Cues S&P to Lower Ratings ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 16 classes from three Home Equity Mortgage Trust transactions. The downgrades reflect the poor performance of the collateral pools. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete write-downs to the overcollateralization for these deals. Furthermore, the principal balances for class 1B-2 from series 2006-2, class B-2 from series 2006-3, and class B-2 from series 2006-4 have been written down to zero. In addition, classes 1B-1 and 1B-2 from series 2006-2, classes B-1 and B-2 from series 2006-3, and classes B-1 and B-2 from series 2006-4 have experienced principal write-downs. As of the August 2007 distribution period, total delinquencies ranged from 11.23% (series 2006-4) to 13.84% (series 2006-3), and cumulative realized losses ranged from 5.61% (series 2006-4) to 6.82% (series 2006-3). Seasoning for these transactions ranges from 11 months to 15 months, and these series have outstanding pool factors of approximately 72% or less. Subordination, O/C, and excess interest cash flows provide credit support for these transactions. The collateral consists of 30- year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Home Equity Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-2 1M-5 A- A 2006-2 1M-6 BB+ A- 2006-2 1M-7 B BB+ 2006-2 1M-8 CCC B 2006-2 1B-1 D CCC 2006-2 1B-2 D CCC 2006-2 2M-1 BB BBB- 2006-3 M-8 CCC B 2006-3 B-1 D CCC 2006-3 B-2 D CCC 2006-4 M-4 A A+ 2006-4 M-5 BBB- A 2006-4 M-6 B+ A- 2006-4 M-7 CCC B 2006-4 B-1 D CCC 2006-4 B-2 D CCC HOME EQUITY: S&P Cuts Rating on Class M-8 to B+ from BB+ -------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on five classes from Home Equity Mortgage Loan Asset-Backed Trust's series INDS 2006-A. The downgrades reflect the poor performance of the collateral pool. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete write-down of the overcollateralization for this deal, as well as the entire principal balances for classes B-2 and B-3. As of the September 2007 distribution period, total delinquencies were 15.63% and severe delinquencies were 8.12%. This transaction is seasoned 15 months and has experienced approximately 9.74% in cumulative realized losses to date. The outstanding pool factor is 67.27%. Subordination, O/C, and excess interest cash flows provide credit support for this transaction. The collateral consists of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Home Equity Mortgage Loan Asset-Backed Trust Series INDS 2006-A Rating ------ Series Class To From ------ ----- -- ---- 2006-A M-7 BBB- BBB+ 2006-A M-8 B+ BB+ 2006-A M-9 CCC B 2006-A B-2 D CCC 2006-A B-3 D CCC ILLINOIS FINANCE: High Vacancy Rates Cue Moody's to Cut Ratings --------------------------------------------------------------- Moody's downgraded to Ba3 the Baa2 rating on $58.43 Million Illinois Finance Authority Student Housing Revenue Bonds, MJH Education Assistance Illinois IV LLC (Fullerton Village Project), Senior Series 2004 A Bonds. Moody's also downgraded to B2 the Baa3 rating on $15.05 Million Illinois Finance Authority Student Housing Revenue Bonds, MJH Education Assistance Illinois IV LLC (Fullerton Village Project), Subordinate Series 2004B bonds. The downgrade is based on high vacancy rates at the project, resulting in appreciably weak cash flows for the Summer and Fall 2007 semesters. Moody's will continue to monitor the ratings of both the Series A and B bonds on Watchlist for further downgrade, as we anticipate a continued decline of the project's financial stability. Legal Security Special obligation of Illinois Finance Authority, secured only by rental income generated at Fullerton Village and any other funds pledged to bondholders under the indenture agreement. DePaul University assumes no financial commitment with respect to the Series 2004 Bonds. Recent Developments MJH Education Assistance Illinois IV LLC, the Fullerton Village Project owner, reported to Moody's that occupancy at Fullerton has fallen from 86% during the Spring 2007 semester to approximately 52% as of the Fall 2007 semester. This is a significant decline in occupancy, and Moody's expects that revenue will not be sufficient to meet the required December 1st interest payment to bondholders. Moody's anticipates that debt service reserve funds may be tapped in order to fulfill obligations to both Series A and Series B bondholders. In our initial rating assessment of the bonds, Moody's relied on pro forma projections, a third-party provided market study analysis, supporting legal documents, and discussions with the owner and management of the project. Moody's also considered Fullerton's close proximity to DePaul University, the need for student housing in the Lincoln Park area due to DePaul's rapid enrollment growth, the existence of an Inducement Agreement between MJH and DePaul, and MJH's legal designation as a "support organization" of the University. Section A of the Inducement Agreement, Acknowledgements and Covenants of the University, states: The university acknowledges that it shall receive a material and substantial benefit by reason of the construction of the FRV [Fullerton Residential Village]. The university further acknowledges that the cooperation of the University is required for the cost-effective and efficient management and operation of the FRV by MJH. As a result, the university agrees that it shall exercise its reasonable efforts to collaborate with MJH and Manager in the marketing, management, and operation of the FRV provided, however, that nothing herein shall be construed to characterize the university as a partner or joint venturer of MJH or Manager. As Moody's understood the language and intent of the above, DePaul University acknowledged that their cooperation is a necessary component of Fullerton's operational success. The university further agreed to exercise reasonable efforts towards marketing, management, and operation of the project. This agreement, coupled with the significant undersupply of student-focused housing in the submarket and strong real estate fundamentals of the project, contributed to our investment grade rating of the underlying bonds. Moody's projected that these various factors were significant strengths to the project that together would ensure occupancy at Fullerton sufficient enough to meet pro forma debt service coverage expectations. Nonetheless, occupancy levels have dropped considerably at the project, despite a successful lease up last year. It is Moody's understanding that some initial concerns voiced by student-tenants about noise levels at the property, while remedied over a year ago with new carpeting and re-insulation of bedroom walls, became a point of contention between students and The Scion Group, Fullerton's original building management. Scion has since been removed from their management position. However, it is possible that tenants of Fullerton during the last academic year were disinclined to renew their leases at the property due to this unfavorable perception of management, contributing to the steep decline in occupancy for the Fall 2007 semester. Outlook While Moody's does not anticipate a depletion of reserve fund monies, if these reserves are tapped to meet the December 1st payment and Spring 2008 occupancy does not improve materially, the lack of newly generated revenue combined with a reduction of interest income earnings may exacerbate Fullerton's current financial difficulties. For this reason, Moody's will continue to keep both bond series on Watchlist for further downgrade. What could stabilize the ratings: -- An inflow of cash from an outside party to supplement revenue. What could cause further Downgrade: -- A tap to debt service reserve funds in order to provide for the December 1st payment to bondholders. Moody's will continue to monitor the financial performance of Fullerton through discussion with MJH and other interested parties. Moody's will update the rating assessment accordingly. KANSAS CITY SOUTHERN: Improved Liquidity Cues S&P to Lift Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Kansas City Southern and its related entities, including raising the corporate credit rating to 'B+' from 'B'. The outlook is developing. The rating actions reflect the company's improved financial profile. The Kansas City, Mo.-based freight railroad has about $2.4 billion in lease-adjusted debt. "The upgrade reflects Kansas City Southern's improved liquidity position and operating performance," said Standard & Poor's credit analyst Lisa Jenkins. Ratings reflect Kansas City Southern's highly leveraged capital structure and challenges associated with its integration of Kansas City Southern de Mexico S. de R.L. de C.V., the Mexican railroad it acquired in April 2005. Offsetting these risks to some extent are the favorable characteristics of the U.S. freight railroad industry and the company's strategically located rail network. Positive industry conditions have enabled Kansas City Southern to strengthen its financial profile and liquidity position over the past year. While the slowing U.S. economy could temper volume gains over the near to intermediate term, the company should still benefit from solid pricing fundamentals and efficiency improvements and, as a result, we expect further improvement in operating performance over time. Kansas City Southern is a Class 1 U.S. freight railroad. It is significantly smaller and less diversified than its peers, but operates a very strategically located rail network in the south- central U.S. and in Mexico. The acquisition of KCSM in 2005 bolstered the company's strategic importance. With its north- south orientation, Kansas City Southern is very well positioned to take advantage of NAFTA trade opportunities. Kansas City Southern had previously maintained a 49% voting interest in KCSM. Now that it owns 100% of the company, Kansas City Southern is more fully integrating KCSR's operations with those of KCSM and should achieve increased marketing and cost synergies over time. Although Kansas City Southern now influences the management of day-to-day operations at KCSM, the two companies have retained separate legal identities and are continuing to finance their operations separately. Kansas City Southern's funds from operations to debt (adjusted for operating leases) is now in the upper-teen percentage area (versus 8% in 2005) and adjusted debt to capital is in the mid-50% area (compared with the low-60% area in 2005). Although debt levels are likely to remain relatively unchanged as a result of ongoing investments in infrastructure and equipment, S&P expect further improvement in operating metrics over the near-to-intermediate term as the company benefits from some new revenue opportunities, a continuing favorable pricing environment, and efficiency gains. If Kansas City Southern continues to bolster its liquidity position and sustains its improved operating performance and financial profile, S&P could raise ratings over the coming year. If liquidity deteriorates, either as a result of operating pressures, investment requirements, or early termination of the credit facility, S&P will likely lower ratings. LEINER HEALTH: Moody's Lowers Corporate Family Rating to Caa3 ------------------------------------------------------------- Moody's Investors Service downgraded all long-term debt ratings of Leiner Health Products Inc. Ratings lowered include the corporate family rating to Caa3 from Caa2, the bank loan to Caa2 (LGD 3, 31%) from B3 (LGD 3, 31%), and the senior subordinated notes to Ca (LGD 5, 88%) from Caa3 (LGD 5, 88%). Leiner's speculative grade liquidity rating remains SGL-4 and the rating outlook is negative. The downgrade was prompted by Moody's increased concerns regarding the company's liquidity profile, its ability to retain customers over the next several months, and the feasibility of monetizing embargoed product inventory following the September 2007 allegations by the Food & Drug Administration that the company falsified records related to quality testing for the production of over-the-counter medications. Previously, Leiner suspended OTC production in March 2007 after an FDA inspection had noted deficiencies in proper manufacturing practices at one of Leiner's production facilities. The SGL-4 rating considers Moody's concern that a lengthy shutdown in OTC distribution will pressure Leiner's liquidity and financial flexibility by reducing its cash generation ability, and Moody's anticipates that short-term covenant compliance will be a substantial challenge. These ratings/assessments are downgraded: -- $50 million senior secured revolving credit facility to Caa2 (LGD 3, 31%) from B3 (LGD 3, 31%); -- $235.8 million senior secured term loan to Caa2 (LGD 3, 31%) from B3 (LGD 3, 31%); -- $150 million 11% senior subordinated notes (2012) rating to Ca (LGD 5, 88%) from Caa3 (LGD 5, 88%); -- Corporate family rating to Caa3 from Caa2; -- Probability-of-default rating to Caa3 from Caa2. This rating is affirmed: -- Speculative Grade Liquidity assessment at SGL-4. Leiner's corporate family rating of Caa3 reflects Moody's heightened concerns about the company's near term liquidity, financial flexibility, and fundamental business franchise. In particular, constraining the ratings are uncertainty around Leiner's ability to quickly obtain FDA consent to restart OTC production and to monetize unsold product inventory, the expectation that the company will incur substantial costs to rectify past manufacturing practices and procedures prior to restarting production, and Moody's belief that the company could permanently lose the confidence of important customers. Eighty- six percent of sales go to the company's top 10 customers so maintaining productive relationships with its important customers is crucial. Prior to the shutdowns, OTC medications comprised around 25% of total revenue and a similar proportion of EBITDA, and the lengthy period of lost sales is meaningfully impacting cash flow and credit metrics. Leiner's operations are supported by the improving operating performance of its vitamin, mineral, and nutritional supplement segment, although there is a risk that the troubles it is experiencing in the OTC segment could crossover and cause marketing and/or customer relations difficulties in the VMS business. Moody's also notes Leiner's wide geographic coverage of the company's distribution network across the U.S. and Canada, and the solid market position as an important manufacturer of certain private label VMS products (and OTC products prior to the shutdown). The Speculative Grade Liquidity assessment of SGL-4 (poor liquidity) reflects Moody's concern that compliance with the maximum leverage and minimum interest coverage ratios in the bank agreement will be challenging over the next few quarters and that the company may need to seek further covenant relief from its bank group. At each revolving credit facility borrowing, Leiner must represent that there has been no material adverse effect on its business, property, results of operations, prospects or condition. The company has few alternate sources of liquidity and substantially all of its assets are pledged for the secured bank loan. The company's equity sponsors are required to contribute additional equity of $6.5 million if available liquidity (revolving credit facility availability plus cash) falls below $10 million. Balance sheet cash of $8.3 million as of June 30, 2007, provides marginal liquidity for small working capital fluctuations. The negative outlook reflects Moody's concern that Leiner's liquidity profile and financial flexibility could further deteriorate if the company cannot overcome its growing operating, legal, and regulatory challenges over the next few quarters and quickly obtain FDA consent to restart production. Leiner Health Products Inc, with headquarters in Carson, California, manufactures private-label vitamins, minerals, & nutritional supplements and over-the-counter pharmaceuticals. Leiner also provides contract manufacturing services. Revenue for the twelve months ending June 30, 2007 was $679 million. LONG BEACH: Credit Enhancement Reduction Cues S&P to Cut Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of mortgage-backed securities issued by Long Beach Mortgage Loan Trust 2004-1. Concurrently, S&P affirmed its ratings on the remaining 10 classes from this transaction. The downgrades of classes M-9 and B reflect a reduction in credit enhancement resulting from monthly realized losses as well as a high amount of severe delinquencies (90-plus days, foreclosures, and REOs). Monthly realized losses have exceeded excess interest during the past six months. As of the August remittance date, the average monthly loss was $1,908,819 over the past six months, while excess spread averaged $733,409 for the same period. There is $55,749,800 in severe delinquencies, compared with $18,447,817 in overcollateralization. Overcollateralization currently amounts to 0.40% of the original pool balance, 10 basis points below its target. The affirmations reflect sufficient credit enhancement for the current ratings. The classes with affirmed ratings have actual and projected credit support percentages that are in line with their original levels. Subordination, overcollateralization, and excess spread provide credit support for this transaction. The collateral for this transaction consists primarily of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Long Beach Mortgage Loan Trust 2004-1 Rating ------ Series Class To From ------ ----- -- ---- 2004-1 M-9 BBB- AA- 2004-1 B BB A+ Ratings Affirmed Long Beach Mortgage Loan Trust 2004-1 Series Class Rating ------ ----- ------ 2004-1 A-1, A-2, M-1 AAA 2004-1 M-2, M-3, M-4 AAA 2004-1 M-5, M-6 AAA 2004-1 M-7 AA+ 2004-1 M-8 AA LONG BEACH: S&P Assigns Default Ratings on Two Loan Classes ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes from Long Beach Mortgage Loan Trust 2006-A. The downgrades reflect the poor performance of the collateral pool. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete write-down of the overcollateralization and the principal balance for class M-5 from this deal. In addition, class M-4 incurred approximately $2.59 million in principal write-downs. As of the August 2007 distribution period, total delinquencies were 17.93%, and severe delinquencies were 7.83%. Although the transaction is 14 months seasoned, it has seen approximately 18.31% in cumulative realized losses to date. The outstanding pool factor is 61.96%. Subordination, O/C, and excess interest cash flows provide credit support for this transaction. The collateral consists of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Long Beach Mortgage Loan Trust 2006-A Series Class To From ------ ----- -- ---- 2006-A A-1 A+ AAA 2006-A A-2 A+ AAA 2006-A A-3 A+ AAA 2006-A M-1 BB+ A 2006-A M-4 D CCC 2006-A M-5 D CCC MADISON PARK: S&P Puts Preliminary BB Rating on Class E Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Madison Park Funding VI Ltd./Madison Park Funding VI (Delaware) Corp.'s $472.5 million floating-rate notes due 2021. The preliminary ratings are based on information as of Sept. 25, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit enhancement provided through the subordination of cash flows to the more junior classes and income notes; -- The transaction's cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The investment manager's experience; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. Preliminary Ratings Assigned Madison Park Funding VI Ltd./Madison Park Funding VI (Delaware) Corp. Class Rating Amount ----- ------ ------ A-1 AAA $302,500,000 A-2 AAA $76,000,000 B AA $30,000,000 C A $28,500,000 D BBB $18,000,000 E BB $17,500,000 Income notes NR $41,250,000 NR — Not rated. MAGNA INTERNATIONAL: Buys 11.9 Mil. Class A Shares for $1.1 Bil. ---------------------------------------------------------------- Magna International Inc. reported final results of its offer to purchase up to $1,536,600,000 in value of its Class A Subordinate Voting Shares, which expired at 5:00 p.m. (Toronto time) on Sept. 20, 2007. Magna confirmed that it has purchased for cancellation 11,908,944 Class A Subordinate Voting Shares, representing 9.2% of its issued and outstanding Class A Subordinate Voting Shares, at $91.50 per share for an aggregate purchase price of approximately $1.1 billion. Payment for these shares was made on Sept. 25, 2007. The purchase was funded from the proceeds of the treasury issuance of 20,000,000 Class A Subordinate Voting Shares pursuant to the plan of arrangement involving Russian Machines, which was completed on Sept. 20, 2007. Any Class A Subordinate Voting Shares which were not validly deposited will be returned as promptly as possible. Headquartered in Ontario, Canada, Magna International Inc. (TSX: MG.A, MG.B; NYSE: MGA) -- http://www.magna.com/-- is a an automotive supplier that designs, develops and manufactures automotive systems, assemblies, modules and components, and engineers and assembles complete vehicles, for sale to original equipment manufacturers of cars and light trucks in North America, Europe, Asia, South America and Africa. The company's capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; metal body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; well as complete vehicle engineering and assembly. The company has approximately 83,000 employees in 229 manufacturing operations and 62 product development and engineering centers in 23 countries. * * * As reported in the Troubled Company Reporter on Sept. 24, 2007, Magna International Inc.'s plan of arrangement and agreements relating to the strategic investment in Magna by Open Joint Stock Company Russian Machines became effective on Sept. 20, 2007. MARCAL PAPER: DOJ Supports $3 Mil. EPA Settlement Agreement ----------------------------------------------------------- The Environmental and Natural Resources Division of the U.S. Department of Justice asks the U.S. Bankruptcy Court for the District of New York to approve the settlement entered by Marcal Paper Mills Inc. with the United States on behalf of the Environmental Protection Agency, the Department of the Interior and the Department of Commerce, Bankruptcy Law360 reports. As reported in the Troubled Company Reporter on July 6, 2007, the EPA filed a $947 million claim against Debtor saying that it will use the amount to clean Passaic River. According to the EPA, the river was polluted by the Debtor's paper plant. As reported in the Troubled Company Reporter on July 30, 2007, the Debtor sought Court approval of a settlement pursuant to which Marcal Paper will $3 million. The settlement will be classified as an unsecured pre-petition claim, subject to the terms of the Plan of Reorganization already developed by the company with the support of its major creditors. Bankruptcy Law360 relates that the Lower Passaic River Study Area Cooperating Parties Group objects to the settlement. The Court will convene a hearing today, September 27, to consider the Debtor's request. About Marcal Paper Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals offices and factories. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. MASTR ASSET: S&P Puts Low-B Ratings on Two Classes -------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of mortgage-backed securities issued by MASTR Asset Backed Securities Trust 2004-WMC1. Concurrently, S&P affirmed its ratings on the remaining five classes from this transaction. The downgrades of classes M-6 and M-7 reflect a reduction in credit enhancement as a result of monthly realized losses. Monthly realized losses have exceeded excess interest during five of the past six months. As of the August remittance date, the average monthly loss was $296,054 over the past six months, while excess spread averaged $140,782 each month for the same period. This transaction currently has $7,009,455 in severe delinquencies (90-plus days, foreclosures, and REOs) and $2,016,712 in overcollateralization, which is 0.26% of the original pool balance and 24 basis points below its target. The affirmations reflect sufficient credit enhancement for the current ratings. The classes with affirmed ratings have actual and projected credit support that is in line with the original levels. Subordination, overcollateralization, and excess spread provide credit support for this transaction. The collateral for this transaction consists primarily of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered MASTR Asset Backed Securities Trust 2004-WMC1 Rating ------ Series Class To From ------ ----- -- ---- 2004-WMC1 M-6 BB BBB- 2004-WMC1 M-7 B BB+ Ratings Affirmed MASTR Asset Backed Securities Trust 2004-WMC1 Series Class Rating ------ ----- ------ 2004-WMC1 M-1 AA 2004-WMC1 M-2 A 2004-WMC1 M-3 A- 2004-WMC1 M-4 BBB+ 2004-WMC1 M-5 BBB MASTR SECOND: S&P Puts Default Rating on Class M-6 Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on classes M-2, M-3, and M-6 issued by MASTR Second Lien Trust 2006-1 and removed the class M-2 and M-3 ratings from CreditWatch with negative implications. The downgrades reflect the poor performance of the collateral pool. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete principal write-down to the overcollateralization for this deal, as well as approximately $4.45 million in principal write-downs to the class M-6 principal balance. As a result, S&P lowered the class M-6 rating to 'D'. As of the September 2007 distribution period, total delinquencies were 14.73%, while cumulative realized losses were 12.33%. This transaction is 18 months seasoned, with an outstanding pool factor of 50.31%. Subordination, O/C, and excess interest cash flows provide credit support for this transaction. The collateral consists of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Rating Lowered MASTR Second Lien Trust 2006-1 Rating ------ Series Class To From ------ ----- -- ---- 2006-1 M-6 D CCC Ratings Land Removed from Creditwatch Negative MASTR Second Lien Trust 2006-1 Rating ------ Series Class To From ------ ----- -- ---- 2006-1 M-2 A- A/Watch Neg 2006-1 M-3 BB+ A-/Watch Neg MERIDIAN AUTO: Wants Final Decree Entered Closing Chapter 11 Cases ------------------------------------------------------------------ Meridian Automotive Systems-Composites Operations, Inc., and its eight debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to enter a final decree closing their Chapter 11 cases pursuant to Section 350 of the Bankruptcy Code and Rule 3022 of the Federal Rules of Bankruptcy Procedures: Case No. Debtor Entity -------- ------------- 05-11168 Meridian Automotive Systems-Composites Operations, Inc. 05-11169 Meridian Automotive Systems, Inc. 05-11170 Meridian Automotive Systems-Angola Operations, Inc. 05-11171 Meridian Automotive Systems-Construction, Inc. 05-11172 Meridian Automotive Systems-Detroit Operations, Inc. 05-11173 Meridian Automotive Systems-Grand Rapids Operation Inc. 05-11174 Meridian Automotive Systems-Heavy Truck Operations Inc. 05-11175 Meridian Automotive Systems-Shreveport Operations, Inc. 05-11176 Meridian Automotive Systems-Mexico Operations, LLC On December 6, 2006, the Court confirmed the Debtors' Fourth Amended Joint Plan of Reorganization, and the Plan became effective as of December 29, 2006. There are no deposit requirements in the Plan, Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, tells the Court. The property required to be transferred under the Plan has been substantially transferred and the Reorganized Debtors have assumed the management of the property dealt with by the Plan. Distributions to be made pursuant to the Plan will be made by The Meridian Automotive Systems, Inc., Litigation Trust, through Ocean Ridge Capital Advisors, LLC, as litigation trustee, Mr. Morton adds. In addition, the Reorganized Debtors have no remaining motions, contested matters or adversary proceedings before the Court except for the avoidance actions asserted by the Litigation Trustee, an appeal by Plastech Engineered Products, Inc., and a request by the Reorganized Debtors to deem reclamation claims to be general unsecured claims. Mr. Morton asserts that the Reclamation Claims Motion will be heard and determined by the time the Court hears the request to close the Chapter 11 cases. The Avoidance Actions and the Plastech Appeal, on the other hand, will no longer require the Court's intervention, Mr. Morton adds, thus, they should not impede in the closing of the Cases. Mr. Morton further asserts that Court can and should enter a final decree closing the Cases but retain jurisdiction for the limited purpose of adjudicating the Adversary Proceedings and, to the extent necessary, resolving any issues that may arise with respect to the Plastech Appeal. Headquartered in Dearborn, Mich., Meridian Automotive Systems Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. The Hon. Mary Walrath has confirmed Meridian's Revised Fourth Amended Reorganization Plan on Dec. 6, 2006. The company emerged from chapter 11 protection on Dec. 29, 2006. (Meridian Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MERIDIAN AUTOMOTIVE: Files Final Report on Fees Paid ---------------------------------------------------- Reorganized Meridian Automotive Systems Inc. and its debtor- affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a final report, containing the break-down of the results in their Chapter 11 cases. Matthew K. Paroly, vice president and secretary of Meridian Automotive Systems-Composites Operations, Inc., at al., signed the report. Type of Payment Payment Amount --------------- -------------- Chapter 11 Trustee's Compensation N/A Debtors' Attorneys' Fees Young Conaway Stargatt & Taylor LLP $1,318,851 Sidley Austin, LLP $10,340,006 Debtors' Attorneys' Expenses Young Conaway Stargatt & Taylor LLP $371,740 Sidley Austin, LLP $350,658 Debtors' Other Professionals' Fees Lazard Freres & Co., LLC $5,296,210 Gavin Anderson & Company $165,910 Foley & Lardner, LLP $226,551 BDO Seidman, LLP $830,556 Mercer Human Resources Consulting $237,287 Seyfarth Shaw, LLP $219,227 PricewaterhouseCoopers, LLP $102,780 FTI Consulting, Inc. $6,777,388 Jeffrey J. Stegenga $191,750 Debtors' Other Professionals' Expenses Lazard Freres & Co., LLC $96,810 Gavin Anderson & Company $19,536 Foley & Lardner, LLP $12,172 Seyfarth Shaw, LLP $15,917 PricewaterhouseCoopers, LLP $1,952 FTI Consulting, Inc. $575,056 Jeffrey J. Stegenga $13,873 Chapter 11 Trustee's Expenses N/A Chapter 11 Trustee's Attorney's Expenses N/A Official Committee of Unsecured Creditors' Attorneys' Fees Ashby & Geddes, P.A. $311,700 Ashby & Geddes, P.A. (Avoidance Action) $337,016 Winston & Strawn, LLP $1,863,755 Creditors Committee's Attorneys' Expenses Ashby & Geddes, P.A. $39,594 Ashby & Geddes, P.A. (Avoidance Action) $32,690 Winston & Strawn, LLP $48,057 Creditors Committee's Other Professionals' Fees Huron Consulting Services, LLC $1,386,175 Sanchez Devanny Eseverri, S.C. $10,812 Peixoto E. Cury Advogados $13,110 Bifferato Gentilotti & Balick $7,597 Creditors Committee's Other Professionals' Expenses Huron Consulting Services, LLC $20,791 Sanchez Devanny Eseverri, S.C. $699 Peixoto E. Cury Advogados $301 Creditors Committee $1,825 Bifferato Gentilotti & Balick $564 Informal Committee of First Lien Secured Lenders Attorneys' Fees Hennigan Bennett & Dorman, LLP $417,951 Informal Committee of First Lien Secured Lenders Attorneys' Expenses Hennigan Bennett & Dorman, LLP $23,375 U.S. Trustee's Fees $573 Mr. Paroly says that no trustee or examiner was appointed in the Chapter 11 cases, hence no fees were incurred for a trustee or trustee's counsel. Mr. Paroly adds that within 30 days after the date of the hearing on the Reorganized Debtors' request for hearing on their request for final decree closing their Chapter 11 cases, they will have paid all required fees under 28 U.S.C. 1930. Headquartered in Dearborn, Mich., Meridian Automotive Systems Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. The Hon. Mary Walrath has confirmed Meridian's Revised Fourth Amended Reorganization Plan on Dec. 6, 2006. The company emerged from chapter 11 protection on Dec. 29, 2006. (Meridian Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MERRILL LYNCH: S&P Slashes Ratings on Two Certs. Series to BB- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings to 'BB-' from 'A-' on Merrill Lynch Financial Assets Inc.'s BMCC corporate centre pass-through certificates series 2000-BMCC and commercial mortgage pass-through certificates series 2002-BC2P. Both ratings remain on CreditWatch with negative implications. The rating actions reflect the Sept. 24, 2007, lowering of Bell Canada's long-term corporate credit rating (BB-/Watch Neg/--). The mortgage loans backing these transactions are secured by buildings that are 100% leased to Bell Canada. MGM MIRAGE: Infinity World Extends Tender Offer to October 5 ------------------------------------------------------------ Infinity World Investments LLC has extended its cash tender offer to purchase up to 14.2 million shares of common stock of MGM MIRAGE at $84 per share, until 11:59 p.m., New York City time, Friday, Oct. 5, 2007. As reported in the Troubled Company Reporter on Aug. 29, 2007, Infinity World has commenced a cash tender offer, pursuant to definitive agreements between Dubai World and MGM MIRAGE dated Aug. 21, 2007, in which the companies agreed to form a 50/50 joint venture, CityCenter Holdings LLC, and under which an affiliate of Dubai World will acquire a significant minority equity position in MGM MIRAGE. All other terms and conditions of the tender offer remain unchanged. As of the close of business on Sept. 24, 2007, stockholders of MGM MIRAGE had tendered 730,271 shares of MGM MIRAGE common stock. MacKenzie Partners Inc. is acting as the Information Agent and Mellon Investor Services LLC is serving as the Depositary in connection with the offer. For questions regarding this offer, investors may call MacKenzie Partners collect at (212) 929-5500 or toll free at (800) 322-2885. About Infinity World and Dubai World Infinity World Investments LLC is a wholly-owned subsidiary of Dubai World. Dubai World is a major investment holding company with a portfolio of businesses that includes DP World, Jafza, Nakheel, Dubai Drydocks, Maritime City, Istithmar, Kerzner, One & Only, Atlantis, Barney's, Island Global Yachting, Limitless, Inchcape Shipping Services, Tejari, Technopark and Tamweel. The Dubai World Group has more than 50,000 employees in over 100 cities around the globe. The group also has real estate investments in the US, the UK and South Africa. In the last five years, Dubai World has developed 80,000 luxury residential villas and apartments and approximately three million square feet of retail space. About MGM MIRAGE Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled Company Reporter on Aug. 27, 2007, Moody's Investors Service changed MGM MIRAGE's rating outlook to stable from negative and affirmed all existing ratings, including its "Ba2" corporate family rating and speculative grade liquidity rating of SGL-3. NOMURA ASSET: Poor Performance Cues S&P's Default Rating -------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes from Nomura Asset Acceptance Corp. Alternative Loan Trust Series 2006-S2. The downgrades reflect the poor performance of the collateral pool. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete write-down of the overcollateralization for this deal, as well as a $2.66 million principal write-down to class B-5. S&P lowered its rating on this class to 'D' as a result. As of the August 2007 distribution period, total delinquencies were 13.28%, and severe delinquencies were 7.37%. Although the transaction is 14 months seasoned, it has seen approximately 6.21% in cumulative realized losses to date. The outstanding pool factor is 64.20%. Subordination, O/C, and excess interest cash flows provide credit support for this transaction. The collateral consists of 30-year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Nomura Asset Acceptance Corp. Alternative Loan Trust Series 2006-S2 Rating ------ Series Class To From ------ ----- -- ---- 2006-S2 B-1 CCC B 2006-S2 B-5 D CCC NTELOS HOLDINGS: Quadrangle Capital to Acquire CVC's Stake ---------------------------------------------------------- Quadrangle Capital Partners II LP, a private equity fund affiliated with Quadrangle Group LLC, has agreed to acquire, subject to regulatory approvals, all of the shares of NTELOS Holdings Corp. common stock owned by Citigroup Venture Capital Equity Partners, a private equity fund managed by an affiliate of Court Square Capital Partners, and certain affiliated limited partnerships. With this acquisition, private equity funds affiliated with Quadrangle Group LLC will own approximately 27% of NTELOS's outstanding common stock. "We are grateful for the support CVC has shown us over the years," James S. Quarforth, NTELOS chief executive officer, president and chairman of the board of directors, commented. "We are also pleased with the level of confidence Quadrangle is demonstrating in NTELOS by having an additional fund invest in our company." Bear, Stearns & Co. Inc. and Lehman Brothers acted as financial advisors to Court Square Capital with regard to the transaction. About Quadrangle Group LLC Quadrangle Group LLC -– http://www.quadranglegroup.com/-- invests in media and communications companies through separate private and public investment strategies and in debt securities across all industries through a debt investment program. Quadrangle Capital Partners represents its private equity group that specializes in the media and communications industries. All investment strategies seek to maximize value by leveraging the investment teams' extensive experience, knowledge and industry relationships. About NTELOS Holdings Corp. Headquartered in Waynesboro, Virginia, NTELOS Holdings Corp. (NASDAQ:NTLS) -- http://www.ntelos.com/-- is a provider of wireless and wireline communications services to consumers and businesses in Virginia and West Virginia under the NTELOS brand name. The company's wireless operations consist of an NTELOS- branded retail business and a wholesale business that it operates under a contract with Sprint Spectrum L.P. Holdings Corp. holds digital wireless personal communication services licenses to operate in 29 basic trading areas, and has deployed a network using code division multiple access technology in 20 basic trading areas. As of Dec. 31, 2006, the company's wireless retail business had approximately 367,000 NTELOS-branded subscribers. * * * As reported in the Troubled Company Reporter on June 20, 2007, Standard & Poor's Ratings Services raised NTELOS Holdings Corp.'s corporate credit ratings to 'BB-' from 'B'. The outlook is stable. NUTRITIONAL SOURCING: Court OKs FTI as Panel's Financial Advisor ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave the Official Committee of Unsecured Creditors of Nutritional Sourcing Corp. and its debtor-affiliates permission to retain FTI Consulting Inc. as their financial advisors. As reported in the Troubled Company Reporter on Sept. 20, 2007, FTI is expected to: a. assist the Committee in the review of financial related disclosures required by the Court, including the schedules of assets and liabilities, the statement of financial affairs and monthly operating reports; b. assist the Committee with information and analyses required pursuant to the Debtors' debtor-in-possession financing including, the preparation for hearings regarding the use of cash collateral and DIP financing; c. assist with a review of the Debtors' short-term cash management procedures; d. assist with a review of critical employee benefit and vendor programs; e. assist with a review of the Debtors' performance of cost/benefit evaluations with respect to the affirmation or rejection of various executory contracts and leases; f. assist in the review of financial information distributed by the Debtors to creditors and others, including cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; g. attend meetings and assist in discussions with the Debtors, potential investors, banks, other secured lenders, the Committee and any other official committees organized in the chapter 11 proceedings, the U.S. Trustee, other parties-in- interest and professionals hired, as requested; h. assist in the evaluation of the asset sale process and bids received; i. assist in the review and preparation of information and analysis necessary for the confirmation of a plan in the chapter 11 proceedings; j. assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; k. render litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the Committee; and l. render other general business consulting or other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in the proceeding. The customary hourly rates of FTI are: Designation Hourly Rate ----------- ----------- Senior Managing Directors $615 - $675 Directors/Managing Directors $450 - $590 Consultants/Senior Consultants $225 - $420 Administration/Paraprofessionals $95 - $180 The Committee assured the Court that FTI does not represent any entity having adverse interest in the case and is therefore eligible to represent the Committee. The firm can be reached at: FTI Consulting Inc. 3 Times Square, 11th Floor New York, NY 10036 Tel: (212) 247-1010 Fax: (212) 841-9350 http://www.fticonsulting.com/ Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and operates supermarkets and video rental shops in Puerto Rico and the US Virgin Islands. The company and two affiliates, Pueblo International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11 protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038 through 07-11040). Kay Scholer LLC represents the Debtors in their restructuring efforts. Pepper Hamilton LLP serves as their Delaware counsel. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. NUTRITIONAL SOURCING: Court Okays Skadden Arps as Panel's Counsel ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware gave the Official Committee of Unsecured Creditors of Nutritional Sourcing Corp. and debtor-affiliates' bankruptcy cases, authority to retain Skadden, Arps, Slate, Meagher & Flom LLP as counsel. The Official Committee of Unsecured Creditors selected Skadden, Arps because of the law firm's familiarity with the Debtors' cases and its extensive knowledge in the field of debtor's and creditor's rights, and in other fields of law that may be involved in Debtors' cases. As the Committee's counsel, the firm is expected to: a) advise the Committee regarding its rights, powers and duties in these cases; b) assist and advise the Committee in its consultations with the Debtors regarding the administration of these cases; c) assist and advise the Committee in its consultations with the Debtors regarding the sale of assets; d) assist the Committee in analyzing claims of the Debtors' creditors and in negotiating with such creditors; e) assist with the Committee's investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and of the operation of their businesses; f) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, the terms of a chapter 11 plan or plans for the Debtors; g) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in these cases; h) represent the Committee at hearings and proceedings; i) review and analyze applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety; j) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interest and objectives; and k) perform such other services as may be required and are deemed to be in the interests of the Committee with the Committee's powers and duties as set forth in the Bankruptcy Code. The firm's compensation rates are: Professional Hourly Rate ------------ ----------- Partners $680 - $950 Counsel $640 - $765 Associates $340 - $625 Legal Assistants $170 - $265 Support Staff $170 - $265 Mr. Mark S. Cheni, Esq., a member of Skadden, Arps assured the Court that his firm does not hold any interest adverse to the Debtors' estate, and ia a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Mr. Poorman can be reached at: Mark S. Cheni, Esq. Skadden, Arps, Slate, Meagher & Flom LLP One Rodney Square P.O. Box 636 Wilmington, Delaware 19899 Tel: (302) 6512-3000 http://www.skadden.com/ Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and operates supermarkets and video rental shops in Puerto Rico and the US Virgin Islands. The company and two affiliates, Pueblo International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11 protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038 through 07-11040). Kay Scholer LLC represents the Debtors in their restructuring efforts. Pepper Hamilton LLP serves as their Delaware counsel. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. OGLEBAY NORTON: Harbinger Won't Extend Tender Offer for Shares -------------------------------------------------------------- Harbinger Capital Partners Master Fund I Ltd. and Harbinger Capital Partners Special Situations Fund L.P. will not extend its Offer to acquire all of the outstanding Shares of Oglebay Norton Company for $31 per Share in cash plus one Contingent Value Right per Share. The Offer will, therefore, expire at 5:00 PM, New York City time Friday, Sept. 28, 2007. As reported in the Troubled Company Reporter on Aug. 9, 2007, Harbinger Capital Partners commenced a tender offer to acquire all of the outstanding shares of common stock, par value $0.001 per share, of Oglebay Norton for $31 per share in cash plus one Contingent Value Right per share. Harbinger Capital Partners owns 2,621,201 Oglebay Norton Shares, representing approximately 18.1% of the company's outstanding shares. The Offer will be dependent upon, Harbinger Capital Partners receiving shares which, when combined with its current holding, represent at least a majority of the total outstanding Shares on a fully diluted basis. About Harbinger Capital Partners Located in New York City, the Harbinger Capital Partners investment team manages in excess of $12 billion in capital as of Aug. 1, 2007, through two complementary strategies. Harbinger Capital Partners Master Fund I, Ltd. is focused on restructurings, liquidations, event-driven situations, turnarounds and capital structure arbitrage, including both long and short positions in highly leveraged and financially distressed companies. Harbinger Capital Partners Special Situations Fund, L.P. is focused on medium to long term, control oriented and frequently less liquid distressed investments, with flexibility to use other investment strategies and types of securities when attractive opportunities arise. About Oglebay Norton Company Based in Cleveland, Ohio, Oglebay Norton Company (OGBY.PK) -- http://www.oglebaynorton.com/-- provides essential minerals and aggregates to a broad range of markets, from building materials and environmental remediation to energy and industrial applications. * * * As reported in the Troubled Company Reporter on July 31, 2007, Standard & Poor's Ratings Services revised its CreditWatch implications to negative from developing on Oglebay Norton Co., which has a 'B' corporate credit rating. ORLANDO CITYPLACE: Holding Public Sale of Assets on November 29 --------------------------------------------------------------- Orlando CityPlace LLC and its debtor-affiliates will be selling their property at an auction set for Nov. 29, 2007, after the U.S. Bankruptcy Court for the Middle District of Florida approved their proposed asset sale procedure, Bill Rochelle of Bloomberg News reports. Hearing on the results of the sale will be conducted at the end of the public sale, Bloomberg says. To participate in the auction, bids must be submitted on or before Nov. 14. Based in Orlando, Florida, Orlando CityPlace LLC and its affiliates -- http://www.lexingtonorlando.com/-- develop real estate property. The Debtors own the Lexington Hotel and District Five Restaurant on Orlando. The company and its affiliates filed for Chapter 11 protection on July 23, 2007 (Bankr. M.D. Fla. Lead Case No. 07-03159). Jimmy D. Parrish, Esq., Mariane L. Dorris, Esq., and R. Scott Shuker, Esq., at Latham, Shuker, Eden & Beaudine, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, Orlando CityPlace, LLC listed total assets of $55,000,000, and total debts of $44,000,000, while O.C.P. Corner, LLC listed total assets of $2,000,000 and total debts of $1,700,000. Orlando CityPlace II, LLC listed total assets and debts of $1 million to $100 million. PATMAN DRILLING: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Patman Drilling International, Inc. fka Patman Brothers Drilling, L.P. fka M.P.P.P. Acquisition Corporation P.O. Box 730, 201 North Highway 174 Rio Vista, TX 76093 Bankruptcy Case No.: 07-34622 Type of business: The Debtor owns and operates oil drilling rigs. Chapter 11 Petition Date: September 25, 2007 Court: Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtor's Counsel: Gerrit M. Pronske, Esq. Pronske & Patel, P.C. 1700 Pacific Avenue, Suite 2260 Dallas, TX 75201 Tel: (214) 658-6500 Fax: (214) 658-6509 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 ------ --------------- ------------ Shandong Afthonia, Inc. Trade Debt $2,425,046 Attention: Tim Moy 3020 Legacy Drive, Suite 100-278 Plano, TX 75023 Kirkpatrick & Lockhart, Legal Fees $283,679 Preston, Gates, Ellis, L.L.P. Attention: Julie Lennon 2828 North Harwood Street, Suite 1800 Dallas, TX 75201-2139 All Star Pump & Supply Trade Debt $159,507 Attention: Lowell Martin P.O. Box 368 541 South Main Street Cross Plains, TX 76443 H.B. Rentals Trade Debt $132,381 Applied Machinery Corporation Trade Debt $119,900 Vortex Fluid Systems, Inc. Trade Debt $104,766 Elliot Electric Supply Trade Debt $93,501 Rexel Electrical & Datacom Trade Debt $91,883 Pro Tornado Trucking, Inc. Trade Debt $77,827 T.K. Stanley, Inc. Trade Debt $77,795 O'Drill/M.C.M. Trade Debt $76,130 F.B. McIntire Equipment Co., Trade Debt $71,607 Inc. Dynasty Transportation Trade Debt $69,501 Matrix International, L.P. Trade Debt $66,970 Pason Systems U.S.A. Corp. Trade Debt $56,915 Fluid End Sales Trade Debt $56,451 R.&H. Supply, Inc. Trade Debt $52,809 Wilson Trade Debt $49,132 Murphy Scott Resources, L.P. Trade Debt $41,752 Allis-Chalmers Rental Tools Trade Debt $39,360 PIERRE FOODS: Covenant Violation Cues S&P to Cut Rating to B ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Cincinnati, Ohio-based Pierre Foods Inc., including its corporate credit rating to 'B' from 'B+'. At the same time, Standard & Poor's placed the ratings on CreditWatch with negative implications, meaning that the ratings could be lowered further or affirmed following the review. About $365 million of total debt was outstanding at June 2, 2007, excluding operating lease obligations. "The downgrade and CreditWatch listing follow Pierre Foods' announcement that it is in violation of its consolidated leverage ratio covenant under its bank credit agreement as of the end of its fiscal 2008 second quarter," said Standard & Poor's credit analyst Rick Joy. "The company's results have been negatively impacted by sharply higher raw materials costs, manufacturing inefficiencies, and certain costs related to its acquisition of Zartic Inc. in December 2006." Pierre Foods is currently seeking a bank waiver and amendment as the company does not have access to its $40 million revolving credit facility. While Pierre Foods currently has adequate cash on its balance sheet, Standard & Poor's is concerned about the company's liquidity and its ability to obtain a waiver and bank amendment in a timely and cost-effective manner given current market conditions. "We will closely monitor Pierre Foods' liquidity, as well as its efforts to obtain a waiver and amend its financial covenants over the near term," said Mr. Joy. If Pierre Foods is unable to secure a covenant amendment and waiver in the very near term, Standard & Poor's would likely lower the ratings further. Standard & Poor's will review operating performance expectations for the company, along with expected covenant cushion pursuant to an amendment, before resolving the CreditWatch. PMA CAPITAL: Good Performance Cues Fitch to Lift Ratings -------------------------------------------------------- Fitch Ratings upgraded the Issuer Default Rating and senior debt rating of PMA Capital Corp. to 'BBB-' from 'BB-' and to 'BB+' from 'B+' respectively. Fitch also upgraded the Insurer Financial Strength ratings of the three active primary insurance subsidiaries collectively referred to as PMA Insurance Group: Pennsylvania Manufacturers Association Insurance Company; Pennsylvania Manufacturers Indemnity Company; and Manufacturers Alliance Insurance Company to 'BBB+' from 'BBB-.' Lastly, Fitch affirmed the 'B-' IFS rating of PMA Capital Insurance Company's run-off reinsurance subsidiary. All rating outlooks are stable. Fitch's upgrade of PMA's ratings reflect a restoration of franchise value, a significant decrease in obligations at the run off operations, and an improved holding company capital structure and liquidity profile. These factors have strengthened PMA's competitive position and thus improved the organization's risk profile. Offsetting these positives is the uncertainty that remains with the run-off of PMA Re and Caliber One operations, below peer average profitability, concentration in Pennsylvania worker's compensation market, and competitive operating environment in chosen markets. The affirmation of PMA Re incorporates Fitch's expectation that a relatively smooth and orderly run-off of operations will continue. Fitch favorably notes that $28 million in commutations have taken place year-to-date and that liabilities have declined 68% since being placed into run-off in November 2003. Any material adverse reserve development at PMA Re could negatively impact the ratings of the ongoing operations. Fitch expects that holding company leverage will be maintained at or near current levels and that operating coverage will not deteriorate below 1.5 times. Fitch anticipates that the convertible debt will be retired prior to its first put date in 2009. As of June 30, 2007, PMAIG had net premiums written of $207.7 million, compared with $199 million for the same period in the prior year and a GAAP combined ratio of 99.9%, compared with a 101.7% prior year. Fitch has taken rating actions of PMA and its subsidiaries as: PMA Capital Corp. -- Issuer Default Rating upgraded to 'BBB-' from 'BB-', Outlook Stable; -- $54.9 million senior notes, 8.5% due June 15, 2018, upgraded to 'BB+' from 'B+', Outlook Stable; -- $13 million convertible debt, 6.5% due Sept. 30, 2022, upgraded to 'BB+' from 'B+', Outlook Stable. Manufacturers Alliance Insurance Co. -- Insurer Financial Strength rating upgraded to 'BBB+' from 'BBB-', Stable Outlook. Pennsylvania Manufacturers Association Insurance Co. -- Insurer Financial Strength rating upgraded to 'BBB+' from 'BBB-', Stable Outlook. Pennsylvania Manufacturers Indemnity Co. -- Insurer Financial Strength rating upgraded to 'BBB+' from 'BBB-', Stable Outlook. PMA Capital Insurance Company -- Insurer Financial Strength rating affirmed at 'B-', Outlook Stable. RADNOR HOLDINGS: Court Extends Solicitation Period to January 14 ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware further extended Radnor Holdings Corp. and its debtor-affiliates' exclusive period to solicit acceptances of their plan of reorganization until Jan. 14, 2008. As the reported in Troubled Company Reporter on Sept. 11, 2007, the Debtors reminded the Court that they have filed a Joint Plan of Liquidation and Disclosure Statement on April 30, 2007. They requested an extension of their plan solicitation period because they, along with their advisors, are continuing to negotiate and finalize the terms of the plan with the asset sale purchaser and the Official Committee of Unsecured Creditors, ultimately confirming the plan without prejudicing any party of interest. The Debtors related that they have made significant, good-faith progress in resolving many of the issues facing the Debtors' estates, including: (i) certain disputes among the Debtors, the Committee and Tennenbaum Capital Partners, LLC regarding, among other things, the sale and the amount and validity of claims filed by Tennenbaum on behalf of itself and its affiliates Special Value Expansion Fund, LLC and Special Value Opportunities Fund, LLC; (ii) the ultimate disposition of the Debtors' assets through a sale; and (iii) the priority and payment of millions of dollars in professional fees and expenses that have been asserted to date by the Committee's professionals. Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Lead Case No. 06-10894). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., Sarah E. Pierce, Esq., Timothy R. Pohl, Esq., Patrick J. Nash, Jr., Esq., and Rena M. Samole, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represent the Debtors. Donald J. Detweiler, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP, serve the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RAIT CRE: Fitch Affirms BB Rating on $35 Mil. Class J Notes ----------------------------------------------------------- Fitch affirmed all classes of RAIT CRE CDO I, Ltd. and RAIT CRE CDO I LLC as: -- $200,000,000 class A-1A at 'AAA'; -- $275,000,000 class A-1B at 'AAA'; -- $90,000,000 class A-2 at 'AAA'; -- $110,000,000 class B at 'AA'; -- $41,500,000 class C at 'A+'; -- $25,000,000 class D at 'A'; -- $16,000,000 class E at 'A-'; -- $22,000,000 class F at 'BBB+'; -- $20,500,000 class G at 'BBB'; -- $18,000,000 class H at 'BBB-'; -- $35,000,000 class J at 'BB' RAIT CRE CDO I is a $1,018,000,000 revolving commercial real estate cash flow collateralized debt obligation that closed on Nov. 7, 2006. As of the Aug. 20, 2007 trustee report and based on Fitch categorization, the CDO was substantially invested as follows: commercial mortgage whole loans/A-notes (71.1%), CRE mezzanine loans (26.5%), CRE preferred equity securities (5.2%), and cash (1.9%). The CDO is also permitted to invest in real estate investment trust debt. The portfolio is selected and monitored by RAIT Partnership, LP. RAIT CRE CDO I 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 November 2011. RAIT Financial Trust (NYSE: RAS), formerly RAIT Investment Trust, is a real estate investment trust focused on the midsized commercial real estate industry. In addition to managing CDOs backed by commercial real estate loans, RAIT's activities include originating secured and unsecured financing for owners of commercial real estate, including senior debt, mezzanine debt, preferred equity and trust preferred securities. Additionally, RAIT invests in the trust preferred CDOs of its subsidiary, Taberna Capital Management LLC. As of Aug. 31, 2007, Taberna had nine REIT trust preferred CDOs and one European REIT/REOC CDO outstanding. RAIT's senior management team has over 25 years commercial real estate investment experience and has established industry networks with a wide range of brokers with whom they conduct business. RAIT CRE CDO I became effective on Aug. 20, 2007. As of the effective date, the as-is poolwide expected loss has increased to 33% from 28.250% at close. The resulting 5.375% of cushion represents below average reinvestment flexibility versus other CRE CDOs. The increased PEL is attributable to the addition of 26 new loans, which have a higher weighted average expected loss than the weighted average expected loss at closing. Generally, these new loans are highly leveraged whole loans secured by assets in a state of transition. Further, 11 loans, which had a weighted average expected loss well below the weighted average expected loss at close, were repaid and are no longer in the CDO. Additionally, the pool's weighted average debt service coverage ratio is 0.90x. The majority of the individual loans with lower than 1x 'as is' stressed DSCRs either were not structured with debt service reserves or have depleted their interest reserves. Fitch raised the volatility on these loans to account for the associated risk. Adjustments were also made to account for a sponsor concentration with over 17.5% of the collateral owned by affiliates of the same sponsor. Next, RAIT reports one loan (0.29% of the pool) as 30 days delinquent. Lastly, although still considered diverse with a Loan Diversity Index of 221, the pool is more concentrated than at close when the LDI was 165. The majority of the collateral is comprised of whole loans/A- notes. However, the majority of these loans are secured by transitional assets. The successful refinancing of these assets is tied to the actualization of the borrower's business plans. As of the effective date, the CDO is within all property type covenants. Substantially all of the loans are secured by traditional property types. Multifamily loans continue to comprise the largest percentage of assets in the pool at 43.1%, up from the closing percentage of 41.6%. Office properties are the second largest percentage at 32.3%. The CDO is also within all of its geographic location covenants with the highest percentage of assets located in Florida at 17%. The portfolio continues to be geographically diverse. The overcollateralization and interest coverage ratios of all classes have remained above their covenants, as of the Aug. 20, 2007 effective date trustee report. The ratings of the classes S, A-1, A-2, and B 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 C, D, E, F, G, H, and J notes address the likelihood that investors will receive ultimate interest, as well as the aggregate outstanding amount of principal by the stated maturity date. 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, quarterly, or semi-annually. RANGE RESOURCES: Moody's Lifts Corporate Family Rating to Ba2 ------------------------------------------------------------- Moody's Investors Service upgraded Range Resources corporate family rating from Ba3 to Ba2 and the ratings for existing senior subordinated notes from B1 (LGD 5; 76%) to Ba3 (LGD 5; 75%). Simultaneously, Moody's rated the new $200 million senior subordinated notes offering Ba3 (LGD 5; 75%). The probability of default rating is also upgraded from Ba3 to Ba2. The outlook is stable. The upgrade to Ba2 reflects RRC's consistently solid operating performance evidenced by consecutive quarterly production growth since 2003 combined with four years of reserve growth at costs that compare favorably to the peer group of similarly rated exploration and production companies. Through a combination of amply equity funded acquisitions and robust organic reserve growth, RRC has adjusted its property portfolio and built a reserve scale and profile in line with a Ba2 rating while maintaining an acceptable level of leverage on the proven developed reserves. Since 2004, Range has issued approximately $800 million of common equity to help fund about $1.5 billion of acquisitions, with the most recent offering of $280 million of common stock helping to fund more than $300 million of acquisitions through the first half of 2007. The Ba2 remains restrained by a production base that is still on the lower end of the peer group, escalating reserve replacement costs, the growing contribution of the more capital intensive unconventional resources plays and a very aggressive drilling program that is likely to result in the outspending of internal cash flow through the remainder of the year and 2008. Currently, leverage of approximately $5.48/boe of proven developed reserves is acceptable for the Ba2 rating assuming ongoing commodity price support and margin strength. However, if the funding of the aggressive drilling program causes leverage on PD reserves to trend towards the $6/boe range without any visible means to decline back towards the $5/boe range in the near-term, the outlook could be pressured. In the past year, RRC has been through a series of transactions that repositioned its property portfolio to become increasingly focused on the unconventional resource and deeper shale plays. As part of this process, RRC significantly expanded its position in the Barnett Shale through its acquisition of Stroud Energy in June of 2006 for $465 million and divested its Gulf of Mexico properties and Austin Chalk (from Stroud) interests. Recently, the company has expanded its interests in the tight gas sands play in the Nora filed and it is actively drilling the Devonian Shale in the Nora field. With a portfolio now focused on the Southwest, Gulf Coast and Appalachia regions and significant hedges in place, RRC believes it is well-positioned to continue mounting sequential quarterly production growth with competitive cash-on-cash returns through an increased inventory of drilling prospects. While the new plays offer upside potential, Moody's views them as more capital intensive due to their complexity and generally high decline rates. The ratings upgrade acknowledges the existing durable productive base Range has that will offer support as it progresses across the plays. However, if the more capital intensive properties become the dominant part of the overall productive and reserve base, it will be important for the company's leverage and cash on cash returns not to deteriorate in order to maintain the Ba2 rating. The company funded first half acquisitions and capex spending primarily through a combination of $276 million in cash flow from operations, $235 million in asset divestitures, and $290 million of equity issuance. While RRC may increase borrowings under its revolver to fund the growth in the second half of 2007, Moody's expects it to maintain a balanced financing strategy in order to prevent escalation in leverage on PD reserves. Despite the expectation of outspending cash flows over the remainder of 2007 and into 2008, RRC's liquidity profile remains very solid. Pro-forma for the notes offering, RRC is expected to have $600 million of availability under its $900 million credit facility, and should be well within its maintenance covenant requirements which ensures accessibility at least over the next year. The stable outlook is supported by a competitive cost structure and very robust cash-on-cash returns buttressed in recent quarters by the roll-off of weak hedges and RRC's ability to capitalize on hedges in place at higher prices. In order to offset rising reserve replacement costs, it will be important for RRC to continue generating strong returns and cash flows. The outlook could be pressured if RRC's leverage on PD reserves escalates to the low $6 range and appears likely to remain there. The ratings could also be pressured if RRC is unable to generate the targeted growth through its aggressive drilling program or if reserve replacement metrics escalate increasing the full-cycle cost structure and pressuring cash-on-cash returns. Range Resources Corporation is headquartered in Fort Worth, Texas, and is engaged in the exploration, development and acquisition of oil and gas properties, primarily in the Southwestern, Appalachian and Gulf Coast regions of the United States. RED HAT: Earns $18.2 Million in Second Quarter Ended Aug. 31 ------------------------------------------------------------ Red Hat Inc. disclosed Tuesday financial results for its second fiscal quarter ended Aug. 31, 2007. Net income for the quarter was $18.2 million, compared with $16.2 million for the prior quarter and $11.0 million in the year ago quarter. Non-GAAP adjusted net income for the quarter was $36.9 million, after adjusting for stock compensation and tax expense. This compares to non-GAAP adjusted net income of $33.7 million in the prior quarter and $24.5 million in the year ago period. Total revenue for the quarter was $127.3 million, an increase of 28.0% from the year ago quarter and 7.0% from the prior quarter. Subscription revenue was $109.2 million, up 29% year-over-year and 6.0% sequentially. Non-GAAP operating cash flow totaled $63.7 million for the quarter, up 43.0% from the year ago quarter and 22.0% sequentially. Total cash, cash equivalents and investments as of Aug. 31, 2007, were $1.3 billion. At quarter end, Red Hat's total deferred revenue balance was $377.0 million, an increase of 33.0% year-over-year and 4.0% sequentially. "We are pleased to report another solid quarter of strong revenues. I am particularly pleased with the steady improvement in operating margin and operating cash flow. These performance improvements come at a time when we are continuing to invest heavily in our processes and systems as we scale globally," stated Charlie Peters, executive vice president and chief financial officer of Red Hat. "We continue to see robust demand for our open source solutions and are encouraged by our market position." In addition, Red Hat Inc. disclosed that its Board of Directors had authorized the continuation of the company's stock and debenture repurchase program. Under the program, the company is authorized to repurchase in aggregate up to $250 million of the company's common stock and in aggregate up to $75 million of the company's 0.5% Convertible Senior Debentures due 2024. Repurchased common stock will be available for use in connection with the company's equity compensation plans and for other corporate purposes. Repurchased debentures will be retired and canceled. The repurchase program will be funded using the company's working capital and may be suspended or discontinued at any time. Red Hat had approximately 193.9 million shares of common stock outstanding as of Sept. 21, 2007. At Aug. 31, 2007, the company's consolidated balance sheet showed $1.92 billion in total assets, $1.02 billion in total liabilities, and $898.5 million in total stockholders' equity. About Red Hat Headquartered in Raleigh, N.C., Red Hat Inc. (NYSE: RHT) -- http://www.redhat.com/-- is an open source solutions provider, with over 50 offices spanning the globe. CIOs have ranked Red Hat first for value in Enterprise Software for three consecutive years in the CIO Insight Magazine Vendor Value study. Red Hat provides high-quality, low-cost technology with its operating system platform, Red Hat Enterprise Linux, together with applications, management and Services Oriented Architecture solutions, including the JBoss Enterprise Middleware Suite. Red Hat also offers support, training and consulting services to its customers worldwide. * * * Red Hat Inc. still carries Standard & Poor's 'B+' corporate credit rating last placed on Aug. 21, 2006. Outlook is Stable. SACO I: S&P Lowers Ratings on 26 Classes of Securities ------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 26 classes of mortgage-backed securities issued by eight SACO I Trust series. The downgrades reflect the deteriorating performance of the collateral pools as monthly net losses continue to significantly outpace monthly excess interest cash flows, resulting in principal write-downs to the overcollateralization for these deals. Consequently, these classes experienced principal write-downs: B-4 from series 2005-9, II-B-3 and II-B-4 from series 2006-5, B-3 and B-4 from series 2006-6, B-4 from series 2006-7, B-4 from series 2005-WM2, and B-4 from 2005-WM3. The principal balances for class II-B-4 from series 2006-5 and class B-4 from series 2006-6 have been written down to zero. As of the August 2007 distribution period, total delinquencies ranged from 10.64% (series 2005-8) to 22.30% (series 2005-WM2), while cumulative realized losses ranged from 6.56% (series 2005-8) to 10.86% (series 2005-WM3). Seasoning for these transactions ranged from 13 months to 22 months, with outstanding pool factors of about 65% or less. Subordination, O/C, and excess interest cash flows provide credit support for these transactions. The collateral consists of 30- year, fixed-rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered SACO I Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-8 B-2 BB BB+ 2005-8 B-3 B- B 2005-8 B-4 D CCC 2005-10 I-B-4 CCC B 2005-10 II-B-1 BBB- BBB+ 2005-10 II-B-2 B+ BB 2005-10 II-B-3 CCC B 2005-WM2 B-3 B- B 2005-WM2 B-4 D CCC 2005-WM3 B-3 CCC B 2005-WM3 B-4 D CCC 2006-4 M-4 A- A+ 2006-4 M-5 BB+ BBB+ 2006-4 M-6 B BB 2006-4 B-1 CCC B 2006-4 B-2 CCC B 2006-4 B-4 D CCC 2006-5 I-B-3 CCC B 2006-5 II-B-1 CCC B 2006-5 II-B-3 D CCC 2006-5 II-B-4 D CCC 2006-6 M-6 CCC B 2006-6 B-3 D CCC 2006-6 B-4 D CCC 2006-7 M-6 CCC B 2006-7 B-4 D CCC SANMINA-SCI: S&P Affirms Ratings and Revises Outlook to Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on San Jose, California-based Sanmina-SCI Corp. to negative from stable, as a result of continued operating weakness and increasing leverage. The corporate credit and senior unsecured ratings are affirmed at 'B+', and the subordinated debt rating is affirmed at 'B-'. Sanmina's EBITDA margin slipped to 2.3% in the June quarter from 3.4% in fiscal 2006. Expectations are for earnings to continue at depressed levels for the near term. Weakness is attributed to volume declines and production inefficiencies at the company's printed circuit board and enclosures businesses. Although debt levels have been flat for the past four quarters and are expected to decline over the next two quarters through working capital contraction and asset sales, leverage statistics will remain high for the rating, with debt to EBITDA at more than 6x as of June 30, 2007. "The ratings reflect continued erosion of profit measures, diminished liquidity, and high leverage," said Standard & Poor's credit analyst Lucy Patricola. "These concerns are partially offset by the company's top-tier business position in low-volume, complex electronic manufacturing services end markets and its top-tier OEM customer base." Sanmina is a leading provider of electronic manufacturing services for the computing, telecommunications, and data communications industries, generating sales of about $10.6 billion for the 12 months ended June 30, 2007. The company had about $2 billion in lease-adjusted debt, including outstandings under accounts securitization programs, as of June 2007. SOLUTIA INC: Poised to Emerge After Chapter 11 Settlement --------------------------------------------------------- Solutia Inc. has secured the support of all of the major constituents in its Chapter 11 cases for a consensual plan of reorganization. "I am extremely pleased to announce that we have reached a comprehensive settlement with all of the major constituents in our bankruptcy case that will form the basis for a revised consensual plan of reorganization that will be filed within the next few days," said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. "The revised plan will position Solutia to emerge from bankruptcy by the end of this year as a financially healthy organization well-positioned to create significant value for its stakeholders." "The revised plan will provide for $250 million of new investment in reorganized Solutia through a backstopped rights offering to certain creditors, as well as a reallocation of the legacy liabilities that Solutia assumed when it was spun off. Importantly, it also will provide for a resolution of all the litigation between the settling parties including a potential appeal by our noteholders, the adversary proceeding filed by our current equity holders against Monsanto and Pharmacia, and related objections to the Monsanto and Pharmacia claims." The settlement and revised plan is supported by the Ad Hoc Committee of Solutia Noteholders, the Official Committee of Equity Security Holders, the Official Committee of Unsecured Creditors, Monsanto Company, Pharmacia Corporation, the Official Committee of Retirees, and the Ad Hoc Committee of Trade Creditors. As part of the settlement, the following parties executed agreements earlier this month in support of the settlement and revised plan of reorganization: Monsanto, noteholders controlling at least $300.1 million in principal amount of the 2027/2037 notes, the official committee of general unsecured creditors, the official committee of equity security holders, the ad hoc trade committee, and Solutia. The support agreements became effective on September 6, 2007. Solutia will update its disclosure statement and plan of reorganization to reflect the terms of the settlement, and anticipates filing these documents with the U.S. Bankruptcy Court for the Southern District of New York promptly. An October 10, 2007 court date has been set seeking approval of the disclosure statement. Once approved, the disclosure statement will be sent to Solutia's creditors and equity interest holders for voting purposes. Following the voting process, the court will hold a hearing to approve or "confirm" the plan. "Since beginning the chapter 11 process, we have concentrated on the implementation of a reorganization strategy focused on enhancing our financial and operating performance, changing our portfolio so that it consists of high potential businesses, and achieving a reallocation of legacy liabilities. I am pleased to say that the men and women of Solutia have been very successful in executing this strategy and, as a result, we are able to provide enhanced recoveries for all creditor constituencies, including current equity holders," added Quinn. "The revised plan also situates us well to deliver the fourth component of our strategy for rehabilitating our company -- exiting bankruptcy with a competitive capital structure." James M. Sullivan, chief financial officer of Solutia, noted, "Despite the recent turbulence in the debt capital markets, I am confident that Solutia will be able to secure the necessary exit financing package to consummate the revised plan. We have improved our earnings, reduced our risk profile, gained the infusion of new money investment through the rights offering, and will propose a capital structure with moderate leverage. We are moving forward in earnest with the exit financing process and plan to put financing in place consistent with our emergence timeframe." Major Terms Underlying Settlement and Reorganization Plan (1) $250 Million of New Investment The revised plan will provide for $250 million of new investment in reorganized Solutia. This investment will be in the form of a rights offering to the noteholders and general unsecured creditors, who will be given the opportunity to purchase shares of the new common stock on a pro rata basis at a 33.3% discount to the implied equity value. The rights offering will be backstopped by a group of Solutia's creditors (i.e. they will purchase any shares not bought by other creditors). For this commitment they will receive a fee of 2.50% and an allocation of 15% of the rights offering. The $250 million generated as a result of the rights offering will be used as follows: $175 million will be set aside in a Voluntary Employees' Beneficiary Association (VEBA) Retiree Trust to fund the retiree welfare benefits for those pre-spin retirees whom receive these benefits from Solutia; and $75 million will be used by Solutia to pay for other legacy liabilities being retained by the company. (2) Relief from Tort Litigation and Environmental Remediation Liabilities Consistent with Solutia and Monsanto's prior agreement, the settlement provides that Monsanto will take on financial responsibilities in the areas of tort litigation and environmental remediation. -- Monsanto will be financially responsible for all current and future tort litigation costs arising from Pharmacia's chemical business prior to the Solutia spinoff. This includes litigation arising from exposure to PCBs and other chemicals. -- Monsanto will accept financial responsibility for environmental remediation and clean-up obligations at all sites for which Solutia was required to assume responsibility at the spinoff but which were never owned or operated by Solutia. Solutia will remain responsible for the environmental liabilities at sites that it presently owns or operates. -- Solutia and Monsanto will share financial responsibility with respect to two sites. Under this cost- sharing arrangement the first $50 million of post-emergence remediation and cleanup costs will be funded by the proceeds of the rights offering described above. Upon emergence, Solutia would be responsible for the funding of these sites up to an agreed amount. Thereafter, if needed, Monsanto and Solutia would share responsibility equally. (3) Current Equity Holders New Common Stock Purchase Option Under the revised plan, in addition to other considerations, current equity holders that own at least a specified number of shares of Solutia common stock will receive rights to purchase, at the time of the company's emergence from bankruptcy, a pro rata share of up to 17% of the new common stock for $175 million which is at a discount from the implied equity value under the revised plan. The proceeds from the sale of this equity will fund a cash payment to Monsanto of up to $175 million. Any portion of the 17% of the new common stock that is not purchased by current equity holders will be distributed to Monsanto under the revised plan. (4) Settlement of Litigation and Claims Objection Each of the settling parties has agreed to stay all pending litigation relating to Solutia's chapter 11 cases until the effective date of the plan, at which time this litigation will be dismissed. This includes objections to the disclosure statement and plan of reorganization filed by the noteholders and the equity security holders, the adversary proceeding filed by the equity security holders against Monsanto and Pharmacia, objections to the claims filed in the case by Monsanto and Pharmacia, and the noteholders' appeal of the decision in the litigation related to the secured or unsecured nature of their claims. (5) Composition of Board of Directors Under the revised plan, reorganized Solutia's Board of Directors will be comprised of nine members, including: Jeffry N. Quinn, Solutia's chairman, president and chief executive officer; J. Patrick Mulcahy, a current director of Solutia; one director designated by each of Monsanto, the general unsecured creditors and the noteholders; and four directors designated by a five- person search committee consisting of Mr. Quinn, two representatives from the noteholders and one representative each from the general unsecured creditors and the ad hoc trade creditors. Solutia has engaged the services of Spencer Stuart, a global search firm, to begin the process of helping identify and recommend highly qualified board candidates. (6) Anticipated Creditor Recoveries and Equity Ownership Assuming full subscription to the rights offering by the participating parties (including the backstop parties), a full exercise of the new common stock purchase option, and an estimated general unsecured claims pool of $342 million, the following creditors and equity security holders will receive the following distributions: -- General Unsecured Creditors will receive their pro rata share of 31.4% of the new common stock, resulting in a recovery of 80.6 cents on the dollar. -- Noteholders will receive their pro rata share of 43.8% of the new common stock, resulting in a recovery of 88.4 cents on the dollar. -- Monsanto will receive up to $175 million in cash. Any shares of new common stock not purchased by current equity holders pursuant to the new common stock purchase option will be distributed to Monsanto and the cash distribution reduced accordingly. -- Equity Security Holders will receive their pro rate share of 1% of the new common stock and pursuant to the new common stock purchase option, holders that own at least a specified number of shares of Solutia common stock will receive rights to purchase a pro rata share of up to 17% of the new common stock. Assuming the new common stock purchase option is fully exercised, current equity security holders will own up to 18% of the new common stock. Additionally, current equity security holders will have the following rights: i) holders who own at least a specified number of shares of Solutia common stock will receive their pro rata share of five-year warrants to purchase 7.5% of the common stock; and ii) holders who own at least a specified number of shares of Solutia common stock will receive the right to participate in a buy out for cash of general unsecured claims of less than $100,000 for an amount equal to 52.35% of the allowed amount of such claims, subject to election of each general unsecured creditor to sell their claim. -- Retirees will receive the benefits provided for under the terms of the settlement between Solutia and its retirees, which was previously announced and is not being altered by the settlement currently announced. In accordance with that settlement, the retirees, as a class, will receive 2% of the new common stock. This stock will be deposited into a VEBA trust that will be used to pay retiree welfare benefits. This is in addition to the $175 million from the rights offering that will also be deposited into the VEBA trust. -- Backstop Parties (the backstoppers of the rights offering) will own 4.7% of the new common stock. General Plan Assumptions Solutia will be an independent, publicly traded company listed on a national exchange. The enterprise value of reorganized Solutia is currently estimated to be approximately $2.85 billion, with corresponding implied reorganization equity value of approximately $1.2 billion. In total, 59.75 million common shares will be issued and allocated upon emergence, exclusive of an anticipated management incentive plan to be approved as part of the revised plan of reorganization. "This settlement is the result of difficult negotiations that lead to compromise. A tremendous amount of hard work by all of the various constituents has gone into this reorganization process and I want to thank everyone who has been involved," stated Quinn. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. Saflex is a registered trademark of Solutia Inc. The company and 15 debtor- affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Disclosure Statement hearing began on July 10, 2007, and is set to continue on Oct. 10, 2007. SOUTHAVEN POWER: Has Until December 12 to File Chapter 11 Plan -------------------------------------------------------------- The Honorable George R. Hodges the United States Bankruptcy Court for the Western District of North Carolina further extended Southaven Power LLC's exclusive periods to: a. file a Chapter 11 plan until Dec. 12, 2007; and b. solicit acceptances of that plan until Feb. 6, 2008. As reported in Troubled Company Reporter on Sept. 13, 2007, the Debtor said that it needed more time to resolve certain issues, including: a. expected amount and timing for distribution on the Debtor's claim against NEGT Energy Trading - Power L.P.; and b. proper calculation of interests on the subordinated debt claim, which NEGT Energy asserted against the Debtor. The Debtor told the Court that some claims against NEGT Energy and its parent company, PG&E National Energy Group Inc. have been liquidated, and were confirmed by the Court in the amount of $395,513,731 against NEGT Energy and 176,209,004 against its parent company. About Southaven Power LLC Headquartered in Charlotte, North Carolina, Southaven Power LLC operates an 810-megawatt, natural gas-fired electric power plant located in Southaven, Mississippi. The company filed for chapter 11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141). Mark A. Broude, Esq., at Latham & Watkins LLP represents the Debtor in its restructuring efforts, and Hillary B. Crabtree, Esq., at Moore & Van Allen, PLLC, represents the Debtor in litigation against PG&E Energy Trading-Power, L.P. No official committee of unsecured creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $100 million. STANDARD PACIFIC: S&P Rates $100MM Sr. Subordinated Notes at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to the $100 million 6% convertible senior subordinated notes due 2012 issued by Standard Pacific Corp. (SPF; BB/Negative/--). The company may issue an additional $15 million to cover overallotments. SPF will use proceeds from the note offering to repay a portion of the outstanding borrowings under its $900 million revolving credit facility, which had an outstanding balance of $384 million as of Sept. 21, 2007. The ratings and outlook on Irvine, California-based SPF reflect the challenging housing conditions in the company's markets, which will continue to weigh on operating performance. SPF remains well positioned in homebuilding markets that have strong long-term prospects, and S&P believe management is taking appropriate steps to manage its inventory levels and generate cash flow from operations; however, S&P will monitor the success of these efforts in this very challenging environment. Standard & Poor's will review its ratings on SPF after the company files its quarterly financial statements. The existing ratings remain contingent upon prudent inventory management, sufficient liquidity, and the maintenance of appropriate financial measures. STRUCTURED ASSET: S&P Junks Ratings on Three Loan Classes --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 11 classes from two series of asset-backed securities issued by Structured Asset Securities Corp. Mortgage Loan Trust. The downgrades reflect the poor performance of the collateral pools. Monthly net losses have consistently exceeded monthly excess interest cash flows, resulting in the complete principal write-downs of the overcollateralization for these transactions. Additionally, class M8 from series 2006-ARS1 has experienced $214,122 in principal write-downs, and all of the principal balances for classes M9, B1, and B2 from series 2006-ARS1, and the balances for all four classes from series 2006-ARS1 have been written down. In addition, class B4 from series 2006-S2 has experienced principal write-downs of approximately $10.06 million. As a result S&P lowered the ratings on these five classes to 'D'. As of the September 2007 distribution period, total and severe delinquencies were 16.94% and 9.08% for series 2006-ARS1 and 12.83% and 7.79% for series 2006-S2, respectively. Cumulative realized losses were 12.80% and 4.36%, respectively, for series 2006-ARS1 and 2006-S2. These transactions are 14 and 15 months seasoned, respectively, and have outstanding pool factors of approximately 64.74% and 61.56% for series 2006-ARS1 and 2006-S2, respectively. Subordination, O/C, and excess interest cash flows provide credit support for these transactions. The collateral consists of 30- year fixed-rate closed-end second-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Structured Asset Securities Corp. Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-ARS1 M3 A AA- 2006-ARS1 M4 BBB- A+ 2006-ARS1 M5 B+ A- 2006-ARS1 M6 CCC BB+ 2006-ARS1 M7 CCC B 2006-ARS1 M8 D CCC 2006-ARS1 M9 D CCC 2006-ARS1 B1 D CCC 2006-ARS1 B2 D CCC 2006-S2 B1 CCC B 2006-S2 B4 D CCC SUB SURFACE: Completes Acquisition of USM Capital's Unit -------------------------------------------------------- Sub-Surface Waste Management of Delaware Inc.'s chief executive officer, Robert Brehm, said Wednesday that the company has completed several key transactions with USM Capital Group Inc. including the purchase of a new subsidiary, additional equity investment, and a transfer of assets as the company continues to enhance its balance sheet in preparation for new business in fiscal year 2008 beginning on October 1. SSWM purchased all of the outstanding stock of Worldwide Water Systems Inc. held by USM Capital Group Inc. WWSI is now a wholly owned subsidiary of SSWM and can be used as an acquisition/merger entity for future acquisitions by SSWM or as an operational entity for new business opportunities. WWSI was purchased under the terms of a stock exchange agreement between the companies. SSWM also concluded an asset transfer from USM Capital Group valued at approximately $125,000 and accepted $13,900 in additional equity investment. Mr. Brehm stated, "As we prepare for pending and future acquisitions we need to have a stronger balance sheet and the appropriate corporate tools such as WWSI to facilitate the acquisition/merger process. The transactions with USM Capital Group and other affiliate companies in the U.S. Microbics family help us prepare for our future growth." About Sub Surface Waste Headquartered in Carlsbad, Calif. Sub Surface Waste Management of Delaware Inc. -- http://www.subsurfacewastemanagement.com/-- is a majority owned subsidiary of U.S. Microbics Inc. The company provides comprehensive civil and environmental engineering project management services including specialists to design, permit, build and operate environmental waste clean-up treatment systems using conventional, biological and filtration technologies. Sub Surface Waste's consolidated balance sheet at June 30, 2007, showed $1.4 million in total assets and $2.3 million in total liabilities, resulting in a $901,703 total stockholders' deficit. SUB SURFACE: Obtains $400,000 Add-Up Funding from U.S. Microbics ---------------------------------------------------------------- U.S. Microbics Inc. is increasing its investment position in its subsidiary, Sub-Surface Waste Management of Delaware Inc. U.S. Microbics has previously invested over $6 million into SSWM and is now increasing that investment by $400,000 to help strengthen SSWM's financial statements. Robert Brehm, chief executive officer of U.S. Microbics and SSWM, "SSWM has previously identified an environmental transportation company as a potential acquisition and we are in the final due diligence and term sheet negotiation for this company which has historical revenues of $10 million plus per year. Although the acquisition terms are not yet complete, we are preparing for the event by taking steps to strengthen the balance sheet of SSWM by increasing our investment position in the company. We are excited about the future prospects of the target company and the expertise and complementary technology and management we bring to expand its growth." Mr. Brehm continued, "SSWM is going through a metamorphosis from its beginnings as a remediation company to its current emphasis of rebuilding and creating new shareholder value through target acquisitions of environmentally related companies with proven business models. With the SSWM stock price at historically low values and a fast approaching fiscal year end for both companies, adding to our current investment in SSWM seemed prudent for [U.S. Microbics] and also helps SSWM as we prepare for our new business year beginning October 1." About U.S. Microbics U.S. Microbics Inc. (OTCBB: BUGS) is a global business development company that acquires, develops, and deploys innovative technologies that positively enhance the environment for the benefit of mankind. About Sub Surface Waste Headquartered in Carlsbad, Calif. Sub Surface Waste Management of Delaware Inc. -- http://www.subsurfacewastemanagement.com/-- is a majority owned subsidiary of U.S. Microbics Inc. The company provides comprehensive civil and environmental engineering project management services including specialists to design, permit, build and operate environmental waste clean-up treatment systems using conventional, biological and filtration technologies. Sub Surface Waste's consolidated balance sheet at June 30, 2007, showed $1.4 million in total assets and $2.3 million in total liabilities, resulting in a $901,703 total stockholders' deficit. SUB SURFACE: Renews $1 Million Credit Line with Pilgrim Bank ------------------------------------------------------------ Robert Brehm, chief executive officer of Sub-Surface Waste Management of Delaware Inc. disclosed last week that the company has successfully renewed its $1,000,000 working capital credit line with Pilgrim Bank for an additional one-year period during the 2008 fiscal year. Mr. Brehm stated, "We are pleased to work with the professionals at Pilgrim Bank and a key shareholder who have extended our note for an additional year as we prepare for new business opportunities in the coming fiscal year. As we position SSWM for future acquisitions, we are making many changes to strengthen our balance sheet for future financing and favorable presentation of key financial ratios in consolidated financial statements with merger or acquired entities. The renewal of our working capital line is another step accomplished in our metamorphosis process." About Sub Surface Waste Headquartered in Carlsbad, Calif. Sub Surface Waste Management of Delaware Inc. -- http://www.subsurfacewastemanagement.com/-- is a majority owned subsidiary of U.S. Microbics Inc. The company provides comprehensive civil and environmental engineering project management services including specialists to design, permit, build and operate environmental waste clean-up treatment systems using conventional, biological and filtration technologies. Sub Surface Waste's consolidated balance sheet at June 30, 2007, showed $1.4 million in total assets and $2.3 million in total liabilities, resulting in a $901,703 total stockholders' deficit. TCW SELECT: S&P Holds BB- Ratings on Three Notes ------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on the class A-2 and B notes issued by TCW Select Loan Fund Ltd., an arbitrage high-yield CLO transaction, on CreditWatch with positive implications. At the same time, S&P affirmed its ratings on the class A-1, C, D-1, D-2, and composite notes based on the level of overcollateralization available to support the notes. The CreditWatch placements reflect factors that have positively affected the credit enhancement available to support the notes since the transaction was originated in May 2001. Since that time, the transaction has paid down approximately $251.420 million to the class A-1 notes. Ratings Placed on Creditwatch Positive TCW Select Loan Fund Ltd. Rating ------ Class To From Balance ----- -- ---- ------- A-2 AA-/Watch Pos AA- $62,000,000 B A-/Watch Pos A- $25,000,000 Ratings Affirmed TCW Select Loan Fund Ltd. Class Rating Balance ----- ------ ------- A-1 AAA $104,579,000 C BBB $15,000,000 D-1 BB- $11,000,000 D-2 BB- $5,000,000 Composite BB- $5,000,000 TERWIN MORTGAGE: Poor Performance Cues S&P to Lower Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 35 of the classes from four Terwin Mortgage Trust transactions issued in 2006. The downgrades reflect the poor performance of all seven loan group structures from these transactions, six of which are backed by 30-year closed-end second-lien mortgages; the remaining loan group, series 2006-1 loan group 1, is backed by subprime collateral. Monthly net losses for all seven structures have continued to exceed the monthly excess cash flow and have deteriorated available credit support. Subordination, overcollateralization, and excess interest cash flow provide credit support for these transactions. S&P lowered its 'AAA' ratings on three classes from series 2006-6, loan group 2, to 'AA-'. This CES structure experienced its first loss four months after issuance. Since that time, losses have continued to build and have steadily deteriorated available credit support, preventing O/C from reaching its target of $5.2 million. This transaction currently has no O/C. In addition, as a result of losses, the class II-B-5 and II-B-6 balances were reduced to zero and class II-B-4 has incurred a principal write-down. As of the August 2007 remittance period, cumulative losses were $8.09 million, or 8.09% of the original principal balance, and the pool had paid down to $63.19 million. S&P lowered its ratings to 'D' on three of the affected classes because they incurred principal write-downs during the August 2007 remittance period. As of the August 2007 distribution period, total delinquencies on all four transactions ranged from approximately 10.45% (series 2006-6, loan group 1) to 23.21% (series 2006-1, loan group 1) of the current principal balances, while severe delinquencies (90- plus days, foreclosures, and REOs) ranged from approximately 5.22% (series 2006-1, loan group 2) to 16.39% (series 2006-1, loan group 1). Cumulative losses continue to increase on all deals and ranged from approximately 0.68% (series 2006-1, loan group 1) to 8.09% (series 2006-6, loan group 2) of the respective original principal balances. Ratings Lowered Terwin Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-1 I-B-2 BB+ BBB+ 2006-1 I-B-3 BB BBB 2006-1 I-B-4, I-B-5 B BBB- 2006-1 II-B-1 BB+ BBB- 2006-1 II-B-2 B BB 2006-1 II-B-3 CCC B 2006-6 I-B-1 BBB- A- 2006-6 I-B-2 B+ BBB+ 2006-6 I-B-3 CCC BBB 2006-6 I-B-4 CCC B 2006-6 I-B-6 D CCC 2006-6 II-A-1, II-A-2, II-G AA- AAA 2006-6 II-M-1a, II-M-1b BBB- AA 2006-6 II-M-2 BB A 2006-6 II-M-3 CCC BB+ 2006-6 II-B-1 CCC B 2006-8 I-M-3 A A+ 2006-8 I-B-1 BB+ A- 2006-8 I-B-2 CCC BB+ 2006-8 I-B-3 CCC B 2006-8 I-B-4 CCC B 2006-8 I-B-6 D CCC 2006-8 II-M-1 A AA 2006-8 II-M-2 BB A 2006-8 II-M-3 B BB+ 2006-8 II-B-1 CCC B 2006-8 II-B-2 CCC B 2006-4SL B-1 BBB+ A 2006-4SL B-2 BB BBB+ 2006-4SL B-3 CCC BB+ 2006-4SL B-6 D CCC TEKTRONIX INC: Earns $20.1 Million in First Quarter Ended Sept. 1 ----------------------------------------------------------------- Tektronix Inc. disclosed Thursday its results of operations for the first quarter ended Sept. 1, 2007. The company reported net earnings from continuing operations of $20.1 million for the first quarter ended Sept. 1, 2007, compared with net earnings from continuing operations of $20.1 million for the same period ended Aug. 26, 2006. Excluding acquisition- related costs, business realignment costs, and share-based compensation expense, net earnings from continuing operations were $30.5 million for the first quarter as compared with $29.2 million for the same period last year. Net sales was $291.5 million for the first quarter ended Sept. 1, 2007. This compares with net sales of $268.1 million for the same period last year. "Sales were up 9.0% over last year resulting in strong earnings and cash flow," said Rick Wills, Tektronix chairman and chief executive officer. "Orders were down 5.0%, primarily due to a decline in our Japan region which was impacted by our order policy changes and some economic uncertainty. In addition, we saw continued market softness for network diagnostic communications products. These factors were partially offset by growth in other geographies and by improvement in orders for our network management products." Instruments business orders were down 7.0%, with modest growth in all geographies except Japan. "We saw continued good demand for oscilloscopes driven by new products, with particular strength in value oscilloscopes. Sales were up 14.0% as we delivered against the new product backlog built last year," continued Wills. Orders in the Communications business were flat year-over-year with strong growth in network management products offset by a decline in network diagnostic products. "Although we continue to see the ongoing impact of both the market consolidation and slow operator spending for network diagnostic products, we are encouraged by signs of strengthening in the market for our network management products," said Wills. "Communications business sales declined 5.0% on a difficult comparison to last year but were up sequentially from the fourth quarter." During the quarter the company issued $345.0 million of convertible debt, and repurchased $164.0 million — or nearly five million shares — of common stock. At Sept. 1, 2007, the company's consolidated balance sheet showed $1.61 billion in total assets, $729.5 million in total liabilities, and $884.8 million in total stockholders' equity. Second Quarter Guidance For the second quarter of fiscal 2008, the company expects net sales to be approximately $270 - $280 million. Earnings per share from continuing operations are expected to be between $0.38 and $0.42 before mostly non-cash acquisition-related costs, business realignment costs, one-time items and share-based compensation expense. About Tektronix Inc. Headquartered in Beaverton, Oregon, Tektronix Inc. (NYSE: TEK) -- http://www.tektronix.com/-- is a supplier of test, measurement, and monitoring products, solutions and services for the communications, computer, and semiconductor industries — as well as military/aerospace, consumer electronics, education and a broad range of other industries worldwide. Tektronix has operations in 19 countries worldwide. * * * As reported in the Troubled Company Reporter on July 2, 2007, Standard & Poor's Ratings Services assigned its 'BB+' rating to Tektronix Inc.'s proposed $300.0 million senior convertible notes. The proposed issue, which will also include an option to sell up to an additional $45.0 million of notes, will be due in 2012. At the same time, Standard & Poor's affirmed its 'BB+' corporate credit rating and stable outlook on Tektronix. TRANSNATIONAL FIN'L: July 31 Balance Sheet Upside-Down by $3.9 Mil ------------------------------------------------------------------ Transnational Financial Network Inc.'s balance sheet at July 31, 2007, showed $7.7 million in total assets and $11.6 million in total liabilities, resulting in a $3.9 million total stockholders' deficit. The company's balance sheet at July 31, 2007, further showed strained liquidity with $4.0 million in total current assets available to pay $8.0 million in total current liabilities. The company reported a net loss of $1.2 million for the first quarter ended July 31, 2007, compared with a net loss of $748,295 for the same period ended July 31, 2006. Total revenue fell to $905,751 compared to $2.5 million for the first quarter ended July 31, 2006. The decline in revenues and increase in net loss in the first quarter of fiscal 2008 may be attributed to the company's diminished ability to sell mortgage loans that it had originated. The company has, in turn, had a severely reduced ability to originate mortgages. This reduced ability to originate mortgages caused the company to suspend its wholesale mortgage lending activities in August of 2007 leaving retail mortgage lending operations in San Francisco, as the company's sole operations. Full-text copies of the company's financial statements for the quarter ended July 31, 2007, are available for free at: http://researcharchives.com/t/s?23b4 Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 20, 2007, Concord, Calif.-based Bedinger & Company expressed substantial doubt about Transnational Financial Network Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended April 30, 2007. The auditing firm pointed to the company's recurring losses, negative cash flow from operations, and issues related to the credit worthiness of the borrowers in which the company has extended credit to in the form of a mortgage loan and the investors who have subsequently purchase these loans. About Transanational Financial San Francisco-based Transnational Financial Network Inc. (Other OTC: TRFN.PK) -- http://www.transnational.com/-- is currently a retail mortgage lender with offices in San Francisco. The company suspended its wholesale mortgage lending operations in August of 2007 due to the turmoil in the mortgage industy. TXU CORP: Commences Tender Offering for $2.3BB of Debt Securities ----------------------------------------------------------------- TXU Corp. has commenced cash tender offers for an aggregate of approximately $2.3 billion of outstanding unsecured debt securities issued by TXU Corp. or its subsidiary Texas Competitive Electric Holdings Company LLC. The tender offer for each series of Notes was conducted concurrently with a related consent solicitation to amend the terms of such Notes and the indentures and officer's certificates pursuant to which the Notes were issued. The tender offers and consent solicitations were conducted in connection with the proposed merger of TXU Corp. with Texas Energy Future Merger Sub Corp., a wholly-owned subsidiary of Texas Energy Future Holdings Limited Partnership. Holders who wish to receive the Total Consideration must validly tender and not validly withdraw their Notes at or prior to 5:00 p.m., New York City time, on Oct. 5, 2007, unless extended or earlier terminated by TXU Corp. in its sole discretion. The tender offer for each series of Notes will expire at midnight, New York City time, on Oct. 23, 2007, unless extended or earlier terminated by TXU Corp. in its sole discretion. The completion of the tender offers and consent solicitations is not a condition to completion of the Merger, but the completion of the Merger is a condition to TXU Corp.'s obligation to accept and pay for the Notes pursuant to the tender offers and consent solicitations. Holders tendering their Notes will be required to consent to proposed amendments which would: -- eliminate certain covenants contained in the indentures and officer's certificates relating to the Notes and in the Notes; -- eliminate certain events of default; -- modify covenants regarding mergers and consolidations; and -- modify or eliminate certain other provisions, including certain provisions relating to satisfaction and discharge, contained in such indentures, the officer's certificates and the Notes. Holders may not tender their Notes without also delivering consents and may not deliver consents without also tendering their Notes. The Total Consideration for each $1,000 principal amount of Notes validly tendered and not validly withdrawn pursuant to the applicable tender offer is the price equal to: (1) the sum of: (a) the present value of $1,000, determined in accordance with standard market practice, on the Scheduled Initial Payment Date on the applicable maturity date for the Notes; plus (b) the present value on the Scheduled Initial Payment Date of the interest that would be payable on, or accrue from, the last interest payment date prior to such Scheduled Initial Payment Date until the applicable maturity date for the Notes, in each case determined on the basis of a yield to such maturity date equal to the sum of (A) the yield to maturity on the applicable U.S. Treasury Security, as calculated by the dealer managers for the tender offers, in accordance with standard market practice, based on the bid-side price of such reference security as of 2:00 p.m., New York City time, on Oct. 9, 2007, unless modified by TXU Corp. in its sole discretion, as displayed on the page of the Bloomberg Government Pricing Monitor or any recognized quotation source selected by the dealer managers in their sole discretion if the Bloomberg Government Pricing Monitor is not available or is manifestly erroneous plus (B) the Applicable Spread, minus (2) accrued and unpaid interest on such Notes from the last interest payment date prior to the Scheduled Initial Payment Date to the Scheduled Initial Payment Date. The Total Consideration includes a consent payment of $30 per $1,000 principal amount of Notes, payable in respect of Notes validly tendered and not validly withdrawn and as to which consents to the Proposed Amendments are delivered at or prior to the Consent Payment Deadline, subject to the terms and conditions of the tender offers and consent solicitations. Holders of the Notes must validly tender and not validly withdraw Notes at or prior to the Consent Payment Deadline in order to be eligible to receive the applicable Total Consideration for those Notes purchased in the tender offers; these holders will be entitled to receive the Total Consideration, plus accrued and unpaid interest, if those Notes are accepted for payment to the Initial Payment Date. Holders who validly tender their Notes after the Consent Payment Deadline and at or prior to the Offer Expiration Date will be eligible to receive an amount, paid in cash, equal to the applicable Total Consideration less the Consent Payment, plus accrued and unpaid interest, if those Notes are accepted for payment to the Final Payment Date. The Scheduled Initial Payment Date is Oct. 10, 2007, unless extended by the company. The Final Payment Date with respect to each tender offer is expected to occur promptly after the Offer Expiration Date, assuming all conditions to such tender offer have been satisfied or waived. Additional details about the Notes and the material pricing terms of the tender offers for the Notes were: a) CUSIP No.: 90210VAD0 Principal Amount Outstanding: $250 Million Issuer: TCEH Security: 6.125% Senior Notes due 2008 Maturity Date: March 15, 2008 Applicable Spread: 37.5 bps Reference Security: 4.625% US Treasury Note due Feb. 29, 2008 Bloomberg Page: BBT3 Consent Payment (per 1,000 Principal Amount): $30 b) CUSIP No.: 873168AJ7 Principal Amount Outstanding: $1 Billion Issuer: TXU Corp. Security: 4.80% Series 0 Senior Notes due 2009 Maturity Date: Nov. 15, 2009 Applicable Spread: 25 bps Reference Security: 4.625% US Treasury Note due Nov. 15, 2009 Bloomberg Page: BBT5 Consent Payment (per 1,000 Principal Amount): $30 c) CUSIP No.: 90210VAB4 Principal Amount Outstanding: $1 Billion Issuer: TCEH Security: 7% Senior Notes due 2013 Maturity Date: March 15, 2013 Applicable Spread: 50 bps Reference Security: 3.875% US Treasury Note due Feb. 15, 2013 Bloomberg Page: BBT6 Consent Payment (per 1,000 Principal Amount): $30 Each tender offer and consent solicitation was made independently of the other tender offers and consent solicitations. TXU Corp. reserves the right to terminate, withdraw or amend each tender offer and consent solicitation independently of the other tender offers and consent solicitations at any time and from time to time. The tender offers and consent solicitations are subject to the satisfaction of certain conditions, including receipt of consents sufficient to approve the Proposed Amendments and the Merger having occurred, or the Merger occurring substantially concurrent with the Offer Expiration Date. TXU Corp. has retained Goldman, Sachs & Co. and Banc of America Securities LLC to act as the dealer managers for the tender offers and solicitation agents for the consent solicitations. Goldman, Sachs & Co. may be contacted at (212) 357-0775 (collect) or (877) 686-5059 (toll-free) and Banc of America Securities LLC may be contacted at (704) 388-9217 (collect) and (888) 292-0070 (toll-free). Requests for documentation may be directed to Global Bondholder Services Corporation, the Information Agent, which can be contacted at (212) 430-3774 (for banks and brokers only) or (866) 804-2200 (for all others toll-free). About TXU Corp. Headquartered in Dallas, Texas, TXU Corp. (NYSE: TXU) -- http://www.txucorp.com/-- is an energy holding company that manages a portfolio of competitive and regulated energy subsidiaries, primarily in Texas , including TXU Energy, Luminant, and Oncor. TXU Energy provides electricity and related services to 2.1 million electricity customers in Texas . Luminant has over 18,300 MW of generation in Texas , including 2,300 MW of nuclear and 5,800 MW of coal-fueled generation capacity. Oncor operates a distribution and transmission system in Texas , providing power to three million electric delivery points over more than 101,000 miles of distribution and 14,000 miles of transmission lines. TCEH is the holding company for TXU Corp.'s competitive businesses, Luminant and TXU Energy, and was formerly known as TXU Energy Company LLC. * * * TXU Corp. continue to carry Moody's "Ba1" senior unsecured debt rating well as Fitch's "BB+" long-term issuer default rating. Both ratings were placed on Feb. 26, 2007. Additionally, TXU still carries Standard & Poor's "BB" Long-term foreign and local issuer credit ratings, which were placed on March 2, 2007, with a negative outlook. UNITED SITE: Poor Financial Performance Cues Moody's B3 Rating -------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of United Site Services Inc. to B3 from B2. The ratings outlook is negative. Moody's also downgraded the first and second lien senior secured facilities of the company. The downgrades were prompted by financial performance below Moody's expectations driven largely by continuing weakness in the residential construction market which generates demand for about half of the company's revenues. The negative outlook reflects the likelihood of a protracted period before recovery in residential construction becomes evident and the potential for a significant slowdown in the broader economy. The B3 rating reflects very high levels of overall indebtedness, weak EBITDA to interest coverage and the high level of goodwill and intangibles to total assets. Free cash flow for the twelve months ended June 30, 2007 was slightly negative, driven in part by seasonality in capital expenditures and the business itself. Nonetheless, given weak current levels of internal cash flow generation, the company's ability to manage uncertainties in a weak business environment is likely to be constrained. The ratings are supported by an expectation that the company will maintain adequate short-term liquidity through revolver access, stable market share and customer relationships, as well as evidence of a certain degree of diversification beyond sanitation services. The ratings also take into account the discretionary nature of a portion of the company's capital expenditures. Sustained positive free cash flow generation and improvement in interest coverage resulting from profitable top line growth could result in a stable outlook. While not likely in the near term, significant regional improvement in the residential construction environment would be needed for an upgrade. Continuing negative free cash flow, material increases in leverage from acquisitions or debt-financed capital expenditures, or interest coverage deterioration from what are already very weak levels could result in a further downgrade. Moody's took these rating actions: -- Downgraded the Corporate Family Rating to B3 from B2; -- Downgraded the Probability of Default Rating to B3 from B2; -- Downgraded to Ba3 (LGD 1, 5%) from Ba2 (LGD 1, 5%) the $100 million senior secured first lien revolving credit facility due 2012; -- Downgraded to B3 (LGD 3, 45%) from B2 (LGD 3, 46%) the $265 million senior secured second lien term loan due 2013; The outlook for the ratings is negative. United Site Services, Inc. headquartered in Westborough, MA, rents and services a comprehensive line of portable restrooms, temporary fencing, temporary electric equipment and storage containers to a broad range of customers including construction contractors, special events planners, private individuals, commercial establishments and governmental agencies. The company is privately held. VENTURE IX: S&P Assigns Preliminary BB Rating on Class E Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Venture IX CDO Ltd./Venture IX CDO Corp.'s $460 million floating-rate notes. The preliminary ratings are based on information as of Sept. 25, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of subordination to be provided by the rated notes and the subordinated notes junior to the respective classes; -- The cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The collateral manager's experience; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. Preliminary Ratings Assigned Venture IX CDO Ltd./Venture IX CDO Corp. Class Rating Amount ----- ------ ------ A AAA $370,000,000 B AA $35,000,000 C A $25,000,000 D BBB $16,000,000 E BB $14,000,000 Subordinated notes NR $40,000,000 NR — Not rated. VONAGE HOLDINGS: Intends to Appeal $69.5 Million Sprint Verdict --------------------------------------------------------------- Vonage Holdings Corp. disclosed that it will seek to overturn Tuesday's U.S. District Court jury verdict in a patent infringement lawsuit brought by Sprint Communications Company L.P. and continue focusing on providing reliable, quality digital phone service. Federal court jurors in Kansas City, Kansas ruled in favor of Sprint, finding that Vonage had willfully infringed Sprint's patents in providing its VoIP telephony services, and awarding $69.5 million in damages, which the jury found to be 5% of Vonage's revenues over the infringing period. Vonage will ask the court to set aside the verdict, and if it is not granted, will vigorously pursue an appeal of the decision, including the underlying issue of liability and the willfulness aspect. Vonage believes any damages awarded are inappropriate. In addition, the company will seek to develop technological workarounds that don't infringe on Sprint's patents. "We are disappointed that the jury did not recognize that our technology differs from that of Sprint's patents," said Sharon O'Leary, chief legal officer for Vonage. "Our top priority is to provide high-quality, reliable digital phone service to our customers. Vonage has already demonstrated that it can keep its focus on customers and on its core business while managing ongoing litigation," she added. About Vonage Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. -- http://www.vonage.com/-- (NYSE: VG) is a provider of digital phone services with 2.45 million subscriber lines. VONAGE HOLDINGS: Appellate Court Upholds Ruling on Two Patents -------------------------------------------------------------- The U.S. Court of Appeals for the Federal Circuit upheld on Wednesday a jury verdict that Vonage Holdings Corp. infringed on two of Verizon Communications Inc.'s patents while remanding the verdict on one patent, various reports say. The Court further vacated the damages award of $58 million as well as the 5.5% royalty award and sent it back for review. Vonage declined to comment while Verizon spokesman Peter Thonis said the decision "speaks for itself," reports add. Vonage however disclosed that it had developed a way to work around the two Verizon patents. Verizon Litigation On June 12, 2006, Verizon filed a suit against Vonage and its subsidiary Vonage America Inc., with the U.S. District Court for the Eastern District of Virginia. Verizon alleged that the company infringed seven patents in connection with providing VoIP services and sought injunctive relief, compensatory and treble damages and attorneys' fees. Verizon dismissed its claims with respect to two of its patents prior to trial, which commenced on Feb. 21, 2007. After trial on the merits, a jury returned a verdict finding that the company infringed three of the patents-in-suit. The jury rejected Verizon's claim for willful infringement, treble damages, and attorneys' fees, and awarded compensatory damages in the amount of $58 million. The trial court subsequently indicated that it would award Verizon $1.6 million in prejudgment interest on the $58 million jury award. The trial court issued a permanent injunction with respect to the three patents the jury found to be infringed effective April 12, 2007. The trial court then permitted the company to continue to service existing customers pending appeal, subject to deposit into escrow of a 5.5% royalty on a quarterly basis. The trial court also ordered that the company may not use its technology that was found to be infringing to provide services to new customers. In addition, Vonage posted a $66 million bond to stay execution of the monetary judgment pending appeal. On April 6, 2007, the company brought the trial court's ruling to the Federal Circuit Court, which Court allowed Vonage to continue to sign up new customers while Vonage appeals the jury's decision. About Vonage Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. -- http://www.vonage.com/-- (NYSE: VG) is a provider of digital phone services with 2.45 million subscriber lines. WARNER CHILCOTT: Moody's Lifts Corporate Family Rating to B1 ------------------------------------------------------------ Moody's Investors Service upgraded the Corporate Family Rating of Warner Chilcott Company Inc. to B1 from B2. Moody's also upgraded the other ratings related to Warner Chilcott Company Inc., Warner Chilcott Corporation and related entities. Upgraded ratings include the company's senior secured credit facilities and its senior subordinated notes. Following this rating action, the outlook is stable. The rating outlook had been positive since Oct. 9, 2006. The upgrade of the ratings reflects several positive developments in the business. Warner Chilcott has reduced leverage significantly since its leveraged buy-out both through growth in EBITDA and debt repayment. The company has repaid debt with the proceeds of its 2006 IPO and with excess free cash flow. The successful launches of Loestrin 24 and Taclonex, along with reduced interest expense, expanding profitability margins and a low tax rate, have helped drive improved cash flow since the leveraged buy-out. Also, the upgrade is supported by the resolution of much of the litigation risk that was present at the time of the original rating. The ratings remain constrained by: 1. the limited scale of the company, which maps to the "B" rating category; 2. the highly competitive environment and risks associated with launches of generic products; 3. Moody's expectation for increased product concentration; and 4. the risk of debt-financed acquisitions. These ratings were upgraded: Warner Chilcott Company Inc. -- Senior secured revolving credit facility due 2011, to Ba3 (LGD3, 36%) from B1 (LGD3, 38%) -- Senior secured term loan due 2012, to Ba3 (LGD3, 36%) from B1 (LGD3, 38%) -- Corporate Family Rating, to B1 from B2 -- Probability of Default Rating, to B1 from B2 Warner Chilcott Corporation: -- Senior secured term loan due 2012, to Ba3 (LGD3, 36%) from B1 (LGD3, 38%) -- Senior subordinated notes due 2015, to B3 (LGD5, 89%) from Caa1 (LGD5, 89%) Warner Chilcott is a marketer and developer of branded pharmaceutical products focused on the U.S. women's healthcare and dermatology markets. Moody's initially assigned the company's ratings in conjunction with the company's leveraged buy-out. Subsequently, Warner Chilcott Limited, a related entity of Warner Chilcott Company, Inc. underwent an IPO and is now publicly traded (NASDAQ: WCRX). WENDY'S INTERNATIONAL: Fidelity Joins Three Others in Bidding ------------------------------------------------------------- Fidelity National Financial, Thomas H. Lee Partners LP, Oaktree Capital Management LP, and Ares Management joined to make a bid for Wendy's International Inc., The Wall Street Journal reports, citing a person familiar with the matter. It is not clear how much the Fidelity group has bid, WSJ relates. After Triarc Cos., more than a dozen parties have signed confidentiality agreements and expressed interest in participating in the sale process for Wendy's, another WSJ source said. As reported in the Troubled Company Reporter on Aug. 1, 2007, Triarc chairman Nelson Peltz sent a letter asking the Wendy's special committee working on the sale to consider his company's purchase offer. In his letter, Mr. Peltz dislosed that Triarc's offer could range from $37.00 to $41.00 per share, which could increase further depending on due diligence results. Mr. Peltz also noted that Triarc, as a natural, strategic buyer for Wendy's, should be encouraged to participate in the sale process. Franchisees Want Say in Sale Proceedings Wendy's franchisees have asked that they be included in talks regarding the sale of the company, Bloomberg reported. Bloomberg said that in a letter to the company signed by representatives of more than 1,100 restaurants, the franchisees asked to be included in discussions and said that ignoring them could result in "a very public renunciation." In response, Bloomberg added, Chairman James Pickett said that although the franchisees are entitled to their opinions, the idea that the company is not concerned with them is "disappointing." As of July 1, Wendy's had 4,661 franchisee-owned restaurants and 1,297 company-owned locations, Bloomberg said. About Wendy's International Headquartered in Dublin, Ohio, Wendy's International Inc. (NYSE: WEN) -- http://www.wendysintl.com/-- and its subsidiaries operate, develop, and franchise a system of quick service and fast casual restaurants in the Americas, Asia, the Pacific Rim, Europe and the Middle East. * * * As reported in the Troubled Company Reporter on June 21, 2007, Moody's Investors Service lowered all ratings of Wendy's International, Inc. and placed all ratings on review for further possible downgrade. Affected ratings include the company's Ba2 corporate family rating which was lowered to Ba3 and its (P)B1 preferred stock shelf rating which was lowered to (P)B2. Additionally, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Wendy's International Inc. to 'BB-' from 'BB+'. All ratings remain on CreditWatch with negative implications, where they were placed on April 26, 2007. WESTWAYS FUNDING: Fitch Takes Rating Actions on Various Classes --------------------------------------------------------------- Fitch downgraded and placed on rating watch negative several classes of notes from Westways Funding VI, VII, VIII, IX, and XI. These rating actions are effective immediately: Westways Funding VI -- $67,500,000 Class A-2 notes rated 'AAA', placed on Rating Watch Negative; -- $15,000,000 Class B notes downgraded to 'BBB' from 'AA', remains on Rating Watch Negative; -- $15,000,000 Class C notes downgraded to 'B' from 'A', remains on Rating Watch Negative; -- $15,000,000 Class D notes downgraded to 'CCC/DR5' from 'BBB', remains on Rating Watch Negative; -- $10,000,000 Class L loan interests downgraded to 'CCC/DR5' from 'BBB', remains on Rating Watch Negative; -- $37,500,000 Income notes downgraded to 'CCC/DR6' from 'B-', remains on Rating Watch Negative. Westways Funding VII -- $140,000,000 Class A-1 notes rated 'AAA', placed on Rating Watch Negative; -- $5,000,000 Class A-2 notes rated 'AAA', placed on Rating Watch Negative; -- $10,000,000 Class B notes downgraded to 'BBB' from 'AA', remains on Rating Watch Negative; -- $10,000,000 Class C notes downgraded to 'B' from 'A', remains on Rating Watch Negative; -- $3,000,000 Class LC loan interests downgraded to 'B' from 'A', remains on Rating Watch Negative; -- $10,000,000 Class D notes downgraded to 'CC/DR5' from 'BBB', placed on Rating Watch Negative; -- $10,000,000 Class LD loan interests downgraded to 'CC/DR5' from 'BBB', remains on Rating Watch Negative; -- $25,000,000 Income notes downgraded to 'CC/DR6' from 'B-', remains on Rating Watch Negative; Westways Funding VIII -- $301,250,000 Class A-1 notes rated 'AAA' is placed on Rating Watch Negative; -- $25,000,000 Class A-2 notes rated 'AAA' is placed on Rating Watch Negative; -- $22,500,000 Class B notes downgraded to 'BBB' from 'AA', remains on Rating Watch Negative; -- $22,500,000 Class C notes downgraded to 'B' from 'A', remains on Rating Watch Negative; -- $5,000,000 Class LC loan interests downgraded to 'B' from 'A', placed on Rating Watch Negative; -- $22,500,000 Class D notes downgraded to 'CC/DR5' from 'BBB', remains on Rating Watch Negative; -- $12,000,000 Class LD loan interests downgraded to 'CC/DR5' from 'BBB', placed on Rating Watch Negative; -- $56,250,000 Income notes downgraded to 'CC/DR6' from 'B-',remains on Rating Watch Negative. Westways Funding IX -- $232,000,000 Class A notes rated 'AAA', placed on Rating Watch Negative; -- $33,000,000 Class LA loan interests rated 'AAA', placed on Rating Watch Negative; -- $16,000,000 Class B notes downgraded to 'BBB' from 'AA', remains on Rating Watch Negative; -- $16,000,000 Class C notes downgraded to 'B' from 'A', remains on Rating Watch Negative; -- $5,000,000 Class LC loan interests downgraded to 'B' from 'A', remains on Rating Watch Negative; -- $16,000,000 Class D notes downgraded to 'CCC/DR5' from 'BBB', remains on Rating Watch Negative; -- $12,000,000 Class LD loan interests downgraded to 'CCC/DR5' from 'BBB', remains on Rating Watch Negative; -- $40,000,000 Income notes downgraded to 'CCC/DR6' from 'B-', remains on Rating Watch Negative. Westways Funding XI -- $10,000,000 Class B notes rated 'AA', placed on Rating Watch Negative; -- $21,000,000 Class LB loan interests rated 'AA', placed on Rating Watch Negative; -- $23,000,000 Class C notes rated 'A', placed on Rating Watch Negative; -- $8,500,000 Class LC loan interests rated 'A', placed on Rating Watch Negative; -- $31,500,000 Class D notes rated downgraded to 'CCC/DR5' from 'BBB', remains on Rating Watch Negative; -- $82,200,000 Class E Income notes downgraded to 'CCC/DR6' from 'BB', remains on Rating Watch Negative The ratings for each of the class B, LB, C, LC, D, or LD notes reflects the likelihood that investors will receive periodic interest payments through the redemption date as well as their respective stated principal balances. The rating of the income notes reflects the likelihood that investors will receive aggregate payments in an amount equal to the principal amount on or prior to the redemption date. The transactions are mortgage market value CDOs (collateralized debt obligation) managed by TCW Asset Management Co. Each CDO has overcollateralization tests designed to protect the notes from declines in the market value of the portfolio. However, some of the overcollateralization tests are not effective as long as total note net asset value is above a threshold. In the event where the NAV falls below that threshold, the asset manager must sell assets from the portfolio until these tests are passing. The sale of assets from one of the transactions may have a negative effect on prices of similar assets in one or more of the other transactions. The downgrades and Rating Watch Negative actions are due to the uncertainty in the proceeds that will be achieved during a possible forced sale of assets given the price volatility that even highly rated securities have seen in the current market environment. The Westways transactions currently have portfolios of all floating AAA or agency collateral with over half of the portfolio in agency securities. These action are the latest in a series of negative actions on these Westways Funding transactions 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). WHOLE FOODS: Board Declares Dividend of $0.18 Per Share ------------------------------------------------------- Whole Foods Market Inc.'s Board of Directors declared a dividend of $0.18 per share to shareholders of record at the close of business on Oct. 12, 2007. The dividend is payable Oct. 23, 2007. About Whole Foods Market Founded in 1980 in Austin, Texas, Whole Foods Market Inc. (NASDAQ: WFMI) -- http://www.wholefoodsmarket.com/-- is a natural and organic foods supermarket. In fiscal year 2006, the company had sales of $5.6 billion and currently has more than 190 stores in the United States, Canada, and the United Kingdom. * * * As reported in the Troubled Company Reporter on Sept. 18, 2007, Moody's Investors Service downgraded Whole Foods Market Inc.'s corporate family rating to Ba1 from Baa3 reflecting the deterioration in the company's debt protection measures following the debt-financed acquisition of Wild Oats Markets Inc. Moody's also downgraded the company's issuer rating to Ba2 from Ba1 (will be withdrawn) and assigned probability-of-default rating of Ba1. The rating outlook is stable. This rating action resolves the review for possible downgrade initiated on Feb. 22, 2007. WHOLE FOODS: Capers Outlet to Shut Down on October 27 ----------------------------------------------------- Whole Foods Market Inc. will close its newly acquired branch at West Vancouver Capers on Oct. 27, 2007, due to location and size problems, Derrick Penner reports for Vancouver Sun, citing Ron Megahan, Regional President of Whole Foods. The closure however, Mr. Megahan explains, is not a move for consolidation and Whole Foods intends to expand in Vancouver, the report says. Workers at the Capers outlet will be offered positions at the parent company's Park Royal Village branch in West Vancouver or at its other Capers outlets, Mr. Penner relates, quoting Mr. Megahan. About Whole Foods Market Founded in 1980 in Austin, Texas, Whole Foods Market Inc. (NASDAQ: WFMI) -- http://www.wholefoodsmarket.com/-- is a natural and organic foods supermarket. In fiscal year 2006, the company had sales of $5.6 billion and currently has more than 190 stores in the United States, Canada, and the United Kingdom. * * * As reported in the Troubled Company Reporter on Sept. 18, 2007, Moody's Investors Service downgraded Whole Foods Market Inc.'s corporate family rating to Ba1 from Baa3 reflecting the deterioration in the company's debt protection measures following the debt-financed acquisition of Wild Oats Markets Inc. Moody's also downgraded the company's issuer rating to Ba2 from Ba1 (will be withdrawn) and assigned probability-of-default rating of Ba1. The rating outlook is stable. This rating action resolves the review for possible downgrade initiated on Feb. 22, 2007. WICKES INC: Disclosure Statement Hearing Scheduled on October 17 ---------------------------------------------------------------- The Honorable Bruce W. Black of the United States Bankruptcy Court for the Northern District of Illinois will convene a hearing on Oct. 17, 2007, at 1:15 p.m., at 219 Southern Dearborn, Courtroom 615, to consider the adequacy of the Disclosure Statement explaining the Amended Joint Chapter 11 Plan of Reorganization filed by Wickes Inc. and the Official Committee of Unsecured Creditors. Overview of the Plan As reported in the Troubled Company Reporter on Sept. 11, 2007, the Plan provides for the liquidation of the Debtor's remaining assets, including, the prosecution of causes of action and distribution of the net proceeds to creditors according to priority under the Bankruptcy Code. On the effective date, the Plan contemplates that the property of the Debtor will vest in the liquidating trust, and the liquidating trustee will administer and liquidate the Debtor's remaining assets, and prosecute and settle litigation claims. The Debtor and Committee tell the Court that substantially all of the Debtor's operating assets have been sold. Treatment of Claims Under the Plan, Administrative and Priority Claims will be paid in full. Holders of Secured Claims, totalling $2,100,000, will expect to recover 100% of their allowed claims. After the effective date, each holder will receive, either: a. cash equal to the unpaid portion of the allowed claim; b. other treatment, which the Debtor and liquidating trustee have agreed upon writing; or c. the return of the holder's collateral. Other Priority Claims, totalling $10,376, will be paid in full and will expect to recover 100% of their claims. Holders of Convenience Claims, totalling $2,415,456 including amounts owed to holders who have reduced their claims to $5,000, will expect to recover 15% of their claims. General Unsecured Claims, totalling between $37,000,000 and $46,500,000, will expect to recover 10%, plus additional net recoveries from litigation claims. Holders of Equity Interests and Tort Claims will not receive any distribution under the Plan. A full-text copy of the Disclosure Statement is available for a fee at: http://ResearchArchives.com/t/s?23b8 Headquartered in Vernon Hills, Illinois, Wickes Inc. -- http://www.wickes.com/-- is a retailer and manufacturer of building materials, catering to residential and commercial building professionals, repairs and remodeling contractors and project do-it-yourself consumers. Wickes, Inc., and GLC Division, Inc., filed for chapter 11 protection on January 20, 2004 (Bankr. N.D. Ill. Case No. 04-02221). The Court dismissed GLC's case on Feb. 17, 2005. Richard M. Bendix Jr., Esq., at Schwartz, Cooper, Greenberger & Krauss and Steven J. Christenholz, Esq., David N. Missner, Esq., and Deborah M. Gutfeld, Esq., at DLA Piper Rudnick Gray Cary US LLP represent the Debtors in their restructuring efforts. Sonnenschein Nath & Rosenthal LLP serves as counsel for the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, it listed $155,453,000 in total assets and $168,199,000 in total debts. XILLIX TECHONOGIES: Completes Plan of Compromise and Arrangement ---------------------------------------------------------------- Xillix Technologies Corp. has completed the amended and restated consolidated plan of compromise and arrangement of the company and its subsidiaries dated Sept. 7, 2007, as approved by the Supreme Court of British Columbia on Sept. 12, 2007. Pursuant to the Plan, these took place: a. Nexia Biotechnologies Ltd., successor by amalgamation to Cavalon Capital Partners Ltd., has made a non-interest bearing loan of $4,400,000 to the company; b. all of the claims of the company's secured and unsecured creditors' have been settled and released for payments by the company totalling $3,600,000; c. the authorized share capital of the company has been increased by creating an unlimited number of non voting shares and an unlimited number of preferred shares; d. 94.5% of the loan has been converted into 112,023,510 common shares of the Company and 435,647,055 non voting shares of the company, such that Nexia now holds 45% of the common shares of the company and 100% of the non-voting shares of the company, providing Nexia with the ownership of 80% of the total equity interests in the company; e. all outstanding options, warrants, exchange rights and conversion rights of the Company and its subsidiaries have been cancelled; f. the company's name has changed to "Biomerge Industries Ltd."; g. PricewaterhouseCoopers Inc. has been discharged as the interim receiver of the Company appointed by the British Columbia Supreme Court; and In addition, pursuant to the Plan and the Court Order approving the Plan, on Wednesday, Sept. 26, 2007, the stay of proceedings imposed on the Company by order of the British Columbia Supreme Court under the Companies' Creditors Arrangement Act will be lifted and the Company will no longer be subject to the CCAA. In connection with the completion of the Plan, the company's common shares will, effective on Sept. 26, 2007, be delisted from the Toronto Stock Exchange and listed on the NEX, under the symbol "BIL.H". About Xillix Xillix Technologies Corp. (TSX:XLX) --- http://www.xillix.com/-- is a Canadian medical device company and the world leader in fluorescence endoscopy for improved cancer detection. Xillix's currently approved device, Onco-LIFETM, incorporates fluorescence and white-light endoscopy in a single device that has been developed for the detection and localization of lung and gastrointestinal cancers. An international multicenter lung cancer clinical trial of Onco-LIFE demonstrated a 325% per- lesion improvement in the detection of early lung cancer (moderate-severe dysplasia and carcinoma in situ) and a 250% per- patient improvement compared to white-light alone. Onco-LIFE is approved for sale in the United States for the lung application and in Europe, Canada and Australia for both lung and GI applications. The Company also recently announced that it has developed a new product, LIFE LuminusTM, designed to allow fluorescence imaging of the colon using conventional video endoscope technology. * * * As reported in the Troubled Company Reporter on Oct. 25, 2006, Xillix Technologies Corp. disclosed that, as a result of the demand letter which it received from its secured lender, Hercules Technology Growth Capital, Inc., on Oct. 13, 2006, the company sought and obtained an order of the British Columbia Supreme Court granting it protection from creditors under the Companies' Creditors Arrangement Act. * Fried Frank London Office Names Sheena McCaffrey as Partner ------------------------------------------------------------- Sheena McCaffrey has joined Fried Frank Harris Shriver & Jacobson LLP as an employment and pensions partner in the London office. She joins from Sidley Austin. Sheena has extensive experience advising on the pensions and employment aspects of international corporate and M&A transactions, including advice to employers and trustees on pension scheme compliance and pension transfers and transfer of undertakings issues. "Employment and pensions issues are so often integral to corporate transactions and our clients are increasingly being faced with complex employment and pensions laws and practices," said Managing Partner, Justin Spendlove. "We are delighted to welcome Sheena to head up our employment and pensions team in London." Fried Frank Harris Shriver & Jacobson LLP -- http://www.friedfrank.com/-- is an international law firm with more than 600 attorneys in offices in New York, Washington, D.C., London, Paris, Frankfurt and Hong Kong. Fried Frank lawyers regularly represent major investment banking firms, private equity houses and hedge funds, well as many of the largest companies in the world. The firm offers legal counsel on M&A, private equity, asset management, capital markets and corporate finance matters, white-collar criminal defense and civil litigation, securities regulation, compliance and enforcement, government contracts, environmental law and litigation, real estate, tax, bankruptcy, antitrust, benefits and compensation, intellectual property and technology, international trade, and trusts and estates. The firm has an association with Huen Wong & Co. in Hong Kong. * Stephen B. Ravin Joins Forman Holt as Named Member ---------------------------------------------------- Forman Holt & Eliades LLC added Stephen B. Ravin as a named member. The firm, which has a major insolvency and bankruptcy practice, is now known as Forman Holt Eliades & Ravin LLC. "Stephen brings us close to 30 years of successful experience in insolvency-related law and out of court restructuring," said Charles M. Forman, senior member of the firm. "We are confident that his strong practice skills, marketing acumen and the results he achieves for his clients will be a tremendous asset to our firm. It is a pleasure to welcome him as a colleague and member of the firm." Mr. Ravin is resident in Forman Holt Eliades & Ravin's Rochelle Park, New Jersey office. He was formerly a partner at Ravin Greenberg PC, with a practice concentrated in the representation of Chapters 7 and 11 debtors and creditor committees, and in state court insolvency matters as an assignee for the benefit of creditors. Some of the noteworthy cases in which he was involved include Grand Union Stores, NBO Menswear, Popular Club Plan and Congoleum. "This move provides me an opportunity to bring my specialties to one of the most successful firms in the region dedicated to bankruptcy and business insolvency," Mr. Ravin said. "I am particularly pleased to join a group known for its expertise, experience and integrity in bankruptcy and insolvency work on behalf of the various parties involved in those matters. I am confident my results-focused approach is a great fit for the way we manage and resolve insolvency issues for commercial enterprises and individuals." Mr. Ravin comes from a family of lawyers, including an uncle who became active in the bankruptcy field in 1938 and his father who became active in the field in 1947. His sister is an attorney in northern New Jersey, while his brother is a Superior Court Judge in Essex County. A 1977 graduate of Franklin Pierce Law Center, Mr. Ravin is a former member of the United States Trustee's panel of trustees. He is active both nationally and in the New Jersey Chapter of the Turnaround Management Association, an association of professionals dedicated to corporate renewal, and is an executive board member and board member of the New York Institute of Credit. He is a member of the New Jersey State Bar, Bankruptcy Section, and is a member and former trustee of the Essex County Bar Association. Mr. Ravin is admitted to practice in New Jersey, New York and Florida. About Forman Holt Eliades & Ravin Headquartered in based in Bergen County, New Jersey, Forman Holt Eliades & Ravin – http://www.forman-law.com/-- is one of the bankruptcy firms in the region and has represented all parties in bankruptcy proceedings, including debtors, creditors and trustees. Teams of attorneys focus on bankruptcy reorganizations and liquidations, bankruptcy litigation, restructurings and loan workouts and the related transactional work. With roots dating to the late 1970s, the firm has additional offices in New York and Philadelphia. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Fairfax M.R.I. Center, Inc. Bankr. C.D. Calif. Case No. 07-17992 Chapter 11 Petition filed September 11, 2007 See http://bankrupt.com/misc/cacb07-17992.pdf In Re Andrew J. Hartpence Bankr. N.D. Ga. Case No. 07-75104 Chapter 11 Petition filed September 18, 2007 See http://bankrupt.com/misc/ganb07-75104.pdf In Re Caricare Medical Services, P.C. Bankr. E.D. N.Y. Case No. 07-45035 Chapter 11 Petition filed September 18, 2007 See http://bankrupt.com/misc/nyeb07-45035.pdf In Re Milliard International, Inc. Bankr. C.D. Calif. Case No. 07-18247 Chapter 11 Petition filed September 19, 2007 See http://bankrupt.com/misc/cacb07-18247.pdf In Re DeFranco Enterprises, Inc. Bankr. N.D. Calif. Case No. 07-52920 Chapter 11 Petition filed September 19, 2007 See http://bankrupt.com/misc/canb07-52920.pdf In Re J.M.T.G., Inc. Bankr. N.D. Iowa Case No. 07-01716 Chapter 11 Petition filed September 19, 2007 See http://bankrupt.com/misc/ianb07-01716.pdf In Re KanTex Hospitality, Inc. Bankr. D. Kans. Case No. 07-41280 Chapter 11 Petition filed September 19, 2007 See http://bankrupt.com/misc/ksb07-41280.pdf In Re Manchester Collision & Custom Graphix, Inc. Bankr. D. New Jersey Case No. 07-23441 Chapter 11 Petition filed September 19, 2007 See http://bankrupt.com/misc/njb07-23441.pdf In Re Woodlawn Restaurant Ventures, L.L.C. Bankr. W.D. Penn. Case No. 07-11517 Chapter 11 Petition filed September 19, 2007 See http://bankrupt.com/misc/pawb07-11517.pdf In Re El Mejillon, Inc. Bankr. D. Puerto Rico Case No. 07-05327 Chapter 11 Petition filed September 19, 2007 See http://bankrupt.com/misc/prb07-05327.pdf In Re Tender Care Veterinary Hospital, Inc. Bankr. M.D. Ala. Case No. 07-31425 Chapter 11 Petition filed September 20, 2007 See http://bankrupt.com/misc/almb07-31425.pdf In Re Old Windmill Property, L.L.C. Bankr. D. Minn. Case No. 07-43340 Chapter 11 Petition filed September 20, 2007 See http://bankrupt.com/misc/mnb07-43340.pdf In Re 100 Steel Street Associates, L.L.C. Bankr. W.D. Penn. Case No. 07-25922 Chapter 11 Petition filed September 20, 2007 See http://bankrupt.com/misc/pawb07-25922.pdf In Re Neovi, Inc. Bankr. S.D. Calif. Case No. 07-05218 Chapter 11 Petition filed September 20, 2007 Filed as Pro Se In Re Idowu Osiomwan Oghogho Bankr. E.D. Calif. Case No. 07-27715 Chapter 11 Petition filed September 20, 2007 Filed as Pro Se In Re Robert Bruce Gittelson Bankr. C.D. Calif. Case No. 07-13477 Chapter 11 Petition filed September 20, 2007 Filed as Pro Se In Re Banick, Inc. Bankr. D. Ariz. Case No. 07-01840 Chapter 11 Petition filed September 21, 2007 See http://bankrupt.com/misc/azb07-01840.pdf In Re Greenscape Landscaping, Inc. Bankr. C.D. Calif. Case No. 07-15803 Chapter 11 Petition filed September 21, 2007 See http://bankrupt.com/misc/cacb07-15803.pdf In Re Tradewinds Mortgage Document Preparation Company, Inc. Bankr. M.D. Fla. Case No. 07-08701 Chapter 11 Petition filed September 21, 2007 See http://bankrupt.com/misc/flmb07-08701.pdf In Re American Business Printing, Inc. Bankr. M.D. Penn. Case No. 07-02987 Chapter 11 Petition filed September 21, 2007 See http://bankrupt.com/misc/pamb07-02987.pdf In Re Pear Tree Meadow, L.L.C. Bankr. W.D. Va. Case No. 07-50648 Chapter 11 Petition filed September 21, 2007 Filed as Pro Se In Re Masjid-Al Islam, Inc. Bankr. M.D. Tenn. Case No. 07-06919 Chapter 11 Petition filed September 21, 2007 Filed as Pro Se In Re Arts Uniq', Inc. Bankr. M.D. Tenn. Case No. 07-06898 Chapter 11 Petition filed September 21, 2007 See http://bankrupt.com/misc/tnmb07-06898.pdf In Re Securitywise, Inc. Bankr. M.D. Tenn. Case No. 07-06917 Chapter 11 Petition filed September 21, 2007 See http://bankrupt.com/misc/tnmb07-06917.pdf In Re Daniel Shane Edwards Bankr. E.D. Texas Case No. 07-42148 Chapter 11 Petition filed September 21, 2007 See http://bankrupt.com/misc/txeb07-42148.pdf In Re S.C. Crushing, L.L.C. Bankr. E.D. Texas Case No. 07-42154 Chapter 11 Petition filed September 23, 2007 See http://bankrupt.com/misc/txeb07-42154.pdf In Re Mystery Shop Link, L.L.C. Bankr. C.D. Calif. Case No. 07-11368 Chapter 11 Petition filed September 24, 2007 See http://bankrupt.com/misc/cacb07-11368.pdf In Re Annizekim, L.L.C. Bankr. D. Colo. Case No. 07-20751 Chapter 11 Petition filed September 24, 2007 See http://bankrupt.com/misc/cob07-20751.pdf In Re Evangelia Sa'ponte Vella Bankr. D. Mass. Case No. 07-16038 Chapter 11 Petition filed September 24, 2007 See http://bankrupt.com/misc/mab07-16038.pdf In Re Paul H. Ripley Bankr. D. Md. Case No. 07-19213 Chapter 11 Petition filed September 24, 2007 See http://bankrupt.com/misc/mdb07-19213.pdf In Re Southern Ohio Oral & Facial Surgeons, Inc. Bankr. S.D. Ohio Case No. 07-57569 Chapter 11 Petition filed September 24, 2007 See http://bankrupt.com/misc/ohsb07-57569.pdf In Re 1143 North California Illinois Limited Lic. Co. Bankr. N.D. Ill. Case No. 07-17350 Chapter 11 Petition filed September 24, 2007 Filed as Pro Se In Re 54 Troy Street Buiding Company, L.L.C. Bankr. D. R.I. Case No. 07-11919 Chapter 11 Petition filed September 24, 2007 See http://bankrupt.com/misc/rib07-11919.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, 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 ***