/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071122.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, November 22, 2007, Vol. 11, No. 277 Headlines ADAMS SQUARE: S&P Junks Ratings on Six Note Classes AEGIS MORTGAGE: Lease Decision Deadline Extended to March 10 AEGIS MORTGAGE: Wants to Extend Removal Period Deadline to Feb. 11 ALLTEL CORP: Moody's Junks Rating on $2.3 Bil. Unsecured Notes AMEREX GROUP: Posts $2.7MM Net Loss in Qtr. Ended September 30 AMPEX CORP: Hillside Standstill Agreement Extended Until Jan. 15 BANC OF AMERICA: Fitch Rates $5.579MM Class Q Certificates at B- BOMBAY COMPANY: Gets Interim Nod on CBRE as Real Estate Broker BOMBAY COMPANY: Section 341(a) Meeting Scheduled for December 27 BOMBAY COMPANY: Wants To Hire DJM Asset as Real Estate Consultant BROTMAN MEDICAL: Taps Butler Snow as Special Labor Counsel BROTMAN MEDICAL: Taps McDermott Will as Special Medicare Counsel BUILDING MATERIALS: Industry Weakness Cues S&P to Cut Ratings C AND C PROPERTIES: U.S. Trustee Wants Chapter 11 Case Converted CAPITAL AUTO: Moody's Rates $7.963 Million Class D Notes at Ba1 CATHOLIC CHURCH: Fairbanks Diocese Still Considering Bankruptcy CEDAR JUNCTION: Case Summary & Nine Largest Unsecured Creditors CENTER FOR DIAGNOSTIC: Moody's Lifts Corp. Family Rating to B1 CENTEX MORTGAGE: Fitch Affirms 'BB+' Rating on $12 Mil. Certs. CHALLENGER POWERBOATS: Sept. 30 Balance Sheet Upside-Down by $2MM CHESAPEAKE ENERGY: Moody's Places Ratings Under Review CHRYSLER LLC: Cerberus Postpones $4 Billion Debt Sale, Source Says COMPLETE PRODUCTION: S&P Holds 'B+' Rating and Revises Outlook COUNTRYWIDE ASSET-BACKED: Fitch Lowers Ratings on 11 Classes CREDIT SUISSE: S&P Cuts Rating on Class E Certs. to B+ from BB+ CREDIT SUISSE: S&P Junks Rating on Class N Certificates CREST 2004-1: Moody's Holds Ba2 Ratings on Two Classes of CDO CYDEFENDER CORP: Sept. 30 Balance Sheet Upside-Down by $3.1 Mil. D'ANGELO BRANDS: Obtains Protection from Creditors Under CCAA DARRICK WRIGHT: Case Summary & Nine Largest Unsecured Creditors DIXIE GROUP: Moody's Affirms B1 Corporate Family Rating DJO INC: ReAble Merger Deal Closing Cues S&P to Withdraw Ratings DUNMORE HOMES: RBC Centura Bank Objects to Use of Cash Collateral DUNMORE HOMES: RBC Centura Objects to $1,000,000 DIP Financing EARTH BIOFUELS: Hearing on Pact Dismissing Case Set for Dec. 10 ECOSPHERE TECH: Sept. 30 Balance Sheet Upside-Down by $11 Mil. EMPIRE BEEF: Allowed to Sell Inventory and Assets at 25% Discount EMPIRE BEEF: U.S. Trustee Reconstitutes Creditors Committee EMPIRE BEEF: U.S. Trustee Appoints Panel of 503(b)(9) Claimants ENRON CORP: Shareholders' Lead Counsel Seeks $700MM Legal Fees FIRST FRANKLIN: Realized Losses Cue S&P to Lower Ratings FORD MOTOR: Names Tata, Mahindra & One Equity as Final Bidders FORD MOTOR: Union Leaders Favor U.K. Brands Bidder Tata Motors FREEDOM CERTIFICATES: S&P Affirms 'B' Rating on Two Classes FREESCALE SEMICON: Depressed Revenues Cue S&P to Cut Rating FRESH DEL MONTE: S&P Holds 'BB-' Rating and Removes Pos. Watch GLOBAL HOME: Files Amended Chapter 11 Reorganization Plan GLOBAL HOME: Disclosure Statement Hearing Set for December 27 GREAT LAND: Files List of 20 Largest Unsecured Creditors GROUP I: Moody's Puts Rating Under Review and May Downgrade HARRAH'S ENT: Apollo Merger Gets Illinois Gaming Board's Approval HELLER FINANCIAL: Fitch Junks Rating on $7.6MM Class M Certs. HOBOKEN WOOD: Judge Sontchi Dismisses Chapter 7 Petition HUBERT LAIRD: Case Summary & 17 Largest Unsecured Creditors HYDRO SPA: Court OKs $2.5 Mil. Sale of Assets to Premium Leisure ILLINOIS FINANCE: Moody's Lowers Rating on $58.43MM Bonds to B1 INTERNATIONAL COAL: Registers Resale of $225 Mil. 9% Sr. Notes INVERNESS MEDICAL: Completes $302 Mil. Buyout of Alere Medical JOVIN INC: Voluntary Chapter 11 Case Summary KING PHARMACEUTICALS: Moody's Puts Ba3 Rating on Sr. Facility L TERSIGNI: Taps M. Stuart Goldberg as Lead Bankruptcy Counsel L TERSIGNI: Wants Approval on Reid and Riege as Local Counsel LAWRENCE SALANDER: Section 341(a) Meeting Slated for December 5 LAWRENCE SALANDER: Taps Baker & Hostetler as General Counsel LB-UBS COMMERCIAL: Fitch Holds Junk Rating on $3.6 Mil. Certs. LEVITT AND SONS: Court Fixes February 11 as Claims Bar Date LEVITT AND SONS: Organizational Meeting Scheduled on December 20 LEVITT AND SONS: Gets Court Nod to Use Lenders' Cash Collateral LEVITZ FURNITURE: Can Employ Asset Disposition as Consultant LEVITZ FURNITURE: Court OKs Young Conaway as Conflicts Counsel LIMITED BRANDS: Earns $12.1 Million in Period Ended November 3 LUXURY VENTURES: Case Summary & 20 Largest Unsecured Creditors M FABRIKANT: Court Sets Dec. 7 as Administrative Expense Bar Date M&M MANUFACTURING: Case Summary & 20 Largest Unsecured Creditors MANITOWOC CO: Prices Public Offering of 4MM Shares of Common Stock MARGARET DEVLIN-WEINHEIMER: Case Summary & 18 Largest Creditors MASTR SPECIALIZED: S&P Puts Low-B Ratings on Three Cert. Classes MATTRESS GALLERY: Committee Selects Klehr Harrison as Counsel MATTRESS GALLERY: Plan Provides Capital Stock Conveyance to OMG MATTRESS GALLERY: Disclosure Statement Hearing Set for Dec. 13 MAUMELLE HOUSING: Moody's Cuts Rating on $4.695MM Bonds to Ba2 MELVIN HARTER: Files List of Six Largest Unsecured Creditors MERRILL LYNCH: Fitch Holds 'B-' Rating on $3.7MM Class P Loans MITCHELL MESSER: Case Summary & 20 Largest Unsecured Creditors MORGAN STANLEY: Fitch Cuts Ratings on $117.2 Million Certs. MORGAN STANLEY: Fitch Lowers Ratings on Two Cert. Classes to B MORGAN STANLEY: S&P Affirms 'BB' Rating on Class F Certificates MOVIE GALLERY: Court Okays Amended Auction and Bid Procedures MOVIE GALLERY: Judge Tice Approves Lease Rejection Procedures MOVIE GALLERY: Wants to Reject 400 Contracts and Leases N-45 FIRST: Moody's Lifts Rating on $6.275MM Certs. to Ba2 NASH FINCH: S&P Holds 'B+' Rating and Revises Outlook to Stable NICHOLS BROTHERS: Case Summary & 20 Largest Unsecured Creditors NELLSON NUTRACEUTICAL: Wants to Continue Using Cash Collateral NELLSON NUTRACEUTICAL: Court OKs Litigation Pact Filing Under Seal NEW CENTURY: Asks Court to Enforce Automatic Stay vs. the IRS NEW CENTURY: D. Rubio Objects to Termination of Captive Policies NEW COMMUNITY: Files List of Four Largest Unsecured Creditors OLIN CORP: Completes $380 Mil. Metal Biz Sale to Global Brass ONE COMMS: Low Revenue Growth Cues Moody's to Cut Rating to B2 OWENS-ILLINOIS: S&P Lifts Rating on Credit Facilities to BB+ PAC-WEST TELECOMM: Court Confirms Final 2nd Amended Ch. 11 Plan PACIFIC CROSSING: Case Summary & 20 Largest Unsecured Creditors PASCACK VALLEY: Can Sell MICU Rights to Hackensack for $3.6 Mil. PASCACK VALLEY: Gets Final Nod to Access HFG's $10 Mil. DIP Fund PASCACK VALLEY: Gets Final Approval to Use BoNY's Cash Collateral PLAINS EXPLORATION: Gets Requisite Consents for Pogo's Sr. Notes PLATINUM PROPERTIES: List of 20 Largest Unsecured Creditors POPE & TALBOT: European Subsidiary Files for Bankruptcy in Belgium POPE & TALBOT: Agrees to Sell Three Sawmills to Interfor PSEG ENERGY: Fitch Affirms 'BB+' Issuer Default Rating QUEBECOR WORLD: Poor Liquidity Prompts S&P to Cut Rating to B- QUALITY HOME: Chapter 11 Trustee Cuts Jobs by More than 50% QUALITY HOME: U.S. Trustee Reconstitutes Creditors Committee REABLE THERAPEUTICS: Merger Deal Cues S&P to Withdraw Rating RED MILE: Posts $9.5 Million Net Loss in 2nd Qtr. Ended Sept. 30 RELIANT ENERGY: Court Approves A&M as Panel's Financial Advisor RELIANT ENERGY: Court OKs Pepper Hamilton as Panel's Counsel REMY WORLDWIDE: Court Approves AP Services as Crisis Manager RESI FINANCE: Superior Performance Cues S&P to Lift Ratings RESIDENTIAL CAPITAL: Incurs $2.3 Bil. Net Loss in Third Qtr. 2007 RESIDENTIAL CAPITAL: Commences $750 Million Cash Tender Offer RESIDENTIAL CAPITAL: May File for Bankruptcy, Gimme Analyst Says RESIDENTIAL FUNDING: Fitch Assigns 'B' Rating on $258,500 Certs. RH DONNELLEY: Fitch Affirms 'B+' Issuer Default Rating RICHARD HIGGINS: Case Summary & Three Largest Unsecured Creditors RICHARD SAYLOR: Case Summary & 18 Largest Unsecured Creditors SAGEMARK COMPANIES: Sept. 30 Balance Sheet Upside-Down by $60,000 SALANDER-O'REILLY: Gets Interim Nod for Halperin as Counsel SALANDER-O'REILLY: U.S. Trustee Appoints Seven-Member Committee SANCON RESOURCES: Sept. 30 Balance Sheet Upside-Down by $117,919 SENDTEC INC: Posts $4.4 Million Net Loss in the Third Quarter SEQUA CORPORATION: Fitch Withdraws 'B+' Issuer Default Rating TECO ENERGY: S&P Lifts Corporate Credit Rating to BBB- from BB TECO FINANCE: Fitch Assigns 'BB+' Issuer Default Rating TRUE TEMPER: S&P Cuts Corporate Credit Rating to CCC from CCC+ VALMONT INDUSTRIES: S&P Puts 'BB' Rating Under Positive Watch VESCOR DEVELOPMENT: Files Chapter 11 Liquidation Plan in Nevada VIJAYKUMAR PATEL: Case Summary & 17 Largest Unsecured Creditors WATERFORD EQUITIES: Case Summary & 50 Largest Unsecured Creditors WATERFORD EQUITIES: Haven's CEO Denies State Counsel's Accusations WCI COMMUNITIES: Gets Performance Waiver Effective Until Dec. 7 WCI COMMUNITIES: Incurs $69.7 Million Net Loss in Third Qtr. 2007 WILD WEST: Auction Sale of Amusement Park Begins December 11 WILLIAM LYON: S&P Lowers Ratings with Negative Outlook WOLVERINE TUBE:Moody's Confirms Caa2 Ratings and Revises Outlook WORD & BOGGUS: Case Summary & 20 Largest Unsecured Creditors * Moody's Says Liquidity of US Companies Continue to Drop * Moody's Says Private Equity Ownership Can Bring Enhancements * Moody's Takes Rating Actions on Various Classes * S&P Holds Ratings on Nine Ford-Related U.S. Repack Transactions * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ADAMS SQUARE: S&P Junks Ratings on Six Note Classes --------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on all seven outstanding classes of notes issued by Adams Square Funding I Ltd. Three of the ratings remain on CreditWatch with negative implications, three were taken off CreditWatch negative, and one was placed on CreditWatch negative. On Nov. 16, 2007, Standard & Poor's received a notice stating that the controlling class of Adams Square Funding I Ltd. was directing the trustee to proceed with the sale/liquidation of the collateral supporting the notes. This notice followed a previous notice declaring an event of default as of Oct. 12, 2007, under section 5.1(h) of the indenture, which occurred after the class A overcollateralization ratio fell below 100%. The rating actions reflect Standard & Poor's opinion of the impact of the liquidation of the collateral at what will likely be depressed prices. The controlling class' election to liquidate the collateral is likely to result in collateral valuation risk, potentially affecting all classes of notes. Therefore, the rating actions are more severe than would be justified based solely on the underlying collateral's credit deterioration. The rating actions also reflect our opinion that there is a high potential for material losses to the noteholders based on the collateral's current market value and our view that market prices may not recover during the liquidation period. As previously stated, these rating actions are based on our expectation that the collateral will be liquidated. Had S&P based its analysis on the decline in the collateral's credit quality, rather than on the collateral pool's liquidation value, S&P estimate that its analysis would have led them to lower the rating on the class A notes by one to two notches and affirm the rating assigned to the senior swap notes. Adams Square Funding I Ltd. is a hybrid collateralized debt obligation transaction backed by asset-backed securities. Credit Suisse Alternative Capital is the investment manager. Through Monday, Nov. 19, Standard & Poor's had received EOD notices on 28 U.S. CDO of ABS transactions (including Adams Square Funding I Ltd.). These transactions contain overcollateralization ratio EOD triggers that are tied to the ratings on the assets that make up the transactions' collateral pools. S&P have received a notice of liquidation for only one other transaction, Carina CDO Ltd.; S&P have not received notices of liquidation for the remaining 26 transactions. If S&P receive notices of acceleration, liquidation, or rescission of any previous actions for any transaction, S&P will adjust its ratings as appropriate. Rating Lowered and Placed on Creditwatch Negative Adams Square Funding I Ltd. Rating ------ Class To From ----- -- ---- Sr swap BB/Watch Neg AAA Ratings Lowered and Remaining on Creditwatch Negative Adams Square Funding I Ltd. Rating ------ Class To From ----- -- ---- A CCC-/Watch Neg AAA/Watch Neg B-1 CCC-/Watch Neg AA/Watch Neg B-2 CCC-/Watch Neg AA-/Watch Neg Ratings Lowered and Removed from Creditwatch Negative Adams Square Funding I Ltd. Rating ------ Class To From ----- -- ---- C CC A/Watch Neg D CC BBB/Watch Neg E CC BB+/Watch Neg AEGIS MORTGAGE: Lease Decision Deadline Extended to March 10 ------------------------------------------------------------ The Honorable Brendan Linehan Shannon granted Aegis Mortgage Corp. and its debtor-affiliates' request to extend the deadline to assume or reject unexpired nonresidential real property leases, in which they are the lessee, through and including March 10, 2008. Judge Shannon ruled that the extension is without prejudice to the rights of the Debtors to request a further extension of the deadline. James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Delaware, said that without an extension the Debtors would be required to assume, assign or reject the leases not later than Dec. 11, 2007, the deadline established under Section 365(d)(4) of the Bankruptcy Code. Section 365(d)(4) states that an unexpired nonresidential real property lease under which a Debtor is the lessee is deemed rejected, and the trustee or the debtor-in-possession would immediately surrender the property to the lessor, if it does not assume or reject the unexpired leases within 120 days after the date of the order for relief. Mr. O'Neill contended that an extension of time is necessary to allow the Debtors to consider their options with respect to their unexpired leases. He said that it would be imprudent and detrimental for the Debtors to elect whether to assume, assume and assign,or reject the unexpired leases within the 120-day period, given the importance of the leases to the continuing operation of the Debtors' business, and the number of issues to consider and resolve. Without the extension, the Debtors are at risk of assuming the leases that may later create potential administrative claims or rejecting the leases that may be critical to their business, Mr. O'Neill further added. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors' Delaware counsel is Landis Rath & Cobb LLP and their co-counsel is Hahn & Hessen LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan expires on Dec. 11, 2007. (Aegis Bankruptcy News, Issue No. 11, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AEGIS MORTGAGE: Wants to Extend Removal Period Deadline to Feb. 11 ------------------------------------------------------------------ Aegis Mortgage Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for an extension of the deadline by which they may file notices of removal with respect to civil actions pending as of the Petition Date, to and including Feb. 11, 2008. Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Delaware, asserts it is prudent to seek an extension so to protect the Debtors' right to remove the actions. Since the Petition Date, the Debtors have been occupied with matters of immediate importance to their Chapter 11 cases, Mr. Cairns explains. The Debtors, he says, focused on the orderly wind down of their businesses and the sale of their remaining assets. "Accordingly, the Debtors have not had an opportunity to appropriately review actions to determine whether there are any that may need to be removed," Mr. Cairns says. Mr. Cairns points out that moving the deadline would allow the Debtors to make fully-informed decisions concerning removal of any action and would assure that the Debtors do not forfeit valuable rights under Section 1452. He notes that the rights of the Debtors' adversaries will not be prejudiced by the extension because any party to an action that is removed may seek to have it remanded to the state court. Judge Shannon will convene a hearing on Dec. 17, 2007, at 2:00 p.m., to consider the Debtor's request. Pursuant to Del.Bankr.LR 9006-2, the Debtor's Removal Period is automatically extended until the conclusion of that hearing. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors' Delaware counsel is Landis Rath & Cobb LLP and their co-counsel is Hahn & Hessen LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan expires on Dec. 11, 2007. (Aegis Bankruptcy News, Issue No. 11, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ALLTEL CORP: Moody's Junks Rating on $2.3 Bil. Unsecured Notes -------------------------------------------------------------- Moody's Investors Service has downgraded Alltel's $2.3 billion legacy senior unsecured notes to Caa1 from A2 and has assigned a Caa1 rating with an LGD 5 (79%) to Alltel's $1.0 billion PIK toggle notes following the leveraged buyout by TPG Capital and Goldman Sachs Capital Partners which closed on Nov. 16, 2007. The corporate family rating remains unchanged at B2. The ratings are subject to Moody's review of final documentation. A portion of the bridge financing will be repaid with the proceeds from the PIK toggle notes. This concludes the review initiated on Nov. 2, 2007. The rating outlook for Alltel is stable. Alltel's B2 corporate family rating is constrained by the considerable financial leverage pro forma for the buyout and an expectation that Alltel's credit metrics, including free cash flow to debt, will remain weak for at least eighteen to twenty-four months following the transaction's close. This reduced financial flexibility could impair the company's ability to compete as effectively as it has in the past, a risk that is further exacerbated by the maturation of the industry. The high leverage will require Alltel to sustain its strong operating margins and revenue growth to generate sufficient free cash flow to reduce debt. Moody's estimates that the company's total adjusted debt to EBITDA will approximate 8.0x at closing and will decline slightly by year-end 2008, mainly due to earnings growth. The main factors that help to mitigate the company's high leverage and weak financial metrics proforma for after the buyout are the flexibility of the proposed capital structure which provides Alltel with the option to defer cash interest related to its $2.5 billion of PIK toggle debt, the relatively long-dated maturity of Alltel's debt obligations, and a $1.5 billion senior secured revolving credit facility which is expected to remain undrawn thereby providing the company with adequate liquidity to cover its near term obligations. The company's strong market position, robust operating performance and the fact that the majority of the company's existing management team is expected to remain in place, are also credit positives. In terms of liquidity, Alltel is expected to have full availability of its $1.5 billion committed senior secured revolving credit facility at closing as well as approximately $550 million of cash on hand. In addition, the company is expected to have a $750 million delayed draw term loan to fund its participation in the upcoming 700-MHz auction should the company choose to partake. The senior secured credit facilities have a net senior secured debt to EBITDA financial maintenance covenant, but Moody's believes there is substantial cushion (set at a ratio of 6.75x net senior secured debt to EBITDA) and that the covenant will not be limiting for quite some time. The Ba3 rating on the company's senior secured facilities, 2 notches above the Corporate Family rating, reflects its priority in the capital structure and a loss given default of LGD 2 (27%). The senior secured facilities are secured by a first lien pledge of substantially all of the domestic assets and stock of the company's subsidiaries. The Caa1 rating on the company's senior unsecured facilities, 2 notches below the Corporate Family rating, reflects their effective subordination to the secured debt and a loss given default of LGD 5 (79%) on the $7.7 billion senior unsecured committed bridge facility. Moody's notes that the company's legacy senior unsecured notes hold the most junior position in the company's capital structure because of their issuance at the Holding company. Alltel's SGL-2 speculative grade liquidity rating is based primarily on the cash balance and the availability of external credit capacity, the headroom under the credit facilities' financial covenants, and PIK option on a portion of the unsecured debt. The SGL rating is somewhat constrained by Moody's expectation that the company will be modestly free cash flow negative in the first year following the acquisition and by the lack of other alternate sources of liquidity. The stable outlook reflects Moody's expectations that the company will achieve modest revenue and EBITDA growth over the next twelve-to-eighteen months as surging data usage offsets declines in voice ARPU and that initiatives designed to improve Alltel's cost structure and optimize its capital deployment will be quickly successful. Nevertheless, cash flow, financial leverage and interest coverage are expected to remain weak for the rating category during this period. Moody's note that execution risk associated with cost reduction plans may be elevated as a result of the new ownership structure and high financial leverage. Given Alltel's high leverage and weak credit metrics pro forma for the buyout, downward ratings pressure could develop with a moderate decline in profitability or any operational shortfall. Moody's notes that should the company utilize what they estimate is its entire capacity in the upcoming 700-MHz spectrum auction, scheduled for January 2008, its balance sheet will be further weakened and its liquidity pressured. Weak credit metrics make a ratings upgrade unlikely in the near term. Over the intermediate term, the ratings could be upgraded if Alltel is able to achieve favorable revenue, earnings and free cash flow growth such that debt reduction could be expected to steadily accelerate. These rating actions have been taken: -- $2.3 billion Senior Unsecured Notes -- Caa1, LGD 6 (95%) -- $1.0 billion Senior Unsecured Toggle Notes -- Caa1 LGD 5 (79%) These rating actions were taken on Nov. 2, 2007: -- Corporate Family Rating (to Alltel Corporation) -- B2 -- Probability of Default Rating (to Alltel Corporation) -- B2 -- Speculative Grade Liquidity Rating (to Alltel Corporation) -- SGL-2 -- $14.0 billion Senior Secured Term Loan B due 2015 (to Alltel Communications) -- Ba3, LGD2 (27%) -- $1.5 billion Senior Secured Revolving Credit Facility due 2013 (to Alltel Communications) - Ba3, LGD2 (27%) -- $7.7 billion Senior Unsecured Committed Bridge Facility (to Alltel Communications) -- Caa1, LGD 5 (79%) Headquartered in Little Rock, Arkansas, Alltel Corporation operates the nation's largest wireless network, which delivers voice and data services to more than 12 million customers in 35 states within the United States. The company operates predominately in tier 2, tier 3 and rural markets and is a significant roaming partner to the 4 largest wireless providers (AT&T Mobility, Verizon Wireless, Sprint Nextel, and T-Mobile) mainly because of its extensive rural coverage. In July 2006, Alltel completed the spin-off of its wireline telecommunications business and the merger of that wireline business with Valor Communications. AMEREX GROUP: Posts $2.7MM Net Loss in Qtr. Ended September 30 -------------------------------------------------------------- Amerex Group Inc. reported results for the third quarter and nine-month period ended Sept. 30, 2007. Amerex reported a net loss of $2.7 million on revenues of $2.2 million in the quarter ended Sept. 30, 2007, compared with a net loss of $764,000 on revenues of $2.3 million in the same period of 2006. The third quarter results included more than $2 million of non- operating expenses related to the ongoing recapitalization of the company, which has included remeasurement of equity obligations, amortization of capitalized financing fees and other expenses. For the current nine-month period, Amerex reported a net loss of $5.8 million on revenues of $6.5 million, compared with a net loss of $3.6 million on revenues of $4.7 million in the same period of 2006. The company reported that it reduced its operating loss by more than 50% in the first nine months of 2007 compared to the prior nine-month period ending Sept. 30, 2006, reflecting efforts to manage the business efficiently and execute on its business plan. During the third quarter, the company closed on financing for a bridge loan in the amount of $750,000 with Professional Offshore Opportunity Fund Ltd. in August of 2007. The company also noted that it is pursuing a sale/leaseback of its property in Pryor, Oklahoma, proceeds of which will be used to pay down its Senior Convertible Notes and further facilitate debt-reduction. In addition, the company is considering the sale/leaseback of its property owned in Harrison County, Texas. Each of these initiatives is intended to improve the company's liquidity and increase working capital, allowing it to pursue strategic acquisitions in line with the Company's long-term growth plan. The company also reported it restated the 2006 results in response to comments issued by the FASB and the Securities and Exchange Commission. About Amerex Group Inc. Headquartered in New York City, Amerex Group Inc. (OTC BB: AEXG.OB) -- http://www.amerexgroup.com/-- is a hazardous waste transportation and logistics firm with capabilities to provide emergency response to environmental emergencies. The company has multiple facilities including a hazardous waste treatment, storage and disposal facility licensed under the Resource Conservation and Recovery Act Part B and a trucking fleet to transport hazardous waste throughout the USA. Amerex has administrative headquarters in Tulsa, Oklahoma. At Sept. 30, 2007, the company's balance sheet showed total assets of $7.2 million and total liabilities of $13.4 million, resulting to a shareholders' deficit of $6.2 million. Going Concern Doubt Sartain Fischbein & Co., in Tulsa, Oklahoma, expressed substantial doubt about Amerex Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's net loss working capital deficiency and stockholders' deficit. AMPEX CORP: Hillside Standstill Agreement Extended Until Jan. 15 ---------------------------------------------------------------- Ampex Corporation disclosed that the company and Hillside Capital Incorporated have agreed to extend the standstill agreement until Jan. 15, 2008 in order to afford the parties additional time to restructure the Hillside Notes previously issued to fund the company's pension contributions. At Sept. 30, 2007, outstanding Hillside Notes totaled $44.8 million. Hillside has agreed to extend the standstill agreement to enable Hillside and Ampex to negotiate a restructuring plan. Hillside Notes In 1994, the company, the Pension Benefit Guaranty Corporation and certain affiliates, including Hillside, who were members of a "group under common control" of the Employee Retirement Income Security Act entered into a Joint Settlement Agreement in connection with the 1994 reorganization of the company's former parent, NH Holding Incorporated. The Agreement relates to the pension plans of the Company and of its former Media subsidiaries, which are substantially underfunded. Under the terms of the Agreement, the company and Hillside are held jointly and severally liable to the PBGC to fund the required contributions under the Ampex and Media pension plans. Pursuant to this Agreement, Hillside is obligated to advance pension contributions for the Ampex and Media pension plans in the event the Company is unable to make the required contributions necessary in order to satisfy the minimum funding standard. Failure by Hillside to advance funds as may be required would enable the PBGC to terminate the plans and seek recovery of termination benefits from Hillside and Ampex. Through Sept. 30, 2007, Hillside made pension contributions totaling $46.6 million pertaining to the Ampex pension plan and the Media pension plan. The company has issued notes to Hillside in the amount of these pension contributions. The company requested Hillside to fund the remaining contributions due in 2007, which are estimated to total an additional $2.5 million, and may do likewise in future years based on the company's liquidity. Hillside satisfied its obligations to fund scheduled contributions through October 2007. If Hillside makes all or a portion of the above pension contributions, the company will issue additional Hillside Notes. Under the terms of the Hillside Notes, $150,000 of principal is due on the first anniversary of each of the notes with the remaining principal due on the fourth anniversary of the Notes. Pursuant to amendments to the senior debt agreements, all principal payments on the Hillside Notes were deferred until after Dec. 31, 2006. In the three and nine months ended Sept. 30, 2007, principal of $0.8 million and $1.1 million was due and paid by the company under the Hillside - Ampex/Sherborne Agreement dated Dec. 1, 1994. There were no principal payments due in the three and nine months ended Sept. 30, 2006. The Hillside debt payments as of Sept. 30, 2007, before giving effect to any restructuring, are reflected in the "Maturities of Debt" table. The Hillside Notes provide for interest paid quarterly at 1% plus 175% of the applicable mid-term federal rate (effective rate of 9.20% at September 30, 2007). The company granted to Hillside a security interest in Data Systems' inventory as collateral for notes issued to Hillside. The Hillside Notes contain certain restrictive covenants which, among other things, restrict the company's ability to declare dividends, sell all or substantially all of its assets or commence liquidation, or engage in specified transactions with certain related parties, breach of which could result in acceleration of the company's potential termination liabilities. Notice of Default On July 13, 2007, the company received notice from Hillside alleging that Ampex had breached the Hillside Agreement, and further alleging that if this breach was not cured by July 23, 2007, it would constitute an event of default under the Hillside Agreement, which would entitle Hillside to declare approximately $45 million of Hillside Notes immediately due and payable. The company does not agree that any breach had occurred, or that there was any basis for declaring a default under the Hillside Agreement or accelerating the Hillside Notes, and the Company notified Hillside of its position. Any acceleration of the Hillside Notes, unless waived or rescinded, could result in the occurrence of an event of default under certain of the company's other obligations, including approximately $6.5 million of its Senior Notes due August 2008, which would entitle holders of the Senior Notes to accelerate the maturity of those obligations. Initial Standstill Agreement On Sept. 12, 2007, the company entered into a standstill agreement with Hillside for the parties to complete documentation that will restructure the Hillside Notes and clarifies how future pension contributions will be funded. The restructuring plan was conditioned upon raising a minimum of $15 million of equity. Proceeds of the offering were to be used to repay Senior Notes which totaled $6.5 million at Sept. 30, 2007, to pay scheduled principal and interest due on the Hillside Notes during the standstill period totaling approximately $1.0 million, and the balance would be available to fund other general corporate initiatives. During the standstill period Hillside agreed not to accelerate the maturity of their indebtedness or commence legal action against the company. This agreement expired on Nov.15, 2007. Likely Insufficient Financial Resources Based on its projected operations, the company believes that it will not have sufficient financial resources or be able to generate cash flow to service all of its obligations, including scheduled indebtedness, within the next 12 months and beyond. In order for the company to remain a going concern it will be required to substantially modify the repayment terms of its Senior Notes as well as the Hillside Notes. Alternatively, the company may be required to issue new equity to holders of all or most of its outstanding debt securities, as well as for debt that will be issued in connection with future pension plan contributions. Any such issuance of equity for debt would result in current stockholders' ownership interest being significantly diluted and potentially cause a substantial decline in the price of the company's Common Stock. The company cannot give assurance that it will be successful in restructuring its indebtedness. Bankruptcy Warning If Hillside were to declare the Hillside Notes due and payable and/or the company is unable to restructure its indebtedness or unable to otherwise service its indebtedness, the company might be forced to reorganize under federal bankruptcy laws, which could negatively affect its revenues and the price of its Common Stock. About Ampex Corp. Headquartered in Redwood City, California, Ampex Corporation (Nasdaq: AMPX) -- http://www.ampex.com/-- manufactures high performance data storage products principally used in defense applications. Ampex Corporation's consolidated balance sheet at Sept. 30, 2007, showed $23.3 million in total assets and $123.8 million in total liabilities, resulting in a $100.5 million total shareholders' deficit. BANC OF AMERICA: Fitch Rates $5.579MM Class Q Certificates at B- ---------------------------------------------------------------- Banc of America Commercial Mortgage Inc., series 2007-4, commercial mortgage pass-through certificates are rated by Fitch Ratings as: -- $27,809,000 class A-1 'AAA'; -- $77,306,000 class A-2 'AAA'; -- $287,473,000 class A-3 'AAA'; -- $73,686,000 class A-SB 'AAA'; -- $817,600,000 class A-4 'AAA'; -- $278,019,000 class A-1A 'AAA'; -- $223,130,000 class A-M 'AAA'; -- $178,522,000 class A-J 'AAA'; -- $2,231,301,788 class XW 'AAA' (Notional amount and interest only); -- $22,313,000 class B 'AA+'; -- $19,524,000 class C 'AA'; -- $22,313,000 class D 'AA-'; -- $22,313,000 class E 'A+'; -- $13,946,000 class F 'A'; -- $16,734,000 class G 'A-'; -- $27,892,000 class H 'BBB+'; -- $22,313,000 class J 'BBB'; -- $19,524,000 class K 'BBB-'; -- $13,945,000 class L 'BB+'; -- $5,578,000 class M 'BB'; -- $5,579,000 class N 'BB-'; -- $5,578,000 class O 'B+'; -- $5,578,000 class P 'B'; -- $5,579,000 class Q 'B-'; -- $39,047,788 class S 'NR'. Classes A-1, A-2, A-3, A-SB, A-4, A-1A, A-M, and A-J are offered publicly, while classes XW, B, C, D, E, F, G, H, J, K, L, M, N, O, P, and Q are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 143 fixed-rate loans having an aggregate principal balance of approximately $2,231,301,788 as of the cutoff date. BOMBAY COMPANY: Gets Interim Nod on CBRE as Real Estate Broker -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas gave The Bombay Company Inc. and its debtor-affiliates interim authority to employ CB Richard Ellis as their real estate broker. CB Richard is expected to act as the Debtors' broker and agent to market and affect a sale of the Debtors' corporate headquarters, pursuant to the terms of the parties' exclusive sales listing agreement. Robert Scully, a managing director at CB Richard, tells the Court that the professionals involved in the bankruptcy cases include: Professionals Designation ------------- ----------- Robert J. Scully Managing Director Michael Huff Director Blake Lloyd Senior Associate Mr. Scully says that the most reasonable terms and conditions concerning its fees are found in the exclusive sales listing agreement. The agreement provides for compensation upon these terms: a) a base fee of $200,000; b) an incentive fee of 6% of gross sale proceeds exceeding $15 million; and c) CB Richard will be responsible for all expenses associated with preparing marketing materials and signage associated with the disposition of the property. Mr. Scully assures the Court that CB Richard is disinterested as that term is defined at Section 101(14) of the U.S. Bankruptcy Code. About Bombay Company Basedc in Fort Worth, Texas, The Bombay Company Inc., (OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/-- designs, sources and markets a unique line of home accessories, wall decor and furniture through 384 retail outlets and the Internet in the U.S. and internationally, including Cayman Islands. The company and five of its debtor-affiliates filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D. Tex. Lead Case No. 07-44084). Robert D. Albergotti, Esq., John D. Penn, Esq., Ian T. Peck, Esq., and Jason B. Binford, Esq., at Haynes and Boone, LLP, represent the Debtors. Attorneys at Cooley, Godward, Kronish LLP act as counsel for the Official Committee of Unsecured Creditors. Forshey & Prostok LLP is the Committee's local counsel. As of May 5, 2007, the Debtors listed total assets of $239,400,000 and total debts of $173,400,000. BOMBAY COMPANY: Section 341(a) Meeting Scheduled for December 27 ---------------------------------------------------------------- The U.S. Trustee for Region 6 will continue the meeting of The Bombay Company and its debtor-affiliates' creditors on Dec. 27, 2007, at 2:00 p.m., at Room 7A24, Fritz G. Lanham Federal Building, 819 Taylor Street, in Fort Worth, Texas. The last meeting with creditors was held on Oct. 22, 2007. 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. About Bombay Company Basedc in Fort Worth, Texas, The Bombay Company Inc., (OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/-- designs, sources and markets a unique line of home accessories, wall decor and furniture through 384 retail outlets and the Internet in the U.S. and internationally, including Cayman Islands. The company and five of its debtor-affiliates filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D. Tex. Lead Case No. 07-44084). Robert D. Albergotti, Esq., John D. Penn, Esq., Ian T. Peck, Esq., and Jason B. Binford, Esq., at Haynes and Boone, LLP, represent the Debtors. Attorneys at Cooley, Godward, Kronish LLP act as counsel for the Official Committee of Unsecured Creditors. Forshey & Prostok LLP is the Committee's local counsel. As of May 5, 2007, the Debtors listed total assets of $239,400,000 and total debts of $173,400,000. BOMBAY COMPANY: Wants To Hire DJM Asset as Real Estate Consultant ----------------------------------------------------------------- The Bombay Company, Inc. and its debtor-affiliates ask permission the U.S. Bankruptcy Court for the Northern District of Texas to employ DJM Asset Management, LLC as their real estate consultant. DJM Asset will assist the Debtors in negotiating the termination, assignment, or other disposition of the Debtors' real property leases, pursuant to the terms of the real estate consulting and advisory services agreement. The engagement will include obtaining waivers or reductions of cure amounts and lease rejection claims. Andrew B. Graiser, a co-president of DJM Asset, tells the Court that, pursuant to the agreement, the firm will receive compensation from: a) Reduction in Bankruptcy Claims. The total amount of claims from the the Debtors' landlords is estimated to be $79,511,404. If the claims are not reduced by $15 million from the estimated amount, DJM Asset will not receive any fee from the Debtor. If the claims are reduced by more than $15 million, the Debtor will pay fees calculated in the following manner: 1. If claims are reduced by a total of $15 million to $25 million -- 0.75% of these total claims (1st Tier Payment); 2. If claims are reduced by a total of $25 million to $35 million -- 1.75% of these total claims (2nd Tier Payment); and 3. If claims are reduced by $35 million or more -- 2% of these total claims (3rd Tier Payment); b) Proceeds from Lease Dispositions. As to lease termination assignement, DJM Asset will receive a fee for 3.5% of the gross cash consideration received by the Debtor from each transaction, provided however, that such fee will not be payable unless the aggregate gross cash consideration for all the leases received by the Debtors exceeds $750,000; and c) Additional Consulting Services. DJM Asset will be compensated for additional consulting services at the rate of $350 per hour. Mr. Graiser assures the Court that the consulting firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. About Bombay Company Basedc in Fort Worth, Texas, The Bombay Company Inc., (OTC Bulletin Board: BBAO) -- http://www.bombaycompany.com/-- designs, sources and markets a unique line of home accessories, wall decor and furniture through 384 retail outlets and the Internet in the U.S. and internationally, including Cayman Islands. The company and five of its debtor-affiliates filed for Chapter 11 protection on Sept. 20, 2007 (Bankr. N.D. Tex. Lead Case No. 07-44084). Robert D. Albergotti, Esq., John D. Penn, Esq., Ian T. Peck, Esq., and Jason B. Binford, Esq., at Haynes and Boone, LLP, represent the Debtors. Attorneys at Cooley, Godward, Kronish LLP act as counsel for the Official Committee of Unsecured Creditors. Forshey & Prostok LLP is the Committee's local counsel. As of May 5, 2007, the Debtors listed total assets of $239,400,000 and total debts of $173,400,000. BROTMAN MEDICAL: Taps Butler Snow as Special Labor Counsel ---------------------------------------------------------- Brotman Medical Center Inc. asks the United States Bankruptcy Court for the Central District of California for authority to employ Butler, Snow, Mara, Stevens and Cannada, PLLC, as its special labor counsel. As the Debtor's special labor counsel, Butler Snow will: a) assist the Debtor in potentially negotiating a new collective bargaining agreement with the Service Employee International Union and the California Nurses Association and handling of all that may be encompassed by that, including represent of the Debtor in the board of inquiry process; b) represent the Debtor in labor, employment, and related issues arising from pre-existing collective bargaining agreements with SEIU and CNA, including handling grievance processing and arbitrations arising thereform, and providing legal advice concerning compliance with the collective bargaining agreements; and c) defend the Debtor with regard to any unfair labor practice charges filed by SEIU and CNA with the National Labor Relations Board. The firm's attorneys and their compensation rates are: Attorneys Hourly Rate --------- ----------- David P. Jaqua, Esq. $320 Bart N. Sisk, Esq. $295 J. Wilson Eaton, III, Esq. $225 Todd P. Photopulos, Esq. $235 Graham W. Askew $150 Non-attorney professionals $110 - $120 Bart N. Sisk, Esq., a member of the firm, 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. Sisk can be reached at: Bart N. Sisk, Esq. AmSouth Plaza 210 East Capitol Street, Suite 1700 Jackson, MS 39201 Tel: (601) 948-5711 Fax: (601) 985-4500 http://www.butlersnow.com/ Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., represent the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. The Official Committee of Unsecured Creditors has selected Benjamin S. Seigel, Esq., and Paul S. Arrow, Esq., at Buchalter Nemer, as its counsel. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. BROTMAN MEDICAL: Taps McDermott Will as Special Medicare Counsel ---------------------------------------------------------------- Brotman Medical Center Inc. asks the United States Bankruptcy Court for the Central District of California for permission to employ McDermott Will & Emery LLP as its special medicare counsel. McDermott Will is expected to represent the Debtor in regard with medicare overpayment liability for outlier payments, anticipated cost report payments and recovery actions and appeals, and other healthcare issues as may arise. The firm's professionals and their compensation rates are: Professionals Hourly Rate ------------- ----------- Timothy P. Blanchard, Esq. $715 Miles W. Hughes, Esq. $555 Peter R. Leone, Esq. $575 Arnold V. Pamplna, Esq. $445 Non-attorney Professionals $240 - $275 Timothy P. Blanchard, Esq., a partner of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Court. Mr. Blanchard can be reached at: Timoty P. Blanchard, Esq. McDermott Will & Emery LLP 2049 Century Park East, 38th Floor Los Angeles, CA 90067-3218 Tel: (310) 551-9320 Fax: (310) 277-4730 http://www.mwe.com/ Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., represent the Debtor. The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. The Official Committee of Unsecured Creditors has selected Benjamin S. Seigel, Esq., and Paul S. Arrow, Esq., at Buchalter Nemer, as its counsel. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. BUILDING MATERIALS: Industry Weakness Cues S&P to Cut Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on San Francisco-based Building Materials Holding Corp. to 'BB-' from 'BB' and its senior secured bank loan rating to 'BB' from 'BB+'. The ratings remain on CreditWatch with negative implications where they were placed on Oct. 18, 2007, following a change-of-management initiative by Chapman Capital LLC, BMHC's largest shareholder. "The downgrade reflects the ongoing weakness in the U.S. housing industry and our expectation that this downturn will last longer than previously expected," said Standard & Poor's credit analyst Pamela Rice. "Given BMHC's exposure to residential construction, this trend has hurt, and will continue to hurt, operating performance. As a result, BMHC's consolidated credit measures have deteriorated in 2007, reaching levels inconsistent with the former ratings. Although the company has substantial availability under its revolving credit facility, its ability to meet its financial covenants over the next few quarters could be challenged, given our expectations that markets will decline further in 2008." If Chapman Capital's plan, announced in October, that it was seeking to replace BMHC's chairman and CEO, Robert Mellor, with Stanley Wilson, president of BMHC subsidiary BMC West Corp., it could lead to unexpected changes in business strategies that neither support credit quality nor fall within S&P's expectations for the current ratings on BMHC. "We will watch for the outcome of this shareholder action," Ms. Rice said. "We will also discuss with management its business and financial outlook, considering the continued downturn in the housing market. We could lower the ratings if the actions BMHC is taking to weather the downturn do not begin to stabilize financial results or if liquidity becomes an issue." C AND C PROPERTIES: U.S. Trustee Wants Chapter 11 Case Converted ---------------------------------------------------------------- The U.S. Trustee for Region 5 asks the Honorable Edward Ellington of the United States Bankruptcy Court for the Southern District of Mississippi to convert C and C Properties Inc.'s Chapter 11 case into a Chapter 7 liquidation proceeding or, to the extent possible, dismiss its case. Pursuant to Section 1112(b) of the Bankruptcy Code, the Trustee listed grounds for cause exist to convert the Debtor's case. These grounds include, but are not limited to: a) failure to file a disclosure statement, or to file or confirm a plan, within the time fixed by this title or by order of the Court; and b) failure to pay any fees or charges required under Chapter 123 of the title 28. The Debtor's exclusive period to file a Chapter 11 plan expired on Sept. 23, 2007. Judge Ellington scheduled a hearing on Dec. 11, 2007, at 1:30 p.m., Courtroom-Jackson for 189, to consider the Trustee's request. Based in Union, Mississippi, C and C Properties, Inc. develops real estate properties. The company filed for Chapter 11 protection on January 24, 2007 (Bankr. S.D. Miss. Case No. 07-50082). Jeffery Kyle Tyree, Esq. and Melanie T. Vardaman, Esq., at Harris Jernigan & Geno, PPLC, represent the Debtor in its restructuring efforts. The U.S.Trustee for Region 5 has not appointed an Committee of Unsecured Creditors in the Debtor's bankruptcy proceedings. In its schedules filed with the Court, the Debtor disclosed total assets of $12,500,000 and total debts of $10,016,965. CAPITAL AUTO: Moody's Rates $7.963 Million Class D Notes at Ba1 --------------------------------------------------------------- Moody's Investors Service has assigned definitive ratings to Capital Auto Receivables Asset Trust 2007-4. The complete rating actions are: Issuer: Capital Auto Receivables Asset Trust 2007-4 -- $333,000,000, 4.91023% Class A-1 Asset Backed Notes, rated P-1 -- $100,000,000, 4.93% Class A-2a Asset Backed Notes, rated Aaa -- $460,000,000, One-Month LIBOR + 0.60% Class A-2b Asset Backed Notes, rated Aaa -- $160,000,000, 5.00% Class A-3a Asset Backed Notes, rated Aaa -- $150,000,000, One-Month LIBOR + 0.70% Class A-3b Asset Backed Notes, rated Aaa -- $301,946,000, 5.30% Class A-4 Asset Backed Notes, rated Aaa -- $51,757,000, 6.39% Class B Asset Backed Notes, rated A2 -- $23,888,000, 7.40% Class C Asset Backed Notes, rated Baa2 -- $7,963,000, 7.50% Class D Asset Backed Notes, rated Ba1 The ratings are based on the quality of the underlying auto loans and their expected performance, the strength of the transaction's structure, the enhancement provided by subordination, non- declining overcollateralization of 0.25% as a percentage of the initial aggregate receivables principal balance, a fully funded non-declining 0.75% reserve account, available excess spread, and the experience of GMAC LLC as servicer. CATHOLIC CHURCH: Fairbanks Diocese Still Considering Bankruptcy --------------------------------------------------------------- The Roman Catholic Diocese of Fairbanks is still considering reorganization under Chapter 11 of the Bankruptcy Code as an option in order to resolve clerical sexual abuse claims, Mary Beth Smetzer of the Fairbanks Daily News-Miner reports. The Diocese has settled with more than 100 Alaska Native sexual abuse victims for $50 million leaving it with around 150 unresolved claims. The settlement however doesn't change anything much for the Diocese, the report adds citing Robert Hannon, special assistant to Catholic Bishop Donald Kettler. The Diocese, the report further relates, is still hoping to reach a settlement with the remaining claims at a Dec. 14, 2007 hearing set by the Anchorage court. As reported in the Troubled Company Reporter on March 8, 2006, the Diocese, in a letter dated Feb. 12, 2006 by Bishop Donald J. Kettler, will likely file for bankruptcy if it was unable to provide equitable, fair, and just support for the victims, families, and communities affected by sexual abuse and negotiate a settlement with the victims. The Roman Catholic Diocese of Fairbanks -- http://www.cbna.info/- - is comprised of the northern regions of the state of Alaska. It is led by a prelate bishop which serves as pastor of the mother church, Cathedral of the Sacred Heart in the City of Fairbanks. The diocese is a suffragan of the Archdiocese of Anchorage. CEDAR JUNCTION: Case Summary & Nine Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Cedar Junction General Store, Inc. aka Conoco Breakplace aka Canyon Springs General Store, Inc. 4017 West Highway 76 Branson, MO 65616 Bankruptcy Case No.: 07-61713 Type of Business: The Debtor owns and operates a convenience stores. Chapter 11 Petition Date: November 20, 2007 Court: Western District of Missouri (Springfield) Debtor's Counsel: Raymond I. Plaster, Esq. Moon, Plaster & Sweere, L.L.P. 3275 E. Ridgeview Street, Suite C Springfield, MO 65804 Tel: (417) 862-3704 Fax: (417) 862-1936 Total Assets: $475,398 Total Debts: $3,909,875 Debtor's Nine Largest Unsecured Creditors: Entity Claim Amount ------ ------------ S.P.C.P. Group, L.L.C. $3,500,000 c/o Laureate Capital, L.L.C. P. O. Box 890862 Charlotte, NC 28289-0862 Brian Karn $206,242 232 Deer Mountain Road Walnut Shade, MO 65771 C.J. General Store, Inc. $135,620 1225 Ridgedale Road Ridgedale, MO 65739 Trendsetters International $15,000 Marketing Arrow Head Surety & Insurance $10,300 Haag Foods $4,750 V.B. Hall Wholesale $4,400 Randy Anglen $500 F.P. Mailing Solutions $300 CENTER FOR DIAGNOSTIC: Moody's Lifts Corp. Family Rating to B1 -------------------------------------------------------------- Moody's Investors Service upgraded the CFR of Center for Diagnostic Imaging, Inc. to B1 from B2 and the Probability of Default Rating to B2 from B3. Concurrently, Moody's upgraded the ratings on the senior secured revolver and senior secured term loan facilities to Ba3 from B1. Following this action, the outlook is stable. Ratings upgraded: -- Corporate Family Rating, to B1 from B2 -- Probability of Default Rating, to B2 from B3 -- $20 million, senior secured revolver due 2009, to Ba3 (LGD2, 25%) from B1 (LGD2, 25%) -- $75 million senior secured term loan due 2010, to Ba3 (LGD2, 25%) from B1 (LGD2, 25%) -- The ratings outlook is stable. The upgrade of the Corporate Family Rating to B1 from B2 primarily reflects the company's continued ability to drive top-line revenue and EBITDA growth as well as maintain strong free cash flow and moderate leverage metrics in the face of recent adverse Medicare reimbursement changes. The upgrade also reflects a sound liquidity position. Downward pressure on the ratings could develop in the event that incremental cuts in Medicare reimbursements are enacted that materially reduce revenues and resulting cash flows, thereby pressuring financial metrics. Absent a decline in reimbursements, the ratings could come under pressure in the event that other adverse factors resulted in a decline in the company's ratio of free cash flow to adjusted debt below roughly 5% or if the ratio of adjusted total debt to EBITDA increases above 4.3 times. A upgrade is unlikely in the near-term given the reimbursement vulnerability presented by the industry together with the company's small size. Headquartered in Minneapolis, Minnesota, CDI is a leading provider of fixed-site, physician and hospital-owned, high-quality, cost- effective diagnostic and therapeutic radiology services. CDI provides diagnostic imaging services through a network of 41 freestanding outpatient imaging centers in 14 markets across 8 states. For the twelve months ended September 30, 2007 CDI generated revenues of approximately $108 million. CENTEX MORTGAGE: Fitch Affirms 'BB+' Rating on $12 Mil. Certs. -------------------------------------------------------------- Fitch Ratings has taken these rating actions on three Centex mortgage pass-through certificates. Affirmations total $1.01 billion. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Centex 2005-B -- $96.7 million class A affirmed at 'AAA' (BL: 78.91, LCR: 7.61); -- $35 million class M-1 affirmed at 'AA+' (BL: 66.50, LCR: 6.41); -- $33 million class M-2 affirmed at 'AA' (BL: 50.48, LCR: 4.87); -- $20.5 million class M-3 affirmed at 'AA-' (BL: 34.22, LCR: 3.30); -- $18.5 million class M-4 affirmed at 'A+' (BL: 30.44, LCR: 2.94); -- $16 million class M-5 affirmed at 'A' (BL: 27.31, LCR: 2.63); -- $18 million class M-6 affirmed at 'A-' (BL: 23.95, LCR: 2.31); -- $15 million class M-7 affirmed at 'BBB+' (BL: 21.17, LCR: 2.04); -- $17.5 million class B affirmed at 'BBB' (BL: 18.43, LCR: 1.78). Summary -- Originators: (100% Centex); -- 60+ day Delinquency: 17.67%; -- Realized Losses to date (% of Original Balance): 0.76%; -- Expected Remaining Losses (% of Current Balance): 10.37%; -- Cumulative Expected Losses (% of Original Balance): 3.92%. Centex 2005-C -- $127.7 million class A affirmed at 'AAA' (BL: 73.23, LCR: 6.63); -- $45.5 million class M-1 affirmed at 'AA+' (BL: 60.92, LCR: 5.51); -- $33.5 million class M-2 affirmed at 'AA' (BL: 51.05, LCR: 4.62); -- $21 million class M-3 affirmed at 'AA-' (BL: 44.51, LCR: 4.03); -- $19.5 million class M-4 affirmed at 'A+' (BL: 30.59, LCR: 2.77); -- $16.5 million class M-5 affirmed at 'A' (BL: 27.60, LCR: 2.50); -- $17.5 million class M-6 affirmed at 'A-' (BL: 24.48, LCR: 2.22); -- $14.5 million class M-7 affirmed at 'BBB+' (BL: 21.95, LCR: 1.99); -- $16.5 million class B-1 affirmed at 'BBB' (BL: 19.10, LCR: 1.73); -- $18 million class B-2 affirmed at 'BBB-' (BL: 16.40, LCR: 1.48). Summary -- Originators: (100% Centex); -- 60+ day Delinquency: 15.76%; -- Realized Losses to date (% of Original Balance): 0.48%; -- Expected Remaining Losses (% of Current Balance): 11.09%; -- Cumulative Expected Losses (% of Original Balance): 4.49%. Centex 2005-D -- $202.6 million class A affirmed at 'AAA' (BL: 61.82, LCR: 4.82); -- $47 million class M-1 affirmed at 'AA+' (BL: 50.12, LCR: 3.91); -- $32.5 million class M-2 affirmed at 'AA' (BL: 43.27, LCR: 3.37); -- $22.5 million class M-3 affirmed at 'AA-' (BL: 38.31, LCR: 2.99); -- $17 million class M-4 affirmed at 'A+' (BL: 34.54, LCR: 2.69); -- $17 million class M-5 affirmed at 'A' (BL: 30.78, LCR: 2.40); -- $15.5 million class M-6 affirmed at 'A-' (BL: 21.41, LCR: 1.67); -- $16 million class M-7 affirmed at 'BBB+' (BL: 18.81, LCR: 1.47); -- $14.5 million class B-1 affirmed at 'BBB' (BL: 16.52, LCR: 1.29); -- $11 million class B-2 affirmed at 'BBB-' (BL: 14.62, LCR: 1.14); -- $12 million class B-3 affirmed at 'BB+', and removed from Rating Watch Negative (BL: 13.33, LCR: 1.04). Summary -- Originators: (100% Centex); -- 60+ day Delinquency: 14.75%; -- Realized Losses to date (% of Original Balance): 0.50%; -- Expected Remaining Losses (% of Current Balance): 12.83%; -- Cumulative Expected Losses (% of Original Balance): 6.12%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. CHALLENGER POWERBOATS: Sept. 30 Balance Sheet Upside-Down by $2MM ----------------------------------------------------------------- Challenger Powerboats Inc. reported net income of $2.8 million for three months ended Sept. 30, 2007, compared to a net loss of $1.7 million for the same period in the previous year. The company reported net loss $1.3 million for nine months ended Sept. 30, 2007, compared to a net loss of $6.8 million for the same period in the previous year. Liquidity and Capital Resources The company continues to raise capital to fund its operations and fulfill its plan of acquiring companies and assisting in the development of those companies internally. As of Sept. 30, 2007, the company has total current assets of $5.1 million, compared to $1.99 million as of Dec. 31, 2006. As of Sept. 30, 2007, the company has total current liabilities of $4.6 million, compared to $5.98 million as of Dec. 31, 2006. Cash and cash equivalents were $1.7 million as of Sept. 30, 2007, as compared to $0.2 million as of Dec. 31, 2006. The company's stockholders' deficit at Sept. 30, 2007 was $2.6 million as compared to $13.3 million stockholders' deficit at Dec. 31, 2006. As of Sept. 30, 2007, the company has debt of $10.9 million, including convertible debentures with related parties which total $3.3 million. About Challenger Powerboats Inc. Based in Washington, Missouri, Challenger Powerboats Inc. (OTC:CPWB) - http://www.challengerpowerboats.com/-- designs and manufactures 'go fast' offshore racing boats, family sport cruisers, jet boats and water ski tow boats under the brands 'Challenger Powerboats', 'Sugar Sand' and 'Gekko', which target the recreational boating market. The company is a design-to- manufacturing organization, creating or licensing designs, and creating tooling, molds, and parts necessary to assemble its products in-house. The company markets its products through a dealer network comprising more than 100 dealers throughout the United States, Canada, Mexico, Europe, Australia, the Middle East and Japan. Going Concern Doubt Jaspers + Hall PC expressed substantial doubt about Challenger Powerboats Inc.'s ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and its difficulties in generating sufficient cash flow to meet its obligation and sustain its operations. CHESAPEAKE ENERGY: Moody's Places Ratings Under Review ------------------------------------------------------ Moody's placed Chesapeake Energy's ratings on review for downgrade. This action reflects imminent senior unsecured note rating pressure under Moody's Loss Given Default notching methodology. However, this action also reflects that the corporate family rating will be assessed in the context of CHK's leverage rise relative to its reserve and production profiles, that much of CHK's announced remedial debt reduction methods appear, in Moody's view, to be debt or debt-like in nature, and that 2008 and 2009 capital outlays are likely to again significantly exceed cash flow. Ratings under review include CHK's Ba2 corporate family, Ba2 senior unsecured note (LGD 4; 60%), Baa3 hedging facility, and SGL-2 speculative grade liquidity ratings. The case for ratings caution is substantial given CHK's surge in leverage relative to productive assets. CHK has sought simultaneously to sustain a heavy capital spending program to meet organic growth expectations conveyed to the market and a heavy multi-year acquisition program of which a large high cost proportion contained unproven acreage. Inherently, the unproven acreage entails heavy front-end investment several years before it can become proportionally productive and contains a high degree of risk until sound full-cycle economics and productivity can be demonstrated. CHK's organic spending pace may be driven by a desire to accelerate the migration of acquired unproven acreage to production to meet market expectations. However, the heavy spending pace may be driven in part by agreed mandatory deadlines with acreage sellers governing when CHK's evaluation, drilling, and development activity must commence. Furthermore, given CHK's third and fourth quarter 2007 increases in secured borrowings, the unsecured note ratings are pressured under LGD methodology. Moody's outlook for continued high levels of senior secured debt through 2008 and an expanded $3 billion secured bank revolver commitment appear likely to, in combination, result in sustained contractual subordination of the notes sufficient to require ratings under the corporate family rating. To the degree CHK's planned asset monetizations through 2008 carry debt characteristics, they would remain in Moody's adjusted total debt and leverage figures and, in some cases, may remain senior to CHK's notes under LGD methodology. Ratings support stems from CHK's large scale, growth trajectory, multiple core basin diversification and intensity, and adequately supportive, though moderating, natural gas prices. Importantly, Moody's also notes that a substantial minority proportion of CHK's reserve base has not been pledged to lenders and is available to support additional borrowings if needed. CHK is the largest independent natural gas producer, and third largest producer overall in the U.S. CHK has expanded its average daily production by over 22% since fourth quarter 2006. It has also continued its historical pattern of inducing conversion of convertible preferred securities to common equity, as shown by its recent offer to convert its 6.25% mandatory and 5% cumulative convertibles to common. Moody's has historically assigned a 50% debt basket to CHK's cumulative convertible preferred stock. Thus, the recent conversion reduced adjusted debt. However, in funding its drive for total scale and for major strategic holdings in key emerging and established resource plays, CHK's balance sheet debt and adjusted debt escalated substantially faster than funded proven developed reserves, total reserves, and production to ranges well in excess of expectations for a Ba2 issuer. Leverage on PD reserves rose from $8.05/boe at year-end 2005, to $9.34/boe at year-end 2006, to over $11.80/boe of estimated fourth quarter debt so far on reported PD reserves as of September 30, 2007. Adjusted debt plus future FAS 69 capital spending needed to bring proven non-producing reserves to production rose from $8.98/boe on year-end 2005 proven reserves to an estimated roughly $11.90/boe on reported Sept. 30, 2007 proven reserves. Leverage on production rose substantially as well, while cash margins declined. Substantial hedge monetizations from fourth quarter 2006 through 2007 prevented leverage from being higher. Aggressive spending momentum has continued into fourth quarter 2007. Though its acquisition pace is slowing, in the first nine months of 2007 CHK spent somewhat over $1.8 billion to acquire unproven acreage and over $700 million for proven reserves. This excludes 2007 organic capital spending and a pending acquisition of 2,000 net lease acres in the Barnett Shale. Between year-end 2006 and September 30, 2007, balance sheet debt increased by roughly $3.5 billion and balance sheet debt plus capitalized leases increased approximately $4.0 billion. The combination of preferred stock, balance sheet debt, and leases jumped from $9.9 billion at year-end 2006 to $13.9 billion by September 30, 2007. CHK's third quarter 2007 10-Q indicates that debt has risen substantially so far in fourth quarter 2007 as well. New revolver borrowings dampened the impact of preferred stock conversions to common stock but preferred stock, debt, and leases still appears to have declined somewhat to roughly $13.6 billion thus far in fourth quarter 2007. Chesapeake Energy is headquartered in Oklahoma City, Oklahoma. CHRYSLER LLC: Cerberus Postpones $4 Billion Debt Sale, Source Says ------------------------------------------------------------------ The sale of Chrysler LLC's $4 billion loans has been postponed indefinitely, a source familiar with the matter told The Wall Street Journal, without specifying any timetable for a possible resale. As reported in the Troubled Company Reporter on Nov. 8, 2007, aiming to lessen $171 billion leveraged loan backlog, JPMorgan Chase and Co., Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and Bear Stearns & Co. planned to sell Chrysler LLC's $4 billion loans at about 97.5 cents on the dollar this week, Pierre Paulden and Bryan Keogh of Bloomberg News reports citing unnamed sources. The banks, sources say, are eager to dispose the $10 billion loans that they were not able to sell in July and August after Cerberus Capital Management acquired Chrysler from former owner DaimlerChrysler AG. According to Reuters, citing an unidentified source, the latest postponement was prompted by weak credit markets and worsening news from the U.S. automotive sector. JPMorgan Chase and Co., Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and Bear Stearns & Co. had planned to sell the loans at about 97.5 cents on the dollar this week, in an aim to lessen US$171 billion in leveraged loan backlog, the TCR-Europe reported on Nov. 9, 2007. The banks, sources said, were eager to dispose the $10 billion loans that they were not able to sell in July and August after Cerberus Capital Management acquired Chrysler from former owner DaimlerChrysler AG. As previously reported, Fitch Ratings has initiated rating coverage on Chrysler LLC by assigning these ratings: -- Long-term Issuer Default Rating 'B+'; -- $10 billion first-lien loan 'BB+/RR1'; -- $2 billion second-lien loan 'BB+/RR1'. The $12 billion in senior secured financing will be raised following the pending acquisition of 80.1% of Chrysler's parent, Chrysler Holding LLC, by affiliates of Cerberus Capital Management, L.P. The 'RR1' Recovery Rating is based on Fitch's expectation of full recovery in the event of bankruptcy. The Rating Outlook is Stable. The sale, which was previously postponed once, will push through depending on market conditions, a source told WSJ. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. Chrysler is a unit of Cerberus Capital Management. * * * * * * As reported in the Troubled Company Reporter on Oct. 31, 2007, Standard & Poor's Ratings Services said its corporate credit ratings on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC remain on CreditWatch with positive implications, following the United Auto Workers' narrow approval of the new Chrysler-UAW labor contract. The ratings were placed on CreditWatch on Sept. 26, 2007, based on S&P's belief that Chrysler would reach a deal similar to the one General Motors Corp. reached with the UAW on that date. As reported in the Troubled Company Reporter on Aug. 8, 2007, Standard & Poor's Ratings Services revised its loan and recovery ratings on Chrysler LLC (B/Negative/--), including a 'BB-' rating to the $5 billion "first-out" first-lien term loan tranche. This rating, two notches above the corporate credit rating of 'B' on Chrysler LLC, and the '1' recovery rating indicate S&P's expectation for very high recovery in the event of payment default. S&P also assigned a 'B' rating to the $5 billion "second-out" first-lien term loan tranche. This rating, the same as the corporate credit rating, and the '3' recovery rating indicate S&P's expectation for a meaningful recovery in the event of payment default. Moody's Investors Service has affirmed Chrysler Automotive LLC's B3 Corporate Family Rating, and the Caa1 rating of the company's $2 billion senior secured, second lien term loan in connection with the closing of DaimlerChrysler AG's sale of a majority interest of Chrysler Group to Cerberus Capital Management LLC. COMPLETE PRODUCTION: S&P Holds 'B+' Rating and Revises Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Houston, Texas-based oilfield services provider Complete Production Services Inc. to positive from stable. At the same time, S&P affirmed all the ratings, including the 'B+' corporate credit rating, on the company. "The outlook revision reflected Complete's growing completion and production segment, expanding geographic markets, and our expectations that the company will continue to improve its business and operational diversity while maintaining a strong financial profile," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. As of Sept. 30, 2007, the Houston, Texas-based company had $867.4 million of debt, adjusted for operating-lease expenses. The ratings on Complete reflect the company's weak business position as an oilfield services provider, with an aggressive growth strategy in the historically cyclical, capital-intensive, and highly competitive oilfield services industry. Slightly mitigating these weaknesses are the company's diversified product lines in the currently favorable well-servicing environment and its improved financial profile. Complete is a provider of oil and gas well completion and production services, with smaller operations in contract drilling and product sales. COUNTRYWIDE ASSET-BACKED: Fitch Lowers Ratings on 11 Classes ------------------------------------------------------------ Fitch Ratings has taken rating actions on these Countrywide Asset- Backed Securitizations mortgage pass-through certificates: Series 2003-BC4 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'AA-' from 'AA'; -- Class M-3 downgraded to 'A' from 'AA-'; -- Class M-4 downgraded to 'BBB' from 'A'; -- Class M-5 downgraded to 'BB+' from 'A-'; -- Class M-6 downgraded to 'B' from 'BBB+'; -- Class B downgraded to 'B' from 'BBB'. Series 2003-BC5 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'A+' from 'AA-'; -- Class M-3 downgraded to 'A' from 'A+'; -- Class M-4 downgraded to 'BBB' from 'A', and placed on Rating Watch Negative; -- Class M-5 downgraded to 'BBB-' from 'A-', and placed on Rating Watch Negative; -- Class M-6 downgraded to 'B' from 'BBB+', and placed on Rating Watch Negative. Series 2005-BC3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class B affirmed at 'BBB-'. The affirmations affect approximately $300.19 million in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The downgrades, affecting approximately $31.23 million of the outstanding certificates, reflect deterioration in the relationship between CE and expected losses. The classes placed on Rating Watch Negative reflect the deterioration in the relationship of CE to future loss expectations and affect $2.49 million in outstanding certificates. The above trusts consist primarily of fixed- and adjustable-rate first and second liens extended to sub-prime borrowers on one- to four-family residential properties and certain other property and assets. Countrywide Home Loans Servicing, LP, rated 'RPS1-' by Fitch, is the Primary Servicer for the above transactions. As of the October remittance date, the pool factors (current principal balance as a percentage of original) of the above transactions range from 9% (2003-BC4) to 28% (2005-BC3). The seasoning ranges from 28 (2005-BC3) to 50 (2003-BC4) months. CREDIT SUISSE: S&P Cuts Rating on Class E Certs. to B+ from BB+ --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes of commercial mortgage pass-through certificates from Credit Suisse First Boston Mortgage Securities Corp.'s series 2005-CND1. At the same time, S&P affirmed its ratings on five classes from the same series. The lowered ratings reflect our analysis of the remaining two loans in the transaction, which are in special servicing. The loans are secured by Hotel 71 and Royal Palm, both of which have abandoned their condominium conversion plans and are operating as full-service hotels. The pool's principal balance is currently $135 million, compared with $665 million at issuance. The first loan is collateralized by Hotel 71 and is located on Wacker Drive and Michigan Avenue in Chicago, Illinois. All of the property's 454 rooms were scheduled to be converted into condo hotel units at securitization. On March 2, 2007, the mezzanine borrower initiated a Chapter 11 voluntary bankruptcy petition. The bankruptcy stay was lifted, and the mezzanine lender, Oaktree Capital Management LLC, foreclosed against the borrower's equity interest in the property. Oaktree assumed ownership and placed the property into Chapter 11 bankruptcy. The property is being marketed for sale. The loan's debt stack consists of a $94.6 million whole loan ($62.8 million A note and $31.8 million B note) and a $27.3 million mezzanine loan. The Royal Palm property is located on Collins Avenue in the South Beach section of Miami Beach, Florida. The property includes 417 hotel rooms, 160 of which (in the Shorecrest Tower building) were scheduled to be converted into hotel condo units. The mezzanine lender, which is an affiliate of BlackRock, initiated a foreclosure action against the borrower's equity interest in the property. The lender has stayed the foreclosure proceeding to allow the borrower time to sell the property. The sponsor/borrowers for the loan are Robert Falor, Guy Mitchell, and Geoffrey Hockman. The loan's debt stack consists of a $109.2 million whole loan ($74.9 million A note and $34.3 million B note) and a $24.5 million mezzanine loan. The first mortgage loan is sponsored by the same participants as Hotel 71. Standard & Poor's will continue to closely monitor the resolution of the assets. S&P will evaluate new information as it becomes available, which may result in further rating adjustments. Ratings Lowered Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2005-CND1 Rating ------ Class To From ----- -- ---- C BBB+ A D BB- BBB- E B+ BB+ Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2005-CND1 Class Rating ----- ------ A-2 AAA AX-1 AAA A-X3 AAA A-Y AAA B A+ CREDIT SUISSE: S&P Junks Rating on Class N Certificates ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M and N commercial mortgage pass-through certificates from Credit Suisse First Boston Mortgage Securities Corp.'s series 2005-CND2. At the same time, S&P affirmed its ratings on four classes from the same series. The lowered ratings reflect S&P's analysis of the remaining loan in the transaction, Mizner Court. The collateral property, Mizner Court at Broken Sound, is a 450-unit apartment complex located in Boca Raton, Florida. The sponsor of Mizner Court abandoned the conversion plan and is operating the property as an apartment rental. Because Mizner Court's loan proceeds were based on the valuation derived from a successful condominium conversion, S&P expect its value as an operating rental property to be less. The loan matured on Nov. 9, 2007, and is currently in default according to Wachovia Securities, as it was not able to meet its loan maturity extension requirements. The whole-loan balance is $89.0 million (A note of $57.3 million and B note of $31.7 million). The outstanding mezzanine loan has a principal balance of $15.0 million. The current trust balance is $57.3 million, compared with 24 floating-rate loans with a trust balance of $1.99 billion at issuance. Standard & Poor's will continue to closely monitor the lease-up of Mizner Court. Rating Lowered Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2005-CND2 Rating ------ Class To From ----- -- ---- M B- B N CCC B- Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2005-CND2 Class Rating ----- ------ A-X-1 AAA A-X-4 AAA A-X-5 AAA L BB- CREST 2004-1: Moody's Holds Ba2 Ratings on Two Classes of CDO ------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 13 classes of Crest 2004-1, Collateralized Debt Obligations, Series 2004-1 as: -- Class A, $157,897,512, affirmed at Aaa -- Class B-1, $44,000,000, affirmed at Aaa -- Class B-2, $8,491,250, affirmed at Aaa -- Class C-1, $2,710,000, affirmed at Aa1 -- Class C-2, $23,000,000, affirmed at Aa1 -- Class D, $17,140,000, affirmed at Aa3 -- Class E-1, $13,000,000, affirmed at A3 -- Class E-2, $12,710,000, affirmed at A3 -- Class F, $6,427,500, affirmed at Baa1 -- Class G-1, $2,000,000, affirmed at Baa3 -- Class G-2, $9,783,750, affirmed at Baa3 -- Class H-1, $7,520,000, affirmed at Ba2 -- Class H-2, $1,050,000, affirmed at Ba2 As of the October 29, 2007 distribution date, the transaction's aggregate bond balance has decreased by approximately 6.5% to $400.6 million from $428.5 million at securitization. The Certificates are collateralized by all or a portion of 125 subordinate classes from 43 CMBS pools (89.2% of the transaction), debt securities from two REITs (5.7%), a REMIC certificate (0.6%), a B Note (3.4%) and three classes from three CDO pools (1.0%). The decrease in the transaction's balance is due primarily to the paydown of the REMIC component. Of the 79 CMBS classes rated by Moody's, no classes have been upgraded and two classes have been downgraded since Moody's last review in August 2006. Moody's reviewed the shadow ratings of the 46 classes not rated by Moody's and upgraded the shadow ratings of 12 classes and downgraded the shadow rating of one class since last review. Of the three CDO classes rated by Moody's, one was upgraded and two were affirmed since last review. The one REMIC certificate rated by Moody's was downgraded since last review. The one B Note rated by Moody's was upgraded since last review. Moody's uses a weighted average rating factor as an overall indicator of the credit quality of a CDO transaction. Based on Moody's analysis, the current WARF is 1,643, compared to 1,574 at last review and compared to 1,543 at securitization, resulting in the affirmation of all classes. The distribution of ratings for the pool's collateral (actual and shadow ratings) is as follows: Aaa - A3 (3.40% compared to 0.0% at last review and compared to 6.6% at securitization), Baa1 -- Baa3 (13.2% compared to 20.1% at last review and compared to 13.1%at securitization), Ba1 - Ba3 (51.0% compared to 48.7% at last review and compared to 49.1% at securitization), B1 - B3 (32.0% compared to 31.2% at last review and at securitization) and Caa1 -- Caa3 and NR (0.5% compared to 0.0% at last review and at securitization) The CMBS certificates are from pools securitized between 1999 and 2004. The largest vintages are 2004 (50.7%), 2003 (34.9%) and 2002 (8.5%). The largest CMBS exposures based on the total CMBS balance are: GMACC 2003-C2 (7.2%), CSFB 2003-CK2 (6.6%), GECMC 2004-C1 (5.9%), WBCMT 2004-C14 (5.7%) and COMM 2004-LB3A (5.6%). CYDEFENDER CORP: Sept. 30 Balance Sheet Upside-Down by $3.1 Mil. ---------------------------------------------------------------- CyberDefender Corp.'s consolidated balance sheet at Sept. 30, 2007, showed $1,532,090 in total assets and $4,638,252 in total liabilities, resulting in a $3,106,162 total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $872,522 in total current assets available to pay $3,433,333 in total current liabilities. The company reported a net loss of $1,274,275 on net sales of $544,956 for the third quarter ended Sept. 30, 2007, compared with a net loss of $2,267,294 on net sales of $843,869 in the third quarter of 2006. The decrease in total revenue was due primarily to a decrease in the renewal sales of the company's CyberDefender Anti-Spyware 2006 product and limited sales of its Early Detection Center product as compared to renewal sales of its CyberDefender Anti-Spyware 2006 product that were generated during the three month month period ended Sept. 30, 2006. The decrease in net loss for the three months ended Sept. 30, 2007, was primarily related to the decrease in interest expense, which decrease totaled $605,762. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2598 About CyberDefender Corp. Headquartered in Los Angeles, CyberDefender Corp. (OTC BB: CYDE) - - http://www.cyberdefender.com/-- is an Internet security software company. The company's Internet security technology offers the earliest possible detection and most aggressive defense against Internet security attacks. CyberDefender uses a secure client-to-client distributed network, enabling protection that the company believes is unparalleled in speed and flexibility. D'ANGELO BRANDS: Obtains Protection from Creditors Under CCAA ------------------------------------------------------------- d'Angelo Brands Inc. and Steelback Breweries were granted protection from creditors under the Companies' Creditors Arrangement Act, Jennifer Wells writes for The Star. Steelback incurred $11.6 million in pre-tax loss in 2006 and incurred about $5.9 million loss early this year, the report says. Similary, d'Angelo Brands incurred more than $10 million in 2005, nearly $14 million in 2006, and about $8.1 million early this year, the report adds. d'Angelo Brands owes Wasanda Enterprises Inc. more than $120 million, $101 million total debt plus $20 million in accrued interest, according to The Star. About Steelback Breweries Steelback Breweries -- http://www.steelbackbrewery.com/-- is a Canadian Brewery in Tiverton Town, Ontario. Its brands include Steelback Premium Beer, Draught, Steelback Authentic and Steelback Copperhead. About d'Angelo Brands Brampton, Ontario-based d'Angelo Brands Inc., (OTC: DNBD) -- http://www.dangelobrands.ca/-- through its subsidiary, produces and markets apple juice, apple and apple-cranberry cocktail, lemonade, and iced tea. It is also developing new products, such as Pulp Fusion, a creamy beverage, in seven flavours; Fruit Wave, a fruit-based children's drink, in three flavours; Bar Espresso, a creamy, coffee-flavoured beverage in single serve format; and tomato-based juices, including vegetable cocktail and Caeser varieties. d'Angelo also produces concentrates, purees, and blends; and provides co-packing, warehousing, and handling services to a flavored iced tea distributor. The company sells its products to retail grocery chains in Ontario, Canada. Frank d'Angelo President, CEO, and founder of d'Angelo Brands sold his majority interest in d'Angelo Brands to financial partners on Oct. 29, 2007. Financial terms of the transaction were not disclosed. Frank remained on board as chairman of the d'Angelo Brands as well as maintain a minority interest in the business. Jonathon Sherman has taken over as President and COO of d'Angelo Brands. DARRICK WRIGHT: Case Summary & Nine Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Darrick Allen Wright Stephanie D. Wright 3996 Broadleaf Walk Ellenwood, GA 30294 Bankruptcy Case No.: 07-77932 Chapter 11 Petition Date: November 1, 2007 Court: Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtors' Counsel: Kenneth Mitchell, Esq. Giddens, Davidson & Mitchell P.C. Suite 300-B 5000 Snapfinger Woods Drive Decatur, GA 30034 Tel: (770) 987-7007 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of their 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citi Mortgage 2733 Penwood $60,400 P.O Box 183040 Place, Lithonia Columbus, OH 43218-3040 Georgia ($50,000 secured) Flagstar 6049 Regent Manor, $58,960 5151 Corporate Drive Lithonia, GA Troy, MI 48098 ($50,000 secured) First Horizon 6047 Regent Manor, $54,600 4000 Horizon Way Lithonia GA Irving, TX 75063 ($50,000 secured) PDQ Judgment $12,353 Bank of America Credit card $9,470 Asset Management Asset fees $8,000 Somerset Condo $7,500 Wells Fargo Loan $6,900 Credit card $5,000 Lowes Credit card $5,200 DIXIE GROUP: Moody's Affirms B1 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service affirmed the B1 Corporate Family Rating of The Dixie Group Inc. The outlook for the ratings is stable. The affirmation reflects Moody's continued expectation of adequate coverage of interest expense and moderate financial leverage which should enable the company to weather adverse market conditions associated largely with the continuing slowdown in residential construction. Moody's believes that Dixie has adequate, albeit pressured, liquidity through 2008 and early 2009 without the need for market access. The ratings also reflect solid top line growth with respect to the core carpet business in prior periods relative to other industry players. The ratings are further supported by the company's relatively low customer concentration, focus on the high-end of the market, and diversified channel mix. The ratings are constrained by the potential for share repurchases at a time of a cyclical downturn, the highly competitive nature of the carpet manufacturing industry, the relatively small size of the company in relation to substantially larger competitors and the significant cyclicality inherent in a business that depends on residential and commercial construction and remodeling. The ratings are further constrained by a history of negative free cash flow generation prior to fiscal 2006. Moody's affirmed these ratings: -- Corporate Family Rating, rated B1; -- Probability of Default Rating, rated B1; -- $20 million 7% convertible subordinated debentures due 2012, rated B3 (LGD 6, 92%). The outlook for the ratings remains stable. Headquartered in Chattanooga, Tennessee, The Dixie Group, Inc. is a leading manufacturer and marketer of carpets and rugs to higher- end residential and commercial customers through the Fabrica International, Masland Carpets and Dixie Home brands. Founded in 1920 as a textile manufacturer, Dixie has since exited the textiles business and is focused entirely on the floorcovering market, selling to a diverse customer base through retailers, designers, home builders and commercial end user channels. Revenues are derived from residential floorcovering products (66%), commercial floorcovering products (30%) and carpet yarn products (4%). Net revenues for the twelve months ended September 29, 2007 were approximately $322 million. DJO INC: ReAble Merger Deal Closing Cues S&P to Withdraw Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew all of its ratings on Vista, California-based DJO Inc., including the 'BB-' corporate credit rating and the 'BB' senior secured debt rating on DJO Inc.'s $50 million revolver and $350 million term loan. This rating action follows the Nov. 20, 2007 announcement that the planned merger closed between ReAble Therapeutics Inc. and DJO Inc. ReAble Therapeutics Inc. is the surviving entity. At the same time, S&P withdrew its 'B+' senior secured debt rating on ReAble Therapeutics Finance LLC's old $50 million revolver and $405 million term loan. These rating actions are consistent with Standard & Poor's Oct. 31, 2007 research update on ReAble Therapeutics Inc. At that time, S&P announced that these ratings would be withdrawn at the close of the transaction. At the same time, S&P had affirmed its 'B' corporate credit rating on ReAble Therapeutics Inc., assigned its 'BB-' bank loan and '1' recovery ratings to ReAble Therapeutics Finance LLC's $100 million senior secured revolving credit facility due 2013 and $1.065 billion (formerly proposed at $1.055 billion) term loan B due 2014. S&P also assigned its 'CCC+' unsecured debt rating to ReAble Therapeutics Finance LLC's $575 million senior unsecured notes maturing in 2015 and affirmed its 'CCC+' subordinated debt rating on ReAble Therapeutics Finance LLC's and ReAble Therapeutics Finance Corp.'s existing $200 million senior subordinated notes maturing in 2014. ReAble Therapeutics Inc. will change its name to DJO Inc. in the near term. Also, the combined entity will be headquartered in Vista, California. Ratings List Ratings Withdrawn DJO Inc. To From -- ---- Corporate Credit Rating NR BB-/Stable/-- Secured Debt NR BB (Recov Rtg: 2) ReAble Therapeutics Finance LLC To From -- ---- Secured Debt NR B+ (Recov Rtg: 2) DUNMORE HOMES: RBC Centura Bank Objects to Use of Cash Collateral ----------------------------------------------------------------- To the extent Dunmore Homes Inc. seeks authority to use cash generated by the Montecito, Diamond Ridge, Stone Creek and Providence projects, RBC Centura Bank objects on the basis that it has a security interest in those projects, and the adequate protection proposed by the Debtor is not sufficient. According to Lawrence P. Gottesman, Esq., at Bryan Cave LLP in New York, the Debtor proposes to grant RBC a junior security interest on certain of its assets as security for the use of RBC's cash collateral. However, majority of the Debtor's assets are already encumbered, Mr. Gottesman notes, citing papers filed in court by Doug Strauch, vice president of finance of Dunmore Homes Inc. "Thus, with regard to most of the proposed collateral, RBC's replacement lien would come in behind the original secured party and the DIP lender," Mr. Gottesman argues. "A third position lien is not adequate to assure that any claim by RBC for diminution of its cash collateral after the Petition Date will be protected. RBC can only be adequately protected by a first priority replacement lien on unencumbered, non- fraudulently transferred assets, of which RBC believes the Debtor has none," Mr. Gottesman tells the United States Bankruptcy Court for the Southern District of New York. As reported in the Troubled Company Reporter on Nov 20, 2007, the Debtor proposed to grant adequate protection to its lenders through a replacement lien, junior to the lien of a postpetition lender and any existing encumbrances, in the collateral. Prior to the bankruptcy filing, RBC Centura Bank provided $62,500,000 in financing to Dunmore Homes LLC's Montecito and Diamond Ridge building projects. RBC also advanced under a separate credit facility, $32,903,000 for Dunmore California's Providence project and $10,000,000 for the Stone Creek project. Mr. Gottesman says that the financings are each secured by properly perfected, first priority, secured interests in the projects, as well as other collateral specified in the parties' security agreements. According to Mr. Gottesman, Dunmore Homes Inc. assumed those obligations as part of its purchase of Dunmore California's assets. Dunmore has been in default under the financing facilities since Aug. 2, 2007. On Nov. 7, 2007, RBC filed complaints in the Superior Court for the State of California against the Debtor and its subsidiaries subject to the RBC credit facilities, Michael Kane, Sidney B. Dunmore, and certain other individuals to foreclose on the Montecito, Diamond Ridge, Stone Creek and Providence project properties. RBC asserted claims for breach of contract, breach of note, conspiracy, and fraudulent transfer. RBC argued that Dunmore California fraudulently transferred its assets to the Debtor to hinder, delay and defraud its creditors, including RBC. Mr. Gottesman points out that the compensation provided by the Debtor consisted of $500 plus assumption of Dunmore California's liabilities, which was an inadequate exchange considering that the Debtor received substantially all of the seller's assets and a $250,000 payment from Mr. Dunmore, Dunmore California, and certain of the subsidiaries. Mr. Gottesman asserts that Dunmore California was insolvent at the time of the transfer. Headquartered in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed assets and liabilities of more than $100 million. The Debtor's exclusive period to file a plan expires on March 7, 2008. (Dunmore Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DUNMORE HOMES: RBC Centura Objects to $1,000,000 DIP Financing -------------------------------------------------------------- RBC Centura Bank told the United States Bankruptcy Court for the Southern District of New York that the request of Dunmore Homes Inc. for authority to obtain $1,000,000 in DIP financing from Sidney B. Dunmore should be denied. According to Lawrence P. Gottesman, Esq., at Bryan Cave LLP in New York, the Debtor was formed solely to receive the assets of Dunmore California and does not have any assets other than those fraudulently transferred to it. RBC Centura Bank opposes any effort by the Debtor to encumber assets that were fraudulently transferred to it by Dunmore Homes LLC as part of the September 2007 sale of Dunmore California's assets. The assets are not property of the Debtor's estate, Mr. Gottesman tells the Court. As reported in the Troubled Company Reporter on Nov. 20, 2007, the Debtor negotiated and entered into an agreement to receive a $1,000,000 postpetition loan from Sidney B. Dunmore. The Debtor tried to borrow money from other sources but was unsuccessful. Prior to Nov. 8, 2007, RBC provided financing to Dunmore California's Montecito, Diamond Ridge, Providence and Stone Creek projects. Dunmore has been in default under the financing facilities since Aug. 2, 2007. On Nov. 7, 2007, RBC filed complaints in the Superior Court for the State of California against the Debtor and certain of its subsidiaries, Michael Kane, Sidney B. Dunmore, and certain other individuals to foreclose on the Montecito, Diamond Ridge, Stone Creek and Providence project properties. RBC asserted claims for breach of contract, breach of note, conspiracy and fraudulent transfer. RBC argued that Dunmore California was insolvent at the time of the sale. To the extent that the Court is willing to consider some type of secured, postpetition financing for the Debtor, Mr. Gottesman contends that changes to the proposed terms are necessary because: -- the proposed DIP financing agreement improperly primes allegedly avoidable security interests prior to actual avoidance of the security interests; and -- the DIP Agreement and proposed Interim Order impermissibly limit the use of funds provided under the DIP Agreement so as to prevent assertion of claims against Mr. Dunmore and challenge to any claims asserted by Mr. Dunmore, including his purported ability to set off certain amounts against his own debt owed to the Debtor. Mr. Gottesman points out that the DIP Agreement requires the Debtor to pay the proceeds of any disposition of collateral to the DIP lender without payment of, or even reservation for, security interests the Debtor deems avoidable, prior to actual judicial determination that the lien is avoided pursuant to Chapter 5 of the Bankruptcy Code. The Debtor should not be able to subordinate or dispose of the collateral of any senior security interest unless and until the lien is actually avoided as determined by the Court, Mr. Gottesman asserts. Mr. Gottesman contends that the proposed limitations on the use of the DIP funds unreasonably tie the hands of the Debtor and the not-yet-formed committee with respect to any claim against Mr. Dunmore and prevent the estate from contesting Mr. Dunmore's claims against it. The DIP Motion, Mr. Gottesman says, provides that the Carve-Out does not include -- and any funds borrowed under the Credit Agreement cannot be used for -- fees or expenses incurred in connection with any challenge to the claims of or against the DIP lender. Given the Debtor's current cash reserves of only $119,000, this provision effectively insulates Mr. Dunmore from any cause of action, including avoidance actions, and any objection to his claims against the estate, Mr. Gottesman says. RBC also asks the Court to take out the DIP loan provision which purports to grant a de facto release by the estate to an individual who was the former principal of Dunmore California, within the first week of the chapter 11 case and prior to appointment of the Committee. Headquartered in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed assets and liabilities of more than $100 million. The Debtor's exclusive period to file a plan expires on March 7, 2008. (Dunmore Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EARTH BIOFUELS: Hearing on Pact Dismissing Case Set for Dec. 10 --------------------------------------------------------------- A hearing has been scheduled for Dec. 10, 2007, to consider approval of an interim settlement agreement Earth Biofuels Inc. has reached with its creditors, Bill Rochelle of Bloomberg News reports. The agreement, according to Bloomberg, provides for the dismissal of an involuntary Chapter 7 petition the creditors filed against the company in July 2007, in exchange for the Debtor admitting its liability under a $52 million loan it owes the creditors. As reported in the Troubled Company Reporter on July 16, 2007, five creditors filed an involuntary chapter 7 petition against Earth Biofuels on July 11, 2007 (Bankr. D. Del. Case No: 07-10928) after the company failed to make payments on the Senior Convertible Notes it issued pursuant to a Securities Purchase Agreement dated as of July 24, 2007. The petitioning creditors, who assert claims amounting to $33 million, are: 1) Castlerigg Master Investment Ltd.; 2) Evolution Master Fund Ltd., SPC; 3) Radcliffe SPC, Ltd.; 4) Cornell Capital Partners, LP; and 5) Portside Growth and Opportunity Fund. Adam G. Landis, Esq. and Kerri K. Mumford, Esq. at Landis Rath & Cobb LLP represent the petition creditors in this case. Headquartered in Dallas, Texas, Earth Biofuels Inc. -- http://www.earthbiofuels.com/-- engages in the production, distribution, and sale of renewable fuels, with a focus on biodiesel fuel, in the United States. The company produces pure biodiesel fuel (B100) through the utilization of vegetable oils, such as soy and canola oil as raw material. The company distributes petroleum/biodiesel blended fuel, such as B20 through wholesale distributors, truck stops, and fueling stations. Earth Biofuels also produces and markets liquefied natural gas. ECOSPHERE TECH: Sept. 30 Balance Sheet Upside-Down by $11 Mil. -------------------------------------------------------------- Ecosphere Technologies Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $3.4 million in total assets, $10.6 million in total liabilities, and $3.8 million in redeemable convertible preferred stock, resulting in an $11.0 million total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $363,274 in total current assets available to pay $6.8 million in total current liabilities. The company reported a net loss of $2.1 million on revenues of $6,789 for the third quarter ended Sept. 30, 2007, compared with a net loss of $929,372 on revenues of $1.4 million in the third quarter of 2006. The primary reasons for the increase in net loss are higher interest charges related to the senior convertible debentures issued in December 2006. The company had no major robotic sales in 2007, as compared to the sale of two robots during the 2006 quarter. Loss from operations for the three months ended Sept. 30, 2007, was $966,192 compared to $612,777 loss for the three months ended Sept. 30, 2006. Interest expense was $1.1 million and $318,327 for the three months ended Sept. 30, 2007 and 2006, respectively. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?259b Going Concern Doubt Tedder, James, Worden & Associates, P.A., in Orlando, Florida, expressed substantial doubt about Ecosphere Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has suffered recurring losses from operations, has a working capital deficit, and has redeemable convertible cumulative preferred stock eligible for redemption. About Ecosphere Technologies Headquartered in Stuart, Florida, Ecosphere Technologies Inc. (OTC BB: ESPH) -- http://www.ecospheretech.com/-- is a diversified clean technology and services company. Ecosphere has an extensive portfolio of patented clean technologies that can be purchased and licensed for use in large-scale and sustainable applications across industries, nations and ecosystems. EMPIRE BEEF: Allowed to Sell Inventory and Assets at 25% Discount ----------------------------------------------------------------- The Honorable John C. Nifo, II of the U.S. Bankruptcy Court for the Western District of New York authorized Empire Beef Co. to discount the sales price of certain of its inventory and account receivables. Specifically, the Court permitted the Debtor to: 1) discount the sales price of inventory in its discretion by not more 25% of the original purchase price, without further review from any party-in-interest or order from the Court; and 2) apply a 2% discount to certain accounts receivables for prompt payment, without further review from any other party- in-interest. The Debtor relates that since the date of bankruptcy, the Debtor and its professionals have struggled to maintain the volume of business with the Debtor's customers, as well as the level of collection of the Debtor's receivables. Recent developments in the case, including the Debtor's inability to purchase new inventory and the termination of the asset purchase agreement with Dot Foods, Inc., have strained its ability to maintain volume of sales and collection of receivables. If the Debtor is not able to move this inventory and collect its receivables, the value of the assets of the Debtor's estate will decrease, the Debtor explains. The Debtor believes that offering such discounts on slower moving inventory and certain receivables falls within the ordinary course of the Debtor's business, but out of an "abundance of caution", it seeks explicit authority from the Court to sell the inventory and collect the receivables pursuant to the Sections 105 and 363 of the U.S. Bankruptcy Code. About Empire Beef Based in Rochester, New York, Empire Beef Co. -- http://www.empirebeef.com/-- ships six million pounds of beef, pork, lamb, veal, seafood, poultry, cheese, processed meats, and multiple food products per week to more than twenty states, the Caribbean, and other international destinations. The meat are purchased from packers like Hormel, JBS Swift, and Perdue Farms, Empire Beef & Redistribution distributes packers' beef, cheese, lamb, pork, poultry, seafood, and veal in a 20 state area of the northeastern US. The firm also offers portion-controlled marinated and flavor-enhanced fresh and frozen meat products for foodservice companies as well as for retail sale. The company filed for Chapter 11 protection on Sept. 6, 2007, (Bankr. W.D. N.Y. Case No. 07-22226). Garry M. Graber, Esq., at Hodgson Russ LLP, represents the Debtor. Robert J. Feinstein, Esq. and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Official Committee of Unsecured Creditors in the bankruptcy case. The Debtor's schedules reflect $58,919,898 in total assets, and $65,093,171 in total liabilities. EMPIRE BEEF: U.S. Trustee Reconstitutes Creditors Committee ----------------------------------------------------------- Diana Adams, the U.S. Trustee for Region 2, reconstituted the composition of the Official Committee of Unsecured Creditors in the Chapter 11 case of Empire Beef Co. The Committee is now composed of: 1. Ryder Truck Rental Inc. Attn: Kevin P. Sauntry 6000 Windward Parkway Alpharetta, GA 30005 Tel: (770) 569-6511 Fax: (770) 569-6712 2. New York State Teamsters Pension & Retirement Fund and NYS Attn: Vincent M. DeBella, Esq. Paravati Karl Green & DeBella 12 Steuben Park Utica, NY 13501-2992 Tel: (315) 735-6481 Fax: (315) 735-6406 3. Total Logistic Control LLC Sara Hoge 8300 Logistic Drive Zeeland, MI 49464 Tel: (952) 828-4510 Fax: (952) 828-4403 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Empire Beef Based in Rochester, New York, Empire Beef Co. -- http://www.empirebeef.com/-- ships six million pounds of beef, pork, lamb, veal, seafood, poultry, cheese, processed meats, and multiple food products per week to more than twenty states, the Caribbean, and other international destinations. The meat are purchased from packers like Hormel, JBS Swift, and Perdue Farms, Empire Beef & Redistribution distributes packers' beef, cheese, lamb, pork, poultry, seafood, and veal in a 20 state area of the northeastern US. The firm also offers portion-controlled marinated and flavor-enhanced fresh and frozen meat products for foodservice companies as well as for retail sale. The company filed for Chapter 11 protection on Sept. 6, 2007, (Bankr. W.D. N.Y. Case No. 07-22226). Garry M. Graber, Esq., at Hodgson Russ LLP, represents the Debtor. Robert J. Feinstein, Esq. and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Official Committee of Unsecured Creditors in the bankruptcy case. The Debtor's schedules reflect $58,919,898 in total assets, and $65,093,171 in total liabilities. EMPIRE BEEF: U.S. Trustee Appoints Panel of 503(b)(9) Claimants --------------------------------------------------------------- The Honorable John C. Ninfo II of the U.S. Bankruptcy Court for the Western District of New York authorized and directed Diana Adams, the U.S. Trustee for Region 2, to appoint an official committee of 503(b)(9) claimants in Empire Beef Co.'s bankruptcy case. The U.S. Trustee appointed the following 503(b)(9) claimants to the official committee: 1) National Beef Packing Company, LLC Dale Robertson 12200 North Ambassador Drive Kansas City, MO 64163 Tel: (816) 713-8524 Fax: (816) 713-8856 2) Tyson Foods, Inc. Larry Alsip, Vice-President, Credit Candice Carlsen 2210 West Oaklawn Drive Springdale, AR 72762 Tel: (479) 290-4521 Fax: (479) 290-7967 3) Mountaire Farms, Inc. Andrew B. Cobb P.O. Box 5726 North Little Rock, AR 72119 Tel: (501) 399-8805 Fax: (501) 399-8846 4) Pilgrim's Pride Corporation Kim Lawrence 4845 U.S. Highway 271 North Pittsburgh, TX 75686 Tel: (903) 434-1624 Fax: (972) 290-8779 5) Pineland Farms Natural Meats, Inc. Allan L. Fairfield 41 Campus Drive, Suite 203 New Gloucester, ME 04260 Tel: (207) 688-4808 Fax: (207) 688-4266 6) Campbell Soup Company Linda Ellis, Director, Credit Oper. 1 Campbell Place Camden, NJ 08103 Tel: (856) 317-3117 Fax: (856) 317-3131 7) Rosina Food Products, Inc. Roger L. Palczewski, COO 170 French Road Buffalo, NY 14227 Tel: (716) 668-0123 ext. 8577 Fax: (716) 608-8598 8) Orion Seafodd Int., Inc. William J. Manning 20 Ladd Street, 3rd Floor Portsmouth, NH 03801 Tel: (603) 373-1022 Fax: (603) 433-8535 9) Rich Products Corporation David J. Carere P.O. Box D Buffalo, NY 14240 Tel: (716) 878-8383 Fax: (716) 878-8800 Earlier, National Beef Packing LLC, a 503(b)(9) claimant, requested the Court to order the appointment of an official committee of holders of claims that would be entitled to administrative priority pursuant to Section 503(b)(9) of the U.S. Bankruptcy Code, to the extent such claims are determined to be valid and enforceable. The Debtor scheduled approximately $29 million of unsecured claims, and the Debtor has recently estimated that up to $21-$22 million of those scheduled unsecured claims may be eligible for administrative priority status. Previously, the U.S. Trustee objected to National Beef's request for the panel appointment, asserting mainly that the 503(b)(9) claimants are not "creditors" pursuant to Section 101(10)(A), since the claimants hold administrative claims that arose during the Debtor's bankruptcy process. However, Judge Ninfo reminds that the language of Section 503(b)(9) expressly requires that the claims' respective goods be delivered before the bankruptcy filing. Judge Ninfo says that the claims arose and were incurred prior to the date of the Debtor's bankruptcy. Moreover, the Court says the appointment of the committee is appropriate, given the unusual and unique circumstances of the Debtor's case. The 503(b)(9) claimants are not adequately represented by the existing Official Committee of Unsecured Creditors, and the appointment of a 503(b)(9) committee is necessary to assure adequate representation of this significant creditor body, Judge Ninfo explains. About Empire Beef Based in Rochester, New York, Empire Beef Co. -- http://www.empirebeef.com/-- ships six million pounds of beef, pork, lamb, veal, seafood, poultry, cheese, processed meats, and multiple food products per week to more than twenty states, the Caribbean, and other international destinations. The meat are purchased from packers like Hormel, JBS Swift, and Perdue Farms, Empire Beef & Redistribution distributes packers' beef, cheese, lamb, pork, poultry, seafood, and veal in a 20 state area of the northeastern US. The firm also offers portion-controlled marinated and flavor-enhanced fresh and frozen meat products for foodservice companies as well as for retail sale. The company filed for Chapter 11 protection on Sept. 6, 2007, (Bankr. W.D. N.Y. Case No. 07-22226). Garry M. Graber, Esq., at Hodgson Russ LLP, represents the Debtor. Robert J. Feinstein, Esq. and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Official Committee of Unsecured Creditors in the bankruptcy case. The Debtor's schedules reflect $58,919,898 in total assets, and $65,093,171 in total liabilities. ENRON CORP: Shareholders' Lead Counsel Seeks $700MM Legal Fees -------------------------------------------------------------- The lead plaintiffs counsel for the 2001 Enron Corp. securities litigation indicated in a Nov. 20, 2007 filing in federal court in Houston that it will seek almost $700,000,000 in legal fees, or just under one tenth of the $7,200,000,000 in settlements recovered from several bankers, accountants and lawyers alleged to have participated in a scheme to defraud Enron shareholders. Trial attorney William S. Lerach, currently representing Lerach Coughlin Stoia Geller Rudman & Robbins LLP, in San Diego, California, is in line to recover as much as $50,000,000 in fees from the litigation, the Wall Street Journal reports, citing people with knowledge of the projected fee distribution. Mr. Lerach resigned from his firm, Milberg Weiss LLP, earlier this year and pleaded guilty to a conspiracy charge in connection with the firm's long-running prosecution. Milberg Weiss has denied wrongdoing. The Houston court filing, which laid out a proposed plan to distribute the $7,200,000,000 Settlement, indicated that plaintiffs will seek approval of the legal fees early next year. The fee compensation, if approved, would be the largest ever in a securities class action, the Journal says. The Enron fee "in absolute terms is a large number but everything about the Enron case involves large numbers," the Journal quoted Trey Davis, a spokesman for the Regents of the University of California, as saying. "When you look at work the legal team has conducted and the results, I think most people would objectively consider this a very reasonable fee request." The University of California is the lead plaintiff in the Enron Securities Litigation. "This is the largest recovery ever obtained for shareholders victimized by corporate fraud," Coughlin spokesman Dan Newman told the Journal, adding that, "the bottom line is that the defrauded shareholders will recover more than 90 percent of the settlement." On April 5, 2007, Enron shareholders filed a petition with the U.S. Supreme Court, asking the justices for a review of their class action lawsuit against several banks whose active and knowing participation in the Enron fraud led to more than $40,000,000,000 in investor losses. The petition seeks to overturn the March 19, 2-1 decision by a three-judge panel of the U.S. Fifth Circuit Court of Appeals. The Securities and Exchange Commission is currently revaluating the long history of "supporting scheme liability," including in the Enron case. Although some of the bank defendants have settled with the SEC, forfeiting nearly a half billion dollars in illegal profits, and some banks have reached settlements with the plaintiffs, certain banks have still not repaid any funds to the Enron shareholders. To date, the University of California has obtained $2,400,000,000 from Canadian Imperial Bank of Commerce; $2,200,000,000 from JPMorganChase; $2,000,000,000 from Citigroup; $222,500,000 from Lehman Brothers; $69,000,000 from Bank of America; $168,000,000 from Enron's outside directors, and $32,000,000 from Andersen Worldwide. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtors. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. FIRST FRANKLIN: Realized Losses Cue S&P to Lower Ratings -------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 43 classes of mortgage-backed securities issued by 12 First Franklin Mortgage Loan Trust transactions. At the same time, S&P removed three of these ratings from CreditWatch with negative implications, left one rating on CreditWatch with negative implications, and placed four of the lowered ratings on CreditWatch with negative implications. Furthermore, S&P placed its ratings on two other classes on CreditWatch with negative implications. Finally, S&P affirmed its ratings on the remaining classes from these and four additional First Franklin Mortgage Loan Trust transactions, two of which were also removed from CreditWatch negative. The downgrades reflect realized losses that have exceeded monthly excess interest cash flow, thereby reducing overcollateralization. As a result, O/C for the downgraded transactions has fallen to these levels (series: O/C amount ($), % of target, O/C target): -- 2002-FF1: $1,207,798; 76.2%; $1,584,884; -- 2002-FF3: $1,020,935; 47.4%; $2,155,304; -- 2003-FF2: $2,972,175; 68.0%; $4,372,301; -- 2003-FF3: $692,476; 36.2%; $1,928,785; -- 2004-FF1: $4,330,039; 29.5%; $14,699,762; -- 2004-FF2: $2,734,192; 62.2%; $4,395,608; -- 2004-FF4: $4,325,922; 90.3%; $4,790,035; -- 2004-FF5: $4,523,758; 82.3%; $5,500,000; -- 2004-FF6: $4,877,264; 91.7%; $5,317,344; -- 2004-FF7: $0; 0.00%; $3,908,327; -- 2004-FF10: $1,939,360; 39.7%; $4,882,076; and -- 2004-FF11: $14,633,740; 90.0%; $16,266,000. S&P's loss projections indicate that the current performance trends may further compromise credit support for the downgraded classes. The transactions with lowered ratings have sizeable loan amounts that are severely delinquent (90-plus-days, foreclosures, and REOs), which suggests that the unfavorable performance trends are likely to continue. The severe delinquencies relative to O/C are (series: severe delinquency amount ($), % of current pool balance, multiple of O/C): -- 2002-FF1: $5.396 mil.; 18.9%, 4.5x; -- 2002-FF3: $10.355 mil.; 21.4%, 10.1x; -- 2003-FF2: $9.440 mil.; 20.5%, 3.2x; -- 2003-FF3: $12.406 mil.; 25.9%, 17.9x; -- 2004-FF1: $14.477 mil.; 10.7%, 3.3x; -- 2004-FF2: $13.705 mil.; 17.9%, 5.0x; -- 2004-FF4: $16.217 mil.; 13.2%, 3.8x; -- 2004-FF5: $22.125 mil.; 10.3%, 4.9x; -- 2004-FF6: $18.679 mil.; 9.7%, 3.8x; -- 2004-FF7: $28.831 mil.; 8.9%, not applicable ($0 in O/C); -- 2004-FF10: $58.456 mil.; 18.3%, 30.1x; and -- 2004-FF11: $50.522 mil.; 15.1%, 3.55x. As of the October 2007 remittance report, cumulative realized losses for the downgraded deals were (series: realized loss ($), % of original pool balance): -- 2002-FF1: $5,363,143, 0.85%; -- 2002-FF3: $7,860,529, 0.91%; -- 2003-FF2: $8,087,492, 0.92%; -- 2003-FF3: $4,321,963, 0.55%; -- 2004-FF1: $9,673,776, 0.72%; -- 2004-FF2: $6,596,473, 0.75%; -- 2004-FF4: $6,857,934, 1.06%; -- 2004-FF5: $10,190,940, 0.93%; -- 2004-FF6: $8,033,772, 0.76%; -- 2004-FF7: $11,024,755, 0.71%; -- 2004-FF10: $9,868,258, 0.71%; and -- 2004-FF11: $11,070,716, 0.82%. S&P removed the ratings on three classes from series 2003-FF3 from CreditWatch negative because we lowered them to 'CCC'. According to Standard & Poor's surveillance practices, ratings lower than 'B-' on classes of certificates or notes from RMBS transactions are not eligible to be on CreditWatch negative. S&P lowered three additional ratings and removed them from CreditWatch negative because S&P believe they have credit support levels that are sufficient to maintain the lowered ratings. The seven ratings on CreditWatch with negative implications reflect severe delinquencies that significantly exceed O/C levels. Furthermore, series 2004-FF10 and 2004-FF11 will step down in the next one to three months, which could significantly deteriorate the subordination that provides support for several mezzanine classes. Standard & Poor's will continue to closely monitor the performance of the transactions with ratings on CreditWatch. If monthly losses decline to a point at which they no longer outpace monthly excess interest and the level of O/C has not been further eroded, S&P will affirm the ratings and remove them from CreditWatch. Conversely, if losses continue to outpace excess interest and the levels of O/C continue to decline, we will take further negative rating actions. The affirmations reflect credit support levels that are sufficient to maintain the current ratings. Subordination, O/C, and excess interest cash flow provide credit support for these transactions. Additionally, series 2001-FF1, 2002-FF2, 2002-FF4, 2002-FF1, 2002-FF3, 2003-FF3, 2004-FF7, and 2004-FF10 benefit from loan-level primary mortgage insurance policies issued by either PMI Mortgage Insurance Co. or Radian Guaranty Inc. The collateral for these series consists of 30-year subprime, fixed- or adjustable-rate mortgage loans that are secured by first liens on one- to four-family residential properties. Ratings Lowered and Placed on Creditwatch Negative First Franklin Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-FF3 M1 BBB/Watch Neg AA 2004-FF10 M-3 BB/Watch Neg A- 2004-FF10 M-4 B+/Watch Neg BBB+ 2004-FF10 M-5 B/Watch Neg BBB Rating Lowered and Remaining on Creditwatch Negative First Franklin Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-FF3 M2 B/Watch Neg BBB/Watch Neg Ratings Lowered and Removed from Creditwatch Negative First Franklin Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-FF3 M3 CCC BBB-/Watch Neg 2003-FF3 M4 CCC BB-/Watch Neg 2003-FF3 B CCC B/Watch Neg Ratings Lowered First Franklin Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2002-FF1 M-2 B AA 2002-FF1 M-3 B BBB 2002-FF3 M1 A AA 2002-FF3 M2 CCC A 2002-FF3 M3 CCC A- 2003-FF2 M-2 BB A 2003-FF2 M-3F B A- 2003-FF2 M-3A B A- 2003-FF2 M-4F B- BBB+ 2003-FF2 M-4A B- BBB+ 2003-FF2 M-5F B- BBB 2003-FF2 M-5A B- BBB 2004-FF1 B-2 BB BBB 2004-FF1 B-3 B BBB- 2004-FF2 M-5 BBB A 2004-FF2 M-6 BB A- 2004-FF2 M-7 B BBB+ 2004-FF2 M-8 B- BBB 2004-FF2 M-9 CCC BBB- 2004-FF4 B-2 BB BBB 2004-FF4 B-3 B- BBB- 2004-FF5 M-7 BB BBB+ 2004-FF5 M-8 B BBB 2004-FF5 M-9 B- BBB- 2004-FF5 B CCC BB+ 2004-FF6 B-4 B BB+ 2004-FF7 M8 BB BBB+ 2004-FF7 M9 B BBB 2004-FF7 B D CCC 2004-FF10 M-6 CCC BBB- 2004-FF10 M-7A CCC BBB- 2004-FF10 M-7F CCC BBB- 2004-FF11 M-10 B BBB- 2004-FF11 B-1 B- BB+ 2004-FF11 B-2 CCC BB Ratings Placed on Creditwatch Negative First Franklin Mortgage Loan Trust Rating ------ Series Class To From ------ ----- --- ---- 2004-FF11 M-8 BBB+/Watch Neg BBB+ 2004-FF11 M-9 BBB/Watch Neg BBB Ratings Affirmed and Removed from Creditwatch Negative First Franklin Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2002-FF2 M-2 BB BB/Watch Neg 2002-FF2 M-3 B B/Watch Neg Ratings Affirmed First Franklin Mortgage Loan Trust Series Class Rating ------ ------ ------ 2001-FF1 A-1, M-1 AAA 2002-FF1 I-A-2 AAA 2002-FF1 M-1 AA+ 2002-FF2 A-1, A-2 AAA 2002-FF2 M-1 AA 2002-FF3 A1, A2 AAA 2002-FF4 I-A2, II-A2 AAA 2002-FF4 M-1 AA 2002-FF4 M-2 A 2002-FF4 M-3 A- 2003-FF2 M-1 AA 2003-FF3 1-A, 2-A2 AAA 2004-FF1 S, R AAA 2004-FF1 M-1 AA 2004-FF1 M-2 A 2004-FF1 B-1 BBB+ 2004-FF2 M-1 AA+ 2004-FF2 M-2 AA 2004-FF2 M-3 AA- 2004-FF2 M-4 A+ 2004-FF4 A-1, A-2 AAA 2004-FF4 M-1 AA+ 2004-FF4 M-2 A 2004-FF4 M-3 A- 2004-FF4 B-1 BBB+ 2004-FF5 A-1, A-2, A-3C AAA 2004-FF5 M-1 AA+ 2004-FF5 M-2 AA 2004-FF5 M-3 AA- 2004-FF5 M-4 A+ 2004-FF5 M-5 A 2004-FF5 M-6 A- 2004-FF6 A-1, A-2B, M-1 AAA 2004-FF6 M-2 A+ 2004-FF6 M-3 A- 2004-FF6 B-1 BBB+ 2004-FF6 B-2 BBB 2004-FF6 B-3 BBB- 2004-FF7 A1, A5 AAA 2004-FF7 M1 AA+ 2004-FF7 M2 AA 2004-FF7 M3 AA- 2004-FF7 M4 A+ 2004-FF7 M5 A 2004-FF7 M6, M7 A- 2004-FF8 A-1, A-2C AAA 2004-FF8 M-1 AA+ 2004-FF8 M-2 AA 2004-FF8 M-3 A 2004-FF8 M-4 A- 2004-FF8 B-1 BBB+ 2004-FF8 B-2 BBB 2004-FF8 B-3 BBB- 2004-FF8 B-4 BB+ 2004-FF10 A-2, A-3 AAA 2004-FF10 M-1 AA 2004-FF10 M-2 A 2004-FF11 I-A1, I-A2, II-A3 AAA 2004-FF11 M-1, M-2 AA+ 2004-FF11 M-3 AA 2004-FF11 M-4 AA- 2004-FF11 M-5 A+ 2004-FF11 M-6 A 2004-FF11 M-7 A- FORD MOTOR: Names Tata, Mahindra & One Equity as Final Bidders -------------------------------------------------------------- Ford Motor Company has narrowed the final bidders for its Jaguar and Land Rover brands to three -- Indian carmaker Tata Motors Ltd., rival Mahindra & Mahindra Ltd. in collaboration with buyout firm Apollo Management LP, and One Equity Partners, a buyout firm funded by U.S. investment bank J.P. Morgan Chase & Co., Mathieu Robbins writes for Reuters, quoting people familiar with the matter. Tata, Mahindra & Mahindra and One Equity are each set to move on to the third round of negotiations with Ford in line with their efforts to acquire the two British marques, the report says. The three bidders are now expected to begin talks with trade unions and the U.K. government about saving jobs following speculations that some of the bidders intend to shift production from the U.K. Buyout firms TPG, Terra Firma and Ripplewood were expected to submit second-round bids but Ford decided to drop them from the third-round shortlist, Reuters reveals. Former Rover Head Eyes Jaguar Wolfgang Reitzle, the former head of Rover, has partnered with former Ford Motor CEO Jacques Nassar in a bid to buy Ford's Jaguar and Land Rover brands, Ben Harrington writes for the Daily Telegraph. According to the report, Mr. Reitzle has started working with One Equity Partners in the final stages of the auction process for the car brands. If One Equity's bid for Jaguar and Land Rover will be successful, Mr. Reitzle would take up a non- executive role at the company, the Telegraph relates. Unnamed industry sources told the Telegraph that Mr. Reitzle could provide the right management and advice to Jaguar and Land Rover. Analysts estimated that the two brands could cost as much as GBP1 billion between them. Mr. Reitzle previously worked for Ford Motor's Premier Automotive Group -- which includes Aston Martin, Jaguar, Lincoln, Volvo and Land Rover -- as chairman and CEO before he left for Linde AG in May 2002. As reported in the Troubled Company Reporter on June 13, 2007, Ford began exploring the sale of the European brands in June as part of a strategic global review, which also included the sale of Aston Martin to a Kuwait-backed consortium in a GBP480 million-deal completed in March, Reuters relates. As previously reported, the sale of the two luxury brands is expected to add about $1.5 billion to $2 billion to Ford's financial coffers. Ford is scrambling to beef up its finances in order to fund a potential Voluntary Employment Benefits Association, as well as its ongoing restructuring plans. About Ford Motor 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 Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. FORD MOTOR: Union Leaders Favor U.K. Brands Bidder Tata Motors -------------------------------------------------------------- Although officially protesting the sale, labor union leaders in the United Kingdom representing workers for Ford Motor Company's Jaguar and Land Rover units have selected bidder Tata Motors Ltd. to acquire the carmaker's Jaguar and Land Rover brands, various papers disclose. Among the final bidders of two of Ford's Premier Automotive Group brands -- Tata, J.P. Morgan Chase & Co.'s One Equity Partners and Mahindra & Mahindra Ltd. -- Tata is seen by Unite, U.K.'s largest union, as the one who will likely serve the best interest of the union members, Russell Hotten of the Telegraph.Co.UK reports citing Unite's joint general secretary, Tony Woodley. Unite union leaders at Jaguar and Land Rover said that if the U.K.-based units are sold it should to be to a company ``with an established presence and background in manufacturing,'' the union said in a statement. Stephen Power of the Wall Street Journal relates that union leaders are trying to make a sale that would streamline closure of manufacturing plants and displacement of workers at Jaguar and Land Rover units, which employs 16,000 workers in U.K. Sources say that the union endorsement is a political commendation for Tata and an influence to U.K.'s governing labor party, which is concern on the loss of investments and jobs in the U.K. About Ford Motor 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 Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. FREEDOM CERTIFICATES: S&P Affirms 'B' Rating on Two Classes ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' ratings on classes A and X from Freedom Certificates US Autos Series 2004-1 Trust and removed them from CreditWatch, where they were placed with positive implications on Sept. 28, 2007. The rating actions reflect the Nov. 19, 2007, affirmation of the long-term corporate credit and senior unsecured debt ratings on Ford Motor Credit Co. (Ford Credit; B/Stable/B-3), a subsidiary of Ford Motor Co. (Ford; B/Stable/B-3), and their removal from CreditWatch positive. The corporate rating actions on Ford and its affiliates have no immediate rating impact on the Ford-related asset-backed securities supported by collateral pools of consumer auto loans or auto wholesale loans. Freedom Certificates US Autos Series 2004-1 Trust is a pass- through transaction, the ratings on which are based solely on the lower of the ratings assigned to the underlying securities, the 7.375% bonds due Feb. 1, 2011, issued by Ford Credit, and the 7.25% notes due March 2, 2011, issued by GMAC LLC (BB+/Negative/B). FREESCALE SEMICON: Depressed Revenues Cue S&P to Cut Rating ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Freescale Semiconductor Inc. to 'B+' from 'BB-' and removed the rating from CreditWatch where it was placed with negative implications on Sept. 18, 2007. The outlook is negative. The action reflects the company's depressed revenues and cash flows, resulting in debt leverage well above earlier expectations, and limited prospects for material near-term improvement. "The ratings on Freescale reflect high debt leverage, about 7x EBITDA, which is not likely to materially improve over the intermediate term, reflecting ongoing challenging conditions in the company's key markets, and substantial revenue dependence on Motorola's cell phone business," said Standard & Poor's credit analyst Bruce Hyman. This is offset partially by the company's strong technology base and expectations that its good business position with its key customers will not significantly erode. Freescale is a major supplier to the networking, wireless, and automotive markets, where its semiconductors are key components of platforms with multiyear design lives. Debt leverage, 6.9x EBITDA for the four quarters ended September 2007, is expected to decline only modestly over the intermediate term. FRESH DEL MONTE: S&P Holds 'BB-' Rating and Removes Pos. Watch -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Cayman Islands-based Fresh Del Monte Produce Inc., and removed the rating from CreditWatch, where it was placed with positive implications on Nov. 1, 2007. The outlook is stable. "The rating affirmation reflects the uncertain regulatory environment in the produce industry despite the company's stronger credit measures and recently reduced debt levels," said Standard & Poor's credit analyst Alison Sullivan. In November 2007, Fresh Del Monte completed its planned equity offering and received about $116 million in proceeds, most of which was applied to debt reduction under its credit facility. However, the European Commission is still investigating Fresh Del Monte and other competitors in the fruit and vegetable industry, having reason to believe they may have violated European Union competition laws. "It is possible that Fresh Del Monte may be subject to a financial penalty which at this point cannot be quantified," said Ms. Sullivan. "In addition, it is possible that changes may be enacted to the current EU banana tariff system in 2008, and it remains unclear whether these could have an adverse effect on the company." Fresh Del Monte is the No. 1 marketer of fresh pineapples worldwide, and the No. 3 marketer of bananas worldwide. "However, product concentration remains a rating concern," said Ms. Sullivan. GLOBAL HOME: Files Amended Chapter 11 Reorganization Plan --------------------------------------------------------- Global Home Products LLC and its debtor-affiliates submitted to the U.S. Bankruptcy Court for the District of Delaware their amended plan of reorganization and amended disclosure statement. Treatment of Claims The amended plan is based on the cash contributions of Global Home Products Investors LLC, the entity that holds 97.75% of the equity security interests of Global Home Products LLC, for distribution to creditors. In addition, under the plan, any cash held by the Reorganized Debtors that constitutes collateral for Madeleine's Secured Claim, as of the date on which the plan becomes effective. The sum of collateral carve out constitutes "Effective Date Cash". Pursuant to the plan, GHPI would contribute $8,500,000 in effective date cash for pro rata distributions to applicable creditors as: (a) $1,000,000 to holders of class 5 general unsecured claims, after payment of any allowed reclamation claims, plus a percentage of certain net proceeds obtained by the Reorganized Debtors from any recoveries pursuant to Section 547 of "net chapter 5 claims recoveries" and (b) $3,500,000 to holders of allowed class 4 503(b)(9) claims. The remainder of the $4,000,000 of Effective Date Cash would be used to satisfy allowed administrative claims, allowed priority claims, and any allowed class 3 claims. The Effective Date Cash will be the sole source of distributions to the holders of allowed class 5 unsecured claims, allowed class 4 503(b)(9) claims, allowed administrative and priority claims, and allowed class 3 claims, provided that the holders of class 5 claims will also receive a portion of net chapter 5 claims recoveries provided under the plan. Who May Vote Under the plan, administrative claims, including professional fee claims and priority tax claims, are unclassified and are not entitled to vote. Except for class 6A (GHPI equity interests) and class 6C (subsidiary equity interests), no classes are unimpaired under the plan. Class 6A and class 6C are unimpaired and are each conclusively deemed to have accepted the plan. Accordingly, only the holders of claims in classes 1 (non- priority tax claims), class 2 (Madeleine secured claim), class 3 (other secured claims, class 4 503 (b)(9) claims, class 5 (unsecured claims and reclamation claims), and class 6B (non- GHPI equity interests) are entitled to vote to accept or reject the plan. Class 7 (canceled options and warrants) is impaired, but the members of this class will not receive or retain any property or other distribution under the plan. A copy of the Debtors' Joint Amended Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=071120221251 A copy of the Debtors' Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=071120221613 About Global Home Headquartered in Westerville, Ohio, Global Home Products LLC -- http://www.anchorhocking.com/and http:/www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. Lead 06-10340). Laura Davis Jones, Esq., David Bertenthal, Esq., Bruce Grohsgal, Esq., and Joshua Fried, Esq, at Pachulski Stang Ziehl & Jones LLP, represent the Debtors. Attorneys at Dinsmore & Shohl, LLP, and Frost Brown Todd LCC are the Debtors' special counsel. Epiq Bankruptcy Solutions, LLC acts as the Debtors' claims agent. Ronald F. Stengel, Conway Del Genio Gries & Co., LLC, is the Debtors' chief restructuring officer. Plante & Moran is the Debtors' 401(k) plan auditors. PricewaterhouseCoopers LLP and Deloitte Tax LLP provide tax services. Houlihan Lokey Howard & Zukin Capital is Debtors' the investment bankers while Johnson Associates Inc. is the special compensation advisor Sharon Levine, Esq., and Bruce Buechler, Esq., at Lowenstein Sandler PC; and David M. Fournier, Esq., at Pepper Hamilton LLP, represent the Official Committee of Unsecured Creditors. Attorneys at Basham, Ringer y Correa, SC is the Committee's special counsel. Huron Consulting Services LLC acts as the Committee's financial advisors. Jesse H. Austin, III, Esq., at Paul, Hastings, Janofsky & Walker LLP, and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell LLP, represent Medeleine LLC. Global Home Products Investors LLC, Cerberus Partners, LP, and Cerberus Capital Management, LP, is represented in these bankruptcy proceedings by Lawrence V. Gelber, Esq., and Sophie S. Kim, Esq., at Schulte Roth & Zabel LLP; and Adam G. Landis, Esq., and Kerri Mumford, Esq., at Landis Rath & Cobb LLP. GLOBAL HOME: Disclosure Statement Hearing Set for December 27 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has scheduled a hearing on Dec. 27, 2007, at 2:00 p.m. to consider the approval of the Amended Disclosure Statement explaining the Joint Plan of Reorganization filed by Global Home Products LLC and its debtor-affiliates. Objections to the disclosure statement must be filed by Dec. 20, 2007. About Global Home Headquartered in Westerville, Ohio, Global Home Products LLC -- http://www.anchorhocking.com/and http:/www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. Lead 06-10340). Laura Davis Jones, Esq., David Bertenthal, Esq., Bruce Grohsgal, Esq., and Joshua Fried, Esq, at Pachulski Stang Ziehl & Jones LLP, represent the Debtors. Attorneys at Dinsmore & Shohl, LLP, and Frost Brown Todd LCC are the Debtors' special counsel. Epiq Bankruptcy Solutions, LLC acts as the Debtors' claims agent. Ronald F. Stengel, Conway Del Genio Gries & Co., LLC, is the Debtors' chief restructuring officer. Plante & Moran is the Debtors' 401(k) plan auditors. PricewaterhouseCoopers LLP and Deloitte Tax LLP provide tax services. Houlihan Lokey Howard & Zukin Capital is Debtors' the investment bankers while Johnson Associates Inc. is the special compensation advisor Sharon Levine, Esq., and Bruce Buechler, Esq., at Lowenstein Sandler PC; and David M. Fournier, Esq., at Pepper Hamilton LLP, represent the Official Committee of Unsecured Creditors. Attorneys at Basham, Ringer y Correa, SC is the Committee's special counsel. Huron Consulting Services LLC acts as the Committee's financial advisors. Jesse H. Austin, III, Esq., at Paul, Hastings, Janofsky & Walker LLP, and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell LLP, represent Medeleine LLC. Global Home Products Investors LLC, Cerberus Partners, LP, and Cerberus Capital Management, LP, is represented in these bankruptcy proceedings by Lawrence V. Gelber, Esq., and Sophie S. Kim, Esq., at Schulte Roth & Zabel LLP; and Adam G. Landis, Esq., and Kerri Mumford, Esq., at Landis Rath & Cobb LLP. GREAT LAND: Files List of 20 Largest Unsecured Creditors -------------------------------------------------------- Great Land Seafoods LLC filed with the U.S. Bankruptcy Court for the Western District of Washington its list of unsecured creditors, disclosing: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carnitech U.S Inc. Trade Debt $620,392 2001 West Garfield Terminal 91, Bldg. A-1 Seattle, WA 98119 International Seafood Loan, Trade Debt $200,000 Trading Inc. Suite 109, 12505 Bellevue Redmond Road, Bellevue, WA Highland Refrigeration $163,229 4250 24th Ave. West Seattle, WA Beckwith & Kuffel $114,966 FM Automation and $111,588 Electric Inc. Redlined Welding and $106,312 Construction LLC AICCO Inc., Imperial $100,000 Credit Jim Branda F/V $60,000 Hydra-Pro $53,116 Rogge $36,013 Armstrong Keta Hatchery $35,000 Northlake Shipyard Inc. $30,000 Ballard Hardware $25,853 Internal Revenue Service, $18,500 Special Procedures Branch Rena International $18,000 Ivan Svansand $17,000 Northern Credit Services $8,574 Marine Vacuum Service $5,799 Marine and Industrial Cleaning Acme Fire Equip & $4,375 Salvage DJ Mahler, PE NA $3,641 Headquartered in Seattle, Washington, Great Land Seafoods LLC filed for Chapter 11 protection on Sept. 3, 2007 (Bankr. W.D. Wash. Case No. 07-14173). Francois L. Fischer, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it has estimated assets and debts of $1 million to $100 million. GROUP I: Moody's Puts Rating Under Review and May Downgrade ----------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 2 tranches and has placed under review for possible downgrade the rating of one tranche from Group I of MortgageIT Mortgage Loan Trust, Series 2006-1. One downgraded tranche remains on review for possible downgrade. The collateral backing these classes consists of primarily first lien, adjustable-rate, Alt-A mortgage loans. The ratings were downgraded and placed under review for downgrade based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. In its analysis Moody's has also applied its published methodology updates to the non delinquent portion of the transaction. Issuer: MortgageIT Mortgage Loan Trust, Mortgage Loan Pass-Through Certificates, Series 2006-1 -- Cl. 1-B1 Currently Aa2 on review for possible downgrade, -- Cl. 1-B2, Downgraded to Ba2, previously A2, -- Cl. 1-B3, Downgraded to B3, previously Baa2, on review for further possible downgrade. HARRAH'S ENT: Apollo Merger Gets Illinois Gaming Board's Approval ----------------------------------------------------------------- Harrah's Entertainment Inc. received approval from the Illinois Gaming Board for the proposed acquisition of Harrah's by affiliates of Apollo Management L.P. and TPG Capital. The transaction remains subject to approval by other jurisdictions in which Harrah's subsidiaries operate and other conditions to closing set forth in the agreement and plan of merger entered into on Dec. 19, 2006. About Apollo Management L.P. Based in New York, Apollo Management L.P. is a private equity L.P. firm, founded in 1990 by Leon Black. It also has offices in Los Angeles and London. It has invested over $16 billion in companies inside and outside the of the United States. About TPG Capital Headquartered in Fort Worth, Texas, TPG Capital, also known as Texas Pacific Group - http://www.texaspacificgroup.com/-- has staked its claim on the buyout frontier. The company, which does not get involved in the day-to-day operations of the companies in which it invests, usually holds onto an investment for at least five years, although consistent moneymakers may be kept indefinitely. About Harrah's Entertainment Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc.(NYSE: HET) -- http://www.harrahs.com/-- has grown through development of new properties, expansions and acquisitions, and now owns or manages casino resorts on four continents and hosts over 100 million visitors per year. The company's properties operate under the Harrah's, Caesars and Horseshoe brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker. Harrah's also owns the London Clubs International family of casinos. * * * Harrah's Entertainment Inc. continues to carry Standard & Poor's "BB" long term foreign and local issuer credit ratings, which were placed in December 2006. HELLER FINANCIAL: Fitch Junks Rating on $7.6MM Class M Certs. ------------------------------------------------------------- Fitch Ratings has downgraded these class of mortgage pass-through certificates from Heller Financial Commercial Mortgage Asset Corp., series 1999 PH-1: -- $7.6 million class M to 'CCC/DR1' from 'B-/DR1'. In addition, Fitch has affirmed these classes: -- $456.6 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $22.7 million class B at 'AAA'; -- $20.2 million class C at 'AAA'; -- $53 million class D at 'AAA'; -- $12.6 million class E at 'AAA'; -- $37.9 million class F at 'AAA'; -- $17.7 million class G at 'AA+'; -- $35.3 million class H at 'A-'; -- $20.2 million class J at 'BBB-'; -- $7.6 million class K at 'BB+'; -- $15.1 million class L at 'B'. The $5.2 million class N is not rated by Fitch. Class A-1 has paid in full. The downgrade is the result of expected losses on specially serviced loans. As of the November 2007 distribution date, the pool's balance has been reduced 29.5% to $711.7 million from $1 billion at issuance. Since issuance, 39 loans (27.7%) have defeased. Thirteen loans (11.4%) are considered Fitch Loans of Concern. Four of these assets are specially serviced (1.6%). The largest specially serviced asset (0.9%) is secured by a multifamily property in Houston, Texas and is currently making principal and interest payments. Losses are expected. The other specially serviced assets (0.6%) are secured by a portfolio of three, cross-collateralized apartment buildings in Colorado Springs, Colorado. The loans are 90 days delinquent. The largest Fitch Loan of Concern (5.1%) is an office property located in Franklin Township, New Jersey. The property is physically vacant, but the tenants are continuing to make lease payments through the lease expiration in April 2009. The anticipated repayment date of this loan is May 2009. Fitch reviewed the performance and underlying collateral of the two shadow-rated loans in the pool: South Plains Mall (7.8%), a retail mall in Lubbock, Texas and the Station Plaza Office Complex (2.4%) in Trenton, New Jersey. Based on their stable performance, both loans remain investment grade. HOBOKEN WOOD: Judge Sontchi Dismisses Chapter 7 Petition -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware on Nov. 16, 2007, dismissed the chapter 7 liquidation case of Hoboken Wood Flooring LLC and its three affiliates, Modern Distribution Management reports. Chapter 7 Trustee Jeoffrey L. Burtch, the report says, had filed for the case dismissal since no financing deal was closed with Wachovia Bank and other prepetition lenders resulting in the lack of funds to administer the case. Mr. Burtch added that the move to dismiss the case was based on his talks with Hoboken representatives, the report adds. As reported in the Troubled Company Reporter on Nov. 12, 2007, Craig S. Dean, Chief Restructuring Officer, said that the company had considered an orderly liquidation under Chapter 11 of the Bankruptcy Code. Mr. Dean relates however that after review, the company opted to file under Chapter 7 of the Bankruptcy Code in light of: (a) that the cash needs of the company in order to pursue the orderly liquidation of its remaining assets in a commercially reasonable manner under the circumstances; (b) its inability to obtain other financing in the event that it pursued an orderly liquidation; (c) its inability to generate cash while operating as a debtor and debtor-in-possession under chapter 11; and (d) the company's inability to fund payroll for its existing employees. Based in Wayne, New Jersey, Hoboken Wood Flooring LLC -- http://www.hobokenfloors.com/-- is the largest independent distributor of hardwood flooring in the U.S. It does business as Hoboken Wood Flooring Corp-South, Hoboken Wood Flooring LLC-South, and Hoboken Floors. The company, together with SPI Floors LLC, Garden State Supplies LLC, and WFA LLC filed for chapter 7 liquidation on Nov. 7, 2007 (Bankr. D. Del. Case Nos. 07-11658 through 07-11661). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom represents the Debtors in their restructuring efforts. John D. McLaughlin Jr., Esq., at Young Conaway Stargatt & Taylor LLP, represents Jeoffrey L. Burtch, the appointed Chapter 7 trustee in the case. The Debtors listed more than $100 million in assets and debts when they filed for bankruptcy. HUBERT LAIRD: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Hubert A. Laird aka Alan Laird 847 Kellaire Drive Destin, FL 32540 Bankruptcy Case No.: 07-31128 Chapter 11 Petition Date: November 19, 2007 Court: Northern District of Florida (Pensacola) Debtor's Counsel: J. Steven Ford, Esq. Wilson, Harrell, Farrington & Ford 307 South Palafox Street Pensacola, FL 32502 Tel: (850) 438-1111 Fax: (850) 432-8500 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Danny Smith $55,000 2637 Cedar Falls Way Sevierville, TN 37862 Hanley Center $28,174 5200 East Avenue West Palm Beach, FL 33407 David Woods $28,000 12720 Highway, 57 Street Darden, TN 38328 Cadenhead Law Firm $5,000 Carr, Riggs & Ingram $3,339 Wells Fargo $2,655 Sears $4,280 Capital One $2,336 Bangkok Cleaners $1,518 Gulf Medical Services $400 Incare Medical Services $291 Cox Communications $185 Town of Madisonville $134 Gulf Coast Collection $114 Embarq $57 Cleco Power $57 Okaloosa Gas $11 HYDRO SPA: Court OKs $2.5 Mil. Sale of Assets to Premium Leisure ---------------------------------------------------------------- The Honorable Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Hydro Spa Parts and Accessories Inc. to sell virtually all of its assets for $2,500,000, to Premium Leisure, LLC. Earlier, the Court approved the Debtor's request to establish sale and bidding procedures for the auction of its assets. The Court relates that no auction was conducted since the Debtor received only one qualified bid from Premium Leisure. The Debtor's plan provides that an amount shall be escrowed out of the purchase price with counsel for the Debtor, pending the confirmation of the Debtor's plan of reorganization. About Hydro Spa Based in St. Petersburg, Florida, Hydro Spa Parts and Accessories, Inc. -- http://www.hydrospa.com/-- sells bathroom, hot tub, and spa equipment and accessories. The Debtor filed for Chapter 11 protection on Sept. 19, 2007 (Bankr. M.D. Fla. Case No. 07-08616). John A. Anthony, Esq., John I. Van Voris, Esq., and Stephenie M. Biernacki, Esq., at GrayRobinson, P.A., represent the Debtor in its restructuring efforts, although the firm's qualifications are still under scrutiny by the Court. Foley & Lardner LLP represents the Official Committee of Unsecured Creditors appointed in the Debtor's in the Chapter 11 case. When the Debtor filed for protection from its creditors, it listed total assets of $10,659,077, and total liabilities of $13,611,578. The Court gave conditional approval to the Debtor's Disclosure Statement on Oct. 30, 2007, which is subject to the rights of objecting parties. The Court set the Plan confirmation hearing on Jan. 11, 2007. ILLINOIS FINANCE: Moody's Lowers Rating on $58.43MM Bonds to B1 --------------------------------------------------------------- Moody's has downgraded to B1 the Ba3 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 has also downgraded to B3 the B2 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. These downgrades are based on the high likelihood that debt service reserve funds will be tapped to provide for both Series A and Series B interest payments due on December 1, 2007. The outlook is negative based on the continued low occupancy rate and weak financial condition of the property, challenges that are expected to persist through the Spring 2008 semester. 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, has 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. As of Oct. 31, 2007, occupancy has not increased materially and, after review of current account balances held in trust, it is evident that revenue will not be sufficient to meet the required Dec. 1, 2007 interest payment to bondholders. Moody's expect that debt service reserve funds will be tapped in order to fulfill obligations to both Series A and Series B bondholders. Both reserve accounts are currently fully funded and will not be depleted by the December tap. Occupancy will likely remain at its current level at least through the end of the academic year, as student housing projects generally do not see large gains to occupancy once the initial Fall registration period completed. This is a characteristic and risk of student housing projects generally and is not particular to Fullerton Village or its real estate sub-market. Due to this cyclical nature of student housing rentals, Moody's expects that improvement in occupancy will not be realized until Fall 2008. Moody's therefore expect that debt service reserve funds will again be accessed to partially provide for the principal and interest due to bondholders on June 1, 2008. Moody's anticipates, looking prospectively, that at its current 52% occupancy level the project will provide just enough income to cover monthly operating expenses and partial debt service fund deposits (based on an average monthly expense level for the first half of 2007). Using these factors to estimate revenue and expenses over the next six months, and after review of the owner's projected financial budget, Moody's expect that a June 1, 2008 tap to debt service reserves is likely, but should not deplete the funds entirely. Moody's estimate that a partial tap will be required to pay Series A bond obligations and should result in a remaining fund balance of approximately $2.0 million (the fully funded required balance is $4.004 million). Moody's further estimate that a full tap will be made to fulfill Series B bond obligations in June, and the remaining balance will be approximately $48,000 (fully funded required balance is $1.043 million). It is likely, however, that expenses will be slightly reduced for the 2007 / 2008 academic year as certain costs naturally fluctuate with occupancy. Further, ICL Management, Inc., a Smithfield Properties affiliate, has replaced the Scion Group as property manager and will forego their usual fee for the first year of service. These two factors should help somewhat to alleviate the current stress on revenues and further ensure the going concern operations of Fullerton during the Spring and Summer 2008 semesters. Successful Fall 2008 lease up will thus be essential to the long term viability of the Fullerton Village project. Outlook The Dec. 1, 2007 tap to reserves, coupled with projected high vacancy rates through the current academic year, may exacerbate Fullerton's current financial difficulties due to both a lack of sufficient income and a reduction of interest income earnings. Significantly increased occupancy for Fall 2008 will be tantamount to the long term success of this project. As a result, the outlook on the bonds is negative, and Moody's will monitor any changes to the financial condition of the project closely. What would change the ratings - UP? -- A significant improvement in cash flow to the project, stemming primarily from increased occupancy for the 2008 / 2009 academic year. What would change the ratings - DOWN? -- Depletion of reserve fund monies. INTERNATIONAL COAL: Registers Resale of $225 Mil. 9% Sr. Notes -------------------------------------------------------------- International Coal Group Inc. has filed a registration statement on Form S-3 with the Securities and Exchange Commission for the resale by selling securityholders of ICG's $225 million aggregate principal amount of 9% convertible senior notes due 2012. The notes were originally issued in July and August 2007 in private placements exempt from registration under the Securities Act of 1933. The registration statement automatically became effective upon filing. ICG will not receive any proceeds from any resale by the selling securityholders of the securities. International Coal Group, headquartered in Scott Depot, West Virginia, is engaged in the mining and marketing of coal. The company has 11 active mining complexes, of which 10 are located in Northern and Central Appalachia and one in Central Illinois. ICG's mining operations and reserves are strategically located to serve utility, metallurgical and industrial customers throughout the Eastern United States. * * * As reported in the Troubled Company Reporter on Aug. 6, 2007, Standard & Poor's Ratings Services raised its rating on the $175 million 10.25% senior unsecured notes due 2014 of International Coal Group Inc. to 'B-' from 'CCC+'. INVERNESS MEDICAL: Completes $302 Mil. Buyout of Alere Medical -------------------------------------------------------------- Inverness Medical Innovations Inc. completed its acquisition of Alere Medical Inc. at a purchase price of $302 million, comprising approximately $128 million in cash and $174 million in Inverness common stock and assumed options. As reported in the Troubled Company Reporter on Oct. 26, 2007, Inverness Medical entered into an agreement to acquire Alere Medical Inc. Previously, the companies agreed that the purchase price amounting to $302 million will be comprised of approximately $125 million in cash and $177 million in Inverness common stock. About Alere Medical Inc. Headquartered in Reno, Nevada, Alere Medical Inc. -- http://www.alere.com/-- is a specialized health management services focusing on a patient-centric, programmatic approach to comprehensive personal health support. Alere's integrated care monitoring system identifies and monitors all medium- and high- risk patients, and prioritizes those patients to facilitate efficient workflow. With published outcomes that exceed those of any competitor, Alere Medical's health management programs improve clinical outcomes for patients and maximize savings for clients. About Inverness Medical Based in Waltham, Massachusetts, Inverness Medical Innovations Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. * * * Moody's placed Inverness Medical's subordinated debt rating at 'Caa1' as well as the company's long term corporate family and probability of default ratings at 'B2' in June 2007. The ratings still hold to date with a stable outlook. JOVIN INC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Jovin, Inc. P.O. Box 158 Hawley, PA 18428 Bankruptcy Case No.: 07-53016 Type of Business: The Debtor owns and operates a membership golf course. Chapter 11 Petition Date: November 20, 2007 Court: Middle District of Pennsylvania (Wilkes-Barre) Judge: Robert N. Opel, II Debtor's Counsel: John J. Martin, Esq. 1022 Court Street Honesdale, PA 18431 Tel: (570) 253-6899 Fax: (570) 253-6988 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. KING PHARMACEUTICALS: Moody's Puts Ba3 Rating on Sr. Facility ------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the senior secured credit facility of King Pharmaceuticals, Inc. Moody's also affirmed King's Ba3 Corporate Family Rating. The outlook for the ratings remains stable. The Ba3 Corporate Family Rating and stable outlook are supported by the company's solid financial metrics and ample liquidity, which are very strong for a "Ba" company. In addition, Moody's views favorably the company's efforts to refocus its strategy to develop core competencies in the pain management, neuroscience and acute care markets. Moody's believes certain key products in the company's pipeline, including Remoxy and Acurox are critical to the success of this strategy. The ratings are principally constrained by King's very high exposure to patent expirations and challenges over the next three years and the potential revenue loss on these products, namely Altace and Skelaxin. Moody's believes that these challenges -- reflected in King's negative shareholder returns -- create event risk, including the potential for a transforming acquisition or shareholder-friendly initiatives. Moody's believes that these risks are rising, but are still consistent with King's Ba3 rating. However, if the company were to experience a setback in the development and launch of a key pipeline product, such as Remoxy or Acurox, Moody's believes that event risk would rise even further. Under this scenario, the rating outlook could potentially be revised to negative. Ratings assigned: -- Senior secured credit facility due 2012, Ba3 (LGD4, 52%) Rating affirmed: -- Ba3 Corporate Family Rating Moody's does not rate King's $400 million senior unsecured convertible notes due 2026. Headquartered in Bristol Tennessee, King Pharmaceuticals, Inc. [NYSE:KG] develops, manufactures and markets branded prescription pharmaceutical products. The company's strategy includes life- cycle management of existing products, new product development, and product acquisitions and collaborations. The company reported revenues of approximately $2.1 billion for the twelve months ended September 30, 2007. L TERSIGNI: Taps M. Stuart Goldberg as Lead Bankruptcy Counsel -------------------------------------------------------------- L. Tersigni Consulting CPA, P.C. asks the United States Bankruptcy Court for the District of Connecticut Bridgeport Division for authority to retain M. Stuart Goldberg LLC as its lead bankruptcy counsel. The Debtor selected MSG as its lead bankruptcy counsel because of MSG's extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under chapter 11 of the Bankruptcy Code. As lead bankruptcy counsel, MSG shall: a) assist and advise the Debtor relative to the administration of its Chapter 11 case: b) attend meetings and negotiate with the representatives of and counsel to creditors of the Debtor; c) assist and advise the Debtor in the conduct of its affairs; d) assist the Debtor in proposing any plan of reorganization that may be filed; e) take all necessary action to protect and preserve the interests of the Debtor, including the prosecution of actions on its behalf and negotiations concerning all litigation in which the Debtor is involved; f) generally prepare on hehalf of the Debtor all necessary motions, applications, answers and orders; g) appear before the Court and protect the interest of the Debtor before said Court; h) perform all other necessary legal services requested or required of the Debtor in this case. Prior to the bankruptcy filing, MSG received a retainer of $65,000 in consideration of services rendered prior to the bankruptcy filing and in contemplation of the Debtor's chapter 11 case; in consideration of the performance of services that will be rendered in the bankruptcy case; and to cover the $1,039.00 cost of the filing. Subject to Court approval, compensation will be payable to MSG on an hourly basis for professional services rendered and expenses incurred in accordance with the provisions of the Bankruptcy Code Sections 328, 330 and 331. MSG currently bills: Professional Hourly Rate ------------ ----------- Marc Stuart Goldberg, Esq. $445 Counsel $375 - $425 Associates $250 - $350 Paralegals $125 Marc Stuart Goldberg, Esq., the sole member of MSG, attests that the firm does not hold or represent any interest adverse to the Debtor's estate and that MSG is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Mr. Goldberg can be reached at: Marc Stuart Goldberg, Esq. M. Stuart Goldberg LLC 81 Main Street, Suite 205 White Plains, New York 10601 Tel.: (914) 949-5400 Based in Stamford, Connecticut, L. Tersigni Consulting CPA, P.C. was engaged in the business of accounting and financial advisor to various constituencies in mattters relating to claims asserted primarily in asbestos litigation and asbestos related bankruptcy cases. The company filed for chapter 11 protection on Nov. 14, 2007 (Bankr. D. Conn. Case No. 07-50702). When the Debtor filed for protection from their creditors, it listed estimated assets of $1 million to $100 million and estimated debts of $100,000 to $1 million. L TERSIGNI: Wants Approval on Reid and Riege as Local Counsel ------------------------------------------------------------- L. Tersigni Consulting CPA, P.C. asks the United States Bankruptcy Court for the District of Connecticut Bridgeport Division for authority to employ Reid and Riege, P.C. as its local counsel. The Debtor selected Reid and Riege, P.C. as its local counsel because of the firm's experience and qualification in matters related to bankruptcy. As local counsel, Reid and Riege, P.C. shall: a) give legal advice with respect to the local rules of the District; b) assist lead counsel when and where necessary without duplication of efforts; c) coordinate with lead counsel in preparing on behalf of the Debtor the necessary applications, motions, complaints, answers, orders, reports and other legal papers without duplication of services; d) attend court hearings on behalf of the Debtor when necessary; and e) perform all other legal services for the Debtor which may be necessary in the Debtor's bankruptcy case without duplicating efforts of lead counsel. Prior to the bankruptcy filing, Reid and Riege, P.C. received a retainer of $20,000 in consideration of performance of services rendered immediately prior to the chapter 11 filing and in contemplation of the Debtor's chapter 11 case; and in consideration of the performance of services that will be rendered in Debtor's bankruptcy case. No promises have been received by Reid and Riege, P.C. or any shareholder or associate thereof as to compensation in connection with the bankruptcy cases other than in accordance with the provisions of the Bankruptcy Code. Carol A. Felicetta, Esq., an associate in the law firm of Reid and Riege, P.C., attests that the firm does not hold or represent any interest adverse to the Debtor's estate and that Reid and Reige, P.C. is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Ms. Carol A. Felicetta, Esq. can be reached at: Carol A. Felicetta, Esq. Reid and Riege, P.C. 195 Church Street New Haven Connecticut 06510 Based in Stamford, Connecticut, L. Tersigni Consulting CPA, P.C. was engaged in the business of accounting and financial advisor to various constituencies in mattters relating to claims asserted primarily in asbestos litigation and asbestos related bankruptcy cases. The company filed for chapter 11 protection on Nov. 14, 2007 (Bankr. D. Conn. Case No. 07-50702). When the Debtor filed for protection from their creditors, it listed estimated assets of $1 million to $100 million and estimated debts of $100,000 to $1 million. LAWRENCE SALANDER: Section 341(a) Meeting Slated for December 5 --------------------------------------------------------------- The United States Trustee for Region 2 will convene a meeting of creditors in the bankruptcy cases of Lawrence B. Salander and Julie D. Salander at 2:00 p.m. on Dec. 5, 2007 at the Office of the U.S. Trustee, 181 Church Street in Poughkeepsie, 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. About Lawrence B. Salander Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York, has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. The couple owns New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- which exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners are Carol F. Cohen of Two Swans Farm claiming $4,607,900; Giorgio Cavallon Family LP with $960,000 claim; and Richard Ellenberg with a contract claim of $50,400. Amos Alter, Esq. at Troutman Sanders LLP and John Koegel, Esq. at The Koegel Group LLP are counsels to the petitioners. On Nov. 9, 2007, the Salander-O'Reilly's case was converted to a chapter 11 proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP, and Susan P. Persichilli, Esq., at Buchanan Ingersoll PC, represent the Debtor. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. LAWRENCE SALANDER: Taps Baker & Hostetler as General Counsel ------------------------------------------------------------ Lawrence B. Salander and Julie D. Salander ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Baker & Hostetler LLP as their general counsel, effective as of the bankruptcy filing. Baker & Hostetler will: (a) give advice to the Debtors with respect to the Debtors' powers and duties as debtors in possession in the continued operation of the Debtors' business and the management of their properties, including the negotiation and finalization of any financing agreements; (b) assist in identification of assets, liabilities of the estate, and the sale of assets; (c) assist the Debtors in formulating a plan of reorganization and to take necessary legal steps in order to confirm the plan, including the preparation and filing of a disclosure statement relating thereto; (d) prepare and file on behalf of the Debtors, all necessary applications, motions, orders, reports, adversary proceedings and other pleadings and documents; (e) appear in Court and to protect the interests of the Debtors before the Court; (f) analyze claims and competing property interests, and negotiate with creditors and parties-in-interest on behalf of the Debtors; and (g) perform all other legal services for the Debtors which may be necessary in these proceedings. Baker & Hostetler's hourly rates range from from $400-$770 for partners, $200-$400 for associate, and $100-$200 for paralegals. The Debtors anticipate that these staff from the firm will assist them in the cases: Professional Rate ------------ ---- John W. Moscow, Esq. $650 Douglas E. Spelfogel, Esq. $560 Patrick Hannon, Esq. $600 Richard J. Bernard, Esq. $450 Elyssa S. Kates, Esq. $340 Jack Fitzgerald, Esq. $320 Rebecca Thalberg, Esq. $260 Eric R. Goodman, Esq. $245 Subject to approval of the Court, the Debtor has agreed to pay a $200,000 funded escrow to Baker & Hostetler. Mr. Spelfogel assures the Court that Baker & Hostetler is a "disinterested person" as such term is defined in Section 101(14) of the Bankruptcy Code as modified by Section 1107(b). The firm can be reached at: Douglas E. Spelfogel, Esq. Baker & Hostetler LLP 45 Rockefeller Plaza, 10th Floor New York, NY 10111 Tel: (212) 589-4280 Fax: (212) 589-4201 http://www.bakerlaw.com/ About Lawrence B. Salander Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York, has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. The couple owns New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- which exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners are Carol F. Cohen of Two Swans Farm claiming $4,607,900; Giorgio Cavallon Family LP with $960,000 claim; and Richard Ellenberg with a contract claim of $50,400. Amos Alter, Esq. at Troutman Sanders LLP and John Koegel, Esq. at The Koegel Group LLP are counsels to the petitioners. On Nov. 9, 2007, the Salander-O'Reilly's case was converted to a chapter 11 proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP, and Susan P. Persichilli, Esq., at Buchanan Ingersoll PC, represent the Debtor. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. LB-UBS COMMERCIAL: Fitch Holds Junk Rating on $3.6 Mil. Certs. -------------------------------------------------------------- Fitch Ratings upgrades two classes of LB-UBS Commercial Mortgage Trust commercial mortgage pass-through certificates, series 2002- C4, as: -- $12.7 million class H to 'AAA' from 'AA+'; -- $12.7 million class J to 'AA-' from 'A+'. Additionally, Fitch affirms the following classes: -- $45.7 million class A-2 at 'AAA'; -- $78.7 million class A-3 at 'AAA'; -- $86 million class A-4 at 'AAA'; -- $850.5 million class A-5 at 'AAA'; -- $18.2 million class B at 'AAA'; -- $20 million class C at 'AAA'; -- $20 million class D at 'AAA'; -- $12.7 million class E at 'AAA'; -- $16.4 million class F at 'AAA'; -- $10.9 million class G at 'AAA'; -- $12.7 million class K at 'A-'; -- Interest-only class X-CL at 'AAA'; -- Interest-only class X-CP at 'AAA'; -- Interest-only class X-VF at 'AAA'; -- $20 million class L at 'BBB-'; -- $7.3 million class M at 'BB+'; -- $7.3 million class N at 'BB'; -- $3.6 million class Q at 'B'; -- $1.8 million class S at 'B-'; -- $3.6 million class T at 'CCC'. Class A-1 has paid in full. Fitch does not rate classes P or U. The upgrades reflect the stable performance and paydown due to scheduled amortization since the last rating action. As of the November 2007 distribution, the pool's aggregate principal balance has been reduced by 13.2% to $1.26 billion from $1.46 billion at issuance. Thirty loans (39.6%) have defeased, including five of the 10 largest loans. There is one specially-serviced loan (0.3%). Two of the shadow rated loans, 605 Third Avenue (12.3%) and the Horizon Portfolio (1.6%), have defeased. Fitch reviewed servicer- provided performance data for the remaining three non-defeased shadow rated loans; Westfield Shoppingtown Valley Fair Mall (21.6%), Hamilton Mall (5.8%), and 1166 Avenue of the Americas (5.6%). The debt service coverage ratios for the loans are calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balances and a hypothetical mortgage constant. The largest loan in the transaction, Westfield Shoppingtown Valley Fair Mall, is secured by 714,603 square feet within a 1.4 million sf shopping mall located in Santa Clara, California. The mall's anchors are Macy's and Nordstrom. As of April 2007, the collateral was 98% occupied, which is a slight improvement over the 96.1% occupancy rate at issuance. The Fitch-stressed debt service coverage ratio on net cash flow for the trust balance as of year- end 2006 financials was 2.06 times compared to 1.67x at issuance. The $273.1 million trust balance loan maintains an investment grade shadow rating. The 1166 Avenue of the Americas loan is secured by 560,925 sf of a 1.6 million sf, 44-story office tower located in Manhattan, New York City. The sole tenant, Marsh & McClennan Companies Inc., occupies 100% of the collateral. Occupancy at issuance was also 100% and the loan maintains an investment grade shadow rating. The $70.8 million trust balance is pari-passu with a $72.4 million note within the AACMT 2002 - C5 securitization. The Hamilton Mall loan is secured by 836,236 sf of a 1 million sf mall located in Mays Landing, NJ that is anchored by Macy's, Sears, and JC Penney. Occupancy has been stable since issuance. As of June 30, 2007, the collateral was 94.4% occupied compared to 94.1% at issuance. The Fitch-stressed DSCR on NCF for the trust balance as of year-end 2006 was 1.45 times compared to 1.28x at issuance. The $73.5 million loan, which has paid down by 5.8% since issuance due to amortization, maintains an investment grade shadow rating. The specially serviced loan is secured by a 77,786 sf mall located in Kenner, Louisiana. The mall was damaged by Hurricane Katrina, but repairs are complete and occupancy has stabilized. The loan is expected to be returned to the master servicer. LEVITT AND SONS: Court Fixes February 11 as Claims Bar Date ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida established Feb. 11, 2008 as the deadline in which creditors of Levitt and Sons LLC and its debtor-affiliates can file proofs of claim against the Debtors' estates. The Court requires each creditor holding or wishing to assert a claim, as defined in Section 101(5) of the Bankruptcy Code, against the Debtors arising on and before the Debtors' date of bankruptcy to file a separate, completed and executed proof of claim no later than 5:00 p.m. on February 11. For governmental units, the claims deadline is May 7, 2008. The claims are to be sent to Kurtzman Carson Consultants, LLC, in 2335 Alaska Avenue, in El Segundo, California. As reported in the Troubled Company Reporter on Nov. 16, 2007, the Debtors anticipate filing their joint liquidating plan of reorganization and disclosure statement shortly. It is essential to ascertain, as soon as possible, the full nature, extent and scope of the claims asserted against the Debtors and their estates, said the Debtors. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Organizational Meeting Scheduled on December 20 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida sets Dec. 20, 2007, at 10:00 a.m., for an organizational meeting of creditors in the Chapter 11 cases of Levitt and Sons, LLC and its debtor-affiliates, at the Claude Pepper Federal Building, 51 Southwest First Avenue, Room 102, in Miami, Florida. Creditors are welcome to attend, but are not required to do so. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Gets Court Nod to Use Lenders' Cash Collateral --------------------------------------------------------------- The Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida permitted Levitt and Sons LLC and its debtor-affiliates to use cash on hand, including the cash collateral in which their bank lenders may claim an interest. The Debtors are allowed to use the cash on hand from the date of bankruptcy through Nov. 27, 2007, the final hearing on the Debtors' request. As reported in the Troubled Company Reporter on Nov. 15, 2007, Lawrence E. Young, a managing director at AlixPartners, LLP, and chief restructuring officer of Levitt and Sons, LLC, relates that the Debtors need immediate access to cash collateral to continue to operate, and pay wages and other direct operating expenses. As of the Debtors' bankruptcy filing, the Debtors had roughly $4,700,000 of unrestricted cash on hand. The Debtors expect receiving $7,438,200 from business operations as well as the sale of certain assets during the period. Mr. Young says the Debtors' cash on hand is maintained at accounts with City National Bank in the company's name. The cash on hand includes funds advanced by Levitt Corp. to LAS, the proceeds of lot sales remitted in the ordinary course of business by LAS's subsidiary to LAS, and other receipts of LAS. None of the lenders has control of the City National Bank accounts. The Debtors also intend to sell homes and lots during bankruptcy. Mr. Young says the proceeds of those sales constitutes the cash collateral of one or more of the lenders. According to him, the Debtors also propose to use those proceeds to fund their postpetition operations in the ordinary course of business in accordance with the budget. Immediate access to cash collateral, Mr. Young notes, will allow the Debtors to preserve the value of their assets so as to avoid immediate and irreparable harm to their estates, and afford the Debtors adequate time to negotiate and seek approval for additional cash collateral use, subject to and within the limits imposed by the budget. A full-text copy of the Debtors' budget is available at no charge at http://researcharchives.com/t/s?2549 Pursuant to the Court order, the Debtors may use the cash on hand to pay their ordinary and necessary business expenses, as stated in their budget, provided that the Debtors may exceed the line item amounts by no more than 10%. As adequate protection for the use of cash on hand, each of the lenders is granted a replacement lien on all postpetition property of the Debtors that is of the same nature and type as each Lender's prepetition collateral. Any objection to the entry of the final order will be filed and served no later than two business days before the November 27 hearing. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITZ FURNITURE: Can Employ Asset Disposition as Consultant ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York gave PLVTZ Inc., dba Levitz Furniture Inc., and its debtor- affiliates authority to employ Asset Disposition Advisors LLC, on an interim basis, as advisors and consultants, nunc pro tunc to the bankruptcy filing. The Debtor desire to employ Asset Disposition -- pursuant to the terms of an engagement letter dated Oct. 29, 2007 -- in connection with the disposition and liquidation of certain of its assets, particularly its inventory and trade fixtures in certain locations designated for closure. Asset Disposition will: * perform or advise the Debtor regarding the disposition of selected non-core business assets, including designated store location inventory, furniture, fixtures and equipment; * identify and contact proposed purchasers of select business operations or assets, including stores selected for closure; * review and inspect the Debtor's assets as may be requested from time to time by the Debtor; * consult with the Debtor and the Debtor's other retained advisors as to the evaluation, valuation, and where appropriate, disposition of certain of the Debtor's leasehold interests or fee-owned properties; and * attend meetings, as requested, with the Debtor, its lenders, any official or unofficial committee of creditors that may be appointed, potential investors and other parties-in- interest. The Debtors will pay Asset Disposition at these standard hourly rates: Professional Hourly Rate ------------ ----------- Paul Traub (Principal) $675 Barry Gold (Principal) $650 Senior Consultants $625 - $640 Junior Consultants $335 - $395 Support Staff $100 - $175 Prior to the Petition Date, the Debtor provided a retainer to Asset Disposition for $527,000. A portion of the retainer -- $127,000 -- was applied to fees and expenses the firm incurred prior to the Petition Date, leaving an unpaid retainer balance of approximately $400,000. The Debtor has selected Asset Disposition because it is an expert in matters that will significantly enhance the value recovered for the Debtor's assets designated for disposition through the conduct of strategic store closings. Mr. Traub, a principal of Asset Disposition, assures the Court that his firm is a "disinterested person," as that phrase is defined in Section 101(14) of the Bankruptcy Code as modified by Section 1107(b). About Levitz Furniture Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. PLVTZ's balance sheet at Sept. 30. 2007, showed total assets of $177,883,000 and total liabilities of $152,476,000. (Levitz Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEVITZ FURNITURE: Court OKs Young Conaway as Conflicts Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave PLVTZ Inc., dba Levitz Furniture Inc., and its debtor- affiliates interim authority to employ Young Conaway Stargatt & Taylor, LLP, as conflicts counsel nunc pro tunc to the bankruptcy filing. As reported in the Troubled Company Reporter on Nov. 14, 2007, the Debtors have selected Young Conaway because of the firm's extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. As conflicts counsel, Young Conaway will have the responsibility to represent the Debtor on matters that may not be appropriately handled by the Debtor's primary bankruptcy counsel -- Jones Day -- because of a potential conflict of interest. Young Conaway is expected to: * advise the Debtor regarding its powers and duties as a debtor-in-possession in the continued management and operation of its businesses and properties; * prepare and pursue confirmation of a plan and approval of a disclosure statement; * attend meetings and negotiate with representatives of creditors and other parties-in-interest; * take necessary actions to protect and preserve the Debtor's estate; * prepare legal documents necessary to the administration of the estate, on the Debtor's behalf,; * advise the Debtor in connection with any potential sale of assets; * appear before the Court and any appellate courts to protect the interests of the Debtor's estate; and * provide other legal services and advice to the Debtor in connection with the case. Under the terms of the engagement letter dated Nov. 6, 2007, Young Conaway will be paid on an hourly basis and reimbursed of expenses incurred in the rendition of services. The firm already received a $75,000 retainer and will hold the retainer until the conclusion of its representation, pursuant to the engagement letter. The principal attorneys and paralegal presently designated to represent the Debtors and their current standard hourly rates are: Professional Rate ------------ ---- M. Blake Cleary, Esq. $450 Ian S. Fredericks, Esq. $275 Nathan D. Grow, Esq. $250 Kimberly Beck $165 M. Blake Cleary, Esq., at Young Conaway, in New York, assured the Court that his firm is a disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). The firm can be reached at: Young Conaway Stargatt & Taylor LLP New York Office 845 Third Avenue Suites 606 & 608 New York, NY 10022 Tel: (646) 290-5018 Fax: (646) 290-5019 http://www.youngconaway.com/ About Levitz Furniture Based in New York City, Levitz Furniture Inc., nka PVLTZ Inc. -- http://www.levitz.com/-- is a specialty retailer of furniture, bedding and home furnishings in the United States. It has 76 locations in major metropolitan areas, principally in the Northeast and on the West Coast of the United States. Levitz Furniture Inc. and 11 affiliates filed for chapter 11 on Sept. 5, 1997. In December 2000, the Court confirmed the Debtors' Plan and Levitz emerged from chapter 11 on February 2001. Levitz Home Furnishings Inc. was created as the new holding company as a result of the emergence. Levitz Home Furnishings and 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 45189). In their second filing, the Debtors disclosed about $245 million in total assets and $456 million in total debts. Nicholas M. Miller, Esq., and Richard H. Engman, Esq., at Jones Day represented the Debtors. Jeffrey L. Cohen, Esq., Jay R. Indyke, Esq., and Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP served as counsel to the Official Committee of Unsecured Creditors. During this period, the Debtors closed around 35 stores in the Northeast, California, Minnesota and Arizona. PLVTZ Inc., a company created by Prentice Capital Management LP, and Great American Group purchased substantially all the assets of Levitz Home Furnishings in December 2005. Initially, Prentice owned all of the equity interests in PLVTZ. On July 6, 2007, PLVTZ was converted into a Delaware corporation, and Harbinger Capital Partners Special Situations Fund, LP, Harbinger Capital Partners Master Fund I, Ltd., and their affiliates became minority shareholders. Great American's stake in the acquisition was in running the going-out-of-business sales for some 27 Levitz units. PLVTZ, dba Levitz Furniture, continued to face decline in financial performance since December 2005. Liquidity issues and the inability to obtain additional capital prompted PLVTZ to seek protection under chapter 11 on Nov. 8, 2007 (Bankr. S.D.N.Y. Lead Case No. 07-13532). Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. PLVTZ's balance sheet at Sept. 30. 2007, showed total assets of $177,883,000 and total liabilities of $152,476,000. (Levitz Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LIMITED BRANDS: Earns $12.1 Million in Period Ended November 3 -------------------------------------------------------------- Limited Brands reported $12.1 million of net income on $1.9 billion net sales for the 13 weeks ended Nov. 3, 2007, compared to $23.5 million of net income on $2.1 billion net sales for 13 weeks ended Oct. 28, 2006. Third quarter operating income was $61.1 million compared to $66.5 million last year. The company reported $329.4 million of net income on $6.8 billion net sales for the 39 weeks ended Nov. 3, 2007, compared to last year's $235.9 million net income on $6.6 billion. Share Repurchase In the third quarter, the company repurchased 14.6 million shares of stock for $336 million, leaving $96 million remaining in its current $250 million authorization. The company also disclosed that its Board of Directors has authorized an additional $250 million share repurchase program. November and Fourth Quarter Outlook The company stated that it now expects negative mid-single digit comparable store sales for November, versus its previous guidance for flat comparable store sales. It also expects fourth quarter earnings per share of $0.90 to $1.05 versus $1.08 last year. The decline versus its previous guidance reflects issues related to the opening of a new distribution center for Victoria's Secret Direct and the challenging overall retail environment. Last year's earnings per share results include approximately $0.04 related to the 53rd week. About Limited Brands Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN) -- http://www.tysonfoods.com/-- is a processor and marketer of chicken, beef, and pork. The company produces a wide variety of protein-based and prepared food products, which are marketed under the "Powered by Tyson(TM)" strategy. The company has operations in China, Japan, Singapore, South Korea, Taiwan, and the United Kingdom. * * * As reported in the Troubled Company Reporter on Aug. 24, 2007, Moody's Investors Service affirmed Tyson Foods Inc.'s ratings, including its Ba1 corporate family rating and Ba1 probability of default rating. The rating outlook is negative. LUXURY VENTURES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Luxury Ventures, L.L.C. 27820 South Tamiami Trail, Suite 3 Bonita Springs, FL 34134 Bankruptcy Case No.: 07-11224 Type of Business: Doing business as Henricks Jewelers, the Debtor sells jewelry in retail. Chapter 11 Petition Date: November 19, 2007 Court: Middle District of Florida (Ft. Myers) Judge: Alexander L. Paskay Debtor's Counsel: Paul J. Battista, Esq. Genovese, Joblove & Battista, P.A. 100 Southeast 2nd Street, 44th Floor Miami, FL 33131 Tel: (305) 349-2300 Fax: (305) 349-2310 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ S.D.C. Designs, L.L.C. $386,281 6 East 45th Street, Suite 901 New York, NY 10017 Spark Creations, Inc. $251,441 10 West 46th Street New York, NY 10036-4500 Epsilon Jewelry Corp. $204,404 70 West 40th Street, 12th Floor New York, NY 10018 Parr Media Group, Inc. $198,558 Luxury Values Direct $186,914 Willis Cowlishaw $171,250 Alexander Kalifano $147,640 L.J.N., Inc. $142,223 Baguette World $134,971 Lustre Diamonds $125,996 Emilio! $113,837 Kalencom Corporation $112,706 Lau International $109,731 D.A. Gold $107,585 B.A.C.E. Group $100,000 Christopher Designs, Inc. $98,022 Festina U.S.A. $93,372 Pronto Jewelry, Inc. $90,895 Amden Jewelry, Inc. $88,535 Mr. Bracelet, Inc. $78,169 M FABRIKANT: Court Sets Dec. 7 as Administrative Expense Bar Date ----------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York set Dec. 7, 2007, as the Administrative Expense Bar Date in M. Fabrikant & Sons Inc. and Fabrikant-Leer International Ltd.'s bankruptcy cases. Administrative expense proofs of claim must be filed, so as to be received on or before Dec. 7, 2007, to one of these addresses: If by mail: United States Bankruptcy Court Southern District of New York Re: M. Fabrikant & Sons Inc., el al., Claims Processing P.O. Box 5197, Bowling Green Station New York, NY 10274 If by hand delivery or overnight courier: United States Bankruptcy Court Southern District of New York Re: N, Fabrikant & Sons Inc., et al., Claims Processing One Bowling Green, Room 534 New York, NY 10004 About M. Fabrikant Headquartered in New York City, M. Fabrikant & Sons Inc. -- http://www.fabrikant.com/-- sells diamonds and jewelries. The company and its affiliate, Fabrikant-Leer International Ltd., filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-12737). Mitchel H. Perkiel, Esq., Lee W. Stremba, Esq., and Paul H. Deutch, Esq., at Troutman Sanders LLP represent the Debtors in their restructuring efforts. Alan Kolod, Esq., Lawrence L. Ginsberg, Esq., and Christopher J. Caruso, Esq., at Moses & Singer LLP serve as counsel to the Official Committee of Unsecured Creditors. In schedules filed with the Court, M. Fabrikant disclosed total assets of $225,612,204 and total debts of $439,993,890. M&M MANUFACTURING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: M & M Manufacturing Co., Inc. 1000 Fowler Street Cortland, OH 44410 Bankruptcy Case No.: 07-42782 Chapter 11 Petition Date: October 31, 2007 Court: Northern District of Ohio (Youngstown) Judge: Kay Woods Debtor's Counsel: Andrew W. Suhar, Esq. Melissa M. Macejko, Esq. Suhar & Macejko, LLC 29 East Front Street, 2nd Floor P.O. Box 1497 Youngstown, OH 44501-1497 Tel: (330) 744-9007 Fax: (330) 744-5857 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hiney Printing LLC Trade Debt $83,451 1034 Home Avenue Akron, OH 44310-3577 Ranstand Trade Debt $46,830 P.O. Box 2084 Carol Stream, IL 60132-2084 Rohrich Corporation Trade Debt $40,470 P.O. Box 4541 Akron, OH 44310-4541 Cohen & Company Ltd. Trade Debt $40,353 Chilson Manufacturing, Inc. Trade Debt $28,883 American Express Trade Debt $28,103 Laird Plastics Trade Debt $22,253 Transcontinental Hardware Inc. Trade Debt $22,138 Oliver Printing Company Inc. Trade Debt $20,920 Millie (Carmela) Marginian Loan $20,000 MD Airfolis Trade Debt $18,957 Kenco Electric Inc. Trade Debt $18,166 GBC Film Products Group Trade Debt $15,355 Nazdar-Cincinnati Trade Debt $9,416 S&S Inc. Trade Debt $9,383 Valley Containers, Inc. Trade Debt $8,848 Fowler Company Trade Debt $6,354 Queen City Reprographics Trade Debt $6,187 Ohio Edison Utility Bill $5,975 Mark Bric Display Trade Debt $5,398 MANITOWOC CO: Prices Public Offering of 4MM Shares of Common Stock ------------------------------------------------------------------ The Manitowoc Company Inc. has priced a public offering of 4 million shares of its common stock was priced at $39.48 per share to the public. The underwriting agreement for the offering does not provide an option for the underwriter to purchase additional shares from the company to cover over-allotments. The company expects that the closing of the offering and the delivery of the shares will occur on Nov. 21, 2007. Manitowoc expects to receive net proceeds from the offering of approximately $156.9 million after deducting underwriting discounts and estimated expenses of the offering. The company intends to use the net proceeds of the offering to repay certain funded indebtedness and for other general corporate purposes. Morgan Stanley is acting as the sole book-running manager of the offering. The offering of securities may be made only by means of a prospectus. Copies of the prospectus can be obtained from: Morgan Stanley & Co. Incorporated No. 180 Varick Street New York, NY 10014 Headquartered in Maniwotoc, Wisconsin, The Manitowoc Company Inc. (NYSE: MTW) -- http://www.manitowoc.com/-- provides lifting equipment for the global construction industry, including lattice- boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. As a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment, the company offers the broadest line of cold-focused equipment in the foodservice industry. In addition, the company is a provider of shipbuilding, ship repair, and conversion services for government, military, and commercial customers throughout the maritime industry. * * * Moody's Investors Service placed The Manitowoc Company's corporate family and its probability of default ratings at 'Ba2' in June 2007. The ratings still hold to date with a stable outlook. MARGARET DEVLIN-WEINHEIMER: Case Summary & 18 Largest Creditors --------------------------------------------------------------- Debtor: Margaret Devlin-Weinheimer aka Peggy Devlin 8 Cotswold Lane San Antonio, TX 78257 Bankruptcy Case No.: 07-53087 Chapter 11 Petition Date: November 20, 2007 Court: Western District of Texas (San Antonio) Judge: Leif M. Clark Debtor's Counsel: Michael G. Colvard, Esq. Martin & Drought, P.C. 2500 Bank of America Plaza 300 Convent Street San Antonio, TX 78205 Tel: (210) 227-7591 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Michael Hiller Attorney Fees $300,000 Hoover Slovacek, L.L.P. 5847 San Felipe, Suite 2200 Houston, TX 77057 Steven Bankler, C.P.A. Account Balance $220,000 9901 I.H. 10 West, Suite 670 San Antonio, TX 78230-2253 L.M. Smyth Enterprises, Ltd. Account Balance $130,000 1531 Crescent View San Antonio, TX 78258 San Antonio Federal Credit Account Balance $33,442 Union American Express Gold Account Balance $42,172 Card Simeon Land Development, Account Balance $10,285 L.L.C. Charles J. Muller, Esq. Attorney Fees $10,000 American Express Account Balance $7,096 American Express Optima Account Balance $7,015 Chase Freedom M.C. Account Balance $5,829 J. Ken Nunley, Esq. Attorney Fees $5,000 Nunley, Davis, Jolley, et al. G.M. Card Account Balance $4,366 M.B.N.A. America Platinum Account Balance $4,182 Plus Chase Bank Account Balance $4,099 John Maher, Jr. Attorney Fees $2,500 Capital One Account Balance $2,327 Chubb Insurance Account Balance $2,129 Auto Insurance Account Balance $1,476 MASTR SPECIALIZED: S&P Puts Low-B Ratings on Three Cert. Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-3, M-4, and B mortgage pass-through certificates from MASTR Specialized Loan Trust 2005-01. Concurrently, S&P affirmed its ratings on the four remaining classes from the same transaction. The lowered ratings reflect collateral performance that has eroded available credit support during recent months. As of the October 2007 remittance period, cumulative losses for this transaction were 1.30% of the original principal balance, total delinquencies were 26.63% of the current principal balance, and severe delinquencies (90-plus-days, foreclosures, and REOs) were 16.12% of the current principal balance. Monthly realized losses for this transaction have exceeded excess interest for six of the past 12 months. The high levels of total and severe delinquencies in this transaction indicate that losses will continue to outpace excess interest and further erode the credit support. The overcollateralization level for this transaction is at approximately 80% of the targeted amount. The affirmations reflect current and projected credit support percentages that are sufficient to support the certificates at their current rating levels. Series 2005-01 is 31 months seasoned, and approximately 36.18% of the original pool principal balance is outstanding. A combination of subordination, excess spread, and O/C provides credit support for this transaction. The underlying collateral for the series consists of a mix of scratch-and-dent, reperforming, nonperforming, document-deficient, and outside-the-guidelines mortgage loans. Ratings Lowered MASTR Specialized Loan Trust 2005-01 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-3 BB BBB M-4 B BBB- B B- BB Ratings Affirmed MASTR Specialized Loan Trust 2005-01 Mortgage pass-through certificates Class Rating ----- ------ A-1, A-2 AAA M-1 AA M-2 A MATTRESS GALLERY: Committee Selects Klehr Harrison as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors in Gallery Corp. dba Mattress Gallery's chapter 11 case asks the U.S. Bankruptcy Court for the District of Delaware for authority to retain Klehr, Harrison, Harvey, Branzburg & Ellers LLP as its counsel, nunc pro tunc to Nov. 8, 2007. Klehr Harrison is expected, among others, to: a) assist, advise and represent the Committee in its consultation with the Debtor relative to the administration of these chapter 11 cases; b) assist, advise and represent the Committee in analyzing the Debtor's assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales or dispositions; c) attend meetings and negotiate with the representatives of the Debtor and secured creditors; d) assist and advise the Committee in its examination and analysis of the conduct of the Debtor's affairs; e) assist the Committee in the review, analysis and negotiation of any plan(s) of reorganization that may be filed and to assist the Committee in the review, analysis and negotiation of the disclosure statement accompanying any plan(s) of reorganization; f) assist the Committee in the review, analysis, and negotiation of any financing or funding agreements; g) take all necessary action to protect and preserve the interests of the Debtor's estate, including, without limitation, the prosecution, and defense, of actions on their behalf, negotiations concerning all litigation in which the Debtor is involved, and review and analysis of all claims filed against the Debtor's estate; h) generally prepare and file on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; i) appear, as appropriate, before this Court, the Appellate Courts, and other Courts in which matters may be heard and to protect the interests of the Committee before said Courts and the United States Trustee; and j) perform all other necessary legal services in these cases. Klehr Harrison's professionals will bill at these normal hourly rates: Partners $325 - $600 Associates $205 - $325 Paralegals $120 - $190 The principal attorneys and paralegal at Klehr Harrison designated to represent the Committee and their current hourly rates are: Joanne B. Wills, Esq. Partner $525 Richard M. Beck, Esq. Partner $450 Michael W. Yurkewicz, Esq. Associate $300 Melissa Hughes Paralegal $150 Ms. Wills assures the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The hearing to consider approval of the request has been set for Dec. 13, 2007 at 2:00 p.m. Eastern Time. Objections are due Dec. 6 at 4:00 p.m. Eastern Time. Headquartered in Commerce, California, Gallery Corp. dba Mattress Gallery filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. D. Del. Case No. 07-11628). Donald J. Detweiler, Esq., and Sandra G.M. Selzer, Esq., at Greenberg Traurig, LLP, represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants as its claim agent. When the Debtor filed for protection from its creditors, it listed total assets and debts between $1 million and $100 million. MATTRESS GALLERY: Plan Provides Capital Stock Conveyance to OMG --------------------------------------------------------------- Gallery Corp. dba Mattress Gallery has submitted to the U.S. Bankruptcy Court for the District of Delaware its Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. Overview of the Plan The Plan proposes to satisfy creditor claims to the extent possible through the conveyance of the Reorganized Debtor's capital stock to OMG Acquisition Corp., in exchange for $6,750,000. The conveyance will occur on the effective date of the Plan. As additional consideration for the acquisition of the capital stock of the Reorganized Debtor, OMG Acquisition Corp. will also: a) waive any commitment fees due and owing under a postpetition credit agreement; and b) cancel a portion of its prepetition unsecured claims against the Debtor. The Plan also contemplates the formation of a liquidation trust established for the primary purpose of liquidating the Debtor's assets. Treatment of Claims Under the Plan, the secured claim of Kimco Securities Corp. will receive, on the effective date of the Plan, a cash distribution equal to the amount of Kimco's allowed claim amount, with interest at the non-default interest rate notwithstanding the Debtor's prepetition defaults and Kimco's noticing of that default. Kimco's claim, which is approximately $4.1 million, is secured by a perfected first priority lien on the Debtor's prepetition assets as well as a lien on all of the Debtor's postpetition assets. Other secured claim holders will receive, in full and final satisfaction of their allowed claims, either: a) the collateral securing their claims; or b) payment in cash equal to the amount of the allowed amount of their secured claim. Holders of unsecured claims of $1,000 or less will receive, in full and final satisfaction of their claims, 80% of the allowed claim amount, in cash, within 120 days after the effective date of the Plan. General Unsecured Claims will receive, in full and final satisfaction of such claims, pro rata share of funds on deposit in the operating account maintained by the liquidation trust after claims in the previous classes have been paid. Prepetition equity interests in the Debtor will be canceled and will not be entitled to any distribution under the Plan. Headquartered in Commerce, California, Gallery Corp. dba Mattress Gallery filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. D. Del. Case No. 07-11628). Donald J. Detweiler, Esq., and Sandra G.M. Selzer, Esq., at Greenberg Traurig, LLP, represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants as its claim agent. When the Debtor filed for protection from its creditors, it listed total assets and debts between $1 million and $100 million. MATTRESS GALLERY: Disclosure Statement Hearing Set for Dec. 13 -------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware will convene a hearing at 2:00 p.m. on Dec. 13, 2007, to consider approval of the Disclosure Statement explaining Gallery Corp. dba Mattress Gallery's Chapter 11 Plan of Reorganization. At that hearing, the Court will determine the adequacy of the information disclosed by the Disclosure Statement for purposes of soliciting acceptances of the Plan. Objections to the Disclosure Statement, if any, are due on Dec. 6, 2007, at 4:00 p.m. Headquartered in Commerce, California, Gallery Corp. dba Mattress Gallery filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. D. Del. Case No. 07-11628). Donald J. Detweiler, Esq., and Sandra G.M. Selzer, Esq., at Greenberg Traurig, LLP, represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants as its claim agent. When the Debtor filed for protection from its creditors, it listed total assets and debts between $1 million and $100 million. MAUMELLE HOUSING: Moody's Cuts Rating on $4.695MM Bonds to Ba2 -------------------------------------------------------------- Moody's Investors Service has downgraded to Ba2 from Baa1 the rating on $4.695 million Maumelle Housing Development Corporation, Taxable First Lien Refunding Revenue Bonds (Audubon Point Apartments), Series 1991 A & B. The rating downgrade is based on the project's weak financial performance. The outlook is stable at this revised rating level. Legal Security: The bonds are secured by revenues derived from operations of Audubon Point Apartments, a 203-unit project for elderly Section 8 tenants. The bonds are further secured by other funds pledged under the indenture. Strengths: According to the HUD Real Estate Assessment Center's review, the project is physically well-maintained, and occupancy at the project is high, averaging 98.5% for the first nine months of 2007. Stable occupancy at this level has resulted in strong and consistent revenue over the past three years. A 2007 market feasibility study shows very little competition for low-income elderly housing in the Maumelle sub-market, and occupancy at Audubon is expected to remain strong in the near term. There have been no taps to debt service reserves. The Replacement & Reserve account has a balance of $103,500, approximately $510 per unit. Challenges: Rental rates are just below HUD's Fair Market Rent for the area, leaving the project little room for a significant boost to revenue in the near term. Utility expenses have grown at approximately 10% per year over the past two years, driving expenses above a level that can be supported by existing, static revenues. Debt expense is high, and as operating expenses rise, Audubon's thin debt service coverage levels continue to weaken. The project was operating at .95x coverage as of audited 2006 financials, down from 1.07x coverage in 2005. Some improvement of financial performance is expected in 2007 based on Moody's review of unaudited operating statements. However, while the project is likely to achieve 1.0x coverage this year, the margin remains slim. Outlook The outlook on the bonds is stable at this revised rating level. The financial performance of the project has been relatively consistent at the 1.0x coverage level, and it is expected to continue to perform at this level in the near term. What could change the rating - UP? -- Several periods of substantial debt service coverage growth. What could change the rating - DOWN? -- Increase in expenses or any reduction in revenue that leads to a further deterioration of the debt service coverage level. MELVIN HARTER: Files List of Six Largest Unsecured Creditors ------------------------------------------------------------ Melvin Harter Ministries Inc. filed with the U.S. Bankruptcy Court for the Northern District of Arizona its list of six unsecured creditors, disclosing: Entity Nature of Claim Claim Amount ------ --------------- ------------ Waste Management Business Debt $7,000 PO Box 78251 Phoenix, AZ 85062 Labor Ready Business Debt $3,596 833 E. Fry Blvd #F Sierra Vista, AZ 85650 Berg's Heating Business Debt $3,440 4109 Monsanto Sierra Vista, AZ 85650 Ferrelgas Propane $1,329 Jim's Electric Business Debt $1,926 STUART FAUVER ESQ Business Debt $500 Headquartered in Hereford, Arizona, Melvin Harter Ministries Inc. dba Miracle Valley Bible College, Miracle Valley Assisted Living Home, Miracle Valley Mobile Home & RV Park, Miracle Valley Childcare Center, Miracle Valley Church of God -- http://www.miraclevalley.net/,http://www.melvinharter.com/, http://www.miraclevalleybiblecoll.org/,and http://www.miraclevalleyassistedliving.org/-- is a religious organization that operates a bible college, childcare center, and senior care facility. The Debtor filed for Chapter 11 protection on Sept. 11, 2007 (Bankr. D. Ariz. Case No. 07-01751). Dennis J. Wortman, Esq. of Dennis J. Wortman, P.C. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it has estimated assets and debts of $1 million to $100 million. MERRILL LYNCH: Fitch Holds 'B-' Rating on $3.7MM Class P Loans -------------------------------------------------------------- Fitch Ratings has affirmed Merrill Lynch Mortgage Trust commercial mortgage securities, series 2004-MKB1 as: -- $19.8 million class A-1 at 'AAA'; -- $379.8 million class A-2 at 'AAA'; -- $65 million class A-3 at 'AAA'; -- $169.7 million class A-4 at 'AAA'; -- $153.4 million class A-1A at 'AAA'; -- Interest only class XC at 'AAA'; -- Interest only class XP at 'AAA'; -- $27 million class B at 'AAA'; -- $11.0 million class C at 'AA'; -- $25.7 million class D at 'A'; -- $11.0 million class E at 'A-'; -- $13.5 million class F at 'BBB+'; -- $12.3 million class G at 'BBB'; -- $11.0 million class H at 'BBB-'; -- $3.7 million class J at 'BB+'; -- $4.9 million class K at 'BB'; -- $4.9 million class L at 'BB-'; -- $4.9 million class M at 'B+'; -- $2.5 million class N at 'B'; -- $3.7 million class P at 'B-'. Fitch does not rate the $13.5 million class Q. The rating affirmations are the result of stable performance of the pool. As of the November 2007 distribution date, the pool's aggregate principal balance has decreased 4.1% to $936.4 million from $980 million at issuance. T en loans, 22% of the pool, have defeased, including four of the top ten loans (16%). Excluding defeased loans, 25.1% of the remaining pool is scheduled to mature in 2008, including the two largest loans which are interest-only. The two largest loans in the pool, the Great Mall of the Bay Area (16.1%) and Galileo Pool No. 2 (5.8%), are shadow-rated investment grade. The Great Mall of the Bay Area is secured by a 1.3 million square foot retail mall located in Milpitas, Cslifornia. The year-end 2006 Fitch stressed DSCR on the A-note was 1.46 times compared to 1.38x at issuance. Mall occupancy was 84.3% as of June 2007 compared to 89.4% at issuance. The Fitch stressed debt service coverage ratio is calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balance and a hypothetical mortgage constant. The Galileo Pool No. 2 is secured by a portfolio of nine retail centers located in eight states. Since issuance, seven properties have been released and replaced with the expansion of one property and addition of two properties. The YE 2006 Fitch stressed DSCR is 1.47x. Occupancy has been stable; the weighted average occupancy as of June 2007 is 96.2% compared to 96.6% at issuance. There is currently one specially serviced asset (0.7%). The real estate owned asset is secured by a 252-unit multifamily property in Arlington, Texas. Fitch expects losses on the specially serviced asset upon liquidation to be absorbed by class Q. MITCHELL MESSER: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Mitchell W. Messer Jennifer C. Messer 7005 Flowes Store Road Concord, NC 28025 Bankruptcy Case No.: 07-51724 Chapter 11 Petition Date: October 31, 2007 Court: Middle District of North Carolina (Winston-Salem) Judge: Thomas W. Waldrep Jr. Debtors' Counsel: Edwin H. Ferguson, Jr., Esq. P.O. Box 444 Concord, NC 28025-0444 Tel: (704) 788-3211 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtors' list of its their 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ RBC Centura $1,693,946 c/o Poiner & Spruill LLP Attn: Constance L. Young Charlotte, NC 28202 GE Capital Small Business Judgment against $255,461 Attn: William Wilson husband only Danbury, CT 06810 North Carolina Department of Income tax $109,000 Revenue P.O. Box 25000 Raleigh, NC 27640-0045 Discover Financial Credit card $15,627 American Express Credit card $9,132 Bank of America Credit card $8,236 Financial Asset Mgmt. Credit card $5,330 Wells Fargo Financial Credit card $3,507 Associated Recovery Systems Credit card $3,492 American Honda Finance $1,564 Healthcare Resource Medical $1,554 Gregory Sowers Judgment against $1,197 husband only Medical Data Systems Medical $761 Windstream Phone and internet $750 NCO Financial Overdraft $679 Public Storage Storage $404 Tallent and Jackson Appraisal $300 American Eagle Outfitters Credit card $290 Professional Medical Adjustment Medical $241 Salisbury Dermatology Medical $227 MORGAN STANLEY: Fitch Cuts Ratings on $117.2 Million Certs. ----------------------------------------------------------- Fitch Ratings has taken rating actions on Morgan Stanley mortgage pass-through certificates. Affirmations total $1.99 billion and downgrades total $117.2 million. In addition, approximately $28.8 million is placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Series 2005-HE1 -- $52.7 million class A affirmed at 'AAA' (BL: 95.13, LCR: 10.47); -- $53.1 million class M-1 affirmed at 'AA+' (BL: 78.99, LCR: 8.69); -- $49.6 million class M-2 affirmed at 'AA' (BL: 62.58, LCR: 6.89); -- $34.2 million class M-3 affirmed at 'AA-' (BL: 28.86, LCR: 3.18); -- $29.1 million class M-4 affirmed at 'A+' (BL: 25.28, LCR: 2.78); -- $25.7 million class M-5 affirmed at 'A' (BL: 22.25, LCR: 2.45); -- $21.4 million class M-6 affirmed at 'A-' (BL: 19.83, LCR: 2.18); -- $20.5 million class B-1 affirmed at 'BBB+' (BL: 17.54, LCR: 1.93); -- $14.5 million class B-2 affirmed at 'BBB' (BL: 15.94, LCR: 1.75); -- $17.1 million class B-3 affirmed at 'BBB-' (BL: 14.54, LCR: 1.60). Deal Summary -- Originators: New Century (40%), Option One (36%); -- 60+ day Delinquency: 22.29%; -- Realized Losses to date (% of Original Balance): 0.72%; -- Expected Remaining Losses (% of Current Balance): 9.09%; -- Cumulative Expected Losses (% of Original Balance): 2.66%. Series 2005-HE2 -- $33.1 million class A-1 affirmed at 'AAA' (BL: 84.01, LCR: 9.64); -- $33.6 million class A-2 affirmed at 'AAA' (BL: 85.79, LCR: 9.85); -- $46.5 million class A-3 affirmed at 'AAA' (BL: 81.48, LCR: 9.35); -- $49.2 million class M-1 affirmed at 'AA+' (BL: 68.49, LCR: 7.86); -- $44.4 million class M-2 affirmed at 'AA' (BL: 56.40, LCR: 6.47); -- $28.6 million class M-3 affirmed at 'AA-' (BL: 29.93, LCR: 3.44); -- $26.2 million class M-4 affirmed at 'A+' (BL: 26.22, LCR: 3.01); -- $25.4 million class M-5 affirmed at 'A' (BL: 22.94, LCR: 2.63); -- $22.2 million class M-6 affirmed at 'A-' (BL: 20.06, LCR: 2.30); -- $19 million class B-1 affirmed at 'BBB+' (BL: 17.70, LCR: 2.03); -- $15.8 million class B-2 affirmed at 'BBB' (BL: 15.87, LCR: 1.82); -- $15.8 million class B-3 affirmed at 'BBB-' (BL: 14.37, LCR: 1.65). Deal Summary -- Originators: Option One (42%), Decision One (22%); -- 60+ day Delinquency: 21.11%; -- Realized Losses to date (% of Original Balance): 0.74%; -- Expected Remaining Losses (% of Current Balance): 8.71%; -- Cumulative Expected Losses (% of Original Balance): 2.97%. Series 2005-NC1 -- $82.3 million class A affirmed at 'AAA' (BL: 85.25, LCR: 11.12); -- $46.5 million class M-1 affirmed at 'AA+' (BL: 70.45, LCR: 9.19); -- $30.8 million class M-2 affirmed at 'AA' (BL: 60.91, LCR: 7.95); -- $21.7 million class M-3 affirmed at 'AA-' (BL: 53.63, LCR: 7.00); -- $34.5 million class M-4 affirmed at 'A+' (BL: 26.58, LCR: 3.47); -- $22.5 million class M-5 affirmed at 'A' (BL: 23.04, LCR: 3.01); -- $15.7 million class M-6 affirmed at 'A-' (BL: 20.66, LCR: 2.70); -- $23.2 million class B-1 affirmed at 'BBB+' (BL: 17.38, LCR: 2.27); -- $12.7 million class B-2 affirmed at 'BBB' (BL: 15.66, LCR: 2.04); -- $19.5 million class B-3 affirmed at 'BBB-' (BL: 13.57, LCR: 1.77). Deal Summary -- Originators: 100% New Century -- 60+ day Delinquency: 17.25%; -- Realized Losses to date (% of Original Balance): 0.77%; -- Expected Remaining Losses (% of Current Balance): 7.66%; -- Cumulative Expected Losses (% of Original Balance): 2.59%. Series 2005-NC2 -- $48 million class A affirmed at 'AAA' (BL: 93.07, LCR: 8.11); -- $48.7 million class M-1 affirmed at 'AA+' (BL: 78.65, LCR: 6.86); -- $44.2 million class M-2 affirmed at 'AA' (BL: 65.52, LCR: 5.71); -- $24.7 million class M-3 affirmed at 'AA-' (BL: 39.68, LCR: 3.46); -- $27 million class M-4 affirmed at 'A+' (BL: 25.09, LCR: 2.19); -- $23.2 million class M-5 affirmed at 'A' (BL: 21.95, LCR: 1.91); -- $22.5 million class M-6 affirmed at 'A-' (BL: 19.11, LCR: 1.67); -- $18.7 million class B-1 affirmed at 'BBB+' (BL: 16.78, LCR: 1.46); -- $17.2 million class B-2 affirmed at 'BBB' (BL: 14.73, LCR: 1.28); -- $16.5 million class B-3 affirmed at 'BBB-' (BL: 13.19, LCR: 1.15). Deal Summary -- Originators: 100% New Century; -- 60+ day Delinquency: 24.38%; -- Realized Losses to date (% of Original Balance): 0.63%; -- Expected Remaining Losses (% of Current Balance): 11.47%; -- Cumulative Expected Losses (% of Original Balance): 3.20%. Series 2005-WMC2 -- $37.5 million class M-1 affirmed at 'AA+' (BL: 87.38, LCR: 8.41); -- $40.4 million class M-2 affirmed at 'AA' (BL: 37.11, LCR: 3.57); -- $24.3 million class M-3 affirmed at 'AA-' (BL: 31.93, LCR: 3.07); -- $21.1 million class M-4 affirmed at 'A+' (BL: 27.95, LCR: 2.69); -- $21.8 million class M-5 affirmed at 'A' (BL: 24.36, LCR: 2.35); -- $19.2 million class M-6 affirmed at 'A-' (BL: 21.45, LCR: 2.07); -- $17.3 million class B-1 affirmed at 'BBB+' (BL: 18.90, LCR: 1.82); -- $14.7 million class B-2 rated 'BBB', placed on Rating Watch Negative (BL: 16.82, LCR: 1.62); -- $14.1 million class B-3 rated 'BBB-', placed on Rating Watch Negative (BL: 15.15, LCR: 1.46). Deal Summary -- Originators: 100% WMC; -- 60+ day Delinquency: 24.02%; -- Realized Losses to date (% of Original Balance): 0.89%; -- Expected Remaining Losses (% of Current Balance): 10.38%; -- Cumulative Expected Losses (% of Original Balance): 2.75%. Series 2005-WMC3 -- $7.1 million class A affirmed at 'AAA' (BL: 99.99, LCR: 6.81); -- $33 million class M-1 affirmed at 'AA+' (BL: 87.65, LCR: 5.97); -- $30 million class M-2 affirmed at 'AA' (BL: 70.21, LCR: 4.78); -- $18.7 million class M-3 affirmed at 'AA-' (BL: 48.43, LCR: 3.30); -- $17.2 million class M-4 affirmed at 'A+' (BL: 26.09, LCR: 1.78); -- $15.7 million class M-5 affirmed at 'A' (BL: 23.19, LCR: 1.58); -- $15.2 million class M-6 downgraded to 'BBB+' from 'A-' (BL: 20.37, LCR: 1.39); -- $12.8 million class B-1 downgraded to 'BBB' from 'BBB+' (BL: 18.05, LCR: 1.23); -- $11.8 million class B-2 downgraded to 'BB' from 'BBB' (BL: 16.05, LCR: 1.09); -- $11.3 million class B-3 downgraded to 'BB' from 'BBB- (BL: 14.48, LCR: 0.99). Deal Summary -- Originators: 100% WMC; -- 60+ day Delinquency: 29.53%; -- Realized Losses to date (% of Original Balance): 1.03%; -- Expected Remaining Losses (% of Current Balance): 14.68%; -- Cumulative Expected Losses (% of Original Balance): 4.03%. Series 2005-WMC4 -- $22.8 million class A affirmed at 'AAA' (BL: 97.7, LCR: 6.15); -- $43.9 million class M-1 affirmed at 'AA+' (BL: 84.34, LCR: 5.31); -- $38.3 million class M-2 affirmed at 'AA' (BL: 70.56, LCR: 4.44); -- $24.4 million class M-3 affirmed at 'AA-' (BL: 61.70, LCR: 3.88); -- $20.7 million class M-4 affirmed at 'A+' (BL: 35.67, LCR: 2.24); -- $21.3 million class M-5 affirmed at 'A' (BL: 26.03, LCR: 1.64); -- $18.8 million class M-6 downgraded to 'BBB+' from 'A-' (BL: 20.65, LCR: 1.30); -- $16.9 million class B-1 downgraded to 'BBB-' from 'BBB+' (BL: 18.19, LCR: 1.14); -- $15.7 million class B-2 downgraded to 'BB' from 'BBB' (BL: 16.01, LCR: 1.01); -- $14.4 million class B-3 downgraded to 'B' from 'BBB- (BL: 14.29, LCR: 0.90). Deal Summary -- Originators: 100% WMC; -- 60+ day Delinquency: 33.37%; -- Realized Losses to date (% of Original Balance): 1.05%; -- Expected Remaining Losses (% of Current Balance): 15.89%; -- Cumulative Expected Losses (% of Original Balance): 4.56%. Series 2005-2 -- $84.1 million class A affirmed at 'AAA' (BL: 79.01, LCR: 5.71); -- $35.3 million class M-1 affirmed at 'AA+' (BL: 65.98, LCR: 4.77); -- $25.7 million class M-2 affirmed at 'AA' (BL: 50.57, LCR: 3.66); -- $17.9 million class M-3 affirmed at 'AA-' (BL: 48.90, LCR: 3.54); -- $16.5 million class M-4 affirmed at 'A+' (BL: 43.36, LCR: 3.14); -- $14.6 million class M-5 affirmed at 'A' (BL: 37.95, LCR: 2.74); -- $14.6 million class M-6 affirmed at 'A-' (BL: 22.49, LCR: 1.63); -- $12.4 million class B-1 affirmed at 'BBB+' (BL: 20.07, LCR: 1.45); -- $11.9 million class B-2 affirmed at 'BBB' (BL: 17.84, LCR: 1.29); -- $10.1 million class B-3 affirmed at 'BBB-' (BL: 16.25, LCR: 1.18). Deal Summary -- Originators: Meritage (42%), Wilmington (41%); -- 60+ day Delinquency: 25.36%; -- Realized Losses to date (% of Original Balance): 1.25%; -- Expected Remaining Losses (% of Current Balance): 13.83%; -- Cumulative Expected Losses (% of Original Balance): 5.32%. MORGAN STANLEY: Fitch Lowers Ratings on Two Cert. Classes to B -------------------------------------------------------------- Fitch Ratings has taken rating actions on the following Morgan Stanley issues: Series 2002-AM3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B-1 downgraded to 'B' from 'BBB'; -- Class B-2 remains at 'CC/DR3'. Series 2004-NC2 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 downgraded to 'BB' from 'BBB-'; -- Class B-4 downgraded to 'B' from 'BB+'. Series 2004-NC7 -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A'; -- Class M-5 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'. Series 2004-HE1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 downgraded to 'BB' from 'BBB-'. Series 2004-HE6 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A'; -- Class M-5 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 downgraded to 'BB' from 'BBB-'. The mortgage loans consist of fixed- and adjustable-rate, 15- and 30-year mortgages extended to subprime borrowers and are secured by first and second liens, primarily on one- to four-family residential properties. As of the October 2007 distribution date, the pools are seasoned between 38 (2004-HE6) and 60 (2002-AM3) months and have pool factors (current collateral balance as a percentage of the initial balance) ranging from 9% (2002-AM3) to 20% (2004-HE6). The loans are serviced by various servicers, including Countrywide Home Loans, Inc. (rated 'RPS1-' by Fitch), Chase Home Finance, LLC (rated 'RPS1' by Fitch), and HomEq Servicing Corps (rated 'RPS1' by Fitch). The AM series is backed by a majority of collateral originated or acquired by Aames Capital Corporation. The NC series are backed by a majority of collateral originated or acquired by New Century Capital Corporation. The HE series are backed by collateral originated or acquired from multiple sellers. The affirmations, affecting approximately $756.4 million in outstanding certificates, reflect adequate levels of credit enhancement (CE) relative to expected losses. The downgrades, affecting approximately $26.3 million, are the result of deterioration in the relationship between CE and expected losses. All of the affected bonds have serious delinquencies (loans delinquent more than 60 days, inclusive of loans in foreclosure, bankruptcy, and real estate owned (REO)) of between 16.22% (2004-NC2) and 18.50% (2002-AM3) and current cumulative losses of between 0.89% (2004-NC2) and 2.60% (2002- AM3). In each of the affected transactions, losses have exceeded excess spread for each of the last six months, depleting the CE of the downgraded bonds. MORGAN STANLEY: S&P Affirms 'BB' Rating on Class F Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class C and D commercial mortgage pass-through certificates from Morgan Stanley Capital I Inc.'s series 1998-XL2. Concurrently, S&P affirmed its ratings on the remaining five classes from the same transaction. The upgrades and affirmations reflect the solid operating performance of of the seven collateral properties securing the pool, as well as increased credit enhancement levels. Credit enhancement levels have increased due to scheduled amortization and partial payoffs for the Edens & Avant Pool I and II loans that resulted from property releases. As of Nov. 3, 2007, the trust collateral consisted of seven loans secured by 28 collateral properties with an aggregate principal balance of $660.7 million, compared with 41 properties with an aggregate balance of $706.4 million at issuance. The decrease in the number of properties is due to collateral substitutions in the Edens & Avant Pool I and II loans, as well as the partial defeasance ($31.5 million) of these two loans. The principal balance of the overall pool has a 91% concentration in retail, which includes four loans collateralized by regional malls and two loans that are supported by neighborhood shopping and community centers. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the loans, and all were characterized as "good." All of the loans in the pool mature within 12 months. The master servicer, Midland Loan Services Inc., reported three loans ($316.8 million, 48%) on its watchlist. Details are: -- Crystal Plaza IV ($58.8 million, 9%) is the smallest loan in the pool, secured by a leasehold interest in an 11-story, 466,369-sq.-ft. class A office building built in 1988 in Crystal City, Virginia. Occupancy declined to 51% as of June 30, 2006, after the largest tenant, US Airways (44% of net rentable area), vacated the property when its lease expired in March 2006. Occupancy has since improved to 72% (as of June 30, 2007). Based on historical occupancy of the property and current market conditions, Standard & Poor's stabilized loan-to-value ratio is 74.4%. -- Grapevine Mills, the largest loan in the pool ($145.5 million, 22%), is secured by a 1.24 million-sq.-ft. value-oriented regional mall in Grapevine, Texas, which is in the Dallas/Fort Worth metropolitan statistical area. The anchors include J.C. Penney, Burlington Coat Factory, and AMC Theatres. Occupancy was 97% as of June 30, 2007, and the reported year-end 2006 debt service coverage was 1.97x. In-line sales for the trailing 12 months ended March 31, 2006, were $321 per sq. ft. The loan is on the watchlist because the borrower has not provided quarterly operating statements. -- Edens & Avant Pool I ($112.5million, 17%), the second- largest loan in the pool, is secured by 12 neighborhood and community shopping centers in Connecticut, Indiana, Ohio, Massachusetts, New York, and Tennessee totaling 1.96 million sq. ft. Anchors include Marshalls, Stop & Shop, and Staples. Year-end 2006 DSC and occupancy were 3.01x and 93%, respectively. The loan appears on the watchlist because one anchor tenant is dark, although it is still paying rent through its lease expiration on April 30, 2011. The remaining four loans are: -- Mall of New Hampshire ($94.9 million, 14.4%) is the third-largest loan in the pool, secured by 329,913 sq. ft. of a 793,533-sq.-ft. mall in Manchester, New Hampshire. Anchors include Filene's Basement, Sears, and J.C Penney, all of which own their own stores. Reported in-line sales were $421 per sq. ft. as of Sept. 30, 2007. Reported year-end 2006 occupancy was 92%, and year-end 2006 DSC was 1.76x, up from 1.58x at year-end 2005. -- Westside Pavilion ($92.2 million, 14%), the fourth- largest loan in the pool, is secured by 443,723 sq. ft. of a 755,701-sq.-ft. regional mall in West Los Angeles, California. Anchors include Nordstrom, Macy's Home, and Macy's. In-line sales per sq. ft. were $483 as of Aug. 31, 2007. Reported year-end 2006 occupancy and DSC were 96% and 1.98x, respectively. -- The Northtown Mall loan ($74.3 million, 11%) is secured by 709,870 sq. ft. of a 952,262-sq.-ft. regional mall in Spokane, Washington. The mall was built in 1955, renovated in 1997, and underwent an extensive expansion in 2005. Kohl's recently purchased the space that Mervyns previously owned. Reported year-end DSC was 1.68x, and occupancy was 92%. -- The Edens & Avant Pool II loan ($51 million, 8%) is secured by 11 neighborhood and shopping centers in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Virginia totaling 1.2 million sq. ft. Anchors include Wal-Mart, Home Depot, and Kmart. Year-end DSC was 3.09x, and occupancy was 89%. Standard & Poor's revalued the collateral securing the loans as part of its analysis. S&P's analysis supports the raised and affirmed ratings. Ratings Raised Morgan Stanley Capital I Inc. Commercial mortgage pass-through certificates series 1998-XL2 Rating ------ Class To From ----- -- ---- C AAA AA+ D AA- A Ratings Affirmed Morgan Stanley Capital I Inc. Commercial mortgage pass-through certificates series 1998-XL2 Class Rating ----- ------ A-2 AAA B AAA E BBB F BB X AAA MOVIE GALLERY: Court Okays Amended Auction and Bid Procedures ------------------------------------------------------------- The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia approved the amended auction and bid procedures proposed by Movie Gallery Inc. and its debtor- affiliates. In his third amended order, Judge Tice held that: -- the auction may be continued without further notice to creditors or parties-in-interest other than by (a) announcement of the adjournment at the Auction or (b) written notice served on the 2002 Core Group list, and all non-Debtor parties to the relevant Leases; -- the Debtors effect consultations relating to the auction procedures with: * the Official Committee of Unsecured Creditors; and * the lenders' agent under the Secured Superiority DIP Credit and Guaranty Agreement; and -- subject to Court approval, the Debtors are authorized, in their sole discretion, to: (i) assume all Leases necessary to complete the transactions contemplated by the Auction; (ii) select the bidder based on the second-highest or the second-best bid for the Leases; and (iii) enter into agreements relating to Lease termination or sale of designation rights. Pursuant to Section 365(k) of the Bankruptcy Code, the Debtors will have no further liability for any breach of a Lease occurring after the closing of a sale, transfer, termination, assignment or other transaction for the Lease. Judge Tice further ruled that subject to Court approval, any executed Sale Agreement constitutes a sale, free and clear of any interest including, without limitation, any liens, claims or encumbrances upon the Leases. A purchaser under any executed Sale Agreement will also be entitled to the protections afforded to good-faith purchasers, pursuant to Section 363(m) of the Bankruptcy Code and subject to Court approval. Judge Tice will convene a hearing on Nov. 28, 2007, at 2:00 p.m., prevailing Eastern Time, to consider entry of one or more orders authorizing and approving the relief sought by the Debtors that is not granted including approval of the sale agreements, the sale of designation rights, and the lease termination agreements. Parties have until Nov. 26, 2007, at 4:00 p.m., prevailing Eastern Time, to file objections to the sale of Designation Rights, the Sale Agreements, and the Lease Termination Agreements and any other disposition of the Leases. More Parties File Cure Objections More than 90 Landlords filed additional objections to the cure amounts reflected by the Debtors in their notice of disposition of interests in certain nonresidential real property leases. The Landlords include: * Widewaters Garner Company, LLC; * Walgreen Eastern Co., Inc.; * Renewal Willingsboro, LLC; * Sunset Lakes Shops, Ltd.; * Southtown Shopping Center; * Frankwood LLC/Louisville Market Street Realty, LLC; * SVF Waldorf, LLC; * Palms Associates; * Century Plaza Corporation; * Equity One (Point Royale) Inc.; * Equity One (Concord) LLC; * Boynton Plaza Shopping Center, Inc.; * Equity One (Northeast Portfolio) Inc.; * Equity One (Southeast Portfolio) Inc.; * Norriton Retail, LP; * Clyde R. Gibb, a lessor of Hollywood Video Store; * Westwood Financial Corporation; * RREEF Management Company; * Centro Properties Group; * Developers Diversified Realty Corporation; * Regency Center LP; * Trails Village Center Company; * RD Investment Virginia, L.L.C.; * JCE Properties, LLC; * Peak Canton Properties, LLC; * Southern Development of Mississippi, Inc.; * James D. Johnson and Connie Sue Lemmon-Johnson; * GR/Fenkell Associates, LLC; * Julian Cohen and Stephen R. Weiner, Trustees of Malway Realty Trust; * JCE Properties Waterloo, LLC; * Holiday CVS, L.L.C., also known as CVS EGL 358 GL, LLC; * DIM Vastgoed, N.V.; * King Entertainment, Inc.; * Sembler H. V. Partnership #1, Ltd.; * Holiday Park Plaza; Ltd.; * 5900 NW 183rd St., LLC; * Kenneth C. Rinker Revocable Trust; * Christopoulos Properties; * QRP Missouri, LLC; and * Excel Enterprise, LLC In separate filings, 13 Landlords notified the Court that they withdraw their (i) objections to the Debtors' proposed cure amounts and (ii) requests to vacate the Bid Procedures Order, based on agreements reached with the Debtors: * Kimco Realty Corporation and Gibraltar Management; * West Acres LLC; * Centre at Woodstock, LLC; * The Macerich Company, RREEF Management Company; * West Valley Properties; * Westwood Financial Corporation; * Watt Management Company; * Sywest Development; * Primestor Los Jardines, LLC; * J.H. Snyder Company; * Sol Hoff Company, LLC; * Beverly Wilcox Properties, LLC; and * GE Commercial Finance Business Property Corporation About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. (Movie Gallery Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' spokeswoman Meaghan Repko said that the Plan will not be filed before November 27, and the company does not expect to exit bankruptcy protection before the second quarter of 2008. MOVIE GALLERY: Judge Tice Approves Lease Rejection Procedures ------------------------------------------------------------- The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia approved Movie Gallery, Inc. and its debtor-affiliates' the expedited procedures for rejecting executory contracts and unexpired non-residential real property leases. Judge Tice approved the procedures in its entirety, provided that: (a) use of the Procedures is subject to the terms of the secured, superpriority DIP Credit and Guaranty Agreement dated as of October 16, 2007; and (b) the agents and lenders under the Agreement will not be required to object to any proposed rejection to preserve their rights and remedies under Agreement -- it being specifically understood that the approved rejection does not modify the Agreement in any respect. Prior to the Court's approval of the Lease Rejection Procedures, various Landlords filed objections including: -- West Acres, LLC and Centre at Woodstock,LLC; -- Applewood, LLC, Yorkshire Village Properties, LLC, Swansea Realty Investments, LLC, Clinton Parkway Center, LLC, Estate of Rowland C. Cobb, Raoul J. Freeman and Ellen A. Freeman, Trustees of the Raoul and Ellen Freeman Family Trust Dated November 3, 1983, PKS Development, Inc., VNO 3098 Long Beach Road LLC, RNY Binns, LLC, RWP Toppenish, LLC, Bowling Green Plaza, LLC, Courthouse Ventures, LLC, Madison Plaza, LLC, and Kilmarnock Partners Limited Partnership; -- North Main Blacksburg, L.L.C.; and -- SEMLAK, LLC, Imperial 1999, LP, Century Associates Auburndale, LLC, Cedav, Associates, Widewaters Connellsville Company, LLC, Princeton (East River) WMS, LLC, Blue Field (Ridgeview) WMS, LLC, and Lexington (East Towne) WMB, LLC. The Landlords asserted, among others, that (i) the Debtors' proposed 10-day response time with respect to the rejection of various leases should be extended pursuant to Rule 9014 of the Federal Rules of Bankruptcy Procedure, (ii) include in any notice of rejection the uncontested portion of the prepetition claim of each Landlord, who will then have the authority to exercise a right of off set up to the amount of the uncontested claim. Objections that are not withdrawn, waived, or settled are overruled on the merits. About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. (Movie Gallery Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' spokeswoman Meaghan Repko said that the Plan will not be filed before November 27, and the company does not expect to exit bankruptcy protection before the second quarter of 2008. MOVIE GALLERY: Wants to Reject 400 Contracts and Leases ------------------------------------------------------- Movie Gallery Inc. and its debtor-affiliates notify various parties-in-interest that they are rejecting about 400 executory contracts and unexpired leases, pursuant to procedures approved by the U.S. Bankruptcy Court for the Eastern District of Virginia. The Leases include: Lessor/Sublessor Store Address Rejection Date ---------------- ------------- -------------- 101 Kappa Drive 2719 Brodhead Rd. Associates #1 Aliquippa, PA 11/13/07 1996 Pavillion 261 Old York Rd. Associates, LP Jenkintown, PA 11/13/07 212 Northside 212 W. Northside Dr. Drive LLC Jackson, MS 11/13/07 2468 Group Inc. 4141 S. Salina St. Syracuse, NY 11/13/07 255 Mall, LLC 25503 Union Tpke Glen Oaks, NY 11/12/07 3130 North Rock 3130 North Rock Road L.L.C. Wichita, KS 11/13/07 3815 NORTH HURON, LLC 3853 North Huron Road Pinconning, MI 11/13/07 5900 N.W. 183rd 5900 NW, 183rd St. Street, LLC Miami, FL 11/18/07 7 & 41, LLC 2499 West Highway 7 Excelsior, MN 11/13/07 75 LaGrange, LP 71 S, La Grange Rd. La Grange, IL 11/13/07 A full text copy of the contract and lease rejection schedule is available for free at: http://researcharchives.com/t/s?2593 If written objections are not timely filed and served to the rejection of a designated contract or lease, the Court may deem any opposition waived, treat the rejection as conceded, and enter an order rejecting the contracts or lease without further notice or hearing. Parties must file objections within 10 days after the date of service of the rejection notice. About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. (Movie Gallery Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' spokeswoman Meaghan Repko said that the Plan will not be filed before November 27, and the company does not expect to exit bankruptcy protection before the second quarter of 2008. N-45 FIRST: Moody's Lifts Rating on $6.275MM Certs. to Ba2 ---------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of three classes of N-45 First CMBS Issuer Corp. 2000-2 as: -- Class A, $60,084,548, affirmed at Aaa -- Class B, $5,648,000, affirmed at Aaa -- Class C, $6,902,000, upgraded to Aaa from Aa2 -- Class D, $7,530,000, upgraded to Aaa from A2 -- Class E, $8,785,000, upgraded to A2 from Baa3 -- Class F, $6,275,000, upgraded to Ba2 from B1 -- Class IO, Notional, affirmed at Aaa As of the November 15, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 61.1% to $97.7 million from $251.05 million at securitization. The Certificates are collateralized by 22 mortgage loans ranging in size from less than 1.0% to 12.0% of the pool, with the top 10 loans representing 72.7% of the pool. To date the pool has not experienced any losses and no loans have defeased. There are no loans in special servicing or on the master servicer's watchlist. Moody's was provided with year-end 2006 operating results for 100.0% of the pool. Moody's loan to value ratio is 53.3%, compared to 62.1% at Moody's last full review in January 2006 and compared to 72.3% at securitization. Approximately 73.6% of the loans are recourse to the borrowers. Moody's is upgrading Classes C, D, E and F due to increased subordination levels and improved overall pool performance. The top three loan exposures represent 37.3% of the outstanding pool balance. The largest loan group consists of the CIBC Building Loan and the Barrington Place Loan ($14.1 million -- 14.4%), two cross collateralized loans secured by properties in Halifax, Nova Scotia. The CIBC Building Loan is secured by a 204,810 square foot office property. As of March 2007 the property was 93.0% leased, compared to 91.0% at last review and compared to 95.0% at securitization. The Barrington Place Loan is secured by an 184,000 square foot retail property. As of March 2007 the property was 96.0% leased, compared to 95.0% at last review and compared to 96.0% at securitization. The loans have amortized by approximately 20.5% since securitization. Moody's LTV is 50.1%, compared to 61.0% at last review and compared to 74.2% at securitization. The second largest exposure is the 6715 and 6725 Airport Road Loan ($11.7 million - 12.0%), which is secured by a 231,000 square foot office property located approximately 14 miles southwest of Toronto in Mississauga, Ontario. As of May 2007 the property was 94.0% leased, compared to 85.0% at last review and compared to 97.0% at securitization. The loan has amortized by approximately 14.5% since securitization. Moody's LTV is 64.6%, compared to 77.3% at last review and compared to 86.0% at securitization. The third largest exposure is the 555, 604 and 664 rue Deslauriers Loan ($10.6 million - 10.8%), which is secured by a 529,000 square foot industrial property located in Saint-Laurent, Quebec. As of March 2007 the property was 100.0% occupied, compared to 96.0% at last review and compared to 98.0% at securitization. The loan has amortized by approximately 20.8% since securitization. Moody's LTV is 59.3%, compared to 63.1% at last review and compared to 82.4% at securitization. NASH FINCH: S&P Holds 'B+' Rating and Revises Outlook to Stable --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Nash Finch Co. to stable from negative. At the same time, S&P affirmed the Minneapolis, Minnesota-based company's 'B+' corporate credit and other ratings. This action reflects stabilized operating performance, improved credit metrics and adequate liquidity. "While credit metrics have strengthened, we anticipate they will likely decline from current levels," said Standard & Poor's credit analyst Stella Kapur, "with leverage increasing by around half a turn, given management's revised financial policy of managing to a 2.5x-3.0x unadjusted debt-to-EBITDA target." NICHOLS BROTHERS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Nichols Brothers Boat Builders, Inc. 5400 Cameron Road Freeland, WA 98249 Bankruptcy Case No.: 07-15522 Type of Business: The Debtors provide expertise in the construction of steel and aluminum vessels. See http://www.nicholsboats.com/ Chapter 11 Petition Date: November 16, 2007 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: David C. Neu, Esq. Marc L. Barreca, Esq. Kirkpatrick & Lockhart Preston Gates Ellis, L.L.P. 925 4th Avenue, Suite 2900 Seattle, WA 98104-1158 Tel: (206) 370-8125 Total Assets: $3,413,495 Total Debts: $43,949,987 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hornbeck Offshore Customer $20,000,000 Sevices, L.L.C. Contract 103 Northpark Boulevard, Suite 300 Covington, LA 70433 Minette Bay Ship Customer $3,300,000 Docking, Ltd. Contract P.O. Box 193 Kitimat B.C., Canada V8C 2G7 Tel: (250) 624-6273 Water Transit Authority Customer $1,500,000 Pier 9, Suite 111 Contract San Francisco, CA 94111 Tel: (415) 291-3377 N.C. Machinery Co. Trade debt $1,204,998 P.O. Box 58201 Tukwila, WA 98138-1201 Tel: (425) 251-5877 Bay Delta Navigation, Inc. Customer $800,000 Pier 15 - The Embarcadero Contract San Francisco, CA 94111 Tel: (415) 693-5800 State Board of Equalization Taxes $670,000 P.O. Box 942879 Sacramento, CA 94279-8001 A.L.M.A. Insurance $609,000 3838 North Causeway, Suite 2424 Metaire, LA 70002 Tel: (888) 285-2562 R.G.W.T., Inc. Customer $465,000 C/O Catalina Express Contract 310-519-7971 x 1002 Berth 95 San Pedro, CA 90731 Pacific Dawn Customer $450,000 2324 Northwest 90th Street Contract Seattle, WA 98217 Tel: (206) 297-2737 Seaport Steel I.S.S.C., Trade debt $349,334 Inc. 3660 East Marginal Way S. Seattle, WA 98134 Tel: (425) 443-6110 (cellular) Garvey Schubert & Barer Legal Services $185,907 Glosten Associates Trade debt $174,370 Puget Sound Pipe & Supply Trade debt $162,500 Washington Department of Taxes $158,579 Revenue Markey Machinery Co. Trade debt $98,454 Water Techonics Trade debt $80,842 Jensen Maritime Consultant Trade debt $59,915 Alaskan Copper & Brass Trade debt $58,162 Smith Berger Marine, Inc. Trade debt $52,500 Airgas-Nor Pac, Inc. Trade debt $44,883 NELLSON NUTRACEUTICAL: Wants to Continue Using Cash Collateral -------------------------------------------------------------- Nellson Nutraceutical Inc. asks the U.S. Bankruptcy Court for the District of Delaware finaly approval to used cash collateral securing its obligations to UBS AG and other prepetition lenders. The Debtor tells the Court that since it has sold substantially all of its assets and no longer have an operating business, the Debtor anticipates that UBS and the Informal Committee of First Lien Lender will agree to its proposed stipulation. Under the stipulation, the Debtor will have authority to continue to use cash collateral for negotiating and proposing a chapter 11 liquidating plan, continuing the process of claims resolution and asset recovery, and winding up the estates' remaining affairs. In return, the Debtor proposes that secured creditors will continue to have adequate protection. UBS and the Informal Committee have consented to the Debtor's use of their cash collateral only for the month of November 2007. About Nellson Nutraceutical Headquartered in Irwindale, California, Nellson Nutraceutical Inc. formulates, makes and sells bars and powders for the nutrition supplement industry. The Debtor filed for chapter 11 protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtor in its restructuring efforts. Kurt F. Gwynne, Esq., and Thomas J. Francella, Jr., Esq., at Reed Smith LLP represent the Official Committee of Unsecured Creditors. In its Schedules of Assets and Liabilities, Nellson reported $312,334,898 in total assets and $345,227,725 in total liabilities. NELLSON NUTRACEUTICAL: Court OKs Litigation Pact Filing Under Seal ------------------------------------------------------------------ Nellson Nutraceutical Inc. obtained authority from the United States Bankruptcy Court for the District of Delaware to file under seal a litigation agreement it entered with the purchaser of substantially all of its operating assets. As reported in the Troubled Company Reporter on Oct. 19, 2007, the Debtor said that the litigation agreement contains various agreements regarding matters that are currently the subject of pending litigation, as well as certain descriptions of the Debtor's litigation strategies and theories. The Debtor believed that it would be extremely prejudicial to the estates for the information to become available to defendants in litigation. The Debtor obtained Court authority to sell its business to a group consisting of the Debtor's first-lien creditors after an auction conducted on Aug. 22, 2007, which transaction closed on Oct. 3, 2007. The group consists of creditors Citigroup Inc., Goldman Sachs Group Inc., MetLife Inc., and New York Life Insurance Co. The group also includes some hedge funds like MainStay Floating Rate Funds, Endurance CLO, Flatiron Capital Management and Archimedes Funding. After the Debtor insisted that an auction be conducted, the group put up a bid. The group offered debt plus $66 million in cash and outbid two other offers. The unsecured creditors had argued the sale order should include a provision that $8.25 million of the sale proceeds should be set aside for them. Judge Sontchi however commented that the provision didn't belong in the sale order. About Nellson Nutraceutical Headquartered in Irwindale, California, Nellson Nutraceutical Inc. formulates, makes and sells bars and powders for the nutrition supplement industry. The Debtor filed for chapter 11 protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtor in its restructuring efforts. Kurt F. Gwynne, Esq., and Thomas J. Francella, Jr., Esq., at Reed Smith LLP represent the Official Committee of Unsecured Creditors. In its Schedules of Assets and Liabilities, Nellson reported $312,334,898 in total assets and $345,227,725 in total liabilities. NEW CENTURY: Asks Court to Enforce Automatic Stay vs. the IRS ------------------------------------------------------------- New Century TRS Holdings Inc., New Century Financial Corp., and their direct and indirect subsidiaries ask the United States Bankruptcy Court for the District of Delaware to enforce the automatic stay against the U.S Internal Revenue Service. Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, tells the Court that a corporate taxpayer sustaining an operating net loss in a tax year is entitled to carry that loss back to a prior profitable taxable year, and reduce the taxable income in that year, as provided by Section 172 of the Tax Code. A tax reduction results from the income reduction, and a corresponding refund to the taxpayer. The taxpayer can claim that refund by filing a Form 1139 Application with the IRS, pursuant to Section 6411 of the Tax Code. According to Mr. Samis, the Debtors claimed a net operating loss carryback from the taxable year 2006 to 2004, resulting in a $66,000,000 allowable tax refund. The Tax Refund is currently credited and reflected as allowed in the Debtors account with the IRS. The Debtors have timely submitted their Form 1139, Mr. Samis notes, but the IRS has failed to release the Tax Refund. The IRS claims that it is entitled to withhold the Tax Refund, based on recent regulations changing the long-held interpretation of Section 6411 of the Tax Code. Mr. Samis insists that it is a violation of Section 7805(b) of the Tax Code for the IRS to attempt to issue a regulation that has a retroactive effect, absent certain circumstances. Therefore, neither the new regulations nor the IRS rulings can support withholding the Tax Refund, Mr. Samis points out. Furthermore, Mr. Samis asserts, withholding the Tax Refund is a violation of Section 362(a)(3) of the Bankruptcy Code, which prohibits a non-debtor from exercising control over property of a debtor's estate. According to Mr. Samis, the IRS has not established an assessed liability or a pending action over the Debtors' outstanding tax liability, hence, it could not set off against any pending refunds. Accordingly, the Debtors ask the Court to direct the release of the Tax Refund without further delay. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a plan expires on Nov. 28, 2007. (New Century Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NEW CENTURY: D. Rubio Objects to Termination of Captive Policies ---------------------------------------------------------------- Daniel J. Rubio, John Hicks, David Vizcarra, object to the termination of the "captive" insurance policies, and ask the United States Bankruptcy Court for the District of Delaware to deny the motion, or order that NCMC Insurance Corporation segregate $1,000,000 for paying the claims of Rubio, et al. In the alternative, Rubio, et al., request that NCMC Insurance provide an accounting to identify all of its known claimants, and an amount be segregated for those claims. As reported in the Troubled Company Reporter on Nov. 8, 2007, New Century Financial Corp. and its debtor-affiliates asked the United States Bankruptcy Court for the District of Delaware for authority to terminate all of the remaining contractual obligations of NCMC Insurance Corporation, a wholly owned subsidiary of New Century Mortgage Corporation, under "captive" insurance policies entered into by the Debtors and NCMC Insurance. In this regard, the Debtors seek relief from the automatic stay. On Aug. 27, 2007, Rubio, et al., filed a $67,115,128 class proof of claim against New Century Mortgage Corporation for violations of the Fair Labor Standards Act. Rubio, et al., on behalf of a class of more than 1,200 employees, are plaintiffs to a lawsuit seeking to recover from NCMC unpaid overtime wages and compensation due to the Debtor's failure to provide statutorily mandated and rest periods to its employees before the bankruptcy filing. The lawsuit is pending in the U.S. District Court for the Central District of California. Karen C. Bifferato, Esq., at Connolly Bove Lodge & Hutz LLP, in Wilmington, Delaware, states that under the Hawaii corporate law, the known claims against a captive insurance company, such as NCMC Insurance, must be resolved before the assets are distributed to stockholders. The Debtors' request is an "end run" around the appropriate dissolution procedure, Ms. Bifferato insists, and claimants having a claim must be addressed before the company is dissolved. According to Ms. Bifferato, the Debtors' request indicates that deductibles covered by NCMC Insurance was $1,000,000 in the 2006- 2007 policy year, within which the action commenced by Rubio, et al., was filed. Thus to adequately "reserve" for the Rubio Action, $1,000,000 should be segregated to settle or pay the claims of Rubio, et al., she asserts. Additionally, Ms. Bifferato points out that NCMC Insurance holds a general unsecured claim for $1,562,143, which the Debtors' request seeks to satisfy. Rubio, et al., maintain that the Debtors are proposing unequal treatment of creditors, and for this the motion should be denied. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a plan expires on Nov. 28, 2007. (New Century Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NEW COMMUNITY: Files List of Four Largest Unsecured Creditors ------------------------------------------------------------- The New Community Baptist Church Inc. filed with the U.S. Bankruptcy Court for the Southern District of Texas its list of unsecured creditors, disclosing: Entity Nature of Claim Claim Amount ------ --------------- ------------ James C. Mize, Trustee $1,650,000 Post Office Box 210156 West Palm Beach, FL Internal Revenue Service Taxes $91,039 1919 Smith Street Stop 5025 Hou Houston, TX 77002 Harris County, Texas Taxes $12,000 Paul Bettencourt Tax Assessor-Collector P.O. Box 4663 Houstoin, TX 77210-4663 Intercontinental Houston Reception Services $1,602 Headquartered in Houston, Texas, The New Community Baptist Church Inc. is a religious organization. The Debtor filed for Chapter 11 protection on August 31, 2007, (Bankr. S.D. Tex. Case No. 07-35897). Jermaine Savoy Thomas, Esq. of Barnes and Turner represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it has estimated assets and debts of $1 million to $100 million. OLIN CORP: Completes $380 Mil. Metal Biz Sale to Global Brass ------------------------------------------------------------- Olin Corporation has completed the sale of its Metals business to Global Brass and Copper Inc., an affiliate of KPS Capital Partners LP. In connection with the sale, Olin expects to realize approximately $380 million in net after tax proceeds. The sale includes all of the company's worldwide Metals operations, including its manufacturing facilities in East Alton, Illinois; Montpelier and Bryan, Ohio; Waterbury, Connecticut; and Cuba, Missouri, as well as its A. J. Oster metals service centers. On Oct. 15, 2007, Olin Corporation signed a definitive agreement to sell its Metals business to GBC for a purchase price of $400 million. The price, which is payable in cash, is subject to a customary working capital adjustment. The company expects to recognize a loss of approximately $140 million, based on an estimated Sept. 30, 2007, balance sheet, in conjunction with this transaction. About Global Brass and Copper Inc. Global Brass and Copper Inc. is a manufacturer and distributor of copper and copper-alloy sheet, strip, plate, foil, rod and fabricated components in North America. The company employs over 2,000 employees, and operates manufacturing facilities in East Alton, Illinois; Montpelier and Bryan, Ohio; Waterbury, Connecticut; and Cuba, Missouri, and operates joint ventures in Japan and China. The company also operates A.J. Oster. GBC and its subsidiaries sell products under the Olin Metals, Olin Brass, and Chase Brass brand names. About Olin Corporation Olin Corporation (NYSE:OLN)-- http://www.olin.com/-- has two business segments: Chlor Alkali Products and Winchester. Chlor Alkali Products manufactures chlorine and caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, potassium hydroxide and bleach products. Winchester products include sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges. * * * On Aug. 31, 2007, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Olin Corp. to 'BB+' from 'BBB-' and removed the ratings from CreditWatch where they were placed May 21, 2007. The outlook is stable. ONE COMMS: Low Revenue Growth Cues Moody's to Cut Rating to B2 -------------------------------------------------------------- Moody's Investors Service has downgraded One Communications Corp.'s corporate family rating to B2 from B1 and changed the rating outlook to stable. As part of the rating action, the ratings on One Communications' first lien term loan and revolving credit facility were downgraded to B2. The ratings action reflects lower-than-expected revenue growth and free cash flow generation. Although the company continues to realize expected cost synergies, lower-than-anticipated sales force productivity, and a complete turnover among executive management have contributed to a revenue shortfall relative to previous projections. Moody's now expects the company to maintain revenue growth, on a lower base, of low- to mid-single digits over the rating horizon and generate free cash flow of 4% relative to its debt in 2007, compared to the previously indicated targets of over 7% and 11%, respectively. In addition, Moody's expects the increasingly competitive operating environment, particularly in the company's northeastern markets, to sustain the pressure on the company's operations. Moody's has taken these ratings actions: Issuer -- One Communications Corp. -- Corporate Family Rating -- Downgraded to B2, from B1 -- Probability of Default Rating -- Affirmed B2 -- Senior Secured Revolving Credit Facility -- Downgraded to B2, LGD4 -- 51%, from B1 -- Senior Secured Term Loan -- Downgraded to B2, LGD4 -- 51%, from B1 Outlook changed to Stable from Negative The B2 corporate family rating reflects the Company's moderate financial risk and free cash flow generation, in addition to the company's significant operating scale in the northeastern USA. The ratings are tempered by the highly competitive operating environment for CLECs, the ongoing integration of three companies with distinct corporate cultures and operating systems, the challenge the new management team will have in revamping the sales effort, and the potential for further acquisitions which may postpone debt reduction. One Communications was formed via a combination of Choice One Communications, CTC Communications and Conversent Communications in June 2006. One Communications is a CLEC with executive management based in Rochester, New York, Waltham, Masachussetts and Marlborough, Masachussetts. The company serves 160,000 customers in 17 states in the Northeast, Mid-Atlantic and Upper Midwest regions of the United States and generated $796 million in revenue in LTM 3Q 2007 period. OWENS-ILLINOIS: S&P Lifts Rating on Credit Facilities to BB+ ------------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on the bank credit facilities of Owens-Illinois Inc. and its wholly owned subsidiary, Owens-Brockway Glass Container Inc., to 'BB+' from 'BB'. S&P have also revised the recovery rating on the debt to '1' from '2', indicating the expectation that lenders would experience very high (90%-100%) recovery of principal in the event of a payment default. "The improved ratings," said Standard & Poor's credit analyst Liley Mehta, "reflect the company's reduction of senior secured debt with the proceeds from the recently completed sale of its plastics packaging business to Rexam PLC." At the same time, Standard & Poor's removed the ratings on the company's senior secured credit facilities from CreditWatch with positive implications where they were placed on June 11, 2007. S&P also affirmed the 'BB-' corporate credit, 'B' unsecured debt, and 'B-' preferred stock ratings. Total debt (adjusted to include unfunded postretirement liabilities as well as capitalized operating leases) was about $5 billion at Sept. 30, 2007. PAC-WEST TELECOMM: Court Confirms Final 2nd Amended Ch. 11 Plan --------------------------------------------------------------- The Honorable Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware confirmed Pac-West Telecomm Inc. and its debtor-affiliates' Final Second Amended Joint Chapter 11 Plan of Reorganization. Treatment of Claims The Debtors' Plan, as reported in the Troubled Company Reporter on Oct. 31, 2007, proposes to pay Class 1 Priority Claims in full, in cash. The Class 2 Prepetition Claim of Pac-West Funding Company LLC will be paid, on the effective date of the Plan, in full, in cash from the proceeds of the New Senior Secured Note to be issued by the Reorganized Debtors in the amount of $18,000,000. The Debtor, will, among others, elect to distribute to the holders of Class 3 Other Secured Claims the property securing their claims, in which event the holder will be entitled within 30 days to file a proof of claim for any deficiency claim entitled to treatment in Class 4. Cisco Systems Capital Corporation's secured claims will receive $270,000 in cash on the effective date. In consideration, Cisco is expected to: a) execute a bill of sale delivering to the Debtors all of its right, title and interest in and all property subject to that certain Cisco Sysetms Capital Master Agreement to Lease Equipment No. 3332; b) execute all documents reasonable requested by the Debtors to release its security interest in that agreement; and c) waive any entitlement to a Class 4 Unsecured Claim. Merrill Lynch's secured claims will be entitled to receive $500,000 on account of its claim on the effective date. Holders of Class 4 General Unsecured Claims will receive pro rata beneficial interest in and to the Class 4 Liquidating Trust and the Class 4 Liquidating Trust Assets. Holders of Class 5 Equity Interests in Pac-West will neither retain nor receive property under the Plan, while holders of Class 6 Equity Interests in the Debtors other than Pac-West will retain 100% of their interest. About Pac-West Based in Stockton, California, Pac-West Telecomm Inc. (OTC: PACW.PK) -- http://www.pacwest.com/-- provides switched local and long distance telecommunications services to, among others, internet service providers and paging companies. The company and its affiliates filed for Chapter 11 protection on April 30, 2007 (Bankr. D. Del. Case Nos. 07-10562 through 07-10567). Jeremy W. Ryan, Esq. and Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represent the Debtors in their restructuring efforts. Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, PLLC represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $53,883,888 and total debts of $66,358,711. PACIFIC CROSSING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Pacific Crossing, LLC 4199 Campus Drive Suite 260 Irvine, CA 92612 Bankruptcy Case No.: 07-13860 Type of Business: The Debtor is an information technology consulting, systems integration and outsourcing company. See http://www.pacificcrossing.com/ Chapter 11 Petition Date: November 16, 2007 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Evan D. Smiley, Esq. Weiland, Golden, Smiley, Wang, Ekvall & Strok, LLP 650 Town Center Drive, Suite 950 Costa Mesa, CA 92626 Tel: (714) 966-1000 Fax: (714) 966-1002 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Phillip L. McAllister Judgment $5,004,229 16 Golden Poppy Drive Trabuco Canyon, CA 92679 Deltha-Critique Joint Venture Subcontractor $316,346 3520 General DeGaulle Drive Suite 5060 New Orleans, LA 70114 Master Card Credit Card $110,713 Payment Remittance Center 54349 Los Angeles, CA 90054-0349 Bremer Whyte Brown and Attorney's Fees $42,160 O'Meara LLP Blue Cross of California Small Group Health $26,442 Insurance First Insurance Funding Corp. Trade $19,211 Great American Insurance Co. Insurance $11,566 Yahoo Hot Jobs Trade $10,488 Careerbuilder.com Trade $8,395 Kaiser Permanente Insurance $8,173 Master Card Credit Card $7,576 Tiarna Real Estate Services Lease $5,714 Golden West Dental Services $2,400 Dell Financial Services Lease $1,752 Monster.com Trade $1,633 Staples Business Advantage Trade $1,610 U.S. Healthworks Medical Trade $1,564 Group, P.C. Prescreen America Trade $1,480 Richard J. Nelson, CPA Accountant $1,400 Cox Communications Trade $1,300 PASCACK VALLEY: Can Sell MICU Rights to Hackensack for $3.6 Mil. ---------------------------------------------------------------- The U.S. Bankruptcy court for the District of New Jersey gave Pascack Valley Hospital Association Inc. authority to sell its mobile intensive care unit operating rights and related equipment to Hackensack University Medical Center for $3.6 million. The Court also approved the asset purchase agreement between the parties, which provides that the MICU rights will be sold free and clear of liens and obligations. Hackensack's offer was deemed the highest and best offer and is in the best interest of the Debtor. Based in Westwood, New Jersey, Pascack Valley Hospital Association Inc. -- http://www.pvhospital.org/-- operates a full-service, 291-bed non-profit medical facility, part of a system of healthcare affiliates known as the Well Care Group Inc., which provides a full range of the most advanced, technically specialized healthcare services available. The Debtor filed for Chapter 11 protection on Sept. 24, 2007 (Bankr. D. N.J. Case No. 07-23686). Jack M. Zackin, Esq., Simon Kimmelman, Esq., and Valerie A. Hamilton, Esq. at Sills Cummis Epstein & Gross PC represent the Debtor in its restructuring efforts. David L. Knowlton, Esq. serves as the Debtor's patient care ombudsman. The Official Committee of Unsecured Creditors selected Douglas J. McGill, Esq. and Robert Malone, Esq. at Drinker, Biddle & Reath LLP, as its counsel. The Debtor's schedules show total assets of $98,609,477 and total debts of $114,652,723. PASCACK VALLEY: Gets Final Nod to Access HFG's $10 Mil. DIP Fund ---------------------------------------------------------------- The U.S. Bankruptcy court for the District of New Jersey gave Pascack Valley Hospital Association Inc. final approval to borrow up to $10 million debtor-in-possession financing from HFG HealthCo-4 LLC. The Debtor informed the Court that it was unable to obtain adequate unsecured loan under Section 503(b)(1) of the Bankruptcy Code and hence, must grant HFG super-priority administrative expense claim. HFG's lending is conditioned upon: a. grant of a priming lien in the Debtor's receivables; b. grant of a first priority lien in all of the other collateral, subject only to permitted liens, the carve out and the postpetition liens granted to the Bank of New York as trustee in bond collateral; and c. receipt of the affiliate guaranties and the affiliate mortgages. The Bank of NY has consented to the granting of priming lien, subject to a cash collateral order issued by the Court allowing the Debtor to use BoNY's cash collateral. Hahn & Hessen LLP serve as HFG's counsel. About Pascack Valley Based in Westwood, New Jersey, Pascack Valley Hospital Association Inc. -- http://www.pvhospital.org/-- operates a full-service, 291-bed non-profit medical facility, part of a system of healthcare affiliates known as the Well Care Group Inc., which provides a full range of the most advanced, technically specialized healthcare services available. The Debtor filed for Chapter 11 protection on Sept. 24, 2007 (Bankr. D. N.J. Case No. 07-23686). Jack M. Zackin, Esq., Simon Kimmelman, Esq., and Valerie A. Hamilton, Esq. at Sills Cummis Epstein & Gross PC represent the Debtor in its restructuring efforts. David L. Knowlton, Esq. serves as the Debtor's patient care ombudsman. The Official Committee of Unsecured Creditors selected Douglas J. McGill, Esq. and Robert Malone, Esq. at Drinker, Biddle & Reath LLP, as its counsel. The Debtor's schedules show total assets of $98,609,477 and total debts of $114,652,723. PASCACK VALLEY: Gets Final Approval to Use BoNY's Cash Collateral ----------------------------------------------------------------- The U.S. Bankruptcy court for the District of New Jersey gave Pascack Valley Hospital Association Inc. final approval to use Bank of New York's cash collateral. The Debtor had informed the Court that without the use of cash collateral, it would likely be required to cease operations immediately, or would disrupt it as a going concern eliminating prospects of an orderly liquidation of the Debtor's assets in chapter 11. The Bank of New York is trustee for certain New Jersey Health Care Facilities Financing Authority Bonds Series 1998 and Series 2003 issued by Pascack. The series 1998 bonds were issued in the aggregate principal amount of $38,185,000 by the Authority, a corporate public body and political subdivision of NJ, pursuant to a Master Trust Indenture dated Oct. 15, 1998. The trustee holds other funds related to the bonds. As of the bankruptcy filing, the balance of the 1998 bond funds is $3,222,688. With the issuance of the 1998 bonds, the Authority loaned the proceeds to the Debtor under a loan agreement dated Oct. 15, 1998. The series 2003 bonds were issued in the aggregate principal amount of $51,205,000 by the Authority, pursuant to a Master Indenture dated April 21, 2003. Similarly, the trustee holds other funds related to the bonds. As of the bankruptcy filing, the balance of the 2003 bond funds is $5,023,187. With the issuance of the 2003 bonds, again the Authority loaned the proceeds to the Debtor under a loan agreement dated April 1, 2003. Both loans are secured by security interest and first priority lien on gross receipts received by the Debtor. As of Sept. 19, 2007, the Debtor owes under the bond documents in the principal amount of $31,720,000, plus $354,511 interest, on the 1998 bonds; and in the principal amount of $49,515,000, plus $710,498 interest on the 2003 bonds. The total bond claim as of Sept. 19, 2007, is in the aggregate amount of $82,300,009, which is exclusive of $77,815 in unliquidated expenses incurred by the trustee through Aug. 31, 2007. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC represents the Bank of New York. Based in Westwood, New Jersey, Pascack Valley Hospital Association Inc. -- http://www.pvhospital.org/-- operates a full-service, 291-bed non-profit medical facility, part of a system of healthcare affiliates known as the Well Care Group Inc., which provides a full range of the most advanced, technically specialized healthcare services available. The Debtor filed for Chapter 11 protection on Sept. 24, 2007 (Bankr. D. N.J. Case No. 07-23686). Jack M. Zackin, Esq., Simon Kimmelman, Esq., and Valerie A. Hamilton, Esq. at Sills Cummis Epstein & Gross PC represent the Debtor in its restructuring efforts. David L. Knowlton, Esq. serves as the Debtor's patient care ombudsman. The Official Committee of Unsecured Creditors selected Douglas J. McGill, Esq. and Robert Malone, Esq. at Drinker, Biddle & Reath LLP, as its counsel. The Debtor's schedules show total assets of $98,609,477 and total debts of $114,652,723. PLAINS EXPLORATION: Gets Requisite Consents for Pogo's Sr. Notes ---------------------------------------------------------------- Plains Exploration & Production Company disclosed the expiration and final results of three separate tender offers and consent solicitations for any and all of the outstanding 7.875% Senior Subordinated Notes due 2013, 6.625% Senior Subordinated Notes due 2015 and 6.875% Senior Subordinated Notes due 2017 (CUSIP Nos. 730448 AV 9, 730448 AR 8 and 730448 AT 4, respectively) of Pogo Producing Company LLC, a wholly-owned subsidiary of PXP and successor to Pogo Producing Company, which PXP acquired on Nov. 6, 2007. The tender offers and consent solicitations expired immediately after 5:00 p.m., New York City Time, on Nov. 20, 2007. Pogo expects to accept for payment and pay for notes from holders of: -- $449,250,000.00 in aggregate principal amount, or 99.833%, of the 7.875% Notes, -- $299,725,000.00 in aggregate principal amount, or 99.908%, of the 6.625% Notes and -- $499,945,000.00 in aggregate principal amount, or 99.989%, of the 6.875% Notes. The total amount to be paid by Pogo to noteholders in connection with the tender offers and consent solicitations is approximately $1,290,900,000, plus approximately $10.4 million in unpaid interest accrued to the payment date. Holders who validly tendered, and did not validly withdraw, their notes prior to the Expiration Date, will receive the total consideration, which (excluding accrued and unpaid interest) is $1,040.00 (including a $30.00 consent payment) for each $1,000 principal amount of the 7.875% Notes and $1,030.00 (including a $20.00 consent payment) for each $1,000 principal amount of the 6.625% and 6.875% Notes so tendered. All noteholders who validly tendered and did not withdraw their notes prior to the Expiration Date will receive accrued and unpaid interest from the last interest payment date to, but not including, the payment date. As a result of receiving consents from holders of a majority in outstanding principal amount of each series of notes, Pogo executed supplemental indentures amending the indentures governing each series of notes. The supplemental indentures eliminated substantially all of the restrictive covenants previously set forth in the indentures as well as certain events of default and other related provisions. Pogo retained J.P. Morgan Securities Inc. to serve as the Dealer Manager and Solicitation Agent for each tender offer and consent solicitation. Requests for documents may be directed to MacKenzie Partners, Inc., the Information Agent at (800) 322-2885. Questions regarding the tender offers and consent solicitation may be directed to J.P. Morgan Securities Inc. by calling collect at (212) 270-3994. About Pogo Producing Headquartered in Houston, Texas, Pogo Producing Company (NYSE: PPP) -- http://www.pogoproducing.com/-- explores for, develops and produces oil and natural gas. Pogo owns approximately 4,000,000 gross leasehold acres in major oil and gas provinces in North America, 3,119,000 acres in New Zealand and 1,480,000 acres in Vietnam. About Plains Exploration & Production Headquartered in Houston, Plains Exploration & Production Co. (NYSE: PXP) -- http://www.plainsxp.com/-- is an independent oil and gas company primarily engaged in the upstream activities of acquiring, developing, exploiting, exploring and producing oil and gas in its core areas of operation: onshore and offshore California, Colorado and the Gulf Coast region of the United States. * * * As reported in the Troubled Company Reporter on Nov. 8, 2007, Standard & Poor's Ratings Services affirmed its 'BB' corporate rating on independent oil and gas company Plains Exploration & Production Co., and removed from CreditWatch and withdrew its 'BB' corporate credit rating on Pogo Producing Co. The rating actions followed the announcement earlier of the successful close of PXP's acquisition of Pogo. PLATINUM PROPERTIES: List of 20 Largest Unsecured Creditors ----------------------------------------------------------- Platinum Properties of Central Florida Inc. filed with the U.S. Bankruptcy Court for the Middle District of Florida its list of unsecured creditors, disclosing: Entity Nature of Claim Claim Amount ------ --------------- ------------ Neeham, Pat and Donna Loan $100,000 25202 E Hwy 316 Salt Springs, FL 32134 Chrysler Financial Vehicles $67,895 P.O. Box 2993 Milwakee, WI 53201-2993 Lougheed Scalfaro & Co. Accounting $56,312 Attn: Pres./Gen. Mgr. 442 W Kennedy Drive, #160 Tampa, FL 33606 Al Pische Lending Fee $51,000 Iero, Chris Loan $40,000 Roswell, Sam Loan $30,000 Bank of America Credit Card $24,000 Gemstone Securities Trade Debt $22,500 Williams Scotsman Inc. Construction $19,280 Trailers (2)(Lease) Evans Group Trade Debt $16,320 Kimely Horne Site Development $14,941 Retirement Plan Plan Mgt Fees $11,896 Specialists Maytag Trade Debt $10,488 American Kitchens Trade Debt $5,086 Atlantic Survey Surveying Services $6,343 Baker & Hostetler Legal Services $5,875 United Healthcare Insurance $5,997 Herring Carpet Trade Debt $5,072 Osceola.com Trade Debt $4,868 DeLage Landen Copier Lease $4,645 Headquartered in Clermont, Florida, Platinum Properties of Central Florida Inc. is a developer of planned/gated communities in Lake County and Polk County, Florida. The Debtor filed for Chapter 11 protection on Sept. 20, 2007, (Bankr. M.D. Fla. Case No. 07-04441). R. Scott Shuker, Esq. of Latham Shuker Eden & Beaudine LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it has estimated assets and debts of $1 million to $100 million. POPE & TALBOT: European Subsidiary Files for Bankruptcy in Belgium ------------------------------------------------------------------ Pope & Talbot, Inc. disclosed that its subsidiary, Pope & Talbot Pulp Sales Europe, LLC, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. If the Belgian court grants the company's application, it is expected that the Pope & Talbot Pulp Sales Europe, LLC will be liquidated through the bankruptcy proceeding. As reported in the Troubled Company Reporter, Pope & Talbot and certain of its subsidiaries obtained protection from their creditors under the Companies' Creditors Arrangement Act of Canada on Oct. 29, 2007 and filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on Nov. 19, 2007. The company will use the protections of Chapter 11 and the CCAA to provide additional time for it to continue its restructuring efforts, which include, but are not limited to, the sale of certain or all of the company's assets. "We want to assure our customers that Europe remains an integral part of our business," Harold Stanton, President and CEO of Pope & Talbot, Inc., said. Headquartered in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products business. Pope & Talbot was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the company's products include the US, Europe, Canada, South America and the Pacific Rim. The company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada on Oct. 28, 2007. The Debtors' initial CCAA Stay expires on Nov. 23, 2007. The company and fourteen of its debtor-affiliates filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case No. 07-11738). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl & Jones L.L.P. is Debtors' proposed bankruptcy counsel. When the Debtors filed for bankruptcy, they listed total assets of $681,960,000 and total debts of $601,090,000. The Debtors' exclusive period to file a plan expires on March 18, 2008. POPE & TALBOT: Agrees to Sell Three Sawmills to Interfor -------------------------------------------------------- Pope & Talbot Inc. disclosed Monday that it has agreed to sell three sawmills and related timber tenures to International Forest Products Limited for roughly $69 million plus the value of certain current assets and liabilities assumed. The three mills, located in Castlegar, British Columbia, Grand Forks, British Columbia and Spearfish, South Dakota are producers of high-quality softwood lumber products. The transaction is subject to approvals by the U.S. Bankruptcy Court for the District of Delaware and the Superior Court of Justice (Commercial List) for the Province of Ontario, in Canada, and will be effected under procedures that provide for the possibility of competing bids. Headquartered in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products business. Pope & Talbot was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the company's products include the US, Europe, Canada, South America and the Pacific Rim. The company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada on Oct. 28, 2007. The Debtors' initial CCAA Stay expires on Nov. 23, 2007. The company and fourteen of its debtor-affiliates filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case No. 07-11738). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl & Jones L.L.P. is Debtors' proposed bankruptcy counsel. When the Debtors filed for bankruptcy, they listed total assets of $681,960,000 and total debts of $601,090,000. The Debtors' exclusive period to file a plan expires on March 18, 2008. (Pope & Talbot Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) PSEG ENERGY: Fitch Affirms 'BB+' Issuer Default Rating ------------------------------------------------------ Fitch Ratings has upgraded the Issuer Default Rating and senior unsecured debt ratings of Public Service Enterprise Group Inc., and PSEG Power LLC to 'BBB+' from 'BBB'. The Ratings Outlook for each entity is now Stable. Fitch has also affirmed the ratings of Public Service Electric and Gas Co. and PSEG Energy Holdings LLC. The Ratings Outlook for Holdings is changed to Stable from Negative. A complete list of the ratings changes is shown below. Fitch upgrades the following ratings: Public Service Enterprise Group Inc. --IDR to 'BBB+' from 'BBB'; --Senior unsecured to 'BBB+' from 'BBB'; --Trust preferred securities to 'BBB' from 'BBB-'. The Rating Outlook is Stable. PSEG Funding Trust II --Preferred securities to 'BBB' from 'BBB-'; The Rating Outlook is Stable. PSEG Power LLC --IDR to 'BBB+' from'BBB'; --Senior unsecured to 'BBB+' from 'BBB' The Rating Outlook is Stable. Also, Fitch affirms the following ratings: Public Service Enterprise Group Inc. --Short-term IDR 'F2'; --Commercial paper 'F2'. Public Service Electric and Gas Company --IDR 'BBB+' --First Mortgage Bonds 'A'; --Preferred stock 'BBB+'; --Short-term IDR 'F2'; -- Commercial paper 'F2'; The Rating Outlook is Stable. PSEG Energy Holdings LLC --IDR 'BB+'; --Senior unsecured 'BB'; The Rating Outlook is Stable. The PSEG rating upgrade reflects the financial strength and strong cash flow of its two core subsidiaries, Power and PSE&G, and the moderate and declining level of parent debt. PSEG redeemed $835 million of parent debt and trust preferred securities earlier this year and plans to retire an additional $180 million of trust preferred securities by year-end. The 2007 redemptions are being funded with proceeds from asset sales at Power and Holdings and cash distributions from each of its three subsidiaries. The expected debt retirements should reduce the consolidated ratio of debt to EBITDA to below 3.0 times. The upgrade of Power's ratings reflect the company's sound and improving financial condition, the favorable competitive position of its low-cost, largely coal and nuclear generating fleet, the locational value of operating in a constrained region where energy supply is tight and opposition to new generating facilities is strong and a regulatory scheme in New Jersey that provides a rolling three-year hedge for a portion of Power's electric generation. The company's improving financial condition is driven by the re-pricing of expiring below market supply contracts earlier this year and scheduled for next year, improved nuclear operations, favorable market conditions and the disposition of under performing assets. Based on Fitch's wholesale power model, Fitch believes power prices in the region are sustainable over the next several years at or near current levels, which should allow Power to achieve and maintain the expected financial improvement. The implementation of capacity auctions in PJM will also provide a supplemental source of earnings and cash flow. The primary credit concerns are the financial impact of an extended coal or nuclear plant outage and potentially stricter environmental regulations. The ratings of PSE&G are consistent with the company's solid and improving financial profile and the relative predictability of its earnings and cash flow due to the absence of any meaningful commodity exposure. The recent improvement in bondholder protection measures reflects the implementation of electric and gas rate increases in November 2006. After 2007, a projected rise in capital expenditures together with a rate freeze through November 15, 2009 will exert pressure on credit quality measures if not offset by sales and customer growth and cost reductions. The ratings affirmation and revised Outlook for Holdings reflect the reduction in business risk and recourse debt achieved over the past several years, primarily from asset sales, and a business strategy to opportunistically dispose of international electric generation and distribution assets. Proceeds from asset sales have and will be used to retire debt and to return capital to PSEG. The potential tax liability resulting from the IRS disallowance of tax deductions for the years 1997 through 2000 associated with certain lease transactions entered into by Holdings' subsidiary PSEG Resources, LLC were not a rating factor for either Holdings or PSEG. The earliest any settlement is expected is post-2010 and PSEG has sufficient liquidity to satisfy a worst case outcome. In February 2007, PSEG filed a protest with the Office of Appeals of the IRS. If the IRS disallowance is upheld, approximately $853 million of PSEG deferred tax liabilities recorded through September 30, 2007 would become currently payable. In addition, interest of approximately $166 million (after-tax) and penalties of $165 million, may become payable, for a total exposure of $1.184 billion. Additional interest and penalties of approximately $17 million accrue quarterly. Settlement for a lesser amount is also possible. QUEBECOR WORLD: Poor Liquidity Prompts S&P to Cut Rating to B- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Montreal-based printing company Quebecor World Inc. by one notch, including the long-term corporate credit rating to 'B-' from 'B'. At the same time, the ratings remain on CreditWatch with negative implications, where they were placed Aug. 9, 2007. "The downgrade reflects Quebecor World's deteriorating liquidity position following the withdrawal of the company's refinancing plan to raise about CDN$750 million by issuing debt and equity," said Standard & Poor's credit analyst Lori Harris. Proceeds from the new issues were to be largely applied to the substantial balance outstanding on the revolving credit facility and to redeem the series 5 preferred shares. Quebecor World views withdrawing the plan as necessary because of adverse financial market conditions, which have led to the company's inability to raise funds under the original terms and conditions. In the near term, management will need to explore future refinancing opportunities, as well as other methods to raise cash, including asset sales and sale leaseback transactions. "Quebecor World has announced that it will hire independent financial advisors to assist in evaluating these alternative actions," Ms. Harris added. On Nov. 7, 2007, the company announced that it had signed a definitive share purchase agreement with Dutch printer RSDB NV (Roto Smeets) to sell Quebecor World's European operations to RSDB. The proposed new company, Roto Smeets Quebecor, which will be the leading player in the European printing industry, will be owned 70.1% by RSDB and 29.9% by Quebecor World. The purchase price for Quebecor World's European business will be EUR 240 million (equal to about $350 million), to be paid to Quebecor World in cash, RSQ shares, and an eight-year note receivable. S&P expect the transaction to close shortly upon regulatory and RSDB shareholder approvals. Reported revenues and adjusted EBITDA were down 7% and 19%, respectively, for the nine months ended Sept. 30, 2007, compared with the same period in 2006. The weak performance is due to price pressures, volume declines, and operating inefficiencies. The company's recent completion of a significant equipment retooling program should positively affect profitability and cash flow in 2008. However, Standard & Poor's believes management will remain challenged in its efforts to turn around the business because of very difficult printing industry fundamentals, including ongoing pricing pressures and volume declines, electronic substitution, cyclicality, and significant competition. The ratings will remain on CreditWatch until Standard & Poor's is comfortable that the company has addressed its near-term liquidity issues. S&P will continue to monitor developments, including management's future refinancing plans. QUALITY HOME: Chapter 11 Trustee Cuts Jobs by More than 50% ----------------------------------------------------------- David Gould, chapter 11 trustee in the bankruptcy cases of Quality Home Loans, submitted to the U.S. Bankruptcy Court for the District of California its preliminary status report. Mr. Gould informs the Court that it discovered that the Debtor has at least two real property leases for office space. The largest leasehold is located at 27001 W. Agoura Road, Third Floor in Agoura, California and consists of 45,911 square feet at $104,034 monthly. Another lease, according to Mr. Gould, is in the same building for $2,299 square feet at $4,735 monthly. The Debtor, Mr. Gould says, may have obtained rights to a third lease in its Banker's Express acquisition consisting of 3,262 square feet at 26010 Mureau Road, Suite 130. Mr. Gould says he is investigating this third potential lease. Mr. Gould relates that these leaseholds contain substantial amounts of business personal property and that he is in the process of identifying leased and owned property. In addition, Mr. Gould says that the Debtor had 25 employees and 4 independent contractors on payroll as of Nov. 5, 2007. Taking the Reins On Nov. 6 and 8, Mr. Gould trimmed down the payroll to 10 employees and 2 independent contractors, primarily in accounting and information technology to support the chapter 11 trustee's continuing reconciliation and investigation of the Debtor's books, records and accounts. Mr. Gould laid off all executives and the payroll is now about $32,000 per two week pay period. Mr. Gould took control of the Debtor's bank accounts as sole signatory. Assisted by FTI Consulting, consultant to the Official Committee of Unsecured Creditors, Mr. Gould is completing a mortgage loan servicing account reconciliations which will reveal the Debtor's total cash, net of claims. Mr. Gould is increasing his bond to $4 million from the initial bond of $10,000, based on the bank account fund balances. Mr. Gould also obtained control of leaseholds, securing personal property and business records. Electronic data is limited to on- site office access only and locks and electronic access card were changed. Insurance contracts have been amended to name the chapter 11 trustee. Currently, Mr. Gould is investigating the closing of a mortgage loan sale transaction between the Debtor and Terwin Advisors LLC, and related settlement with Countrywide Securities Corporation pursuant to the Court's order entered Oct. 16, 2007. Mr. Gould had investigated a sale of the Debtor's operating "platform" to Quality Loans LLC, an affiliate of Pacificor LLC, which would have involved an interim management agreement in anticipation of a Section 363 sale. No agreement was reached for a sale of the platform. Thus, the trustee is presently planning to: (1) reject equipment leases and real property leases and return possession of leased property to the lessors, and (2) reduce the Debtor's office space to only the minimum necessary for accounting functions and IT support. Appointment of Mr. Gould As reported in the Troubled Company Reporter on Nov. 5, 2007, the Court approved the appointment of David Gould as the chapter 11 trustee for Quality Home Loans' bankruptcy case. The Court also fixed the Trustee's bond at $10,000. On Nov. 5, 2007, pursuant to Section 332(a), Mr. Gould accepted his appointment by filing chapter 11 trustee bond with the Court. Mr. Gould retained Lewis R. Landau, Esq., as counsel, Omni Management Group as on-site field agent and consultant to manage the estates' facilities and resources, analyze cash management systems and establish new bank accounts, assist with the preparation of projected cash flow statements, and assist with the ongoing reporting requirements of the Office of the United States Trustee. About Quality Home Based in Agoura Hills, California, Quality Home Loans -- http://www.qualityhomeloans.com/-- is a residential hard money lender. The company does business as Clear Credit Capital, Last Chance Home Loans, Last Option Lending, and Q.H.L. Investments. The company and its debtor-affiliates filed for Chapter 11 protection on Aug. 21, 2007 (Bankr. C.D. Calif. Case Nos. 07- 13003 through 07-13006). William N. Nobel, Esq. and Mike D. Neue, Esq. at Irell & Manella LLP represent the Debtors in their restructuring efforts. Eric. E. Sagerman, Esq. and David L. Wilson III, Esq. at Winston & Strawn LLP act as counsels to the Official Committee of Unsecured Creditors. David Gould, Chapter 11 Trustee, is represented by Lewis R Landau, Esq., at Lewis R Landau Attorney at Law. The Debtors' schedules disclose total assets of $130,319,336 and total debts of $177,043,476. QUALITY HOME: U.S. Trustee Reconstitutes Creditors Committee ------------------------------------------------------------ The United States Trustee for Region 16 reconstituted the Official Committee of Unsecured Creditors in the bankruptcy cases of Quality Home Loans upon the resignation of two previously appointed members, Country Wide Home Loans and First California Bank. The U.S. trustee appointed Kernel Ware Technology Inc. and Lost Hills Office Partners LLC to serve on the Committee. The members of the reconstituted Committee are: 1. Clear Capital.Com 6030 Orchard Avenue Richmond, CA 94804 Attn: Cy Epstein Tel: (510) 684-5400 2. Kernel Ware Technology Inc. 24229 Park Granada Calabasas, CA 91302 Attn: Ali Neyestani Tel: (818) 437-1346 3. Lost Hills Office Partners LLC 26901 Agoura Road, Suite 180 Calabasas, CA 91301 Attn: Gary Leff Tel: (818) 676-3310 About Quality Home Based in Agoura Hills, California, Quality Home Loans -- http://www.qualityhomeloans.com/-- is a residential hard money lender. The company does business as Clear Credit Capital, Last Chance Home Loans, Last Option Lending, and Q.H.L. Investments. The company and its debtor-affiliates filed for Chapter 11 protection on Aug. 21, 2007 (Bankr. C.D. Calif. Case Nos. 07- 13003 through 07-13006). William N. Nobel, Esq. and Mike D. Neue, Esq. at Irell & Manella LLP represent the Debtors in their restructuring efforts. Eric. E. Sagerman, Esq. and David L. Wilson III, Esq. at Winston & Strawn LLP act as counsels to the Official Committee of Unsecured Creditors. David Gould, Chapter 11 Trustee, is represented by Lewis R Landau, Esq., at Lewis R Landau Attorney at Law. The Debtors' schedules disclose total assets of $130,319,336 and total debts of $177,043,476. REABLE THERAPEUTICS: Merger Deal Cues S&P to Withdraw Rating ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew all of its ratings on Vista, California-based DJO Inc., including the 'BB-' corporate credit rating and the 'BB' senior secured debt rating on DJO Inc.'s $50 million revolver and $350 million term loan. This rating action follows the Nov. 20, 2007 announcement that the planned merger closed between ReAble Therapeutics Inc. and DJO Inc. ReAble Therapeutics Inc. is the surviving entity. At the same time, S&P withdrew its 'B+' senior secured debt rating on ReAble Therapeutics Finance LLC's old $50 million revolver and $405 million term loan. These rating actions are consistent with Standard & Poor's Oct. 31, 2007 research update on ReAble Therapeutics Inc. At that time, S&P announced that these ratings would be withdrawn at the close of the transaction. At the same time, S&P had affirmed its 'B' corporate credit rating on ReAble Therapeutics Inc., assigned its 'BB-' bank loan and '1' recovery ratings to ReAble Therapeutics Finance LLC's $100 million senior secured revolving credit facility due 2013 and $1.065 billion (formerly proposed at $1.055 billion) term loan B due 2014. S&P also assigned its 'CCC+' unsecured debt rating to ReAble Therapeutics Finance LLC's $575 million senior unsecured notes maturing in 2015 and affirmed its 'CCC+' subordinated debt rating on ReAble Therapeutics Finance LLC's and ReAble Therapeutics Finance Corp.'s existing $200 million senior subordinated notes maturing in 2014. ReAble Therapeutics Inc. will change its name to DJO Inc. in the near term. Also, the combined entity will be headquartered in Vista, California. Ratings List Ratings Withdrawn DJO Inc. To From -- ---- Corporate Credit Rating NR BB-/Stable/-- Secured Debt NR BB (Recov Rtg: 2) ReAble Therapeutics Finance LLC To From -- ---- Secured Debt NR B+ (Recov Rtg: 2) RED MILE: Posts $9.5 Million Net Loss in 2nd Qtr. Ended Sept. 30 ---------------------------------------------------------------- Red Mile Entertainment Inc. reported a net loss of $9.5 million on net revenues of $3.2 million for the second quarter ended Sept. 30, 2007, compared with a net loss of $1.4 million on net revenues of $284,903 in the same period ended Sept. 30, 2006. The increase in revenues is primarily due to sales of Jackass: The Game in North America. For the three months ended Sept. 30, 2006, revenue consisted of royalties from five products (Crusty Demons, GripShift, Disney's Aladin Chess Adventure, El Matador, and Dual Sudoku). Cost of goods sold were approximately $4.8 million during the three months ended Sept. 30, 2007, as compared to approximately $575,795 during the comparable periods from 2006. The increase in cost of goods sold as compared to the prior year is primarily the result of the sales of Jackass: The Game and the write-down of software development costs. Sales, marketing and business development costs were approximately $1.7 million during the three months ended Sept. 30, 2007, as compared to approximately $348,000 during the three months ended Sept. 30, 2006, an increase of 385%. During the three months ended Sept. 30, 2007, the company took a non-cash debt inducement conversion charge of $4.3 million related to converting $8,244,000 principal amount of senior secured convertible debentures and $155,281 in accrued interest on the debentures into shares of the company's common stock at a lower conversion price than the conversion price attached to the debentures. In addition, the company took a non-cash charge of $662,902 on the conversion of $2,400,000 in principal amount of convertible promissory notes into shares of the company's common stock related to the beneficial value of warrants issued with the common stock at the time of conversion. At Sept. 30, 2007, the company's consolidated balance sheet showed $11.1 million in total assets, $2.8 million in total liabilities, and $8.3 million in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2597 Going Concern Doubt Burr, Pilger & Mayer LLP, in San Francisco, expressed substantial doubt about Red Mile Entertainment Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended March 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses, negative cash flows from operations, and accumulated deficit. About Red Mile Headquartered in Sausalito, California, Red Mile Entertainment Inc. (OTC BB: RDML.OB) -- http://www.redmileentertainment.com/-- is a worldwide developer and publisher of interactive entertainment software. Red Mile creates, incubates, and licenses premier intellectual properties and develops products for console video-game systems, personal computers, and other interactive entertainment platforms. RELIANT ENERGY: Court Approves A&M as Panel's Financial Advisor --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Reliant Energy Channelview LP and debtor-affiliates' chapter 11 cases obtained authority from the United States Bankruptcy Court for the District of Delaware to retain A&M Securities LLC as its financial advisor. As reported in the Troubled Company Reporter on Oct. 5, 2007, A&M Securities is expected to: a) evaluate the assets and liabilities of the Debtors; b) analyze the financial and operating statements of the Debtors; c) analyze the business plans, budgets, and forecasts of the Debtors; d) evaluate the prospects for debtor-in-possession financing, cash collateral usage and adequate protection therefore, and the prospects for exit financing in connection with any plan of reorganization and any budgets relating thereto; e) provide such specific valuation or other financial analyses as the Committee may require in connection with the cases; f) assess the financial issues and options concerning the sale of the Debtors, or any of them, or their respective assets and structuring any plan of reorganization; g) provide testimony in court, on behalf of the Committee, if necessary or as reasonably requested by the Committee, subject to the terms of this Agreement; and h) provide such other support as may be reasonable requested by the Committee. The firm's professionals and their compensation rates are: Designations Hourly Rate ------------ ----------- Managing Director $650 Senior Director $500 - $550 Director $400 - $500 Associate $300 - $400 Analyst $200 - $300 James D. Decker of A&M Securities LLC assured the Court that the firm does not hold any interest adverse to the Debtors and their estate and that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Houston, Reliant Energy Channelview L.P. owns a power plant located near Houston, and is an indirect wholly owned subsidiary of Reliant Energy Inc. -- http://www.reliant.com/-- The company and its three affiliates, Reliant Energy Channelview (Texas) LLC, Reliant Energy Channelview (Delaware) LLC, and Reliant Energy Services Channelview LLC filed for chapter 11 protection on Aug. 20, 2007 (Bankr. D. Del. Lead Case No. 07-11160). Mark D. Collins, Esq., Paul N. Heath, Esq., and Jason Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. Evelyn J. Meltzer, Esq., at Pepper Hamilton LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $362,000,000 and total debts of $342,000,000. RELIANT ENERGY: Court OKs Pepper Hamilton as Panel's Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors in Reliant Energy Channelview LP and debtor-affiliates' chapter 11 cases obtained authority from the United States Bankruptcy Court for the District of Delaware to retain Pepper Hamilton LLP as their counsel, nunc pro tunc to Aug. 30, 2007. As reported in the Troubled Company Reporter on Oct. 4, 2007, Pepper Hamilton is expected to: a) advise the Committee with respect to its rights, duties and powers in these cases; b) assist and advise the Committee in its consultations with the Debtors relating to the administration of these cases; b) assist the Committee in analyzing the claims of the Debtors, creditors and the Debtors' capital structure and in negotiating with the holders of claims and, if appropriate, equity interests; d) assist the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and other parties involved with the Debtors, and of the operation of the Debtors' businesses; e) assist the Committee in analyzing intercompany transactions; f) assist the Committee in its analysis of, and negotiations with the Debtors or any other third party concerning matters related to, among other things, the assumption or rejection of certain leases of non-residential real property and executory contracts, asset dispositions, financing of other transactions and the terms of a plan of reorganization or liquidation for the Debtors; g) assist and advise the Committee as to its communications, if any, to the general creditor body regarding significant matters in these cases; h) represent the Committee at all hearings and other proceedings; i) review, analyze and advise the Committee with respect to all applications, orders, statements of operations and schedules filed with the Court; j) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; and k) perform such other services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set for in the Bankruptcy Code. The firm's professionals and their compensation rates are: Designation Hourly Rates ----------- ------------ Partners $400 - $690 Associates $250 - $320 Paraprofessionals $175 David B. Stratton, Esq., a partner at Pepper Hamilton, assured the Court that the firm does not hold any interest adverse to the Debtors and their estate. Mr. Stratton can be reached at: David B. Stratton, Esq. Pepper Hamilton LLP Hercules Plaza, Suite 5100 1313 Market Street P.O. Box 1709 Wilmington, Delaware, 19899-1709 Tel.: (302) 777-6500 Fax.: (302) 421-8390 http://pepperlaw.com/ Based in Houston, Reliant Energy Channelview L.P. owns a power plant located near Houston, and is an indirect wholly owned subsidiary of Reliant Energy Inc. -- http://www.reliant.com/-- The company and its three affiliates, Reliant Energy Channelview (Texas) LLC, Reliant Energy Channelview (Delaware) LLC, and Reliant Energy Services Channelview LLC filed for chapter 11 protection on Aug. 20, 2007 (Bankr. D. Del. Lead Case No. 07-11160). Mark D. Collins, Esq., Paul N. Heath, Esq., and Jason Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for protection from their creditors, they listed total assets of $362,000,000 and total debts of $342,000,000. REMY WORLDWIDE: Court Approves AP Services as Crisis Manager ------------------------------------------------------------ Remy Worldwide Holdings Inc. and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to: (a) employ AP Services, LLC, as their crisis managers effective as of the Effective Date; and (b) designate David C. Johnston as assistant treasurer of Remy International Inc. As reported in the Troubled Company Reporter on Oct. 17, 2007, the Debtors asserted that APS' experience in providing crisis management services to financially-troubled organizations for over 20 years qualifies the firm for the contemplated services it will perform on the Debtors' behalf. Furthermore, Mr. Johnston had held a variety of restructuring management and advisory leadership roles during his 10-year tenure with APS' affiliate, AlixPartners. Pursuant to an Engagement Letter between the Debtors and APS dated Sept. 25, 2007, Mr. Johnston will serve as Remy International's assistant treasurer under the direct supervision of Remy International's chief executive officer. As Remy International's assistant treasurer, Mr. Johnston is expected to: -- collaborate with the senior management team composed of Remy's Board of Directors and the Debtors' other professionals in assisting the Debtors in evaluating strategic and tactical options through the restructuring process; -- oversee elements of Remy's Treasury and Cash Management functions; and -- assist the CEO and the Chief Financial Officer in developing improved financial reporting and timelier decision-making information. The Debtors will pay for APS' full time Temporary Staff at these hourly rates: Professional Hourly Rate ------------ ----------- Managing Directors $600 - $750 Directors $440 - $575 Vice-Presidents $325 - $450 Associates $260 - $315 Analysts $210 - $230 Paraprofessionals $100 - $175 Based on APS' billing schedule, Mr. Johnston, designated as full- time Assistant Treasurer, will be compensated with an hourly rate of $525. Aside from providing full-time Temporary Staff, APS will occasionally use part-time temporary staff for certain Chapter 11-related activities, Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, told the Court. The Debtors will be billed for services provided by the part-time Temporary Staff for hours worked at hourly rates similar to those of the full-time Temporary Staff. Among other things, the part-time Temporary Staff may be tasked to: (a) prepare short-term cash flow and liquidity forecasts for domestic and international operations; (b) assist in the preparation and monitoring of business plans and forecasts; (c) evaluate Remy's relationship with significant customers, development strategies to address customer issues, and negotiations for improvements in pricing, product specifications, payment terms and other elements affecting the company's cash flow; (d) develop information for Remy's prepackaged Chapter 11 filing, through: -- compiling required information for the Chapter 11 petition and other required forms; -- assisting the Accounting Department with related issues like cutoff and segregation of prepetition and postpetition activity; and -- assisting counsel with information and analysis to support "first day" motions; and (e) after the Chapter 11 filing, assist: -- the Debtors in managing their bankruptcy process, including working with and coordinating the efforts of other professionals representing the Debtors' various stakeholders; -- in preparing information required by the Bankruptcy Court, including schedules of assets and liabilities, statement of financial affairs and monthly operating reports; -- in managing supplier relationships to help ensure continuation of deliveries and receipt of credit terms; and -- in tasks like reconciling, managing, and negotiating claims, evaluating preferences and the like and in supporting the Debtors' positions with respect to various Court motions. David Rawden, an independent contractor of APS, will perform certain accounting and finance functions for the Debtors. Mr. Rawden was formerly a managing director of AlixPartners, with over 25 years of accounting, finance and restructuring experience. Mr. Rawden was a former chief financial officer for several manufacturing companies, including a $1 billion automotive supplier. APS is billing the Debtors for Mr. Rawden's services at a fixed monthly rate of $100,000, which is equal to or less than the comparable hourly rate that the firm charges for its own employees who are managing directors, according to Mr. Enos. The APS professionals contemplated to be employed by the Debtors and their fees are: Hourly Name Description Rate Commitment ---- ----------- ------- ---------- David C. Johnston Assistant Treasurer $525 Full-Time Alan Holtz Engagement Leader $675 Part-Time Jason Muskovich Int'l. Cash Mgmt. $520 Full-Time Henry Colvin Case Management $495 Full-Time Kyle Braden Vendor Management $475 Full-Time Brent Robison Int'l. Cash Mgmt. $440 Full-Time Nishit Shah Case Management $315 Full-Time Jarod Clarrey Case Management $230 Full-Time The Debtors will also reimburse APS of necessary out-of-pocket expenses incurred in connection with their Chapter 11 cases, including travel, lodging, postage and telephone charges. APS intended to submit to the Court quarterly reports of compensation earned. In addition to the hourly fees, APS and the Debtors agreed that in the event of a meaningful and appropriate milestone, APS will receive a $1,000,000 Success Fee. The fee is intended to reflect the alignment of both parties' interests. Under the Engagement Letter, the Debtors agreed to indemnify, hold harmless, and defend APS and its affiliates against all claims, liabilities, losses, damages, and reasonable expenses as they are incurred, including reasonable legal fees and disbursements of counsel. Without prejudice to these rights, APS waives indemnification of itself as an entity. Indemnification of APS personnel who are not officers of the Debtors will be subject to the approval of Remy International's Board of Directors. The Debtors asserted that they will use reasonable efforts to include and cover Temporary Staff serving as their officers from time to time, as insureds under the Debtors' policy for directors' and officers' insurance. The Debtors will maintain the D&O Insurance coverage for the period through which claims can be made against those persons. Alan D. Holtz, a managing director at APS, declared that none of APS' principals, employees, agents, or affiliates have any connection with the Debtors, their creditors, the U.S. Trustee, or any other party, with an actual potential interest in the Debtors' Chapter 11 cases. Mr. Holtz related that APS has represented Angelo Gordon, AT&T Corp., Bear Stearns, BellSouth, Blue Diamond, Bombardier Inc., Caterpillar, Citicorp Del-Lease, Credit Suisse First Boston, DaimlerChrysler, Deloitte & Touche, Fiat, Ford, General Motors Corp., Honda, Morgan Stanley, among others, in matters unrelated to the Debtors. About Remy Worldwide Based in Anderson, Indiana, Remy Worldwide Holdings Inc. acts as a holding company of all the outstanding capital stock of Remy International Inc. Remy International -- http://www.remyinc.com/ -- manufactures, remanufactures and distributes Delco Remy brand heavy-duty systems and Remy brand starters and alternators, locomotive products and hybrid power technology. The company also provides a worldwide components core-exchange service for automobiles, light trucks, medium and heavy-duty trucks and other heavy-duty, off-road and industrial applications. Remy has operations in the United Kingdom, Mexico and Korea, among others. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 8, 2007 (Bankr. D. Del. Cases No. 07-11481 to 07-11509). Douglas P. Bartner, Esq., Fredric Sosnick, Esq., and Michael H. Torkin, Esq., at Shearman & Sterling LLP, represent the Debtors' in their restructuring efforts. Pauline K. Morgan, Esq., Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as co-counsels to the Debtors. The Debtors' claims agent is Kurtzman Carson Consultants LLC and their restructuring advisor is AlixPartners, LLC. At Sept. 30, 2006, Remy Worldwide's balance sheet showed total assets of $919,736,000 and total liabilities of $1,265,648,000. (Remy Bankruptcy News; Issue No. 4, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). RESI FINANCE: Superior Performance Cues S&P to Lift Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services raised it ratings on 12 classes of real estate synthetic investment securities issued by RESI Finance L.P.'s series 2003-A and 2003-B. The raised ratings reflect the series' superior performance and increased percentages of loss protection provided through remaining credit support (subordination). S&P expect the remaining percentages of credit enhancement to increase over time unless significant losses occur, because class B12 from each series (the most subordinate classes) will receive no principal allocations unless the amounts of all other class B interests have been reduced to zero. Significant prepayments have lowered the pool balances of series 2003-A and 2003-B to approximately 11.3% and 8.8% of their original size, respectively. These prepayments have increased percentages of loss protection provided by the remaining credit support. In addition, the upgrades reflect an updated loan-by-loan analysis performed on the mortgage pools. The loss coverage requirements derived from the recent loan-by-loan analysis are significantly lower than the original runs, primarily because of loan seasoning, updated FICO scores, and amortized and value-adjusted loan-to- value ratios. The analysis also incorporates projected loss severities for the delinquent loans. As a result, Standard & Poor's adjusted its ratings to reflect the lower loss coverage percentages needed to support the raised ratings. As of the Oct. 25, 2007, distribution date, these series had experienced low delinquency levels of 0.26% (series 2003-B) and 0.33% (series 2003-A) of the current remaining pool balances. Severely delinquent loans (90-plus days, foreclosures, and REOs) were 0.15% (series 2003-B) and 0.20% (series 2003-A). Realized losses have been particularly low at 0.00% (series 2003-B) and 0.01% (series 2003-A) of the original pool balances. The remaining credit support should be sufficient to support the certificates at the raised and affirmed rating levels. These transactions are real estate synthetic investments, synthetic securitizations of jumbo, A-quality, fixed-rate and first-lien residential mortgage loans (the reference portfolio). Unlike traditional mortgage-backed securitizations, the actual cash flow from the reference portfolio is not paid to the holders of the securities. Rather, the proceeds from the issuance of the securities are invested in eligible investments. Interest payable to the securityholders is paid from income earned on the eligible investments and from payments from the Bank of America under a financial guarantee contract. Ratings Raised RESI Finance L.P. Real estate synthetic investment securities Rating ------ Series Class To From ------ ----- -- ---- 2003-A B8 AAA AA 2003-A B9 AA+ AA- 2003-A B10 AA- A- 2003-A B11 A- BB+ 2003-B B4 AAA AA 2003-B B5 AA+ A 2003-B B6 AA A- 2003-B B7 AA- BBB 2003-B B8 A+ BBB- 2003-B B9 BBB+ BB 2003-B B10 BBB BB- 2003-B B11 BB B- RESIDENTIAL CAPITAL: Incurs $2.3 Bil. Net Loss in Third Qtr. 2007 ----------------------------------------------------------------- Residential Capital LLC incurred a net loss of $2.3 billion for the third quarter ended Sept. 30, 2007, compared to net income of $83.0 million in the third quarter of 2006. Interest income for the third quarter 2007 was $1.9 billion, compared with interest income of $2.1 billion for the third quarter 2006. ResCap's U.S. residential mortgage earnings deteriorated sharply as a result of: i) higher provision for credit losses; ii) mark-to-market adjustments on trading securities and mortgage loans held for sale; iii) tighter margins on the sale of mortgage loans; iv) a decrease in net financing revenue driven by higher borrowing costs; and v) lower production levels. Additionally, the reported net income for the quarter includes a non-cash $455 million goodwill impairment. Liquidity and Capital ResCap significantly strengthened its liquidity position in the third quarter. ResCap cash and certain marketable securities increased from $3.7 billion at the end of the second quarter to $6.5 billion on Sept. 30, 2007 -- including $2.2 billion held at GMAC Bank. ResCap took several important measures in the third quarter to augment cash balances during the capital markets turmoil. In September, GMAC established a committed secured funding facility with Citi to finance automotive, mortgage and commercial finance assets of up to $21.4 billion. A portion of this facility is available to ResCap. In the third quarter, GMAC injected $1 billion of equity into ResCap to bolster the company's capital base. As of Sept. 30, 2007, ResCap's equity base stood at $6.2 billion. As of Sept. 30, 2007, ResCap has $114.5 billion total assets, $107.1 billion total liabilities, $1.2 billion minority interests, and $6.2 billion stockholders' equity. A full-text copy of the company's third quarter report for 2007 is available for free at http://ResearchArchives.com/t/s?2592 Real Estate Finance ResCap's total revenue was depressed in the third quarter, reflecting the company's concerted efforts to sharply curtail originations of all non-conforming product for which there was virtually no outlet in the capital markets. However, as part of ResCap's overall restructuring plan, the company will maintain the flexibility to quickly modify its product offerings based on changing market conditions. "We have significantly reduced our exposure to nonprime and non- conforming loans this year, but the company will selectively originate higher-margin non-conforming product as secondary market distribution becomes available," said GMAC Chief Executive Officer Eric Feldstein. "Meanwhile, ResCap continues to avail itself of its relationship with GMAC Bank to help support its current mortgage loan production. Accordingly, ResCap remains committed to offering a broad and competitive menu of high quality products to its customers." ResCap's business lending operation posted a loss for the third quarter as severely weak conditions in the housing market contributed to an increase in the number of unsold homes and higher cancellation rates for homebuilders. ResCap's international business also experienced a loss in the third quarter as mortgage finance markets in the U.K. and Continental Europe tightened abruptly, leading to higher cost of funds and depressed valuations on the company's portfolio of European assets held for sale. Restructuring "The third quarter financial performance of ResCap is a major disappointment," said Mr. Feldstein. "We are moving swiftly and aggressively to restructure our real estate finance business as weakness in the housing market and mortgage industry continues to prevail." As announced on Oct. 17, ResCap is implementing a major restructuring of its business in order to streamline operations and significantly reduce structural cost. The company will be reducing its workforce by about 25 percent, or approximately 3,000 employees, and will be rationalizing numerous facilities. This reduction in workforce is in addition to the measures undertaken in the first half of 2007, in which 2,000 positions were eliminated. "Successful execution of these plans will be essential to restoring the mortgage business to profitability," Mr. Feldstein continued. "This is a top priority for ResCap." Outlook Looking ahead, ResCap expects that the challenges in the housing and mortgage markets will continue to prevail. Nonetheless, the company's strengthened liquidity position and sound capital base will provide flexibility to execute its restructuring plan and right-size the businesses in line with the industry environment. About GMAC Financial Services GMAC Financial Services -- http://www.gmacfs.com/-- is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and commercial finance businesses. GMAC was established in 1919 and currently employs about 31,000 people worldwide. At Dec. 31, 2006, GMAC held more than $287 billion in assets and earned net income for 2006 of $2.1 billion on net revenue of $18.2 billion. About Residential Capital Residential Capital LLC -- http://www.rescapholdings.com/-- is a real estate finance company, focused primarily on the residential real estate market in the United States, Canada, Europe, Latin America and Australia. The company's diversified businesses cover the spectrum of the U.S. residential finance industry, from origination and servicing of mortgage loans through their securitization in the secondary market. It also provides capital to other originators of mortgage loans, residential real estate developers, and resort and timeshare developers. Residential Capital is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. * * * As reported in the Troubled Company Reporter on Nov. 5, 2007, Moody's downgraded to Ba3, from Ba1, its ratings on the senior debt of Residential Capital LLC. The outlook is negative. This concludes a rating review that was initiated on Aug. 16, 2007, at which time senior debt was downgraded from Baa3. This rating action follows ResCap's $2.3 billion loss in Q307. At the same time, Standard & Poor's Ratings Services removed its ratings on Residential Capital LLC from CreditWatch, where they were placed with negative implications on Oct. 17, 2007. S&P also lowered its long-term counterparty credit rating on Residential Capital LLC to 'BB+/B' from 'BBB-/A-3'. The outlook is negative. The company, as of Nov. 16, 2007, holds Fitch's B short-term ratings and BB+ long-term ratings. Fitch has placed the ratings under review for possible downgrade. RESIDENTIAL CAPITAL: Commences $750 Million Cash Tender Offer ------------------------------------------------------------- Residential Capital, LLC, a GMAC Financial Services subsidiary, has commenced a cash tender offer for its debt securities. ResCap is offering to purchase up to $750 million aggregate principal amount (the maximum tender amount) of the notes, upon the terms and subject to the conditions in its Offer to Purchase, dated Nov. 21, 2007 and the related Letter of Transmittal. The tender offer will expire at 12:00 midnight EST on Dec. 19, 2007, unless extended or earlier terminated by ResCap in its sole discretion (the expiration time). The total consideration for each $1,000 principal amount of notes validly tendered and accepted for purchase pursuant to the tender offer will be the applicable total consideration in the table below (in each case, the total consideration). Subject to the terms and conditions of the tender offer, notes tendered will be accepted for purchase in a specified acceptance priority. The series of notes subject to the tender offer, the acceptance priority and the total consideration for each series of notes are enumerated: a) Security: Floating Rate Notes Due June 9, 2008 Principal Amount Outstanding: $1,250,000,000 Early Tender Premium(1): $30 Acceptance Priority Level: 1 Total Consideration Per $1,000 Principal Amount: $830 b) Security: Floating Rate Notes Due Nov. 21, 2008(2) Principal Amount Outstanding: $500,000,000 Early Tender Premium(1): $30 Acceptance Priority Level: 2 Total Consideration Per $1,000 Principal Amount: $760 c) Security: 6.125% Notes Due Nov. 21, 2008(2) Principal Amount Outstanding: $750,000,000 Early Tender Premium(1): $30 Acceptance Priority Level: 3 Total Consideration Per $1,000 Principal Amount: $760 d) Security: Subordinated Floating Rate Notes Due April 17, 2008(2)(3) Principal Amount Outstanding: $1,000,000,000 Early Tender Premium(1): $30 Acceptance Priority Level: 4 Total Consideration Per $1,000 Principal Amount: $500 1 -- Per $1,000 principal amount of notes. 2 -- Listed on the Luxembourg Stock Exchange. 3 -- Notes are currently callable at par. Holders must tender their notes prior to 5:00 p.m. EST on Dec. 5, 2007 (unless extended or earlier terminated, the early tender time), in order to be eligible to receive the total consideration, which includes an early tender premium of $30 per $1,000 principal amount of notes purchased. Holders that validly tender their notes after the early tender time but prior to the expiration time will be eligible to receive the total consideration less the early tender premium, which amount we refer to as the tender offer consideration. In addition, in each case, holders whose notes are accepted for purchase by ResCap, will also receive accrued and unpaid interest on such notes from the last interest payment date for the applicable series of notes to, but not including, the settlement date. The settlement date with respect to the notes is the date on which ResCap will pay the total consideration or tender offer consideration, as applicable, in respect of the notes accepted for purchase. The settlement date is expected to be the first New York City business day following the expiration time. Subject to applicable law, ResCap may, with respect to any or all series of notes: (i) extend or otherwise amend the early tender time or the expiration time, or (ii) increase the maximum tender amount without extending the withdrawal deadline or otherwise reinstating withdrawal rights of holders. In the event of a termination of the tender offer with respect to any series of notes, all notes of such series tendered pursuant to the tender offer will be promptly returned to the tendering holders. ResCap will (subject to the terms and conditions of the tender offer) accept notes based on the acceptance priorities and will pro-rate the notes purchased as set forth in the Offer to Purchase. Except as set forth in the Offer to Purchase or as required by applicable law, notes tendered prior to 5:00 p.m. EST on Dec. 5, 2007 (the withdrawal deadline) may only be withdrawn in writing before the withdrawal deadline, and notes tendered after the withdrawal deadline but before the expiration time may not be withdrawn. The tender offer is conditioned on the satisfaction of certain conditions. If any of the conditions are not satisfied or waived, ResCap is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, in each event, subject to applicable laws, and may terminate the tender offer. Banc of America Securities LLC and Citi are the dealer managers for the tender offer. Global Bondholder Services Corporation is the information agent and depositary. Deutsche Bank Luxembourg S.A. is the Luxembourg tender agent for the tender offer. Persons with questions regarding the tender offer should contact the dealer managers: Banc of America Securities LLC toll-free at (866) 475-9886 or collect at (704) 386-3244 and Citi toll-free at (800) 558-3745 or collect at (212) 723-6106, or the information agent, toll-free at (866) 294-2200. Net Worth Covenant Compliance Several of ResCap's credit facilities contain a financial covenant requiring ResCap to maintain a minimum consolidated tangible net worth as of the end of each fiscal quarter. As of Sept. 30, 2007, the most restrictive provision requires ResCap to maintain a minimum consolidated tangible net worth of $5.4 billion. ResCap's reported consolidated tangible net worth as of Sept. 30, 2007, was $6.2 billion. The purchase of the notes in this tender offer at a discount and the retirement of the notes will increase ResCap's income in the fourth quarter of 2007 and its consolidated tangible net worth as of the end of the year above the levels that would have occurred in the absence of acquiring notes pursuant to the tender offer. Management of GMAC Financial Services (GMAC) currently intends to take steps, to the extent necessary, to cause ResCap to be in compliance with all of the consolidated tangible net worth covenants contained in its credit facilities as of Dec. 31, 2007, subject to approval of GMAC's board of directors. Among the steps that GMAC's management intends to recommend is, to the extent necessary, a capital contribution to ResCap. There can be no assurances, however, that GMAC's board will authorize such a capital contribution or any other actions, or that such a capital contribution will actually be made. During this tender offer, GMAC may purchase ResCap notes in open market transactions, other than those that are the subject of this tender offer. Thereafter, GMAC may contribute notes that it purchases to ResCap as part of any capital contribution. Following the tender offer, GMAC also may purchase ResCap notes, including those that are the subject of this tender offer and are outstanding following this tender offer, in open market purchase transactions or otherwise. Strategic Initiatives GMAC and ResCap continue to investigate strategic alternatives for a variety of reasons, including to improve ResCap's liquidity and to adjust its business in light of current domestic and international market conditions. These strategic alternatives include potential acquisitions as well as dispositions, alliances, and joint ventures with a variety of third parties with respect to some or all of ResCap's businesses. GMAC and ResCap are in various stages of discussions with respect to certain of these alternatives, including, in some cases, execution of confidentiality agreements, indications of interest and other exploratory activities such as preliminary due diligence and conceptual discussions. Recently, GMAC and ResCap also have engaged advisers to explore the sale of certain parts of ResCap's operations. There are currently no substantive binding contracts, agreements or understandings with respect to any particular transaction. Further, there can be no assurances that any of these strategic alternatives will occur, or that even if they do, they will achieve their anticipated benefits. One substantial transaction currently under consideration includes GMAC's recent submission of a second-round non-binding indication of interest to acquire a large non-U.S. mortgage lending institution. If it were successful in making such an acquisition, GMAC's current intention would be to integrate ResCap's local mortgage business with the acquired institution. Other interested parties are actively pursuing the same acquisition and there can be no assurance that GMAC will be successful in consummating a transaction for all or part of such institution. Certain On-Balance Sheet Assets ResCap actively manages risks associated with its balance sheet. As disclosed in ResCap's Form 10-Q for the period ending Sept. 30, 2007, the balance sheet includes the consolidation of certain securitization trusts that primarily include mortgage loans held for investment and related collateralized borrowings. The investors in these securitization trusts have no recourse to ResCap's other assets beyond the assets inside the securitization trusts. At Sept. 30, 2007, total assets, after allowance for loan losses, relating to on-balance sheet securitization trusts totaled $38.6 billion while the related total liabilities of the on- balance sheet securitization trusts were $37.9 billion. If every mortgage loan underlying these on-balance sheet securitizations were deemed to be completely uncollectable, ResCap would incur an economic loss of approximately $0.7 billion (or 2% of the total assets after allowance for loan losses). In addition, ResCap's balance sheet includes unsecuritized mortgage loans in its held for investment portfolio. As of Sept. 30, 2007, this portfolio of unsecuritized mortgage loans was $21.7 billion, prior to the allowance for loan losses, of which approximately $4.1 billion consisted of nonprime mortgage loans. About GMAC Financial Services GMAC Financial Services -- http://www.gmacfs.com/-- is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and commercial finance businesses. GMAC was established in 1919 and currently employs about 31,000 people worldwide. At Dec. 31, 2006, GMAC held more than $287 billion in assets and earned net income for 2006 of $2.1 billion on net revenue of $18.2 billion. About Residential Capital Residential Capital LLC -- http://www.rescapholdings.com/-- is a real estate finance company, focused primarily on the residential real estate market in the United States, Canada, Europe, Latin America and Australia. The company's diversified businesses cover the spectrum of the U.S. residential finance industry, from origination and servicing of mortgage loans through their securitization in the secondary market. It also provides capital to other originators of mortgage loans, residential real estate developers, and resort and timeshare developers. Residential Capital is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. * * * As reported in the Troubled Company Reporter on Nov. 5, 2007, Moody's downgraded to Ba3, from Ba1, its ratings on the senior debt of Residential Capital LLC. The outlook is negative. This concludes a rating review that was initiated on Aug. 16, 2007, at which time senior debt was downgraded from Baa3. This rating action follows ResCap's $2.3 billion loss in Q307. At the same time, Standard & Poor's Ratings Services removed its ratings on Residential Capital LLC from CreditWatch, where they were placed with negative implications on Oct. 17, 2007. S&P also lowered its long-term counterparty credit rating on Residential Capital LLC to 'BB+/B' from 'BBB-/A-3'. The outlook is negative. The company, as of Nov. 16, 2007, holds Fitch's B short-term ratings and BB+ long-term ratings. Fitch has placed the ratings under review for possible downgrade. RESIDENTIAL CAPITAL: May File for Bankruptcy, Gimme Analyst Says ---------------------------------------------------------------- GMAC Financial Services and Cerberus Capital LP are likely to place Residential Capital LLC into bankruptcy due to ResCap's exposure to homebuilders, the Associated Press relates, citing Gimme Credit analyst Kathleen Shanley's statement Monday. ResCap presently holds more than $500 million equity in two homebuilders, has a subsidiary which is bankrupt Neumann Homes Inc.'s largest unsecured lender, and holds $1.5 billion investments in residential development at Sept. 30, 2007, Ms. Shanley says, AP notes. On the other hand, ResCap spokeswoman Gina Proia said that the company believes it has the "right plan" to counter the present issues, AP relates. As of Sept. 30, 2007, ResCap has $114.49 billion total assets, $107.16 billion total liabilities, $1.16 billion minority interests, and $6.17 billion stockholders' equity. During the third quarter ended Sept. 30, 2007, the company incurred $2.26 billion net loss on $1.88 billion revenue, as compared with $83.43 million net income on $2.08 billion revenue in the year-ago quarter. A full-text copy of the company's third quarter report for 2007 is available for free at http://ResearchArchives.com/t/s?2592 About GMAC Financial Services GMAC Financial Services -- http://www.gmacfs.com/-- is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and commercial finance businesses. GMAC was established in 1919 and currently employs about 31,000 people worldwide. At Dec. 31, 2006, GMAC held more than $287 billion in assets and earned net income for 2006 of $2.1 billion on net revenue of $18.2 billion. About Residential Capital Residential Capital LLC -- http://www.rescapholdings.com/-- is a real estate finance company, focused primarily on the residential real estate market in the United States, Canada, Europe, Latin America and Australia. The company's diversified businesses cover the spectrum of the U.S. residential finance industry, from origination and servicing of mortgage loans through their securitization in the secondary market. It also provides capital to other originators of mortgage loans, residential real estate developers, and resort and timeshare developers. Residential Capital is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. * * * As reported in the Troubled Company Reporter on Nov. 5, 2007, Moody's downgraded to Ba3, from Ba1, its ratings on the senior debt of Residential Capital LLC. The outlook is negative. This concludes a rating review that was initiated on Aug. 16, 2007, at which time senior debt was downgraded from Baa3. This rating action follows ResCap's $2.3 billion loss in Q307. The loss was primarily driven by marks on the company's residential mortgage held-for-sale inventory and mortgage backed securities, high levels of provisioning and an impairment of goodwill of $455 million. This represents ResCap's fourth consecutive quarterly loss. As a result of this loss the company received a $1 billion capital injection from its parent to avoid violating its minimum net worth covenant of $5.4 billion at Sept. 30, 2007. At the same time, Standard & Poor's Ratings Services removed its ratings on Residential Capital LLC from CreditWatch, where they were placed with negative implications on Oct. 17, 2007. S&P also lowered its long-term counterparty credit rating on Residential Capital LLC to 'BB+/B' from 'BBB-/A-3'. The outlook is negative. The company, as of Nov. 16, 2007, holds Fitch's B short-term ratings and BB+ long-term ratings. Fitch has placed the ratings under review for possible downgrade. RESIDENTIAL FUNDING: Fitch Assigns 'B' Rating on $258,500 Certs. ---------------------------------------------------------------- Fitch Ratings has assigned these ratings to Residential Funding Mortgage Securities I, Inc.'s mortgage pass-through certificates, series 2007-S9: -- $165,049,398 classes I-A-1, I-A-2, II-A-1, II-A-2, II-A-3, I-A-P, I-A-V, II-A-P, II-A-V, R-I, R-II and the non- offered P certificates (senior certificates) 'AAA'; -- $3,449,000 class M-1 'AA'; -- $1,465,000 class M-2 'A'; -- $603,000 class M-3 'BBB'; -- $949,000 non-offered class B-1 'BB'; -- $258,500 non-offered class B-2 'B'. The 'AAA' rating on the senior certificates reflects the 4.25% credit enhancement provided by the 2.00% class M-1, the 0.85% class M-2, the 0.35% class M-3, the 0.55% non-offered class B-1, the 0.15% non-offered class B-2, and the 0.35% non-offered and non-rated class B-3. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the master servicing capabilities of Residential Funding Company, LLC, rated 'RMS2+' by Fitch and the primary servicing capabilities of GMAC Mortgage, LLC, rated 'RPS1- ' by Fitch. This transaction contains certain classes designated as exchangeable certificates and others as regular certificates. The class II-A-1, II-A-2, and II-A-3 certificates are exchangeable certificates. The other classes are regular certificates. The certificates represent ownership in a trust fund, which consists primarily of 318 one-to four-family conventional, fixed- rate mortgage loans secured by first liens on residential mortgage properties. As of the cut-off date (Nov. 1, 2007), the mortgage pool has an aggregate principal balance of approximately $172,377,289, a weighted average original loan-to-value ratio of 73.20%, a weighted average coupon of 6.58%, a weighted average remaining term of 323 months, and an average balance of $542,067. The mortgage loans consist of 100% fixed-rate loans. The weighted average credit score of the mortgage loans is expected to be approximately 742. The loans are primarily located in California (21.90%), Virginia (11.24%) and Illinois (6.05%). All of the mortgage loans were purchased by the depositor through its affiliate, Residential Funding, from unaffiliated sellers as described in the prospectus supplement, except in the case of approximately 10.2% and 68.0% of the mortgage loans, which were purchased by the depositor through its affiliate, Residential Funding, from Homecomings and GMAC Mortgage, LLC, respectively. First Savings Mortgage Corp. sold approximately 11.7% of the mortgage loans by stated principal balance to Residential Funding. No unaffiliated seller sold more than approximately 4.7% of the mortgage loans. RFMSI, a special purpose corporation, deposited the loans in the trust, which issued the certificates. US Bank National Association (AA-/F1+) will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as two real estate mortgage investment conduit (REMICs). RH DONNELLEY: Fitch Affirms 'B+' Issuer Default Rating ------------------------------------------------------ Fitch Ratings has affirmed the 'B+' Issuer Default Ratings on R.H. Donnelley Corp, R.H. Donnelley, Inc., Dex Media, Inc., Dex Media East and Dex Media West. Fitch has also taken these rating actions: R.H. Donnelley Corp. (RHD Holding Company) -- IDR affirmed at 'B+'; -- Senior unsecured upgraded to 'B/RR5' from 'B-/RR6' R.H. Donnelley Inc. (Operating Company; subsidiary of RHD) -- IDR affirmed at 'B+'; -- Bank facility affirmed at 'BB+/RR1'; -- Senior unsecured upgraded to 'BB+/RR1' from 'B+/RR4'; Dex Media, Inc. (Dex Holding Company; subsidiary of RHD) -- IDR affirmed at 'B+'; -- Senior unsecured upgraded to 'B/RR5' from 'CCC+/RR6.' Dex Media East, Inc. (Operating Company; subsidiary of Dex) -- IDR affirmed at 'B+'; -- Bank facility affirmed 'BB+/RR1'; -- Senior unsecured withdrawn from 'BB/RR1'; -- Senior subordinated withdrawn from 'B-/RR6'. Dex Media West, Inc. (Operating Company; subsidiary of Dex) -- IDR affirmed at 'B+'; -- Bank facility affirmed at 'BB+/RR1'; -- Senior unsecured upgraded to 'BB+/RR1 from 'B/RR5'; -- Senior subordinated upgraded to 'B/RR5' from 'B-/RR6'. The Rating Outlook remains Stable. Three key developments over the past several months have contributed to the rating actions described above (and contributed to two prior rating actions on Sept. 20 and Oct. 3, 2007.) First, the company issued $1.5 billion in unsecured notes at the RHD holding company level and downstreamed a total of roughly $830 million to RHDI: $640 to refinance the senior unsecured notes and approximately $190 to paydown secured debt. Second, the company refinanced its DXE senior secured credit facility. As part of this transaction the company downstreamed $300 million from RHD holding company (also through proceeds from the $1.5 billion issuance) and tendered for DXE unsecured notes. The remaining $370 million of the $1.5 billion issuance was predominantly used to repay $328 million in borrowings associated with the acquisition of www.business.com, as well as to pay for fees and expenses related to the refinancings. Lastly, in addition to capital structure actions, repayment of debt from operating cashflow has improved the recoverability of securities at the various debt issuing entities (DXW in particular). Consistent with Fitch's recovery methodology, the individual security ratings reflect the determination and application of prospective recovery in a stressed scenario and are notched accordingly. R.H Donnelley's recovery ratings reflect Fitch's expectation that the enterprise value of the company, and hence, recovery rates for its creditors, will be maximized in a restructuring scenario (going concern), rather than a liquidation. Fitch reviewed the recovery prospects of each of the three operating companies separately. Specifically, the 'RR1' recovery rating for the each of the senior secured facilities, as well as RHDI and DXW senior unsecured notes reflects Fitch's belief that 91%-100% recovery is reasonable. The recovery rating of 'RR5' for RHD and DXI senior unsecured and DXW senior subordinated notes reflects that 10%-30% recovery is reasonable due to their position in the capital structure. Going forward, Fitch expects the company to continue to pay down debt under the secured facilities. Also, the company has several relatively high priced debt tranches (at DXW) that could be called around mid-2008. Fitch will continue to address the changes in expected recovery as these events unfold. Fitch expect management will continue to balance debt repayment with returns of capital to shareholders (including the recently instituted dividend) and that leverage levels will remain above management's stated target of 5.5 times for the next three to five years. There is capacity for some sustained top line revenue softness and modest additional shareholder friendly actions incorporated into the IDR. The secured lenders to R.H. Donnelley Inc, Dex Media West and Dex Media East have a strong covenant package. The facilities contain financial covenants, change of control provisions, additional debt restrictions, limitation on asset sales, restricted payments tests, limitation on liens, cross default, and mandatory pre- payments among other protections. The bonds are covered under various indentures, each with slightly different provisions from one another. Key provisions generally include protections in the form of financial covenants, change of control language, restrictions on secured debt, cross acceleration language and restricted payment tests. The consolidated leverage covenant maximum is 7.25x. RICHARD HIGGINS: Case Summary & Three Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Richard S. Higgins 625 Mirabay Boulevard Apollo Beach, FL 33572 Bankruptcy Case No.: 07-11199 Chapter 11 Petition Date: November 19, 2007 Court: Middle District of Florida (Tampa) Judge: Michael G. Williamson Debtor's Counsel: Buddy D. Ford, Esq. Buddy D. Ford, P.A. 115 North MacDill Avenue Tampa, FL 33609 Tel: (813) 877-4669 Fax: (813) 877-5543 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Capital One Bank Credit Card $6,269 TSYS Debt Management P.O. Box 5155 Norcross, GA 30091 Beneficial/Household Finance Credit Card $4,399 961 Weigel Drive Elmhurst, IL 60126 Citibank USA Credit Card $818 P.O. Box 20487 Kansas City, MO 64195 RICHARD SAYLOR: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Richard D. Saylor 3684 Kingwood Road Rockwood, PA 15557 Bankruptcy Case No.: 07-71277 Chapter 11 Petition Date: November 16, 2007 Court: Western District of Pennsylvania (Johnstown) Debtor's Counsel: David J. Novak, Esq. Spence, Custer, Saylor, Wolfe & Rose 400 U.S. Bank Building P.O. Box 280 Johnstown, PA 15907 Tel: (814) 536-0735 Total Assets: $2,160,002 Total Debts: $4,944,926 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Reed A. Luce Livestock $205,454 2091 New Centerville Road consisting of 643 Rockwood, PA 15557 cows and 539 heifers U.S. of America Acting Thru Livestock $152,877 Farm Service Agency consisting of 643 1590 North Center Avenue, cows and 539 Suite 102 heifers Somerset, PA 15501 Walker's Farm Service, Inc. Consignment of $88,965 1694 North Center Avenue milk proceeds for Somerset, PA 15501 chemicals/fertilizer Yachere Feed, Inc. trade debt feed $49,437 Stearns Bank, N.A. 1 Spreader $46,221 1 Penta 8000 TMR $39,640 Mixer Luther P. Miller, Inc. trade debt fuel $43,986 Animal Medical Center trade debt vet $42,249 Kinard & Associates trade debt U.S. $41,964 Commodities, L.L.C. A.T.&T. Universal Card credit card $32,442 purchases Nel Net, Inc. trade debt school $31,484 loan Furst McNess trade debt $30,579 LeFerne Saylor loan $30,000 John Deere Credit 1 John Deere 1780 $28,656 Corn Planter J.&L. Hay trade debt $27,005 hay/stray Academy Collection Service, trade debt A.T.&T. $26,176 Inc. Universal Card National Collegiate Trust Education loan $24,794 Renaissance Nutrition, Inc. trade debt minerals $23,836 Agri-Financial Services, Livestock $21,766 L.L.C. consisting of 643 cows and 539 heifers SAGEMARK COMPANIES: Sept. 30 Balance Sheet Upside-Down by $60,000 ----------------------------------------------------------------- The Sagemark Companies Ltd.'s consolidated balance sheet at Sept. 30, 2007, showed $17.37 million in total assets, $15.88 million in total liabilities, and $1.55 million in minority interest, resulting in a $60,000 total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $3.66 million in total current assets available to pay $8.10 million in total current liabilities. The company reported a net loss of $5.25 million on total revenues of $2.02 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $252,000 on total revenues of $2.92 million in the same period last year. Total revenues for the third quarter of 2007 represent a net decrease of approximately $892,000 from the third quarter of 2006 which is the impact of decreases in management fee revenues of $198,000, a decrease in net patient service revenues of $678,000, and a decrease in lease revenues of $16,000. Consolidated operating expenses when comparing the third quarter of 2007 to the third quarter of 2006 increased by $3.06 million, or 108%, of which $2.73 million was goodwill impairment, $33,000 was increased expenses of the company's PET imaging centers and $291,000 was increased corporate expenses. The net loss for the three months ended Sept. 30, 2007, also includes a loss on sale of investment in an unconsolidated affiliate of $986,000. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2599 Liquidity During the first nine months of 2007, the company used $1.51 million of working capital for its operations compared to $1.09 million provided by operations for the first nine months of 2006. Other uses of working capital during the first nine months of 2007 included $1.23 million of loan and capital lease payments, as compared to $1.31 million for the first nine months of 2006, $2.44 million for capital expenditures as compared to $1.12 million of capital expenditures and constructions deposits for the first nine months of 2006. Effective July 11, 2006, the company sold its interest in Trident Growth Fund L.P to Trident Advisors for $2,570,000 which was comprised of a $625,000 cash payment and a $1,945,000 four year secured promissory note. As of June 30, 2007, the current portion of the note approximated $486,000 and the long-term portion was $1,459,000. Payments under the note were due in four annual installments in amounts equal to the greater of $486,250, or 75% of the amount of all cash and property distributions received by Trident Advisors from Trident Growth Fund L.P. each year, plus accrued interest. On Aug. 13, 2007, in order to accelerate the timing in which the company received funds, it executed an amendment to the sale agreement whereby the sales price was reduced by approximately $986,000 in exchange for an acceleration of the remaining payments owed on the note receivable. As a result of the amendment, on Aug. 13, 2007, the company received a payment of $775,000. On Oct. 31, 2007, the company received a final payment of $225,000. Going Concern Doubt Moore Stephens P.C., in Cranford, N. J., expressed substantial doubt about The Sagemark Companies Ltd.'s ability to continue as a going concern after reviewing the company's consolidated financial statements as of Sept. 30, 2007. The auditing firm pointed to the company's continuing recurring losses, minimal volume growth in the number of outpatient medical diagnostic imaging procedures performed by its PET imaging centers, reduced reimbursement rates for outpatient medical diagnostic imaging procedures performed on patients as a result of the effectivity of the Federal Deficit Reduction Act of 2005 on Jan. 1, 2007, non-compliance with certain loan covenants required by some of its capital lease and loan agreements, and working capital deficiency as of Sept. 30, 2007. About Sagemark Companies Based in New York, The Sagemark Companies Ltd. (OTC BB: SKCO.OB) together with its subsidiaries, owns, operates, and manages out- patient medical diagnostic imaging centers in the United States. The company's imaging centers utilize positron emission tomography, combination PET and computed tomography, and related equipment and technology. PET is a non-invasive medical diagnostic imaging procedure that produces images of the body's metabolic and biologic functions for diagnosis, staging, and treatment of certain cancers, coronary disease, and neurological disorders. As of Sept. 30, 2007, the company owns or operates eight PET imaging centers. SALANDER-O'REILLY: Gets Interim Nod for Halperin as Counsel ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave its interim nod for Salander-O'Reilly Galleries LLC to employ Halperin Battaglia Raicht, LLP, as its bankruptcy counsel. As counsel, Halperin Battaglia is expected to: a. advise the Chief Restructuring Officer, on behalf of the Debtor, with respect to its powers and duties as a debtor-in-possession in the continued operation of its business and the management of its property; b. assist the Debtor to emerge from the Chapter 11 case; c. assist the Debtor in confirming a plan of reorganization; d. prepare, on behalf of the CRO and the Debtor, necessary applications, answers, orders, reports, and other motions, complaints, pleadings, and documents; e. appear before the Bankruptcy Judge and the U.S. Trustee and represent the interests of the Debtor before said Bankruptcy Judge and U.S. Trustee. f. perform any and all other legal services for the Debtor that may be necessary and appropriate herein. The Debtor tells the Court that attorneys at the firm bill between $195 to $410 per hour. Law clerks bill $100 per hour while paraprofessionals bill between $75 to $95 per hour. To the best of the Debtor's knowledge, the firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Alan D. Halperin, Esq. Halperin Battaglia Raicht, LLP 555 Madison Avenue - 9th Floor New York, NY 10022-3301 Tel: (212) 765-9100 Fax: (212) 765-0964 http://www.halperinlaw.net/ About Salander-O'Reilly Galleries Established in 1976, New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners, Carol F. Cohen of Two Swans Farm, Cavallon Family LP, and Richard Ellenberg, disclosed total claims of more than $5 million. Amos Alter, Esq., at Troutman Sanders LLP and John Koegel, Esq., at The Koegel Group LLP represent the petitioners. On Nov. 9, 2007, the Debtor's case was converted to a chapter 11 proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Salander-O'Reilly Galleries is owned by Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York. The couple also has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the couple in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander disclosed estimated assets and debts between $50 million and $100 million. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. SALANDER-O'REILLY: U.S. Trustee Appoints Seven-Member Committee --------------------------------------------------------------- Diana G. Adams, the U.S. Trustee for Region 2, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in Salander-O'Reilly Galleries LLC's chapter 11 case. The Creditors Committee members are: 1. Earl Davis 6 Horizon Road, Apt. 2906 Fort Lee, NJ 07024 Represented by: William P. Weintraub, Esq. Friedman Kaplan Seiner & Adelman, LLP 1633 Broadway New York, NY 10019 2. Nella Longari S.R.L. Via Bigli 15 2021 Milan, Italy Represented by: Francesco Di Pietra Wuersch & Gering, LLP 100 Wall Street, 21st Floor New York, NY 10005 3. John Crawford 609 Bergen Street Brooklyn, NY 11238 4. Lawrence Sunden, Inc. 111 Old Hook Road Harrington Park, NJ 07640 5. Donald Schupak. c/o Schupak Group 595 Madison Avenue, 35th Floor New York, NY 10022 6. Frelinghuysen Morris Foundation P.O. Box 2256 Lenox, MA 01240 Represented by: Debra A. Mayer, Esq. Shatzkin & Mayer, P.C. 1776 Broadway, 21st Floor New York, NY 10019 7. Thomson Works of Art Limited Suite 2400, 65 Queen Street West Toronto, Ontario M5H2M8 Attn: Sarah K. Lerchs Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Salander-O'Reilly Galleries Established in 1976, New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners, Carol F. Cohen of Two Swans Farm, Cavallon Family LP, and Richard Ellenberg, disclosed total claims of more than $5 million. Amos Alter, Esq., at Troutman Sanders LLP and John Koegel, Esq., at The Koegel Group LLP represent the petitioners. On Nov. 9, 2007, the Debtor's case was converted to a chapter 11 proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Salander-O'Reilly Galleries is owned by Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York. The couple also has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the couple in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander disclosed estimated assets and debts between $50 million and $100 million. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. SANCON RESOURCES: Sept. 30 Balance Sheet Upside-Down by $117,919 ---------------------------------------------------------------- Sancon Resources Recovery Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $1,358,220 in total assets, $1,345,003 in total liabilities, and $131,136 in minority interest, resulting in a $117,919 total stockholders' deficit. The company reported net income of $76,166 on net sales of $1,270,261 for the third quarter ended Sept. 30, 2007, compared with net income of $53,098 on net sales of $1,589,117 in the same quarter last year. The decrease in revenues was mainly due to the significant sales drop contributed from DFSL in the third quarter of 2007. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2595 Going Concern Kabani & Company Inc., in Los Angeles, expressed substantial doubt about Sancon Resources Recovery Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing frim pointed to the company's accumulated deficit of $116,715 as of Dec. 31, 2006 and working capital deficiency of $288,087. About Sancon Resources Sancon Resources Recovery Inc. (OTC BB: SRRY.OB) -- http://www.sanconinc.com/-- is an industrial waste recycling company with operations based in Australia, Hong Kong and China. Sancon currently exports more than 25,000 tons of recycled industrial waste material annually to its processing partners and manufacturers in China. SENDTEC INC: Posts $4.4 Million Net Loss in the Third Quarter ------------------------------------------------------------- SendTec Inc. reported a net loss of $4.4 million on revenues of $7.4 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $3.0 million on revenues of $9.4 million for the corresponding period in 2006. Internet advertising revenues decreased $2.3 million to $4.4 million in the third quarter of 2007, from $6.7 million in the 2006 quarter because one of the company's largest clients in 2006 ended their advertising campaign in August 2006. Accordingly, this revenue did not recur in 2007. Advertising program revenues decreased $417,927, or 27.9%, due to fewer projects being completed during the three months ended Sept. 30, 2007, as compared to the prior year period. These decreases were partly offset by revenue increases in online search revenues and direct response media revenues. Operating loss increased to $1.3 million for the three months ended Sept. 30, 2007, from $5,574 for the three months ended Sept. 30, 2006. The increase in the operating loss is the result of the decrease in gross profit of $146,377, the increase in salaries wages and benefits of $154,305, the increase in professional fees of $98,543, and the increase in selling, general and administrative expenses of $917,620. The company reported a loss from continuing operations of approximately $4.4 million for the three months ended Sept. 30, 2007, compared to a loss from continuing operations of approximately $3.0 million for the three months ended Sept. 30, 2006. Included in the loss from continuing operations for the three months ended Sept. 30, 2007, and 2006, are non-cash expenses totaling $3.3 million and $3.0 million, respectively. At Sept. 30, 2007, the company's consolidated balance sheet showed $55.4 million in total assets, $41.6 million in total liabilities, and $13.8 million in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $13.9 million in total current assets available to pay $41.5 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2596 Defaults Upon Senior Securities As of Sept. 30, 2007, the company was required to have a minimum cash balance of $3,500,000 pursuant to the financial covenants the company is required to maintain under the modified terms of the Securities Purchase Agreement with the Debenture holders. As of Sept. 30, 2007, the company was not in compliance with this requirement. In addition, the company did not make a required interest payment of approximately $502,000 due on Nov. 1, 2007. The company's failure to meet the financial covenants and to make interest payments are events of default under the Debentures. Subsequent to Nov. 1, 2007 the company and Debenture holders representing more than 75%, the required minimum, of the outstanding principal amount of the Debentures, executed a Letter Agreement, which among other things, provides that during the period from the signing of the Letter Agreement until the close of business on Nov. 16, 2007, the Debenture holders forbear their right to declare the company in default under the Debentures and the Securities Purchase Agreement and their right to demand acceleration of the Debentures. Bankruptcy Warning If the company is not able to restructure the Debentures or negotiate a further forbearance, holders of 75% of the principal amount of the Debentures may elect to declare the company in default of the Debentures. If the company is declared in default, this would have a material adverse effect on the business, operating results, and financial condition. In such event, the company may be forced to restructure, file for bankruptcy, sell assets, or cease operations, any of which would put the company, its investors and the value of its common stock, at significant risk. About SendTec Inc. Headquartered in St. Petersburg, Florida, SendTec Inc. (OTC BB: SNDN) -- http://www.sendtec.com/-- is a holding company organized for the purpose of acquiring, owning, and managing various marketing and advertising businesses, primarily involving the Internet. The direct response marketing services business of the company's wholly-owned subsidiary, SendTec Acquisition Corp., has been its sole line of business. SEQUA CORPORATION: Fitch Withdraws 'B+' Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has withdrawn its ratings on Sequa Corporation and its subsidiaries, including the Issuer Default Rating, bank credit facilities, and senior unsecured notes. On July 9, 2007, SQA announced it had agreed to be acquired by The Carlyle Group for approximately $2.8 billion, including $745 million of debt. All existing debt is expected to be repaid as a part of the transaction. If the transaction closes as planned, Fitch expects that Sequa's IDR would be no lower than 'B- '. At the time of the withdrawal, Fitch's ratings for Sequa were: Sequa Corporation: -- Issuer Default Rating 'B+'; -- Senior unsecured notes 'BB/RR2'. Warwick International Group Ltd. Chromalloy UK Ltd. Chromalloy Holland B.V.: -- Senior secured bank credit facility 'BB+/RR1'. The ratings were placed on Ratings Watch Negative on July 10, 2007. Fitch will no longer provide rating coverage of Sequa. TECO ENERGY: S&P Lifts Corporate Credit Rating to BBB- from BB -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on utility holding company TECO Energy Inc. to 'BBB-' from 'BB', and affirmed its 'BBB-' corporate credit rating on TECO's primary subsidiary, Tampa Electric Co. At the same time, a 'BBB-' corporate credit rating was assigned to Teco Finance Inc. in anticipation of that entity assuming a portion of TECO's debt that will be guaranteed by TECO. The outlook on all entities is stable. Tampa, Florida-based TECO has about $3.5 billion of debt outstanding. "The impending sale of TECO's marine transportation business, TECO Transport, will allow the company to accelerate a debt-reduction plan that will restore its balance sheet to an investment-grade level," said Standard & Poor's credit analyst Todd Shipman. "Shedding TECO Transport and deemphasizing the unregulated coal operations in 2008 as synthetic coal production ceases will bring TECO back to a utility-focused business strategy that also bolsters credit quality," Shipman added. The stable outlook on TECO and subsidiaries reflects the company's commitment to the redefined business strategy and the reconfigured balance sheet. Debt leverage and other credit metrics after the execution of TECO's debt-management plan will support the higher ratings, but without significant further debt reduction, upgrade potential is limited until the company can grow into the newly constituted balance sheet. Ratings could improve if TECO is able to successfully invest in Tampa Electric in a prudent manner that is supported by regulators and enhances cash flow and earnings. A negative outlook or a downgrade is unlikely short of significant financial or operational deterioration. TECO FINANCE: Fitch Assigns 'BB+' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has assigned these ratings to TECO Finance, Inc.: -- 'BB+' Issuer Default Rating; -- Senior unsecured 'BB+'. Fitch has also placed TECO Finance's ratings on Rating Watch Positive, as are those of TECO Energy, Inc. (TECO, Fitch IDR 'BB+'). TECO Finance's ratings are based on the unconditional guarantee of TECO. TECO Finance is a wholly owned finance subsidiary of TECO. Its business activities consist solely of providing funds to TECO for general corporate purposes. As part of TECO's ongoing debt management plan, TECO expects to exchange TECO Energy notes ($1.2 billion) maturing in 2011-2015 with new unsecured notes issued by TECO Finance and extend the maturity on up to $300 million of TECO notes maturing in 2011-2012 to 2017. Completion of the exchange offers will enhance the company's consolidated debt maturity profile. TECO management also intends to complete $500 million of parent debt retirements. TECO plans to tender $300 million of unsecured parent company notes due 2010 using the proceeds from the sale of TECO Transport Corp. by the end of December 2007. The sales transaction is anticipated to close by Dec. 31, 2007. TECO also plans to retire debt obligations not included in the debt tender and exchange offers in 2008 . TECO has already retired $110 million of Dock and Wharf bonds at Transport on the maturity date in September 2007 using cash on hand. TECO Finance's ratings are based on the unconditional and irrevocable guarantee of TECO Finance's obligations by parent company TECO. As a result, both entities have the same IDR. TECO's guarantee will be unsecured and will rank on parity with all of TECO's other unsecured and unsubordinated indebtedness. Also, the $200 million bank revolving agreement, dated May 9, 2007, includes TECO Finance as a borrower and TECO as guarantor. TRUE TEMPER: S&P Cuts Corporate Credit Rating to CCC from CCC+ -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Memphis, Tennessee-based golf shaft manufacturer True Temper Sports Inc., including its corporate credit rating, to 'CCC' from 'CCC+'. At the same time, Standard & Poor's lowered its rating on the company's first-lien senior secured credit facility to 'B-' from 'B'; the recovery rating is unchanged at '1', indicating the expectation for very high recovery (90%-100%) of principal in the event of a payment default. Standard & Poor's also lowered ratings on the company's senior subordinated notes to 'CC' from 'CCC-'. All the ratings were removed from CreditWatch, where they had been placed with negative implications on Aug. 17, 2007. "The ratings on TTSI reflect the company's very high debt leverage, extremely tight financial covenants, weak operating performance, narrow product focus, and the discretionary nature of its products," said Standard & Poor's credit analyst Kenneth Shea. TTSI's financial performance has been weak in 2007, and has been volatile since 2004. "Credit measures have weakened significantly," said Mr. Shea. "We remain concerned about the company's liquidity position, which could become constrained in the event that the company violates its covenants and is unable to obtain a bank waiver." VALMONT INDUSTRIES: S&P Puts 'BB' Rating Under Positive Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'BB' corporate credit rating, on Valmont Industries Inc. on CreditWatch with positive implications. "The CreditWatch listing reflects the company's continued improved financial performance due to steady sales growth and continued cost controls," said Standard & Poor's credit analyst Thomas Nadramia. "During 2007, despite modest growth in operating margins, EBITDA and operating cash flow have continued to improve. As a result, credit measures have strengthened to a level that we consider to be strong for the current rating." Specifically, at Sept. 30, 2007, total debt to EBITDA, adjusted for pensions and operating leases, was about 1.4x, and total debt to capital about 34%. In resolving the CreditWatch listing on the Omaha, Nebraska-based company, S&P will meet with management and review its expectations for operational trends and financial strategies in the near to intermediate term, particularly with respect to acquisitions. "If an upgrade is the ultimate outcome of our review, it would likely be limited to one notch," Mr. Nadramia said. Valmont has a well-established market position in its Engineered Structural Support segment, which provides custom designed metal poles for use in the lighting, traffic, utility, and specialty markets. It also benefits from its significant market positions in its Utility Support Structures and Irrigation Segments. VESCOR DEVELOPMENT: Files Chapter 11 Liquidation Plan in Nevada --------------------------------------------------------------- Vescor Development LLC and its debtor-affiliates delivered their Joint Chapter 11 Plan of Liquidation dated Nov. 19, 2007, to the United States Bankruptcy Court for the District of Nevada. Overview of the Plan The Plan contemplates the liquidation and distribution of the Debtors' assets to all of their valid creditors. The Debtors together with the Plan administrator will continue to market each of the Debtors' properties for sale. The Debtors say that only the Plan administrator has the authority to close each sale and the net sale proceeds will be held by the Plan administrator into the payment reserve. The Debtors further say that, if no offer is received by the offer deadline, the automatic stay will be lifted, so that Apex Holding Company LLC may foreclose the Debtors' properties in accordance with the applicable state law. The Plan further implements the Global Settlement Agreement that provides unsecured creditors against Val E. Southwick and his affiliates a pro rata distribution in any remaining proceeds and any intercompany collections after all valid claims have been paid in full. Treatment of Claims Under the Plan, each allowed Administrative and Priority Tax Claims will be paid in full from the Plan distribution cash on the effective date. In addition, unpaid balance, if any, of allowed Priority Tax claim will accrue interest fixed at the rate per annum equal to the rate provided by Internal Revenue code Section 6621 and 6622. Apex Holding Company LLC's Claims will be paid from the net sale proceeds on one or more payment date established by the Plan administrator after the closing of one or more sales. Apex Utility Holding Company's Claims will also be paid from the nets sale proceeds on one or more payment dates established by the Plan administrator after the closing of one or more sales. Under the Plan, if offers for all of the Debtor's properties are received on the confirmation date, each of these allowed claims, among others: -- Apex Holding Company LLC -- Apex Utility Holding Company -- Miscellaneous Secured -- VesCor Lease Rejection -- General Unsecured will be cured or reinstated by payment of these amount, from the Plan distribution cash in the payment reserve, including: a) the principal portion of the claim, prepetition interest at the non-default contract rate and prepetition charges that are not default-related; b) posptetion interest from the petition date at the applicable non-default contract of statutory rate; and c) the amount of actual damages incurred by these holders as provided in Section 1124(2)(C) and 1124(2)(D) of the Bankruptcy Code. In contrast, if offers are not received on the confirmation date, holders of these claims will be entitled to receive 100% plus interest, only if the Debtors are solvent. Other Priority Claims will be entitled to receive cash in full amount, but without interest on the distribution date. The Debtors tell the Court that each holder of Affiliate's Intercompany Claims will be entitled to vote. According to the Debtor, any value attributable to these claim is being re- directed, which value is to be distributed through global settlement payments and interpleader, all of which in accordance with the Plan. Equity Interest in each of the Debtors will be transferred to the Plan administrator to enable it to carry out the terms of the Plan. The Debtors said holders have consented to re-direct the value attributable to their interest, which value is also to be distributed through global settlement payments and interpleader. A full-text copy of Vescor's Joint Chapter 11 Plan of Liquidation is available for a fee at: http://www.researcharchives.com/bin/download?id=071121012805 About Vescor Development Henderson, Nevada-based Vescor Development LLC develops real estate. The company and its affiliates share common management and ownership. Apex MM serves as the Debtors' manager. The company and three of its affiliates, ADL 1 LLC, IDL 9 LLC and JDL 10 LLC, filed for chapter 11 bankruptcy protection on Aug. 20, 2007 (Bankr. D. Nev. Case Nos. 07-15210 through 07-15213). Laurel E. Davis, Esq. at Fennemore Craig, P.C. represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed total assets of $151,954,690 and total debts of $85,590,847. The company's affiliates, Vescor Development 3 LLC, BDL 2 LLC and EDL 5 LLC had filed for chapter 11 protection on Aug. 26, 2006 (Bankr. D. Nev. Lead Case No. 06-12094). Laurel E. Davis, Esq., at Lionel Sawyer & Collins serves as the Debtors' counsel. When Vescor filed for protection from its creditors, it listed total assets of $109,570,385 and total debts of $63,290,195. Vescor Development 3 and its debtor-affiliates delivered its reorganization plan and disclosure statement in January 2007, whereby they planned to pay its general unsecured creditors in full. The Court confirmed that plan on March 20, 2007, with a condition to retain a qualified chief restructuring officer. VIJAYKUMAR PATEL: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Vijaykumar U. Patel faw Johnston Threads, Inc. aka Vijay U. Patel 9922 Gladiola Circle Fountain Valley, CA 92708 Bankruptcy Case No.: 07-13886 Chapter 11 Petition Date: November 20, 2007 Court: Central District Of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Thomas J. Tedesco, Esq. 1855 West Katella Avenue, Suite 365 Orange, CA 92867 Tel: (714) 771-1693 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ International City Bank value of collateral: $1,022,245 249 East Ocean Boulevard $800,000; value of Long Beach, CA 90802 security: $656,820 Khan, Afzal/Greenstar $800,000 Technology, Inc. C/O James B. Christensen, Esq. 1202 Kettner Boulevard, Suite 4200 San Diego, CA 92101 Johnston, Tom and Charlotte $600,000 c/o Mark Asdourian Esq. 4695 MacArthur Court, Suite 30 Newport Beach, CA 92660-1882 Bank of America $109,163 Toyota Federal Credit Union $39,799 Mastercard California State Board of Trade debt $31,634 Equalization CitiBank $29,222 Chase $27,852 United Mileage Plus $20,173 J.A.M.S. $18,599 Capital One Services $14,037 Sears Gold MasterCard $8,240 Wells Fargo Business Card $6,516 Home Depot Credit Services $2,985 American Express $2,951 Wells Fargo Card Services $2,249 Mervyns Card $171 WATERFORD EQUITIES: Case Summary & 50 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: Waterford Equities, L.L.C. 245 Long Hill Road Middletown, CT 06457 Bankruptcy Case No.: 07-32719 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Waterford Equities, L.L.C. 07-32719 Haven Eldercare, L.L.C. 07-32720 Haven Health Care Center of Windham, 07-32721 L.L.C. Haven Healthcare Management, L.L.C. 07-32722 Haven Health Center of Cromwell, L.L.C. 07-32723 Haven Health Center of Rocky Hill, L.L.C. 07-32724 Haven Health Center of Danielson, L.L.C. 07-32725 Haven Health Center of Litchfield Hills, 07-32726 L.L.C. Haven Health Center of East Hartford, 07-32727 L.L.C. Haven Health Center of Jewett City, 07-32728 L.L.C. Haven Health Center, Soundview L.L.C. 07-32729 Haven Health Center of New Haven, L.L.C. 07-32730 Haven Health Center of West Hartford, 07-32731 L.L.C. Haven Health Center of Farmington, L.L.C. 07-32732 Haven Health Center of Norwich, L.L.C. 07-32733 Haven Health Center of Waterbury, L.L.C. 07-32734 Haven Health Center of South Windsor, 07-32735 L.L.C. Haven Health Center of Waterford, L.L.C. 07-32736 Haven Health Center of Rutland, L.L.C. 07-32740 Lighthouse Medical Supply, L.L.C. 07-32741 Haven Health Center of St. Albans, L.L.C. 07-32742 Haven Health Care Trust II, L.L.C. 07-32743 Cromwell Crest Convalescent Home, Inc. 07-32744 Applegate Lane, Inc. 07-32745 Haven Health Center of Claremont, L.L.C. 07-32746 Litchfield Health Care Trust, L.L.C. 07-32747 Haven Health Care Center of Warren, L.L.C. 07-32748 Ferretti's Nursing Home, Inc. 07-32749 Haven Equities of Warren, Rhode Island, 07-32750 L.L.C. Haven Health Center of Pawtucket, L.L.C. 07-32751 Pawtucket Equities, L.L.C. 07-32752 Haven Health Center of Derry, L.L.C. 07-32753 Haven Health Center of Greenville, L.L.C. 07-32754 Haven Eldercare of New Hampshire, L.L.C. 07-32755 Haven Eldercare II, L.L.C. 07-32756 Greenville Equities, L.L.C. 07-32757 Hampton Equities , L.L.C. 07-32758 Haven Health Center at Seacoast, L.L.C. 07-32759 Haven Health Center of Coventry, L.L.C. 07-32760 Chelsea Equities, L.L.C. 07-32761 Coventry Equities, L.L.C. 07-32762 Haven Health Center of Chelsea, L.L.C. 07-32763 Type of Business: The Debtors provide nursing care to the elderly in New England, Connecticut. They operate health centers and assisted living facilities. They specialize in short-term rehabilitative care and long-term care. See http://www.havenhealthcare.com/ Chapter 11 Petition Date: November 20, 2007 Court: District of Connecticut (New Haven) Judge: Albert S. Dabrowski Debtors' Counsel: Robert S. Hoff, Esq. Wiggin & Dana 400 Atlantic Street, 7th Floor Stamford, CT 06911 Tel: (203) 363-7626 Fax: (203) 363-7676 --and-- Sharyn B. Zuch, Esq. Wiggin & Dana One CityPlace, 34th Floor 185 Asylum Street Hartford, CT 06103-3715 Tel: (860) 297-3715 Fax: (860) 525-9380 Debtors' Estimated Assets: $1 Million to $100 Million Debtors' Estimated Debts: $1 Million to $100 Million Debtors' Consolidated List of 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Omnicare Value Health Care trade debt $13,710,301 Attention: Richard T. Richow, Director National Credit & Collections Omnicare, Inc. 1600 RiverCenter II 100 East RiverCenter Boulevard, Suite 1500 Covington, KY 41011 Tel: (859) 392-3495 Fax: (859) 392-3330 Medventures Consulting, consultant $1,817,641 L.L.C. Attention: Jim Allen 1349 Southwest 80th Avenue Bell, FL 32619 Tel: (203) 772-4134 McKeeson Medical Co. trade debt $1,646,605 Supply Attention: Don Trull Director, Credit & Collections McKeeson Medical and Surgical 8741 Landmark Road Richmond, VA 23228 Tel: (804) 553-2247 Fax: (804) 264-7540 Tax Administrator-Provider tax $1,392,170 Tax Attention: Eileen Hall, Collections Manager State of Rhode Island One Capitol Hill Providence, RI 02908 Tel: (401) 222-3195 Fax: (401) 222-3145 State of Vermont-Path tax $1,315,470 Attention: Mr. John Dick P.O. Box 888 312 Hurricane Lane Williston, VT 05495-0888 Tel: (802) 879-5937 P.F.G. P.F.G. Note and $1,018,775 Attention: Shane J. Gebo invoices Multi-Unit Sales Manager P.F.G.-Springfield 340 Taylor Street P.O. Box 3024 Springfield, MA 01101 Tel: (413) 846-5465 Fax: (413) 272-1602 Anthem self-insured health $1,009,351 Attention: Ed Kask claims Tel: (203) 985-7496 Fax: (860) 655-9447 C.I.T. Carroll Hospital note for bed lease $667,724 Lease Attention: Archie Leach Carroll Hospital Group 825 Bradley Avenue London, Ontario Canada N63 3C2 Tel: (519) 963-4010 Fax: (519) 963-4013 Commissioner of Revenue sales tax audit $585,688 Services through various Attention: Ronald Dirienzo 2005 dates dispute Tax Division Assistant Chief interest and penalty State of Connecticut of $250,000 Department of Revenue Services 25 Siguourney Street Hartford, CT 06106-5032 N.E.H.C. Pension Fund Union 1199 $530,708 Attention: Robert Tessier Pension Executive Director 1199 New England Healthcare 77 Huyshope Avenue Hartford, CT 06106-7001 Tel: (860) 728-1100 Fax: (860) 947-8080 C.I.&P. utilities-electric $419,457 Attention: Susan Hissong Collections Manager Connecticut Light & Power 1985 Blue Hills Avenue Extension Windsor Locks, CT 06095 Tel: (860) 607-4627 Health Care Services trade debt $413,603 Collections Manager Health Care Services Group 3220 Tillman Drive Glenview Corp. Center Bensalem, PA 19020 First Insurance Funding insurance $373,858 Attention: Mark C. Lucas Senior V.P. Loan Collections First Insurance Funding 8075 Innovation Way Chicago, IL 60682 Tel: (800) 837-3707-4982 Fax: (847) 509-7112 Fire Protection Testing trade debt $370,619 Attention: Robert Babcock Manager, F.P.T. 1701 Highland Avenue, Suite 4 Cheshire, CT 06410 Tel: (203) 250-1115 Gulf South Medical Supply medical supplies $302,280 Attention: Billy Williams V.P. Sales Gulf South Medical Supply 4345 Southpoint Boulevard Jacksonville, Florida 32216 Tel: (775) 854-9381 Zurich American Insurance insurance $274,573 Co. of Illinois Attention: Howard R. Heilweil Customer Service Executive Zurich Global Corporate, North American 60 State Street Suite 600 Boston, MA 02109 Tel: (617) 570-8974 Fax: (404) 805-2246 Connecticut Natural Gas utilities-heat $260,000 Attention: Juliete Morle Credit Services The Connecticut Natural Gas Corp. P.O. Box 1500 Hartford, CT 06144-1500 Tel: (860) 727-3000 Genter Healthcare, Inc. trade debt $250,263 Attention: Dennis Genter, President Genter Healthcare 28 Ridgewood Commons Wilmot, New Hampshire 03287 Tel: (603) 526-6559 Direct Supply trade debt $237,235 Nstar Electric utilities-electric $236,500 Hudson Home Health Care trade debt $236,258 Lawn Tailors trade debt $230,202 Triple A Supplies, Inc. trade debt $216,085 National Grid #64712 utilities-electric $215,042 21660 26 William Backus Hospital ancillary medical $213,130 services N.E.H.C. Welfare Fund union claim $204,237 Guardian insurance $173,891 Microsoft Licensing, G.P. licensing $162,590 Staples trade debt $162,457 Complete Waste Removal trade debt $160,291 W.B. Mason Co., Inc. trade debt $154,253 Metro District Water utilities-water $138,828 Holland & Knight Attorney legal fees $135,000 Ufcwlocal 371 Welfare union claim $134,700 Guida Selbert Dairy Co. trade debt $129,914 H.&E. Enterprise fire sprinklers $126,700 and construction Care Realty Group settlement of care $125,000 health bridge facilities R. Thomas Crovo tax claim $121,042 Heidell, Pittoni, Murphy & legal fees $108,590 Bach, L.L.P. New England Gas utilities-gas $106,378 New England Mobil X-Ray X-rays $101,334 Therapeutic Dimensions trade rentals $98,174 Northeast, Inc. Collaborative Lab Services labs $89,316 C.T. Mobile Diagnostics, X-rays $88,013 L.L.C. Path Lab, Inc. labs $84,514 Yankee Gas Account utilities-gas $82,102 Tax Collector-South Windsor tax $82,001 City of Chelsea #153501/ utilities-water $80,396 Water-Sewer and sewer Hill-Rom trade debt $79,129 American Medical Response trade debt $78,268 WATERFORD EQUITIES: Haven's CEO Denies State Counsel's Accusations ------------------------------------------------------------------ Raymond Termini, chief executive officer of Haven Healthcare, a debtor-affiliate of Waterford Equities LLC, published his response to the Hartford Courant's articles on Nov. 18, 2007 at Haven's Web site. The Hartford Courant had published articles regarding allegations of the State Attorney General Richard Blumenthal that Mr. Termini used Haven's assets for his personal gain and that the company rendered poor care to its elderly patients. As a response, Mr. Termini says, "The Hartford Courant story unfairly misrepresents Haven Healthcare's commitment to quality care, adequate staffing and financial management." "The story references seven malpractice cases while ignoring the fact that Haven has served 15,000 medically complex and frail elderly in the past three years. The complete circumstances of each lawsuit and Haven's point of view are not represented at all in the story. The story takes into account the words of those who stand to gain financially by their negative statements." "The Courant displayed a complete misunderstanding of the state's review process and the unique role played by Haven in providing hope and care to the medically complex and frail elderly." "Like other providers, Haven has struggled for years with inadequate state reimbursements. Since July, Haven has begun to invest more than $10 million in frontline caregivers for our facilities. Hundreds of new staff are now at the bedside in Haven homes and the benefits are already showing. No one asked us to do that; no one forced us to do it. That was our decision because we want the best for our patients," added Mr. Termini. Meanwhile, Governor M. Jodi Rell ordered several state agencies to attend to about 2,000 patients at Haven's 15 nursing homes in Connecticut after Haven Health of Waterford's admission was halted by the Department of Public Health, StamfordPlus reports, citing Governor Rell's Office. Gov. Blumenthal said Wednesday that the state will request the appointment of an independent trustee to manage Haven's nursing facilities, StamfordPlus relates. Haven Healthcare is indebted to more than 50 creditors for almost $31 million, Hartford Courant reveals. Middletown, Connecticut-based Waterford Equities LLC -- http://www.havenhealthcare.com/-- and its affiliates operate nursing homes and provide nursing care throughout New England states. WCI COMMUNITIES: Gets Performance Waiver Effective Until Dec. 7 --------------------------------------------------------------- WCI Communities Inc. was not able to comply with a modified Fixed Charge Coverage covenant under its Senior Secured Revolving Credit Agreement and Term Loan Agreement for the quarter ended Sept. 30, 2007. As a result, on Nov. 7, 2007, the company obtained a limited waiver of performance under this covenant of the Credit Facility and Term Loan which is effective through Dec. 7, 2007. As of Sept. 30, 2007, the balance on the Credit Facility was $448.7 million, the balance on the Term Loan was $262.5 million, and the balance on the $390 million Revolving Tower Construction Loan Agreement was $358.5 million. At this time, it is not certain that the company will reach agreement or obtain approval of the anticipated longer-term amendment. This amendment will be expensive and there can be no assurance that WCI will able to comply with the amended covenants and other requirements. If WCI is unable to obtain the amendment or comply with its terms, the lenders would have the right to exercise remedies specified in the loan agreements, including foreclosing on certain collateral and accelerating the maturity of the loans, which could result in the acceleration of substantially all of WCI's other outstanding indebtedness. In this situation, there can be no assurance that WCI would be able to obtain alternative financing. In addition, if the company is determined to be in default of these loan agreements, it may be prohibited from drawing additional funds under the Credit Facility and the Tower Loan, which could impair WCI's ability to maintain sufficient working capital. Either situation could have a material adverse affect on the solvency of the company. As reported in the Troubled Company Reporter on Aug. 21, 2007, WCI has reached an agreement with its lenders to amend the company's Revolving Credit Facility, Term Loan Agreement, and Tower Facility, on Aug. 17, 2007. The amendments are intended to provide for greater operational flexibility in the current market environment. About WCI Communities Headquartered in Florida, WCI Communities Inc. (NYSE: WCI) -- http://www.wcicommunities.com/-- is a home builder catering to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The company offers both traditional and tower home choices and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division and its recreational amenities, well as through land sales and joint ventures. The company currently owns and controls developable land on which the company plans to build about 20,000 traditional and tower homes. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Moody's lowered the ratings of WCI Communities Inc., including its corporate family rating to Caa2 from B3 and the ratings on its senior subordinated notes to Caa3 from Caa2. The ratings outlook is negative. WCI COMMUNITIES: Incurs $69.7 Million Net Loss in Third Qtr. 2007 ----------------------------------------------------------------- WCI Communities Inc. reported a net loss of $69.7 million for the three months ended Sept. 30, 2007, as compared with net income of $10.7 million in the third quarter of 2006. Revenues for the third quarter of 2007 were $166.0 million, compared with $425.6 million for the third quarter of 2006, a 61.0% decrease. Of this decrease, $88.9 million was due to reversal of Tower Homebuilding revenue related to defaults recorded this quarter. Company gross margin for the third quarter of 2007 was negative $40.6 million versus positive $62.6 million, or 14.7% of revenue, for the third quarter of 2006, a decrease of $103.2 million. Of this decrease, $23.7 million was due to reversal of Tower Homebuilding gross margin related to defaults and default reserves recorded this quarter. Other unfavorable adjustments of estimates totaling $12.9 million were also recorded to the Tower Homebuilding gross margin this quarter. In addition, real estate inventory impairment charges and write-offs totaled $35.9 million in this third quarter. "Demand continues to be unpredictable from week to week and we saw an increase in defaults and cancellations during the third quarter," said Jerry Starkey, President and chief executive officer of WCI Communities. "We are focused on reducing our costs of operation and recently announced a restructuring that we expect will enable us to lower our annual salary and benefit expenses by about $46 million. As a part of this restructuring, we have combined geographic regions and retained the top talent capable of taking on expanded roles and responsibility during this downturn. During the quarter, we experienced higher tower defaults and increased our reserves for future tower defaults. This resulted in revenue and earnings reversals and had a negative impact on our financial performance during the period." "We also wrote down our traditional and tower inventory to reflect impairments caused by expected lower prices and slower absorption in some product lines. While lower demand and increased defaults have severely hampered our earnings, we continue to expect significant cash flow in the fourth quarter to result in about $210 million to $460 million of cash flow for the full year ($200 million to $450 million from operating activities and $10 million from investing activities). The company's expected cash flow from operations includes 275 to 300 traditional homes closings in the fourth quarter. The backlog of 591 traditional homes as of Sept. 30, 2007 includes 273 homes scheduled to close by year end." For the nine month period ended Sept. 30, 2007, net loss totaled $118.8 million compared with net income of $73.6 million during the first nine months of 2006. Revenues decreased 51.0% to $746.5 million from $1.52 billion for the nine months ended Sept. 30, 2006. For the three months ended Sept. 30, 2007, gross new orders totaled 197 units, a decline of 13.6% compared to the same quarter in 2006, with a value for the third quarter of 2007 of $139.1 million, down 22.5% from 2006. Due largely to the reversal of orders upon recording tower defaults, aggregate net orders were a negative $14.3 million for this quarter, while the number of net unit orders declined 82.9% to 24. Traditional Homebuilding Third quarter 2007 revenues for Traditional Homebuilding, including lot sales, fell 25.9% to $157.0 million from $211.9 million for the third quarter of 2006. The company closed 212 homes compared with 279 for the same period a year ago. For the nine month period ended September 30, 2007, Traditional Homebuilding revenues decreased 27.3% to $550.2 million. The company closed 735 homes compared with 1,143 for the same period a year ago. Tower Homebuilding For the three months ended Sept. 30, 2007, Tower Homebuilding reported negative revenue of $36.8 million as compared to revenue of $172.3 million for the same period a year ago, primarily due to the reversal of revenue during the quarter related to defaulted tower contracts, as well as a decrease in the number of towers under construction this quarter and limited progression of building percentage of completion among the towers under construction. For the nine months ended Sept. 30, 2007, revenues in Tower Homebuilding fell 93.5% to $39.3 million. Real Estate Services Revenues for the Real Estate Services Division for the third quarter 2007 were $20.8 million, an 11.1% decrease from the $23.4 million recorded for the same period a year ago. The decline was primarily due to the slowing market for new and resale homes during the quarter. For the nine month period ended Sept. 30, 2007, revenues in the Real Estate Services Division totaled $73.8 million, down 15.2% from the $87.1 million recorded for the nine months ended Sept. 30, 2006. Cash Flow/Financial Position For the nine months ended Sept. 30, 2007, cash flow from operating activities and investing activities totaled $59.5 million ($33.3 million from operating activities and $26.2 million from investing activities), compared with cash used of $650.1 million ($605.0 million used in operations and $45.1 million used for investing activities) in the same period a year ago. As of Sept. 30, 2007, the company had $3.4 billion in total assets, $2.5 billion in total liabilities, and $974.9 million in total stockholders' equity. A full-text copy of the company's third quarter report for 2007 is available for free at: http://ResearchArchives.com/t/s?2594 About WCI Communities Headquartered in Florida, WCI Communities Inc. (NYSE: WCI) -- http://www.wcicommunities.com/-- is a home builder catering to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The company offers both traditional and tower home choices and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division and its recreational amenities, well as through land sales and joint ventures. The company currently owns and controls developable land on which the company plans to build about 20,000 traditional and tower homes. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Moody's lowered the ratings of WCI Communities Inc., including its corporate family rating to Caa2 from B3 and the ratings on its senior subordinated notes to Caa3 from Caa2. The ratings outlook is negative. WILD WEST: Auction Sale of Amusement Park Begins December 11 ------------------------------------------------------------ Wild West World LLC will be up for a series of public sale beginning Dec. 11, 2007, after no buyer turned out to take over and operate the Debtor's business, Bill Rochelle of Bloomberg News reports. A hearing will take place on December 10 should any party objects to the request, Bloomberg News adds. As reported in the Troubled Company Reporter on Oct. 30, 2007, the Debtor obtained authority from the U.S. Bankruptcy Court for the District of Kansas to hire Rides-4-U Inc. as its broker. Rides-4-U will assist the Debtor in the sale of about 24 rides located within the Debtor's amusement park. The broker will receive compensation of 10% commission for its services. No retainer will be paid to the broker. The Bank of Blue Valley had previously filed a limited objection with the Court indicating that the Debtor and the broker had historical relationship with the bank. BBV also indicated intention to hire Rides-4-U to liquidate its assets. Hence, the Court ruled that BBV may separately hire Rides-4-U for the sale of BBV's assets in a subsequent employment. However, the subsequent employment will not preclude the Debtor from seeking, or BBV opposing, an assessment of administrative claims for the sale of BBV's collateral within the Debtor's facility. Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. D. Kans. Case No. 07-11620). Edward J. Nazar, Esq., at Redmond & Nazar, LLP represents the Debtor in its restructuring efforts. In its schedules filed with the Court, the Debtor disclosed total assets of $22,979,898 and total debts of $25,601,177. Restoration Farms Inc., Wild West's parent company, filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Kans. Case No. 07-11913). WILLIAM LYON: S&P Lowers Ratings with Negative Outlook ------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on William Lyon Homes. The outlook remains negative. The rating actions affect $550 million of unsecured notes. "The downgrades reflect the likelihood that conditions will remain very challenging in 2008, which will weigh on this privately held homebuilder's already weak liquidity position and interest coverage," said Standard & Poor's credit analyst George Skoufis. "The company's investments in community growth have resulted in elevated debt and inventory levels, and tough operating conditions in 2008 will make it difficult to liquidate inventory, which we believe will weigh on the company's financial profile." Standard & Poor's expects market conditions to remain challenging, which will negatively affect the company's more concentrated platform. S&P would lower the ratings further if continued weakness in key housing markets further constrains liquidity. Alternatively, S&P would revise the outlook back to stable if market conditions stabilize, inventory liquidations reduce revolver balances, and interest coverage improves. WOLVERINE TUBE:Moody's Confirms Caa2 Ratings and Revises Outlook ---------------------------------------------------------------- Moody's Investors Service confirmed Wolverine Tube's Caa2 corporate family rating, Caa2 probability of default rating, and Caa3 senior unsecured rating (LGD4, 63%). The rating outlook was revised to negative from ratings under review. This action concludes the review on Wolverine's ratings originated on August 30, 2007, when the ratings were placed under review for a possible upgrade, which was prompted by the announcement of the rights offering for up to $51 million, from which, together with the exercised option value, the company could have received a maximum of $83 million in cash proceeds. On October 29, 2007, Wolverine completed its equity rights offering, which resulted in gross proceeds of $28 million from the shareholders' purchase of 25,450,453 shares of common stock. Wolverine also anticipates realizing an additional $4.6 million in proceeds from the Alpine Group's and/or Plainfield's purchase of an additional 4,620 shares of preferred stock, needed to maintain their fully diluted ownership in Wolverine at 55%. Combined with additional $4.6 million in preferred share proceeds, total proceeds would approximate $32.6 million in equity, which has improved its near-term liquidity. The proceeds from the rights offering and $45.2 million in proceeds from the initial sale of preferred stock in February 2007 have been used to repurchase all receivables outstanding under the receivables sale facility as of November 7, 2007. Wolverine's current ratings are reflective of the company's still constrained liquidity profile due to near-term debt maturities, cost and working capital pressures on the raw materials side, particularly associated with copper price escalation, cash charges resulting from the discontinuation of the US plumbing tube business and closure of two facilities in Alabama and Mississippi, as well as an overall weak operational profile and prolonged margin compression. The Caa2 corporate family rating incorporates a greater likelihood than not that Wolverine will be able to refinance its credit facilities and its $137 million of 7.375% senior notes prior to their maturity in April 2008 and August 2008, respectively. Therefore, a lack of progress in refinancing upcoming debt maturities could lead to a downgrade. As of September 30, 2007, Wolverine's current liquidity included unrestricted cash of $25.8 million and $11.5 million of availability under its $35 million senior secured credit facility. The availability under this facility has been reduced by $23.3 million of standby letters of credit. The company also has about $60 million of availability under its receivables sale facility. The company's credit facility and receivables sale facility both terminate on April 28, 2008, and are expected to be refinanced in the first quarter of 2008 as part of a complete recapitalization plan. These ratings were confirmed: -- Corporate family rating -- Caa2 -- Probability of default -- Caa2 -- 7.375% guaranteed senior unsecured notes due 2008 -- Caa3 (LGD4, 63%) -- 10.5% guaranteed senior unsecured notes due 2009 -- Caa3 (LGD4, 63%) The rating outlook was changed to negative from under review for possible upgrade Moody's previous rating action for Wolverine was on November 1, 2006, when its corporate family rating was lowered to Caa2 from Caa1 and its unsecured note rating was lowered to Caa3 from Caa2. Headquartered in Huntsville, Alabama, Wolverine Tube, Inc. is U.S. manufacturer and distributor of copper alloy tube, fabricated products, and metal joining products for use in refrigeration and air conditioning. For the LTM ended Sept. 30, 2007, the company had revenues of $1.3 billion, but generated a $40 million net loss. WORD & BOGGUS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Word & Boggus Building Co., Inc. Post Office Box 278 Guntersville, AL 35976 Bankruptcy Case No.: 07-41984 Chapter 11 Petition Date: October 31, 2007 Court: Northern District of Alabama (Anniston) Judge: James J. Robinson Debtor's Counsel: Harry P. Long, Esq. P.O. Box 1468 Anniston, AL 36202 Tel: (256) 237-3266 Fax: (256) 237-3268 Estimated Assets: Unknown Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Madison Materials $879,370 P.O. Box 306 Guntersville, AL 35976 Hanson Pipe & Precast, Inc. $300,233 P.O. Box 730477 Dallas, TX 75373 Atlas Blasting Corporation $126,064 4204 Underwood Ind. Drive Birmingham, AL 35210 Whitaker Contracting Corporation $125,328 Tractor & Equipment Company $122,685 Bancorpsouth $90,956 Marshall County Concrete $87,829 CDG Engineers & Associates, Inc. $86,930 Komatsu Financial $30,838 Ragghlantl Foundations, Inc. $29,233 Cowin Equipment Co., Inc. $25,923 Magnolia Steel Company $20,787 Ingram & Associates $15,000 Volvo Commercial Finance $12,226 ASC Construction Equipment $11,905 Mericap Credit Corporation $9,760 Citizens Bank $8,718 Wolford Excavation, LLC $8,010 Sunshine Supplies $6,300 Key Equipment Company $6,226 * Moody's Says Liquidity of US Companies Continue to Drop --------------------------------------------------------- The intrinsic liquidity of US speculative-grade companies continued to drop in October, as the number of issuers with weak liquidity grew for the fourth month in a row and more issuers showed a decline in liquidity quality than an improvement for the third month in a row, says Moody's Investors Service in its monthly Liquidity Risk Monitor. Specifically, nine companies experienced downgrades of their Speculative-Grade Liquidity rating in October, while only four issuers had upgrades. During the month, there were three downgrades to the lowest SGL-4 rating of "weak," while only a single issuer was upgraded out of the SGL-4 category. "SGL rating changes have taken a decidedly negative turn since the summer, in conjunction with the tighter credit environment," says Analyst John Puchalla. "Not withstanding a favorable credit market that has aided balance-sheet repair in recent years, the fragility of the speculative-grade issuers is increasingly evident." As of Oct. 31, 2007, Moody's had SGL ratings on 453 issuers, with total rated debt of approximately $1.04 trillion. Thirty of these issuers now have SGL-4 or "weak" liquidity, which represents a 36% jump from the 22 issuers with SGL-4 ratings at the end of June. Puchalla says that an expanding population of issuers with SGL-4 ratings, especially at the lower end of the corporate family rating scale, suggests an increase in the number of issuers in the "pipeline" for default. Of the 30 issuers with SGL-4 ratings, 19 have corporate family ratings of Caa1 or lower. The number of issuers rated Caa1 or below with either SGL-4 ("weak") or SGL-3 ("adequate") ratings increased to 35 in October from 32 in September. In all, the number of such issuers has increased 52% from 23 a year ago. Currently 90% of Caa1-or-lower rated issuers have SGL ratings of either SGL-3 or SGL-4, down slightly from the 91% of a month ago, but above the 85% average over the last two years. This "priming" for a rise in defaults is in line with Moody's current projections of an increase in the global speculative-grade default rate from its currently extremely low level of 1.1%. Moody's projects the default rate to rise to 3.6% in October 2008 and to 3.9% in October 2009. Liquidity is a fundamental component of credit analysis. As part of its liquidity stress analysis for speculative-grade rated companies, Moody's looks at their ability\u2014in the event of complete loss of market access\u2014to meet financial obligations due over the next 12 months with available cash and liquid assets, ongoing cash generation, and committed sources of financing. These latter financing alternatives include bank lines not subject to material adverse change clauses, triggers, or other conditions. * Moody's Says Private Equity Ownership Can Bring Enhancements -------------------------------------------------------------- Private equity ownership can bring some corporate governance enhancements that benefit bondholders, says Moody's Investors Service in a new report. Private equity owners have a high tolerance for leverage/risk and minimal public transparency. This approach heightens credit risk and highlights that private equity owners pay less regard to bondholders (at least, holders of bonds prior to the buy-out). The owner's relatively short-term investment horizon creates event risk. " Notwithstanding the very material risks associated with private equity ownership, the involvement of private equity can provide benefits for bondholders and potentially some reduction of the credit risk posed by governance concerns, at least when compared to other companies with high leverage that have different ownership forms," says Moody's Team Managing Director Mark Watson, author of the report. Overall, private equity ownership usually heightens credit risk, because of increased leverage and tolerance for risk, and also because of the event risk created by the potential for dividends and the inevitability of the company's eventual sale, which also means owners are focused on increasing near-term investment returns and on engineering the exit. But all the effects on governance are not against the interests of bondholders. Watson notes, "Current market conditions may mean private equity firms have to work harder to generate returns from the improved governance and oversight they bring to companies they own. After all, the credit market squeeze means the companies have to operate with less leverage, at least when compared to earlier in the year. And volatile equity markets limit the owner's IPO options." Watson explains that private equity ownership structures typical lead to management rewards based strictly on successfully creating value, an ongoing commitment to robust controls and financial reporting, and, importantly, an extremely involved board of directors. "Ultimately, bondholders benefit when engaged, knowledgeable board of directors oversees management," says Watson. "Boards of private equity owned companies, which are comprised mainly of representatives of the owner, are arguably the most engaged boards." Boards of private equity-owned companies are also much more willing and able to fire managers that under perform, a quick trigger usually in the interests of bondholders. In general, the pay-for-performance culture and philosophy that permeates private equity ownership is double-edged for bondholders. "On the one hand, pay-for-performance promotes a high performance culture among management and focuses management on value-adding activities," says Watson. "On the other hand, it can encourage management to share the owner's pre-disposition towards higher leverage and risk and to focus on actions that have short-term, not long-term, benefits." As for financial reporting, while the quality and quantity of publicly available information on a company clearly drops off when a company goes private, and this lack of transparency adds credit risk, reporting processes may well in fact be enhanced as owners work to remove any hurdles to an eventual sale. "It is often incorrect to infer that the lack of transparency from going private translates into weak financial reporting processes or under-resourced control functions such as audit, compliance, or legal," says Watson. "The private equity firm has a self-interest in ensuring that these processes remain robust, and indeed in some cases financial reporting and systems are strengthened to enable more detailed, timely reporting to the private equity firm." Moody's analysis of the governance implications of private equity ownership develops over time as the private equity firm goes through the stages of acquiring, running, and then selling the company. Factors with major credit implications include whether there is a strategic investor or multiple investors (participating in a "club deal") and the issues surrounding related party transactions. The full title of this Moody's Special Comment is "Credit Implications of Corporate Governance in Private Equity Owned Companies." * Moody's Takes Rating Actions on Various Classes ------------------------------------------------- Moody's Investors Service has issued press releases on these rating actions: Downgrades 360(Degree) Communications Company -- $16.49M affected -- BACKED Senior Unsecured ... to Caa1 from A2 ALLTEL Corporation -- $2.50B affected -- Senior Unsecured ... to Caa1 from A2 ALLTEL Ohio Limited Partnership -- $17.30M affected -- Senior Unsecured ... to Caa1 from A2 Saphir Finance Plc -- $2.05B affected -- STRUCT. Senior Secured ... to Baa3 from A2 Upgrades Center for Diagnostic Imaging, Inc. -- $95.00M affected -- LT Corporate Family Ratings ... to B1 from B2 -- Senior Secured Bank Credit Facility ... to Ba3 from B1 N-45 First CMBS Issuer Corporation, Commercial Mortgage-Backed Bonds, Series 2000-2 -- $6,902,000 Class C Notes ... to Aaa from Aa2 -- $7,530,000 Class D Notes ... to Aaa from A2 -- $8,785,000 Class E Notes ... to A2 from Baa3 -- $6,275,000 -Class F Notes ... to Ba2 from B1 Review for Possible Downgrade Amegy Bank National Association -- LT Bank Deposits ... A1 -- LT OSO ... A1 -- LT Issuer Rating ... A1 -- Bank Financial Strength ... B- Amegy Corporation -- LT Issuer Rating ... A2 Aphex Capital Plc -- $14.63M may be affected -- STRUCT. Senior Secured ... Baa2 California Bank & Trust -- LT Bank Deposits ... A1 -- LT OSO ... A1 -- LT Issuer Rating ... A1 -- Bank Financial Strength ... B- MortgageIT Mortgage Loan Trust 2006-1 -- $17.79M may be affected -- STRUCT. Subordinate ... B3 -- STRUCT. Subordinate ... Aa2 Nevada State Bank -- LT Bank Deposits ... A1 -- LT OSO ... A1 -- LT Issuer Rating ... A1 -- Bank Financial Strength ... B- Northern Rock plc -- $18.47B may be affected -- STRUCT. Senior Secured ... Aaa Royal Bank of Scotland plc -- $15.00M may be affected -- STRUCT. Senior Subordinate ... Aa3 Saphir Finance Plc -- $820.78M may be affected -- STRUCT. Senior Secured ... Baa3 Zions Bancorporation -- $1.44B may be affected -- Senior Unsecured ... A2 -- Subordinate ... A3 -- Preferred Stock ... Baa1 -- Senior Unsec. Shelf ... (P)A2 -- Subordinate Shelf ... (P)A3 -- Preferred Shelf ... (P)Baa1 -- Preferred shelf -- PS2 ... (P)Baa1 -- Commercial Paper ... P-1 Zions Capital Trust B -- $285.00M may be affected -- BACKED Preferred Stock ... A3 Zions Capital Trust C -- $1.10B may be affected -- BACKED Preferred Shelf ... (P)A3 Zions Capital Trust D -- $1.10B may be affected -- BACKED Preferred Shelf ... (P)A3 Zions First National Bank -- $793.19M may be affected -- LT Bank Deposits ... A1 -- LT Deposit Note/CD Program ... A1 -- LT OSO ... A1 -- LT Issuer Rating ... A1 -- Bank Financial Strength ... B- Zions Institutional Capital Trust A -- $200.00M may be affected -- BACKED Preferred Stock ... A3 Review for Possible Upgrade Athena Assurance Company -- Insurance Financial Strength ... Aa3 Atlantic Insurance Company -- Insurance Financial Strength ... Aa3 Automobile Insurance Company of Hartford -- Insurance Financial Strength ... Aa3 BNP Paribas, London Branch -- $87.80M may be affected -- STRUCT. Senior Subordinate ... Aa1 Charter Oak Fire Insurance Co. -- Insurance Financial Strength ... Aa3 Farmington Casualty Company -- Insurance Financial Strength ... Aa3 Gulf Underwriters Insurance Company -- Insurance Financial Strength ... Aa3 MMI Capital Trust I -- $125.00M may be affected -- BACKED Preferred Stock ... Baa1 MMI Companies, Inc. -- $125.00M may be affected -- Junior Subordinate ... Baa1 Phoenix Insurance Co. -- Insurance Financial Strength ... Aa3 Select Insurance Company -- Insurance Financial Strength ... Aa3 St. Paul Fire and Marine Insurance Company -- Insurance Financial Strength ... Aa3 St. Paul Medical Liability Insurance Company -- Insurance Financial Strength ... Aa3 St. Paul Reinsurance Company Limited -- Insurance Financial Strength ... Aa3 St. Paul Surplus Lines Insurance Company -- Insurance Financial Strength ... Aa3 Target Corporation -- $17.29B may be affected -- Senior Unsecured ... A1 -- Senior Unsecured MTN ... A1 -- LT Issuer Rating ... A1 -- Senior Unsec. Shelf ... (P)A1 -- Preferred Shelf ... (P)A3 -- Preferred shelf -- PS2 ... (P)A3 Travelers Capital II -- BACKED Preferred Shelf ... (P)Baa1 Travelers Capital III -- BACKED Preferred Shelf ... (P)Baa1 Travelers Capital IV -- BACKED Preferred Shelf ... (P)Baa1 Travelers Capital V -- BACKED Preferred Shelf ... (P)Baa1 Travelers Casualty & Surety Co of Europe, Ltd -- Insurance Financial Strength ... Aa3 Travelers Casualty Company CT -- Insurance Financial Strength ... Aa3 Travelers Casualty and Surety Co of Illinois -- Insurance Financial Strength ... Aa3 Travelers Casualty and Surety Company -- Insurance Financial Strength ... Aa3 Travelers Casualty and Surety of America -- Insurance Financial Strength ... Aa3 Travelers Commercial Insurance Company -- Insurance Financial Strength ... Aa3 Travelers Companies, Inc. (The) -- $4.21B may be affected -- Senior Unsecured ... A3 -- Senior Unsecured MTN ... A3 -- Junior Subordinate ... Baa1 -- Senior Unsec. Shelf ... (P)A3 -- Subordinate Shelf ... (P)Baa1 -- Preferred Shelf ... (P)Baa2 -- Preferred shelf -- PS2 ... (P)Baa2 -- Commercial Paper ... P-2 Travelers Indemnity Company -- Insurance Financial Strength ... Aa3 Travelers Indemnity Company of America -- Insurance Financial Strength ... Aa3 Travelers Indemnity Company of Connecticut -- Insurance Financial Strength ... Aa3 Travelers Indemnity Company of Illinois -- Insurance Financial Strength ... Aa3 Travelers Insurance Group Holdings, Inc. -- $200.00M may be affected -- Senior Unsecured ... A3 Travelers Personal Security Ins Co -- Insurance Financial Strength ... Aa3 Travelers Property Casualty Corp. -- $1.40B may be affected -- Senior Unsecured ... A3 Travelers Property Casualty Ins Co of ILL -- Insurance Financial Strength ... Aa3 Travelers Property Casualty Insurance Company -- Insurance Financial Strength ... Aa3 USF&G Capital I -- $100.00M may be affected -- BACKED Preferred Stock ... Baa1 USF&G Capital III -- $100.00M may be affected -- BACKED Preferred Stock ... Baa1 USF&G Corporation -- $525.00M may be affected -- Senior Unsecured MTN ... A3 -- BACKED Subordinate ... Baa1 -- BACKED Junior Subordinate ... Baa1 United States Fidelity & Guaranty Company -- Insurance Financial Strength ... Aa3 Assignments Alltel Communications, Inc. -- $1000.00M 10.38% GTD PIK NOTES due 2017 ... Caa1 BA Credit Card Trust, BAseries (formerly MBNA credit Card Master Note Trust, MBNAseries) -- $1.25 Billion Floating Rate Class A(2007-15) Notes ... (P)Aaa BBVA RMBS 4 Fondo de Titulizacion de Activos -- EUR2,740.0 Million Series A1 notes due 2060 ... Aaa -- EUR960.0 Million Series A2 notes due 2060 ... Aaa -- EUR1,050.5 Million Series A3 notes due 2060 ... Aaa -- EUR41.7 Million Series B notes due 2060 ... Aa3 -- EUR107.8 Million Series C notes due 2060 ... Baa1 Balti Investeeringute Grupi Pank AS -- BANK FINANCIAL STRENGTH RATING ... E+ -- Frgn.Cur. BANK DEPOSIT RATING ... B1 -- Frgn.Cur. BANK DEPOSIT RATING ... NP Banco de Santiago del Estero S.A. -- BANK FINANCIAL STRENGTH RATING ... D- -- Ar.Peso BANK DEPOSIT RATING ... NP -- Ar.Peso BANK DEPOSIT RATING ... Ba2 -- Frgn.Cur. BANK DEPOSIT RATING ... NP -- Ar.Peso BANK DEPOSIT RATING ... Aa2.ar -- Frgn.Cur. BANK DEPOSIT RATING ... Caa1 -- Frgn.Cur. BANK DEPOSIT RATING ... Ba1.ar Banco Espiritu Santo, S.A. -- EUR 0.00M Series 1 COVERED BONDS due 2012 ... (P)Aaa -- Frgn.Cur. 0.00M Programme COVERED BOND PROGRAMS ... (P)Aaa CCT MTN Pte. -- Sing.$1000.00M GTD SINGAPORE MTN PROGRAM ... Baa1 Capital Auto Receivables Asset Trust 2007-4 -- $51.76M 6.39% Cl. B COLL NOTES due 2014 ... A2 -- $7.96M 7.50% Cl. D COLL NOTES due 2014 ... Ba1 -- $23.89M 7.40% Cl. C COLL NOTES due 2014 ...Baa2 -- $301.95M 5.30% Cl. A-4 COLL NOTES due 2014 ... Aaa -- $333.00M 4.91% Cl. A-1 COLL NOTES due 2008 ... P-1 -- $100.00M 4.93% Cl. A-2a COLL NOTES due 2010 ... Aaa -- $160.00M 5.00% Cl. A-3a COLL NOTES due 2011 ... Aaa Nuevo Banco de La Rioja S.A. BANK FINANCIAL STRENGTH RATING ... D- -- Ar.Peso BANK DEPOSIT RATING ... NP -- Ar.Peso BANK DEPOSIT RATING ... Ba2 -- Frgn.Cur. BANK DEPOSIT RATING ... NP -- Ar.Peso BANK DEPOSIT RATING ... Aa2.ar -- Frgn.Cur. BANK DEPOSIT RATING ... Caa1 -- Frgn.Cur. BANK DEPOSIT RATING ... Ba1.ar Wachovia Capital Trust X -- $750.00M PFD/PREF STOCK due 2047 ... A1 Rated 11/13/2007 Withdrawals St. Paul Capital Trust I -- BACKED Preferred Stock ... Formerly Baa1 USF&G Capital II -- BACKED Preferred Stock ... Formerly Baa1 USF&G Corporation -- Junior Subordinated ... Formerly Baa1 Outlook Actions 360(Degree) Communications Company -- To Stable ... from Rating(s) Under Review ALLTEL Corporation -- To Stable ... from Rating(s) Under Review ALLTEL Ohio Limited Partnership -- To Stable ... from Rating(s) Under Review Amegy Bank National Association -- To Rating(s) Under Review ... from Stable Amegy Corporation -- To Rating(s) Under Review ... from Stable Athena Assurance Company -- To Rating(s) Under Review ... from Positive Atlantic Insurance Company -- To Rating(s) Under Review ... from Positive Balti Investeeringute Grupi Pank AS -- To Stable ... from Never Assigned Banco de Santiago del Estero S.A. -- To Stable(m) ... from Never Assigned CCT MTN Pte. -- To Stable ... from Never Assigned California Bank & Trust -- To Rating(s) Under Review ... from Stable Farming -- Ton Casualty Company -- To Rating(s) Under Review ... from Positive Konica Minolta Holdings, Inc. -- To Positive ... from Stable MMI Capital Trust I -- To Rating(s) Under Review ... from Positive MMI Companies, Inc. -- To Rating(s) Under Review ... from Positive Nevada State Bank -- To Rating(s) Under Review ... from Stable Nuevo Banco de La Rioja S.A. -- To Stable(m) ... from Never Assigned Phoenix Insurance Co. -- To Rating(s) Under Review ... from Positive St. Paul Capital Trust I -- To Ratings Withdrawn ... from Positive Target Corporation -- To Rating(s) Under Review ... from Stable Travelers Capital II -- To Rating(s) Under Review ... from Positive Travelers Capital III -- To Rating(s) Under Review ... from Positive Travelers Capital IV -- To Rating(s) Under Review ... from Positive Travelers Capital V -- To Rating(s) Under Review ... from Positive Travelers Casualty & Surety Co of Europe, Ltd -- To Rating(s) Under Review ... from Positive Travelers Casualty Company CT -- To Rating(s) Under Review ... from Positive Travelers Casualty and Surety Co of Illinois -- To Rating(s) Under Review ... from Positive Travelers Casualty and Surety Company -- To Rating(s) Under Review ... from Positive Travelers Casualty and Surety of America -- To Rating(s) Under Review ... from Positive Travelers Commercial Insurance Company -- To Rating(s) Under Review ... from Positive Travelers Capital II -- To Rating(s) Under Review ... from Positive Travelers Capital III -- To Rating(s) Under Review ... from Positive Travelers Capital IV -- To Rating(s) Under Review ... from Positive Travelers Capital V -- To Rating(s) Under Review ... from Positive Travelers Casualty & Surety Co of Europe, Ltd -- To Rating(s) Under Review ... from Positive Travelers Casualty Company CT -- To Rating(s) Under Review ... from Positive Travelers Casualty and Surety Co of Illinois -- To Rating(s) Under Review ... from Positive Travelers Casualty and Surety Company -- To Rating(s) Under Review ... from Positive Travelers Casualty and Surety of America -- To Rating(s) Under Review ... from Positive Travelers Commercial Insurance Company -- To Rating(s) Under Review ... from Positive USF&G Capital I -- To Rating(s) Under Review ... from Positive USF&G Capital II -- To Ratings Withdrawn ... from Positive USF&G Capital III -- To Rating(s) Under Review ... from Positive USF&G Corporation -- To Rating(s) Under Review ... from Positive United States Fidelity & Guaranty Company -- To Rating(s) Under Review ... from Positive Zions Bancorporation -- To Rating(s) Under Review ... from Stable Zions Capital Trust B -- To Rating(s) Under Review ... from Stable Zions Capital Trust C -- To Rating(s) Under Review ... from Stable Zions Capital Trust D -- To Rating(s) Under Review ... from Stable Zions First National Bank -- To Rating(s) Under Review ... from Stable Zions Institutional Capital Trust A -- To Rating(s) Under Review ... from Stable POS = Positive NEG = Negative DEV = Developing NOO = No Outlook RUR = Rating(s) Under Review (m) = Multiple outlooks with directional differences exist for this issuer. STA(m) = Stable with directional differences at the asset/issue level. NEG(m) = Negative with directional differences at the asset/issue level. POS(m) = Positive with directional differences at the asset/issue level. DEV(m) = Developing with directional differences at the asset/issue level. RWR = Ratings Withdrawn * S&P Holds Ratings on Nine Ford-Related U.S. Repack Transactions ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on nine U.S. repack transactions related to Ford Motor Co. (Ford; B/Stable/B-3) and removed them from CreditWatch, where they were placed with positive implications on Sept. 28, 2007. These rating actions reflect the Nov. 19, 2007, affirmation of the long-term corporate credit and senior unsecured debt ratings on Ford and related entities and their removal from CreditWatch positive. The corporate rating actions on Ford and its affiliates have no immediate rating impact on the Ford-related asset-backed securities supported by collateral pools of consumer auto loans or auto wholesale loans. All of the transactions with affirmed ratings are pass-through transactions, and the ratings are based solely on the senior unsecured rating assigned to the underlying collateral. The underlying collateral consists of securities issued by Ford, as indicated in the list below. Ratings Affirmed and Removed from Creditwatch Positive Corporate Backed Trust Certificates Ford Motor Co. Debenture-Backed Series 2001-36 Trust Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- A-1 CCC+ CCC+/Watch Pos 7.7% deb due 05/15/2097 A-2 CCC+ CCC+/Watch Pos 7.7% deb due 05/15/2097 Corporate Backed Trust Certificates Ford Motor Co. Note-Backed Series 2003-6 Trust Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- A-1 CCC+ CCC+/Watch Pos 7.45% Global Landmark Secs (GlobLS) notes due 07/16/2031 CorTS Trust for Ford Debentures Rating ------ Class To From Underlying collateral ----- -- ---- -------------------- Certs CCC+ CCC+/Watch Pos 7.4% deb due 11/01/2046 CorTS Trust II for Ford Notes Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Certs CCC+ CCC+/Watch Pos 7.45% Global Landmark Secs (GlobLS) notes due 07/16/2031 PPLUS Trust Series FMC-1 Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Certs CCC+ CCC+/Watch Pos 7.45% Global Landmark Secs (GlobLS) notes due 07/16/2031 PreferredPLUS Trust Series FRD-1 Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Certs CCC+ CCC+/Watch Pos 7.4% deb due 11/01/2046 Public STEERS Series 1998 F-Z4 Trust Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- A CCC+ CCC+/Watch Pos 7.7% deb due 05/15/2097 B CCC+ CCC+/Watch Pos 7.7% deb due 05/15/2097 SATURNS Trust No. 2003-5 Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Units CCC+ CCC+/Watch Pos 7.45% Global Landmark Secs (GlobLS) notes due 07/16/2031 Trust Certificates (TRUCs) Series 2002-1 Trust Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- A-1 CCC+ CCC+/Watch Pos 7.7% deb due 05/15/2097 * 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 442 North Sutter Street Bankr. E.D. Calif. Case No. 07-29563 Chapter 11 Petition filed November 9, 2007 See http://bankrupt.com/misc/caeb07-29563.pdf In Re Club Boogie 2, Inc. Bankr. E.D. Penn. Case No. 07-16726 Chapter 11 Petition filed November 13, 2007 Filed as Pro Se In Re Lisa Peterson Love Bankr. D. Ariz. Case No. 07-06046 Chapter 11 Petition filed November 14, 2007 See http://bankrupt.com/misc/azb07-06046.pdf In Re Timberpoint Unfinished Furniture, L.L.C. Bankr. D. Ariz. Case No. 07-06068 Chapter 11 Petition filed November 14, 2007 See http://bankrupt.com/misc/azb07-06068.pdf In Re J.G.T. Restaurant Group #2, L.L.C. Bankr. N.D. Ga. Case No. 07-79192 Chapter 11 Petition filed November 14, 2007 See http://bankrupt.com/misc/ganb07-79192 In Re Sean O. Hanlin Bankr. S.D. Ind. Case No. 07-11352 Chapter 11 Petition filed November 14, 2007 See http://bankrupt.com/misc/insb07-11352.pdf In Re Sharon Ringgenberg Bankr. N.D. Calif. Case No. 07-43886 Chapter 11 Petition filed November 14, 2007 Filed as Pro Se In Re J.R.B. Food, Inc. Bankr. N.D. Tex. Case No. 07-35664 Chapter 11 Petition filed November 14, 2007 See http://bankrupt.com/misc/txnb07-35664.pdf In Re Rio Sabor Brazil Restaurant, L.L.C. Bankr. D. Ariz. Case No. 07-06087 Chapter 11 Petition filed November 15, 2007 See http://bankrupt.com/misc/azb07-06087.pdf In Re Parnasa Holding, L.L.C. Bankr. S.D. Fla. Case No. 07-20084 Chapter 11 Petition filed November 15, 2007 See http://bankrupt.com/misc/flsb07-20084.pdf In Re Joel Richard Saline Bankr. D. Md. Case No. 07-21525 Chapter 11 Petition filed November 15, 2007 See http://bankrupt.com/misc/mdb07-21525.pdf In Re Challenger Resources, L.L.C. Bankr. E.D. N.C. Case No. 07-04337 Chapter 11 Petition filed November 15, 2007 See http://bankrupt.com/misc/nceb07-04337.pdf In Re R.J.C. Realty Holding Corp. Bankr. E.D. N.Y. Case No. 07-74678 Chapter 11 Petition filed November 15, 2007 See http://bankrupt.com/misc/nyeb07-74678.pdf In Re R.G. Endeavors, Inc. Bankr. S.D. N.Y. Case No. 07-13609 Chapter 11 Petition filed November 15, 2007 See http://bankrupt.com/misc/nysb07-13609.pdf In Re A.G.C. Petcenter, Inc. Bankr. N.D. Ohio Case No. 07-34972 Chapter 11 Petition filed November 15, 2007 See http://bankrupt.com/misc/ohnb07-34972.pdf In Re Touch of Summer, Ltd. Bankr. E.D. N.Y. Case No. 07-74677 Chapter 11 Petition filed November 15, 2007 Filed as Pro Se In Re Jeffrey A. Catlin Bankr. E.D. Calif. Case No. 07-29760 Chapter 11 Petition filed November 15, 2007 Filed as Pro Se In Re Unlimited Clothing & Shoes, Inc. Bankr. N.D. Calif. Case No. 07-43943 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/canb07-43943.pdf In Re The Rug Merchant Bankr. D. Mass. Case No. 07-17353 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/mab07-17353.pdf In Re Bon Vie, Inc. Bankr. D. Md. Case No. 07-21536 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/mdb07-21536.pdf In Re Greentrails, Inc. Bankr. E.D. N.C. Case No. 07-02602 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/nceb07-02602.pdf In Re Willow Creeks, Inc. Bankr. D. Nev. Case No. 07-51560 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/nvb07-51560.pdf In Re Willow Creek Partners, L.L.C. Bankr. D. Nev. Case No. 07-51561 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/nvb07-51561.pdf In Re Oak Engineered Products, Inc. Bankr. W.D. Penn. Case No. 07-27290 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/pawb07-27290.pdf In Re ClassicStar, L.L.C. Bankr. D. Utah Case No. 07-70001 Chapter 11 Petition filed November 16, 2007 Filed as Pro Se In Re Alazon Waco Corp. Bankr. N.D. Tex. Case No. 07-35703 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/txnb07-35703.pdf In Re M.G.A. Planning Services, Inc. Bankr. W.D. Tex. Case No. 07-12137 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/txwb07-12137.pdf In Re Startup Partnership #1 Bankr. W.D. Wash. Case No. 07-43888 Chapter 11 Petition filed November 16, 2007 See http://bankrupt.com/misc/wawb07-43888.pdf In Re Nievezquez Production, Inc. Bankr. D. Conn. Case No. 07-21662 Chapter 11 Petition filed November 19, 2007 See http://bankrupt.com/misc/ctb07-21662.pdf In Re Nu-Way Cleaners, Inc. of Medford Bankr. D. Mass. Case No. 07-17417 Chapter 11 Petition filed November 19, 2007 See http://bankrupt.com/misc/mab07-17417.pdf In Re Strategic Applications & Technologies, Inc. Bankr. D. Md. Case No. 07-21661 Chapter 11 Petition filed November 19, 2007 See http://bankrupt.com/misc/mab07-21661.pdf In Re Keenan-Dylan Entertainment, L.L.C. Bankr. D. Nev. Case No. 07-51572 Chapter 11 Petition filed November 19, 2007 See http://bankrupt.com/misc/nvb07-51572.pdf In Re Keystone Cue and Cushion, Inc. Bankr. D. Nev. Case No. 07-51573 Chapter 11 Petition filed November 19, 2007 See http://bankrupt.com/misc/nvb07-51573.pdf In Re Alison Novelties Bankr. D. Nev. Case No. 07-51574 Chapter 11 Petition filed November 19, 2007 See http://bankrupt.com/misc/nvb07-51574.pdf In Re H.R.E., Inc. Bankr. W.D. Va. Case No. 07-71845 Chapter 11 Petition filed November 19, 2007 See http://bankrupt.com/misc/vawb07-71845.pdf In Re Richmond Beach Coffee Co. Bankr. W.D. Wash. Case No. 07-15536 Chapter 11 Petition filed November 19, 2007 See http://bankrupt.com/misc/wawb07-15536.pdf In Re Statewide Express, Inc. Bankr. M.D. Fla. Case No. 07-11309 Chapter 11 Petition filed November 20, 2007 See http://bankrupt.com/misc/flmb07-11309.pdf In Re M.C.G. I, L.L.C. Bankr. N.D. Ill. Case No. 07-21866 Chapter 11 Petition filed November 20, 2007 See http://bankrupt.com/misc/ilnb07-21866.pdf In Re Dovetail, Inc. Bankr. N.D. Ill. Case No. 07-72820 Chapter 11 Petition filed November 20, 2007 See http://bankrupt.com/misc/ilnb07-72820.pdf In Re Tile Solutions Corp. Bankr. D. N.J. Case No. 07-27112 Chapter 11 Petition filed November 20, 2007 See http://bankrupt.com/misc/njb07-27112.pdf In Re Fernali Ferrice Bankr. N.D. Ill. Case No. 07-21850 Chapter 11 Petition filed November 20, 2007 Filed as Pro Se In Re Gluth Construction Co., Inc. Bankr. W.D. Va. Case No. 07-71851 Chapter 11 Petition filed November 20, 2007 See http://bankrupt.com/misc/vawb07-71851.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, Joseph Martirez, 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 ***