/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071123.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, November 23, 2007, Vol. 11, No. 278 Headlines AEI: $685 Million PSEG Deal Cues Fitch to Affirm 'BB' Ratings AFFILIATED COMPUTER: Replacement Directors Join Board AMERICAN HOME: Court Approves Amended Terms of AHM Sale Deal AMERICAN HOME: Modified Non-Insider Employee Retention Plan OK'd AMERICAN HOME: Sec. 341(a) Creditors' Meeting to Resume Nov. 30 AMERICAN HOME: Settles Loan Servicing Disputes w/ Credit Suisse ATHLETES WORLD: Forzani Group Discloses Acquisition Plans BADRAN STORES: Case Summary & 20 Largest Unsecured Creditors BANYAN CORP: Sept. 30 Balance Sheet Upside-Down by $420,448 BASIS YIELD: Joint Provisional Liquidators Seek Summary Judgment BIG A DRUG: Case Summary & 19 Largest Unsecured Creditors BOMBAY COMPANY: Court OKs Sale of Corporate Headquarters for $16MM BOSTON SCIENTIFIC: Amends Pact to Settle Product Claims BOYD GAMING: Fitch Affirms 'BB-' Issuer Default Rating BROTMAN MEDICAL: Section 341(a) Meeting Scheduled for January 8 CABLE & CO: Continues Efforts to Meet AMEX Requirements CANADA 3000: PwC Holds $758,000 Ready for Distribution CARDTREND INTERNATIONAL: Posts $1,049,738 Net Loss in Third Qtr. CATHOLIC CHURCH: Davenport Unable to File Plan by Nov. 16 Deadline CATHOLIC CHURCH: Dismissal Order Issued in San Diego's Ch. 11 Case CHAMPION PARTS: Taps McDermott Will as Special Counsel CHAMPION PARTS: U.S. Trustee Unable to Appoint Creditors Committee CITIGROUP COMMERCIAL: Fitch Holds 'BB+' Ratings on Two Classes CITIGROUP COMMERCIAL: Fitch Holds Low-B Ratings on Six Classes COINMACH SERVICE: S&P Retains Negative Watch on Completed Deal CONCHITA SUPERMARKET: Case Summary & 5 Largest Unsecured Creditors CONSTAR INT'L: Moody's Revises Outlook to Negative from Stable DELTA FUNDING: Fitch Cuts Rating on Class B Trust to B from BB- DONALD COON: Case Summary & 16 Largest Unsecured Creditors DUNMORE HOMES: Gets Interim Nod for Pachulski Stang as Counsel DUNMORE HOMES: Has Until Dec. 20 to File Schedules & Statements ENVIRONMENTAL TECTONICS: Restatement Cues Default on PNC Bank Pact EXIDE TECHNOLOGIES: Improved Financials Cue S&P to Lift Rating FIELDSTONE MORTGAGE: Fitch Cuts Rating on $7.5MM Trust to BB FOOT LOCKER: Posts $33 Mil. Net Loss in Quarter ended Sept. 30 FORD MOTOR: Al Ver to Retire as ACH CEO, COO and Vice President FORD MOTOR: Russian Plant Workers Resume Strike GARY KIMBERLIN: Case Summary & 20 Largest Unsecured Creditors GENERAL GROWTH: Fitch Affirms 'BB' Issuer Default Rating GENERAL MOTORS: UAW Members Wary on GM's Exposure to ResCap Woes GEORGE PHILLIPS: Case Summary & Two Largest Unsecured Creditors GHI AUTOMOTIVE: Case Summary & 18 Largest Unsecured Creditors HARBORVIEW MORTGAGE: Fitch Holds 'BB' Rating on Class B-11 Loan HOMETOWN COMMERCIAL: Fitch Holds 'B-' Rating on $559,000 Certs. IKON OFFICE: $500MM Stock Repurchase Cues Moody's Rating Review IKON OFFICE: $500 Mil. Stock Purchase Cues S&P's Negative Watch INDYMAC ABS: Fitch Holds Junk Ratings on Three Cert. Classes INNOVA ROBOTICS: Sept. 30 Balance Sheet Upside-Down by $4.06 Mil. INROB TECH: Sept. 30 Balance Sheet Upside-Down by $896,291 INTERACT HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $2.5 Mil. JACK TAYLOR: Voluntary Chapter 11 Case Summary JUDY ROSS: Case Summary & Eight Largest Unsecured Creditors JULIA JACKSON: Case Summary & Nine Largest Unsecured Creditors LARRY MORINIA: Case Summary & Eight Largest Unsecured Creditors LB-UBS COMMERCIAL: Stable Performance Cues Fitch to Hold Ratings LEVITT AND SONS: Can Hire Kurtzman Carson as Claims Agent LEVITT AND SONS: Court Okays Berger Singerman as Bankr. Counsel LEVITT AND SONS: Wants to Abandon Bank Collateral and Properties LEVITZ FURNITURE: U.S. Trustee Balks at Jones Day Retention LEVITZ FURNITURE: U.S. Trustee Forms Seven-Member Creditors Panel LEVITZ FURNITURE: Wants to Hire FTI Consulting as Crisis Manager LIFECARE HOLDINGS: Posts $13MM Net Loss in Qtr. ended Sept. 30 LONG BEACH: Fitch Downgrades Ratings on $695.4 Million Certs. LONG BEACH: Fitch Junks Ratings on Two Certificate Classes MAAX HOLDINGS: Adopts Management Retention Plan MARATHON CORP: Case Summary & Six Largest Unsecured Creditors MARCELLA MCCARTHY: Case Summary & 11 Largest Unsecured Creditors MBS-LODGE: Case Summary & 20 Largest Unsecured Creditors MCCLATCHY CO: Low Revenue Cues S&P to Cut Rating to BB from BB+ MORGAN STANLEY: Limited Pay Down Cues Fitch to Affirm Ratings MOVIE GALLERY: Judge Tice Approves Store Closing Sales Procedures NEPHROS INC: Appoints James S. Scibetta as Director NEUROBIOLOGICAL TECH: Regains Nasdaq Listing Compliance NEW CENTURY: Unlikely to File September 30 Quarterly Report NY RACING: Amended Ch. 11 Plan to Pay Unsecured Creditors in Full NY RACING: Plainfield's Motion to Terminate Excl. Periods Denied OLEN CRAWFORD: Case Summary & Six Largest Unsecured Creditors OSCAR ROJAS: Case Summary & Seven Largest Unsecured Creditors PATHEON INC: Wesley Wheeler Appointed as Chief Executive Officer PATIENT PORTAL: Posts $675,992 Net Loss in 3rd Qtr. Ended Sept. 30 PETRO ACQUISITIONS: Files for Chapter 11 in Ohio PETRO ACQUISITIONS: Voluntary Chapter 11 Case Summary POPE & TALBOT: Delays Filing of September 30 Form 10-Q POPE & TALBOT: CCAA Proceedings Transferred to British Columbia POPULAR ABS: Fitch Affirms 'BB-' Rating on $2.2 Million Certs. PRUDENTIAL'S ROCK: Fitch Affirms 'B-' Rating on $4.5MM Certs. QUEBECOR WORLD: Market Status Cues Refinancing Plan Withdrawal RELIANT ENERGY: To Pay $10 Million to Equistar Under Agreement RELIANT PHARMA: Agrees to Sell Assets to GSK for $1.65 Bil. Cash RESIDENTIAL ASSET: Fitch Cuts Ratings on $13 Mil. Certificates RESIDENTIAL ASSET: Fitch Holds 'BB+' Ratings on Two Classes RESIDENTIAL ASSET: Fitch Lowers Ratings on Two Classes to BB RESIDENTIAL CAPITAL: Mulls Merger with U.K. Lender Northern Rock RICHARD ZUCARO: Case Summary & 19 Largest Unsecured Creditors ROBERTO MARTINS: Case Summary & 20 Largest Unsecured Creditors SAKS INC: Earns $21.6 Million in Third Quarter Ended Nov. 3 SAKS INC: Settles IDC Lawsuit on Improper Chargebacks SALANDER-O'REILLY: Gets Interim Nod for Triax as Contractor SCENIC HOLLOW: Case Summary & 10 Largest Unsecured Creditors SCOTTS MIRACLE: Moody's Withdraws Ratings for Business Reasons ST ALBANS: Case Summary & 12 Largest Unsecured Creditors TARRAGON CORP: Must File June & Sept. Form 10-Q's by December 31 THINKPATH INC: Sept. 30 Balance Sheet Up-Side-Down by $2.3 Mil. TRICADIA CDO: S&P Places 'BB' Rating Under Negative CreditWatch UNITED RENTALS: Files Lawsuit Against Cerberus Capital VALLEY HEALTH: Airs Cost-Cutting Plans; Intends to Cut Jobs by 2% VIRGIN MOBILE: S&P Assigns 'B-' Corporate Credit Rating WASTE TO CHARITY: Voluntary Chapter 11 Case Summary WASHINGTON MUTUAL: Moody's Downgrades Ratings on 34 Tranches WATERFORD EQUITIES: Connecticut Wants Chapter 11 Trustee Appointed WENTWORTH ENERGY: Posts $2 Million Net Loss in Third Quarter WESTLAKE DEVELOPMENT.: Voluntary Chapter 11 Case Summary WHITING PETROLEUM: Registers Initial Public Offer of Units WHITNEY SMITH: Case Summary & Largest Unsecured Creditor WHOLE FOODS: Board Increases January 22 Dividend by 11% WHOLE FOODS: Earns $34 Million in Quarter ended September 30 * Continued Credit Deterioration Leads Fitch to Review CDO's * Fitch Downgrades Ratings on $29.8 Bil. of Structured Finance CDO * Fitch Says US CMBS Deliquencies Fall to 0.28% in October 2007 * Moody's Takes Rating Actions on Various Classes * S&P Lowers Ratings on 136 Tranches from 28 U.S. Hybrid CDO * BOOK REVIEW: Building American Cities: The Urban Real Estate Game ********* AEI: $685 Million PSEG Deal Cues Fitch to Affirm 'BB' Ratings ------------------------------------------------------------- Fitch Ratings has affirmed AEI's (formerly Ashmore Energy International) ratings as: -- Issuer Default Rating at 'BB'; -- $1 billion term loan 'BB'; -- $500 million revolving credit facility 'BB'. The rating affirmation follows the announcement of AEI's agreement to acquire a 50% indirect interest in Chilquinta Energia S.A. and a 37.9% indirect interest in Luz del Sur S.A. and related companies from Public Service Enterprise Group for $685 million as well as various other recently completed and pending acquisitions and investments. The Rating Outlook is Stable. The affirmation incorporates the leveraging impact the acquisition of Chilquinta and Luz del Sur and the other investments will have on AEI. These transactions are expected to be funded with a combination of balance sheet cash, debt and equity which will increase leverage both on a consolidated, and parent-only basis. Additional debt funded transactions or the absence of expected equity funding may pressure credit quality over the medium term. Other recently completed acquisitions include acquisitions of Calidda, Del Sur as well as the purchase of incremental ownership interests in existing investments including San Felipe (formerly Smith Enron Cogeneration), Puerto Quetzal Power, and Corinto. The combination of these transactions is expected to increase proforma (LTM June 30, 2007) total debt to EBITDA to approximately 3.5 times from 3x and net debt to EBITDA to 2.6x from 1.6x assuming an equity offering of $330 million. Consolidated debt and EBITDA will increase to $4.8 billion and $1.4 billion, respectively, on a proforma (LTM June 30, 2007) basis following the closing of these transactions with $2.8 billion of the debt at the project level. Holding company debt (including the PIK sub- debt) is expected to increase to approximately $2 billion from $1.3 billion. Cash to AEI from its subsidiaries was approximately $430 million in 2006 and was approximately $550 million (inclusive of the sale proceeds of BLM) through the end of 3Q07. Parent-only leverage (including PIK sub-debt) is expected to increase to 3.6x from 2.7x in the lower end of the rating category. Parent-level free cash flow is sufficient to service debt. Parent company debt service is expected to be approximately $125 million. Fitch expects that the company will continue to maintain sufficient cash on the balance sheet to provide adequate liquidity in the business. Strategically, these investments are positive as they further geographically diversify AEI. In particular, Chilquinta and Luz del Sur represent a significant presence in their respective countries with long-term concession contracts, low- to moderately- low leverage and ample liquidity. This purchase marks AEI's entry into Chile and strengthening of their presence in Peru following the acquisition of Calidda, and further supports the company's strategy of diversifying into stable countries with reasonable regulatory frameworks. Chilquinta is one of the largest power distribution companies in Chile serving over 541,000 customers in region V including the city of Valparaiso. Luz del Sur is the largest power distribution company, by sales, in Peru serving over 800,000 customers in the area of southern Lima. Luz del Sur is a solid asset with low leverage and stable cash flow. The ratings also reflect AEI's portfolio of energy companies focused in five lines of business including: power distribution, power generation, natural gas transportation and services, natural gas distribution, and retail fuel. AEI's assets consist of 34 energy companies in which AEI has direct or indirect ownership interest. All of the assets are operating and generally performing well. AEI's operating assets have a relatively stable base of revenues and cash flows as more than 90% of its revenues are either from contracted Power Purchase Agreements or from regulated energy businesses. Contract and regulated revenues and cash flows tend to be more stable and have lower business risk. Contracted revenues from long-term PPAs are primarily with government-owned off-takers. In addition, AEI has an experienced operating management team. Cash flows are geographically concentrated in Brazil (rated 'BB+' by Fitch) and more generally in Latin America. From a portfolio standpoint, as of fiscal 2006, 90% of consolidated cash flows can be attributed to companies located in Latin America and 73% of consolidated cash flows are derived from Brazilian assets. Cash flow is concentrated in non-investment-grade countries and is generally rated in the 'BB+/BB-' range. Additionally, AEI's cash flow is concentrated in four key assets: Elektro (Brazil), Cuiaba (Brazil), Promigas (Colombia), and Trakya (Turkey). Forty percent of 2006 EBITDA is attributed to power distribution, 19% to power generation, 30% to natural gas transportation and services, 4% to natural gas distribution, and 7% to retail fuel. The largest cash flow contributor is expected to be Brazilian power distribution company, Elektro, which at the end of fiscal 2006 represented approximately 37% of consolidated proforma EBITDA and approximately 66% of AEI's dividend cash flow. Elektro is a very solid, well-managed, moderately low risk electric distribution company serving almost 2 million customers in the State of Sao Paulo. Elektro's credit metrics are strong with low leverage of total debt to EBITDA of 0.9 times for fiscal year-end 2006. AEI owns and operates a portfolio of energy infrastructure assets in power generation, power distribution, natural gas transportation and services, natural gas distribution and retail fuel. AEI's portfolio, directly or indirectly, consists of 34 companies in 19 countries, most of which are located in Latin America. The company's largest asset is Brazilian electric distribution company, Elektro, which represents approximately 37% of consolidated proforma EBITDA, and 66% of fiscal 2006 consolidated cash flow to parent company AEI. AFFILIATED COMPUTER: Replacement Directors Join Board ----------------------------------------------------- The independent directors of Affiliated Computer Services Inc.'s board of directors have completed their review of the replacement directors proposed by Darwin Deason, chairman of the board. No shareholders suggested any alternative nominees to those nominated by Mr. Deason. "We have determined that we have no reason to conclude that the nominees are not independent of Mr. Deason and the company's management," Dennis McCuistion said. Effective Nov. 21, 2007, Messrs. Robert B. Holland, III, J. Livingston Kosberg, Dennis McCuistion, Joseph P. O'Neill and Frank A. Rossi resigned from the company's board. The remaining directors have appointed Frank Varasano, Ted B. Miller, Jr., Richard W. Spears, and Kurt R. Krauss to fill the resulting vacancies. Mr. John H. Rexford also resigned from the company's board effective Nov. 21, 2007, leaving the board to consist of four independent directors and two management directors. Neither Mr. Deason nor any member of the company's management or board has any prior relationship with any of the newly elected independent directors. Frank Varasano Mr. Varasano, 61, served as executive vice president of Oracle Corporation from 1999 to 2001, where he was responsible for marketing, sales and consulting to Oracle's 400 largest product producing clients and was a member of the executive committee. Prior to that, Mr. Varasano held several senior management positions during his 26-year tenure at Booz Allen Hamilton. As a senior vice president, he led Booz Allen Hamilton's engineering and manufacturing practice, New York office and United States regional profit center. He also served on the firm's board of directors and executive committee. From 2005 to 2006, Mr. Varasano served as a director of Loudeye Corporation, serving on the compensation committee and the special committee that led the analysis and review of the sale of Loudeye to Nokia Corp. Mr. Varasano holds a Masters in Business Administration from Harvard Business School and a Bachelor of Science Degree from the United States Naval Academy. He also served as an officer aboard the USS Patrick Henry, a nuclear submarine. Ted B. Miller, Jr. From 1996 to 2001, Mr. Miller, 56, was the chief executive officer of Crown Castle International Corp., a wireless communications company he founded in 1995 which grew from start up to an $11.1 billion market capitalization. He was chairman of the Crown Castle board of directors from 1999 to 2002. Prior to founding Crown Castle, Mr. Miller was involved in the commercial real estate development, management and brokerage business and various investments including the media business as an original licensee of Blockbuster Video. Mr. Miller is currently managing director of Imperium International LLC and president of 4M Investments LLC, both international private investment companies. He is currently the chairman and majority shareholder of M7 Aerospace LP, an internationally diversified aerospace service, manufacturing and technology company. He is also vice chairman and majority shareholder of Intercomp Technologies LLC, a payroll outsourcing company with operations in Europe. Mr. Miller received a Juris Doctor from Louisiana State University and a Bachelor of Business Administration from the University of Texas. Richard W. Spears From 1980 to 1992, Mr. Spears, 71, was senior vice president, law and human resources, of Ashland Oil Inc., then a Fortune 100 company. From 1992 to 2003, he was a co-owner and director of Kentucky Bank and Trust Co. From 1992 to 1994, Mr. Spears served as of counsel to Greenebaum, Doll & McDonald PLLC, a corporate law firm with offices in Kentucky, Ohio, Tennessee and the District of Columbia. Currently, Mr. Spears is President and a director of Ashmark, Inc., a private retail venture which he co-founded. Mr. Spears received a Bachelor of Laws from the University of Kentucky College of Law and a Bachelor of Arts in Economics from Georgetown College. Kurt R. Krauss From 1978 to 1992, Mr. Krauss, 58, was a partner with Booz Allen Hamilton. He also served on the firm's board of directors and executive committee. From 1992 to 1997, Mr. Krauss was managing partner of the Mead Group, a management consulting firm which he founded with offices in Greenwich, Connecticut, and London, England. From 1997 to 2000, he served as chief financial officer of Burson- Marsteller, a public relations and public affairs firm. Currently, Mr. Krauss is the managing member of Sachem Investments LLC, an investment company he founded in 2001. Mr. Krauss currently serves on the board of directors of Prescient Medical Inc., for which he is the audit committee chairman, and has served on the boards of directors of Zila, Inc., Loudeye Corporation and several other not-for-profit organizations. Mr. Krauss received a Master of Science in Industrial Administration from Carnegie-Mellon University and a Bachelor of Arts in Mathematics from Heidelberg College. About Affiliated Computer Headquartered in Dallas, Affiliated Computer Services Inc. (NYSE: ACS) -- http://www.AffiliatedComputer-inc.com/ -- provides business process outsourcing and information technology solutions to world-class commercial and government clients. The company has more than 58,000 employees supporting client operations in nearly 100 countries. The company has global operations in Brazil, China, Dominican Republic, India, Guatemala, Ireland, Philippines, Poland, and Singapore. * * * As reported in the Troubled Company Reporter on Nov 6, 2007, Standard & Poor's Ratings Services kept its 'BB' corporate credit and senior secured ratings on Dallas-based Affiliated Computer Services Inc. on CreditWatch with negative implications, where they were placed on March 20, 2007. AMERICAN HOME: Court Approves Amended Terms of AHM Sale Deal ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has approved the amended terms of a purchase agreement between American Home Mortgage Investment Corp., its debtor-affiliates, and Wilbur Ross' AH Mortgage Acquisition Co. Inc. A copy of the Amended APA is available for free at: http://bankrupt.com/misc/AHM_2ndAmended_APA.pdf As reported in the Troubled Company Reporter on Nov. 13, 2007, the amendment was prompted by DB Structured Products Inc.'s intention to appeal before the U.S. District Court for the District of Delaware the order of the Bankruptcy Court approving the sale of the Debtors' loan servicing business to AHM Acquisition, free and clear of liens, claims and interests. The Debtors are expected to sell their loan servicing business to AHM Acquisition Co. Inc. for approximately $500,000,000, under a two-stage closing process. Included in the approved sale are certain of the Debtors' rights and obligations arising out of a master mortgage loan purchase and servicing agreement between the Debtors and DBSP. DB Structured Products asked the Bankruptcy Court to issue a limited stay of the sale order solely insofar as it would authorize the assignment of, and otherwise impair DBSP's rights under, the MLPSA, pending an expedited appeal that it intends to take to the District Court. Accordingly, the Debtors asked the Court to deny DBSP's motion given that they have recently agreed to a modification of the purchase agreement as it relates to the sale and transfer of DBSP servicing rights. Under the amended purchase agreement, DBSP's servicing rights are placed on a separate schedule, "Disputed Servicing Agreements." Pending a decision on DBSP's appeal, the mortgage loans under the MLPSA will continue to be serviced by the Debtors through the later of the final closing and Sept. 30, 2008, and the portion of the total purchase price under the purchase agreement relating to the unpaid principal balance of the loans serviced under the MLPSA will be escrowed, subject to the final resolution of the appeal. On Nov. 6, 2007, DBSP filed with the Court a notice stating that it is withdrawing the stay motion. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 16, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Modified Non-Insider Employee Retention Plan OK'd ---------------------------------------------------------------- At American Home Mortgage Investment Corp. and its debtor- affiliates' behest, the U.S. Bankruptcy Court for the District of Delaware authorized, but not required, the Debtors to modify their non-insider employee retention plan to: -- deem the assignments of the transferring employees complete; -- pay the employees' deferred payments and final payments upon the initial closing of sale of the Debtors' loan servicing business; and -- return the employees' salaries to the levels in existence prior to the implementation of the Plan. On October 30, 2007, the Court approved the sale of the Debtors' servicing business to AH Mortgage Acquisition Co. Inc. Under the terms of the Asset Purchase Agreement, the Sale will close in two steps -- the Initial Close, and the Final Close. Between the Initial Close and the Final Close, the Debtors will operate the Servicing Business. In August 2007, the Court approved a Non-Insider Employee Retention Plan proposed by the Debtors. However, at the time the Plan was approved, it was not contemplated that the sale of the Servicing Business would be structured as a two-step process with an Interim and Final Close. Rather, it was envisioned that at the time the Debtors received the proceeds from the sale of the Servicing Business, the employees either would be terminated or transferred to the purchaser and the employees would be paid their Deferred Payments and Final Payments. The Debtors initiated the Non-Insider Employee Retention Plan in order to successfully maintain the Debtors' Servicing Business throughout the sale process. With the sale approved, the Debtors sought to modify the Non- Insider Employee Retention Plan to deem the assignments of the Transferring Employees complete and to pay them their Deferred Payments and Final Payments upon the Initial Close. Upon payment of the Deferred Payments and Final Payment, the Non- Insider Employee Retention Plan with respect to the Transferring Employees will terminate and the salaries of the Transferring Employees and will return to the level that would have been in place for the Non-Insider Employee Retention Plan with whatever amendments that may be implemented by the Purchaser after the Initial Close. The Debtors proposed to pay the Employees their Deferred Payments and Final Payments and return their salaries to the level that would have been in place since their assignment would be complete upon the initial close. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 16, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Sec. 341(a) Creditors' Meeting to Resume Nov. 30 --------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will resume the meeting of American Home Mortgage Investment Corp. and its debtor-affiliates' creditors on Nov. 30, 2007, at 10:00 a.m. The meeting will be held at Room 2112, J. Caleb Boggs Federal Building, 844 King Street, in Wilmington, Delaware. The first meeting was initially convened last Sept. 18, 2007. This meeting of creditors, required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases, offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. All creditors are invited, but not required, to attend. Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Issue No. 16, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Settles Loan Servicing Disputes w/ Credit Suisse --------------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor- affiliates obtained the U.S. Bankruptcy Court for the District of Delaware's approval of a settlement agreement that resolves the adversary proceeding under which an affiliate of Credit Suisse First Boston asked the Court to compel the Debtors to remit all mortgage payments and turnover servicing rights with respect to loans CSFB purchased from the Debtors. Pursuant to a Master Repurchase Agreement, dated as of September 13, 2006, (i) Credit Suisse First Boston Mortgage Capital LLC purchased mortgage loans from American Home Mortgage Corp., American Home Mortgage Acceptance Inc., American Home Mortgage Servicing Inc., American Home Mortgage Investment Corp., and American Home Mortgage Holdings Inc., and (ii) the Debtors were obligated to repurchase the loans at a later, agreed-upon date. CSFB contracted AHM Servicing to service the loans. CSFB owned loans exceeding $46,000,000 in unpaid principal balance as of the Petition Date. As of November 15, 2007, the Debtors are holding in a segregated account (P&I account) $547,123 in principal and interest payments made by the mortgagors under the Mortgage Repurchase Agreement. The Debtors are also holding in a segregated account (T&I account) $36,938 in tax and insurance payments made by the Mortgagors to the Debtors relating to the Mortgage Loans, whether collected prior to or after the Petition Date. In August 2, 2007, amidst deteriorating financial condition of the Debtors, CSFB notified the Debtors that they have defaulted under the Mortgage Repurchase Agreement and, as a result, their obligations under the Agreement were immediately due and owing. In light of the Debtors' refusal to comply with the terms of the notice, CSFB commenced a suit in the Debtors' Chapter 11 cases, asking the Court to compel the Debtors to: -- remit to CSFB all amounts received on mortgage loans owned by CSFB and remit all those collections to an account designated by CSFB and segregate funds; -- immediately transfer servicing rights to the successor servicer appointed by CSFB; and -- immediately transfer to CSFB the mortgage files relating to any purchased mortgage loans in the Debtors' possession or control, as well as all records, files and all other documents held by each Debtor relating to the purchase mortgaged loans. The Debtors and certain CSFB affiliates are parties to other agreements: -- A Master Repurchase Agreement, dated as of December 2, 2003 (the Securities Repurchase Agreement), between Credit Suisse Securities (USA) LLC, formerly known as Credit Suisse First Boston LLC, and AHM Investment. As of the Petition Date, AHM Investment owed CS Securities about $1,600,000 on account of its repurchase obligations under the Agreement, and CS Securities is holding about $1,400,000 in cash collateral to secure AHM Investment's repurchase obligations. -- A Servicing Agreement dated as of October 31, 2005, among Wells Fargo Bank, N.A., as Master Servicer, Deutsche Bank National Trust Company, as Trustee, DLJ Mortgage Capital, Inc., as Seller, and AHM Servicing, as Servicer. -- An Amended and Restated Seller's Purchase, Warranties and Interim Servicing Agreement dated as of August 1, 2006, among DLJ Mortgage Capital, American Home Mortgage Corp. and AHM Servicing. AHM Corp. and AHM Servicing owed DLJ an unliquidated amount under the DLJ Purchase Agreement on account of "Early Payment Default" claims which could be in the amount of at least $2,800,000. -- A Master Securities Forward Transaction Agreement (the TBA Agreement), dated September 18, 2006, between CS Securities and AHM Corp. AHM Corp. owed CS Securities approximately $837,656 under the TBA Agreement as of the Petition Date. The Debtors and CSFB have reached Global Settlement Agreement to compromise and settle their respective rights and obligations under the Agreements and the Adversary Proceeding. The parties agree that: a. Transfer of Servicing. On a date that is designated by CS Mortgage, but no later than April 30, 2008, the Debtors will transfer to CS Mortgage or its designee, all right, title, and interest in the servicing of the mortgage loans under the Mortgage Repurchase Agreement. b. Servicing Transfer Cooperation. The Debtors, CS Mortgage and its designee, if any, will cooperate in connection with the transfer of the Servicing Rights and will use good-faith efforts to cause the transfer in an efficient non-disruptive manner. c. Mortgage Files. The Debtors will use good-faith efforts to ensure any and all instruments, agreements and other books, records, and reports and data with respect to Mortgage Loans are intact. d. Construction Loan Information. The Debtors will provide CS Mortgage all information and documents within their possession concerning the three Mortgage Loans that are construction loans. e. Sale of the Mortgage Loans. CS Mortgage, in its sole discretion, may market and offer the Mortgage Loans for sale at any time pursuant to one or more auctions for the sale or sales of each of the Mortgage Loans and the servicing rights related thereto. f. Sale Cooperation. The Debtors will cooperate with CS Mortgage or its designee in connection with CS Mortgage's efforts to sell the Mortgage Loans. g. Offering List. Not less than three business days prior to the commencement of the solicitation for participants in the Auction(s), and subject to an appropriate form of confidentiality agreement to be executed between the Debtors and CS Mortgage, CS Mortgage will provide the Debtors with a list of individuals or entities to which CS Mortgage will market the Mortgage Loans. CS Mortgage, in its sole discretion, will determine the qualified bidders. h. Participation. CS Mortgage will have the right to participate in the Auction(s). i. Excess Proceeds. In the event CS Mortgage sells the Mortgage Loans following the Auction(s) for an amount greater than the amounts advanced by CS Mortgage under the Mortgage Repurchase Agreement, CS Mortgage will turn over to the Debtors any proceeds received in excess of the Advance Amount as soon as practicable. j. Construction Loan Advances. The Advance Amount will include any advances made by CS Mortgage in connection with the Construction Loans, including, without limitation, advances made following the date of the Global Settlement Agreement. k. Deficiency Claim; Rights to Object. If CS Mortgage sells the Mortgage Loans for an amount that is in the aggregate less than the Advance Amount, CS Mortgage will have a general unsecured claim against the Debtors in an amount equal to the Advance Amount minus the proceeds received from the sale(s) of the Mortgage Loans provided, however, the Debtors and the Official Committee of Unsecured Creditors may object to the allowance of the Deficiency Claim only on these bases: (1) CS Mortgage's calculation of the Deficiency Claim was incorrect; or (2) the sale(s) of the Mortgage Loans was not done in a commercially reasonable manner under applicable state and federal law. l. Attorneys' Fees. CSFB will have an allowed general unsecured claim for reasonable attorney's fees and expenses. CS Mortgage will provide a summary fee statement of the fees and expenses which will be reviewed by the Debtors and the Official Committee of Unsecured Creditors may review for reasonableness. m. P&I Account; T&1 Account. The Debtors will transfer to CS Mortgage or its designee, by wire transfer, all amounts in the T&I Account less any advances appropriately made by the Debtors. On a monthly basis thereafter, the Debtors will transfer to CS Mortgage or its designee all amounts in the P&I Account. Basing from the payment histories for the Mortgage Loans submitted by the Debtors, CS Mortgage will advise the Debtors if any payments posted or that should have been posted to the system were not included in the amounts transferred by the Debtors from the T&I Account and the P&I Account. The Debtors will pay for any deficiencies. n. Set-off of Securities Cash Collateral. CS Securities will be authorized to set off the Securities Cash Collateral against its claims under the Securities Repurchase Agreement. o. Waiver of Deficiency Claim. After set-off of the Securities Cash Collateral, CS Securities will waive any deficiency claim under the Securities Repurchase Agreement. p. Turn Over of Securities. CS Securities will turn over to the Debtors any Securities in CS Securities' possession that were delivered to CS Securities by AHMC under the Securities Repurchase Agreement, consisting of: (i) 026931AH8 AMERICAN 2007-A 1M2 (ii) 026931AJ4 AMERICAN 2007-A 1M3 (iii) 02693lAQ8 AMERICAN 2007-A 2M6 (iv) 026931APO AMERICAN 2007-A 2M5 (v) 026933AG6 AMERICAN 2007-A 4M6 (vi) 026933AEI AMERICAN 2007-A 4M4 (vii) 026933AF8 AMERICAN 2007-A 4M5 q. Principal & Interest. AHM will be authorized to retain any principal and interest collected on account of the Securities after the Petition Date. r. The TBA Agreement. CS Securities will waive the TBA Claim. s. The EPD Claim. DLJ will waive the EPD Claim. t. Release by Debtors. CSFB releases the Debtors from any and all claims and actions arising from or relating to the Agreements. v. Limitation of Releases. The releases will not include or have any effect upon these claims and causes of action: * Claims of Credit Suisse Cayman Islands Branch or AHM Investment, AHM Servicing, AHM Corp., and AHM Acceptance arising from or relating to the the Second Amended Restated Credit Agreement entered into on August 10, 2006, by and between the Debtors and Bank of America, as Administrative Agent, and certain lenders, including Credit Suisse Cayman Islands; * The Debtors' right to assert that the sale(s) of the Mortgage Loans was not conducted in a commercially reasonable manner under applicable state and federal law; * The Debtors' right to assert a claim against CS Mortgage if, after the date the Debtors transfer servicing of the Construction Loans to CS Mortgage, CS Mortgage takes any action or fails to make an advance in accordance with the agreements governing the Construction Loans, which causes damage to the related mortgaged properties and for which a related borrower under a Construction Loan asserts a claim against a Debtor related to the action or failure to advance by CS Mortgage; and * Claims or causes of action of CSFB or the Debtors that arise from or are related to any other contract between CSFB and Debtors. w. The Adversary Proceeding. The Parties agree that the Adversary Proceeding will be dismissed with prejudice. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors has selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 4, 2007. (American Home Bankruptcy News, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ATHLETES WORLD: Forzani Group Discloses Acquisition Plans --------------------------------------------------------- The Forzani Group Ltd. said Wednesday that it proposes to acquire 100% of bankrupt Athletes World Limited. The acquisition of Athletes World, Forzani said, will be financed through existing credit facilities. Forzani said that Athletes World will seek court approval of the transaction later this week. If that approval is granted, it is expected that the transaction will close at the end of November subject to the satisfaction of conditions customary in a transaction of this nature. Following the acquisition, Forzani intends to support the continuation of the restructuring of Athletes World under the Companies' Creditors Arrangement Act. In its most recently csompleted fiscal year, Athletes World generated $186 million in revenues, and currently operates 138 stores. The acquisition of Athletes World represents a great opportunity for Forzani to add another recognized national banner. Forzani management believes that Forzani buying power, operational expertise and experience will provide the necessary platform on which to base Athletes World's long-term profitability upon its emergence from CCAA proceedings. In order to maintain Athletes World's positioning and identity, Forzani anticipates that Athletes World will, as it has with its other banners, maintain dedicated office staff, store employees and operational functions. Once the proposed acquisition is completed, senior management of Forzani will host a conference call to discuss the acquisition and its plans for the Athletes World banner. As reported in the Troubled Company Reporter on Nov. 7, 2007, Athletes World Ltd., Canadian unit of Bata Ltd., filed for protection from its creditors under the Companies' Creditors Arrangement Act with the Ontario Superior Court of Justice on Oct. 30, 2007. The company, which is losing money to competitors and facing thousand of dollars in tax claims, said it hopes to sell off its assets through the bankruptcy process. The company has been in negotiation with Michael Gold relating to the sale of the company's assets and had reached an agreement last May. However, Mr. Gold backed out on the deal on October 29 which led to the company's bankruptcy filing the next day. Athletes World owes about $152 million, about $115 million of which is owed to its parent company, Bata. About The Forzani Group The Forzani Group Ltd. (TSX: FGL) -- http://www.forzanigroup.com/ -- is Canada's largest national retailer of sporting goods, offering a comprehensive assortment of brand-name and private- brand products, operating stores from coast to coast, under corporate banners: Sport Chek, Coast Mountain Sports, Sport Mart, National Sports and Hockey Experts. The company also retails on- line at -- www.sportmart.ca -- and provides a content rich sporting goods information site at -- www.sportchek.ca -- The Forzani Group is also a franchisor under the banners: Sports Experts, Intersport, Econosports, Atmosphere, Tech Shop, Pegasus, The Fitness Source and Nevada Bob's Golf. About Athletes World Headquartered in Ontario, Athletes World Ltd. is a shoe retailer with over 100 stores in Canada. It is the only remaining Canadian retailer unit of Bata Ltd., -- http://www.bata.com/-- a privately owned global shoe manufacturer and retailer. Bata is led by a third generation of the Bata family. With operations in 68 countries, Bata is organized into four business units. Bata Canada, based in Toronto, serves the Canadian market with 250 stores. Based in Paris, Bata Europe serves the European market with 500 stores. With supervision located in Singapore, Bata International has 3,000 stores to serve markets in Africa, the Pacific, and Asia, Finally, Bata Latin America, operating out of Mexico City, sells footwear throughout Latin America. Bata owns more than 4,700 retail stores and 46 production facilities. Total employment for the company exceeds 50,000. BADRAN STORES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Badran Stores Corp. Calle Atocha #24 Ponce, PR 00730 Bankruptcy Case No.: 07-06728 Chapter 11 Petition Date: November 13, 2007 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Madeline Soto Pacheco, Esq. Lube & Soto Law Offices, P.S.C. 702 Calle Union Apt G-1 Condominio Unimar San Juan, pr 00907-4202 Tel: (787) 722-0909 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 ------ --------------- ------------ Rubio Imports, Inc. Trade debt $107,591 P.O. Box 3933 Aguadilla, PR 00605 Flamingo, Inc. Distribuidora Trade debt $63,288 P.O. Box 9066537 San Juan, PR 00906 Banco Santander Puerto Rico Trade debt $45,000 P.O. Box 362589 San Juan, PR 00936-2589 Fun Tech Imports, Inc. Trade debt $39,160 Royal Manufacturing Inc. Trade debt $38,462 Linen Universe Trade debt $36,360 Golden Sheets Factory, Inc. Trade debt $29,000 Nucci International Corp. Trade debt $25,976 Crest Home Design Trade debt $25,116 Goldenvale, Inc. Trade debt $24,434 Tomas R. Rivera & Hijo Trade debt $23,103 Vicente, Inc. Rent arrears $23,000 Horizon Int'l. Shipping, Inc. Trade debt $22,451 Gindi Imports, Ltd. Trade debt $19,232 Suarez Sales Inc. Trade debt $17,093 Gold American Art Inc. Trade debt $16,761 Sandra Santiago Rivera, Esq. Civil complaint $16,264 Omega/Nabat Inc. Trade debt $16,000 Better Homes Plastics Corp. Trade debt $15,312 Lati Fashions Int. Inc. Trade debt $11,536 BANYAN CORP: Sept. 30 Balance Sheet Upside-Down by $420,448 ----------------------------------------------------------- Banyan Corp.'s consolidated balance sheet at Sept. 30, 2007, showed $5,127,401 in total assets and $5,547,849 in total liabilities, resulting in a $420,448 total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $2,416,260 in total current assets available to pay $2,901,725 in total current liabilities. The company reported a net loss of $1,232,913 on revenues of $1,168,400 for the third quarter ended Sept. 30, 2007, compared with a net loss of $565,527 on revenues of $1,432,204 in the same period last year. A decrease in revenue from the diagnostic testing business of $281,300 accounted for most of the decrease in revenues. Loss from operations increased to $349,630 in 2007 from income of $217,855 in 2006 as a result of decreased revenue and increases in selling, general and administrative expenses. 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?259e Going Concern Doubt Schwartz Levitsky Feldman LLP, in Toronto, expressed substantial doubt about Banyan Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations, working capital deficiency and net stockholders' deficit. About Banyan Corp. Headquartered in Beverly Hills, California, Banyan Corporation (OTC BB: BANY.OB) operates in two segments of the health care industry: diagnostic imaging and franchising Chiropractic USA chiropractic clinics. All clinics are operated by independent entrepreneurs under the terms of franchise arrangements. BASIS YIELD: Joint Provisional Liquidators Seek Summary Judgment ---------------------------------------------------------------- Hugh Dickson, Stephen John Akers and Paul Andrew Billingham, as joint provisional liquidators and authorized foreign representatives of Basis Yield Alpha Fund (Master), ask the U.S. Bankruptcy Court for the Southern District of New York to issue summary judgment recognizing Basis Yield's insolvency proceeding pending before the Grand Court of the Cayman Islands pursuant to Chapter 15 of the U.S. Bankruptcy Code. Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, tells the U.S. Court that not one party-in-interest has opposed recognition or challenged the Foreign Representatives' evidence that Basis Yield's "center of main interest" is located in the Cayman Islands. Ms. Dine asserts that Basis Yield is entitled to the statutory presumption provided for in the Bankruptcy Code that the Cayman Islands is the Fund's COMI because the Cayman Islands is the location of its registered office. Given this presumption, together with the lack of any factual dispute concerning the evidence already presented to the Court that the Foreign Debtor's COMI is located in the Cayman Islands, Ms. Dine contends that: -- the U.S. Court should not be compelled to expend further judicial resources; and -- the Foreign Representatives should not be required to expend significant amounts of time and money, to the detriment of Basis Yield's estate, producing additional evidence to the U.S. Court. Ms. Dine points out that the sole response filed to the Foreign Representatives' Recognition Motion was a limited objection by Citigroup Global Markets Limited to the proposed form of order granting recognition. The Limited Objection, she notes, only addresses the current form of proposed recognition order and expressly states that CGML "takes no position on whether the Joint Provisional Liquidators . . . have demonstrated the propriety of recognition of [the Cayman Islands Proceeding] as a main or non-main proceeding." The Limited Objection does not preclude a determination by the U.S. Court that the Foreign Representatives are entitled to summary judgment at this time, she says. Basis Yield is the master fund in a master-feeder structure. Basis Yield has one active feeder fund -- Basis Yield Alpha Fund, a registered mutual fund domiciled in the Cayman Islands and regulated by the Cayman Islands Monetary Authority. A further Cayman Islands registered mutual fund, Basis Yield Alpha Fund (US), was established with the intention of becoming Basis Yield's second feeder fund. BYAF(US) was intended to be marketed to U.S. taxable investors. BYAF(US) is currently, and has always been, dormant, however, and holds no shares in Basis Yield. Cayman Island-based Fortis Prime Fund Solutions (Cayman) Limited serves as administrator to Basis Yield and each of its feeder funds. Basis Yield's investment manager is a Cayman Islands company. The Foreign Representatives have petitioned the High Court of Justice, Chancery Division, Companies Court, in England pursuant to Section 426 of the Insolvency Act of 1986, and obtained recognition as joint provisional liquidators from the High Court of Justice. The Supreme Court of New South Wales also has granted the Foreign Representatives' application for orders compelling certain parties to turnover, among other things, documents and funds in their possession. "Third parties, including creditors, trading counterparties, and/or investors of Basis Yield, have appeared in the proceedings pending in the Cayman Islands and Australia; however, no foreign court or party appearing before a foreign court has challenged the basis for the liquidation proceeding in the Cayman Islands," Ms. Dine says. "This remains true today." Basis Yield has already produced sufficient evidence that the Cayman Islands proceeding should be recognized as a Foreign Main proceeding, Ms. Dine tells the Court. Basis Yield is entitled to the statutory presumption set forth in Chapter 15 and therefore, should not be required to produce further evidence of COMI at a full evidentiary hearing, Ms. Dine contends. Ms. Dine points out that Section 1516(c) provides that "[i]n the absence of evidence to the contrary, the debtor's registered office, . . . is presumed to be the center of the debtor's main interests." The Foreign Representatives are entitled to the benefit of the Bankruptcy Code's statutory presumption, Ms. Dine tells the Court. Other bankruptcy courts have made note of the presumption, Ms. Dine notes. In In re Tri-Continental Exch. Ltd., 349 B.R. 627, 635 (Bankr. B.D. Cal. 2006), Ms. Dine says the court held that "[i]n effect, the registered office (or place of incorporation) is evidence that is probative of, and that may in the absence of other evidence be accepted as a proxy for, 'center of main interests.' " Congress expressly chose to incorporate the statutory presumption into the Bankruptcy Code when it enacted Chapter 15 to help foreign debtors preserve time and money for the benefit of their true creditors, Ms. Dine asserts. International law is no different, she adds. "[T]he simple presumption laid down by the Community legislature in favour of the registered office of that company can be rebutted only if factors which are both objective and ascertainable by third parties enable it to be established that an actual situation exists which is different from that which locating it at that registered office is deemed to reflect," Ms. Dine cites Bondi v. Bank of America, NA. (In re Eurofood IFSC Ltd.), 2006 B.C.R. 1-3813, ~ 34 (B.C.J. May 2, 2006). Ms. Dine also argues that the decision in In re Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd.; 374 B.R. 122 (Bankr. S.D.N.Y. 2007), appeal docketed, Case No. 07- 08730-RWS (S.D.N.Y. Oct. 10, 2007), supports application of the presumptions provided for in Chapter 15 in Basis Yield's case. Ms. Dine explains that the Bear Stearns court characterized its decision as refusing to "rubber-stamp" the foreign debtors' request for recognition even in the absence of objections to recognition. The rationale throughout the Bear Stearns decision makes clear that while recognition is not to be "rubber stamped" by the court, a petitioner who has presented the required evidence to establish its prima facie case of recognition, where there is no evidence of a serious dispute about the petitioner's true center of interest, is entitled to the presumption that its registered office is its COMI, Ms. Dine says. Unlike the Bear Stearns' case, no controversy regarding Basis Yield's center of main interest -- serious or otherwise -- exists, and the facts before the U.S. Court are not doubtful, according to Ms. Dine. Key Dates The Foreign Representatives and CGML have stipulated that responses or objections, if any, to the Summary Judgment Motion must be filed and served so as to be received on or before December 6, 2007. Replies, if any, to the Summary Judgment Objections are due December 17. Replies, if any, to CGML's Limited Objection are due December 17. The U.S. Court will convene a hearing on the Summary Judgment Motion and all related responses on January 15, 2008, at 9:45 a.m. (New York time). The hearing may continue as ordered by the court. The U.S. Court will also take up CGML's Limited Objection and all related responses at the January 15 hearing. About Basis Yield Basis Yield Alpha Fund (Master) is a Cayman Islands mutual fund. It operates as a master-feeder structure that allows investors' funds to be channeled through two companies operating in a single jurisdiction to a "master" company operating in the same jurisdiction. These two feeder funds are Basis Yield Alpha Fund (US), a US feeder fund for US taxable investors, and Basis Yield Alpha Fund, a non-US feeder for all other investors. On Aug. 29, 2007, Hugh Dickson, Stephen John Akers, and Paul Andrew Billingham filed a chapter 15 petition for Basis Yield (Bankr. S.D.N.Y. Case No. 07-12762). Karen Dine, Esq. at Pillsbury Winthrop Shaw Pittman LLP represents the petitioners. (Basis Yield Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). BIG A DRUG: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Big A Drug Stores, Inc. aka Drug Emporium aka Drug Barn aka Big A Pharmacy aka Drug Fair aka Camelot Drug 12030 South Garfield Avenue South Gate, CA 90280 Tel: (562) 633-9578 Bankruptcy Case No.: 07-20699 Type of Business: The Debtor operates a chain of 21 retail drug stores, located throughout California. The company's stores offer full service pharmacies and over-the-counter drugs, cigarettes, optical products, liquor, general merchandise, groceries, beer and wine, and beverages. See http://www.bigadrug.com/ Chapter 11 Petition Date: November 19, 2007 Court: Central District Of California (Los Angeles) Judge: Samuel L. Bufford Debtor's Counsel: Steven R. Fox, Esq. 17835 Ventura Boulevard, Suite 306 Encino, CA 91316 Tel: (818) 774-3545 Fax: (818) 774-3707 Debtor's financial condition as of November 18, 2007: Total Assets: $18,788,648 Total Debts: $54,424,646 Debtor's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ PNC Bank Broad Form UUC-1 $31,337,741 c/o Leo Plotkin and interest in 3 Secured: Levy, Small & Lallas leaseholds (Colma, $9,599,145 815 Morage Drive La Palma and Unsecured: Los Angeles, CA 90049 South Gate) $21,738,596 AmerisourceBergen Junior Position $18,000,000 c/o Morton Branzburg UCC-1 in various 260 South Broad Street assets, security Philadelphia, PA 19102 value: $0 Core-Mark International, Inc. $1,604,114 c/o Robert Jackson 4495 Haleyville Street Aurora, CO 80016 Edward Dallal Loan to Business $960,000 c/o Daniel Weintraub Weintraub & Selth 12424 Wilshire Boulevard Suite 1120 Los Angeles, CA 90025 American Greetings Corp. Vendor $215,052 Western Union Vendor $200,000 L&R Distributors, Inc. Vendor $130,536 Southern CA Edison $125,720 Promotions Unlimited Corp. Vendor $98,382 Law Office of Brad S. Sures Newark Landlord $83,725 Lease Arrearages Variety Distributors, Inc. Vendor $81,700 Hallmark Marketing Corp. Vendor $74,250 PG&E $61,498 Quaker Sales & Distribution Vendor $58,431 Gourmet Award Foods Vendor $42,797 Focal Point Investment Banking Vendor $40,000 COTY US LLC Vendor $39,191 Forrester & Vos Co. Vendor $38,481 BIC USA, Inc. Vendor $37,980 Bargain Wholesale Vendor $31,439 BOMBAY COMPANY: Court OKs Sale of Corporate Headquarters for $16MM ------------------------------------------------------------------ The Honorable D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas gave authority to The Bombay Company Inc. and its debtor-affiliates to sell their corporate headquarters and related assets. As reported in the Troubled Company Reporter on Nov. 12, 2007, the Debtors will sell theur corporate headquarters to Goff Capital Inc. for $16.35 million. The property is a seven-story, 122,000-square-foot building and a parking garage at 550 Bailey Avenue in Fort Worth, Texas. In addition, Goff Capital will be assuming the unexpired leases of office spaces at the complex. The Debtor also provided adequate assurance of future performance pursuant to Section 365(f)(2) of the U.S. Bankruptcy Code, and no cure amounts are required to be paid to the office tenants pursuant to Section 365(b)(1). The Court acknowledges that the sale agreement constitutes the highest and best offer for the Bombay office complex and is appropriate to maximize the value to the Debtors' estates. 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. BOSTON SCIENTIFIC: Amends Pact to Settle Product Claims ------------------------------------------------------- Boston Scientific Corporation has reached an amended agreement to settle claims associated with a series of product communications issued by Guidant Corporation in 2005 and 2006. Boston Scientific acquired Guidant last year. This agreement amends a prior agreement Boston Scientific reached in July 2007 to cover additional unanticipated claims. The amended agreement was reached during mediation sessions conducted before U.S. Magistrate Judge Arthur J. Boylan in Minneapolis. Under the terms of the amended agreement, subject to certain conditions, Boston Scientific will pay a total of up to $240 million. The agreement covers 8,550 patient claims, including all of those that have been consolidated in the U.S. District Court for the District of Minnesota in a Multi-District Litigation, well as other filed and unfiled claims throughout United States. As a result of the amendment, proceedings in Minnesota state court have -- like the trials in the bellwether cases in the MDL -- been stayed. Under the terms of the prior agreement, Boston Scientific had agreed to pay $195 million to settle over 4,000 claims in the MDL, well as an undetermined number of additional similar claims. The company stated that the claims covered by the amended agreement constitute substantially all currently asserted claims in the United States arising from the 2005 and 2006 product communications. "We are pleased with this amendment, which is in the best interest of all involved," Jim Tobin, president and chief executive officer of Boston Scientific, said. About Boston Scientific Headquartered in Natick, Massachusetts, Boston Scientific Corporation (NYSE: BSX) -- http://www.bostonscientific.com/-- develops, manufactures and markets medical devices used in a broad range of interventional medical specialties. The company has offices in Argentina, Chile, France, Germany, and Japan, among others. * * * As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its ratings on Boston Scientific Corp. (including the 'BB+' corporate credit rating) and removed them from CreditWatch, where they were placed with negative implications Aug. 3, 2007. The rating outlook is negative. BOYD GAMING: Fitch Affirms 'BB-' Issuer Default Rating ------------------------------------------------------ Fitch Ratings has affirmed Boyd Gaming's credit ratings as: -- Issuer Default Rating at 'BB-'; -- Senior Credit Facility at 'BB'; -- Senior Subordinated Debt at 'B+'. The ratings apply to roughly $2.2 billion of outstanding debt as of September 30, 2007. The Rating Outlook is Stable. The Stable Outlook is based on continued near-term stabilization of the Las Vegas locals market and continued operating pressure at Blue Chip and the Borgata. Beyond the next couple of quarters, operating results should benefit from hotel expansions at the Borgata (opens in mid-2008) and Blue Chip (opens late 2008). The ratings reflect Boyd's sizable and diversified portfolio of quality assets, successful operating history, strong liquidity position and solid credit metrics for the rating category. Boyd's credit benefits from being among the most diverse gaming operators with significant geographic and customer diversification. The company's near-term credit profile and free cash flow generation before dividends should continue to be solid since near-term capital expenditures are limited primarily to its Blue Chip expansion and spending on Echelon (its premier Las Vegas Strip project that is just beginning to ramp up as construction began in June 2007). Other potential projects such as Dania Jai Alai (Florida) and North Las Vegas have been delayed for the time being. However, there is near-term operating pressure at some of the company's properties, which is likely to somewhat offset the limited near-term spending profile. The Four Winds casino (a large tribal casino owned by the Pokagon Band of Potawatomi Indians) recently opened in New Buffalo, Michigan near Boyd's Blue Chip (Michigan City, IN) property and Harrah's is building a new $485 mil riverboat to replace its Horseshoe Hammond facility. Blue Chip's revenues have declined 22%-23% in September and October. The Borgata in Atlantic City continues to face additional competition from Pennsylvania and New York slot additions as well as a partial smoking ban. And Boyd's most important market, the Las Vegas locals market, has had to digest significant new capacity in the last 18 months while economic strains on the local economy have grown. However, the longer-term economic fundamentals remain solid in the LV locals market and the most recent quarter's results showed a return to revenue and EBITDA growth for Boyd's properties in the LV locals market. An additional credit concern includes the potential for increased Echelon development costs. Echelon is a $4.75 billion project that consists of a $3.3 billion wholly owned portion, a $950 million hotel joint venture with Morgans Hotel Group Co., and a $500 million retail joint venture with General Growth Properties Inc. MGM MIRAGE recently increased the cost for its large-scale LV Strip project, CityCenter, to $7.8 billion from $7.4 billion when it reported its Q307 earnings. While project cost creep is a concern, it is mitigated by the fact that Boyd currently has enough liquidity to fund the project with its cash from operations, Boyd's $4 billion bank facility, Borgata's cash distributions, and the $850 million credit facility at Borgata. In addition, the company's project development pipeline is discretionary and well staged. Strong Liquidity Profile As of September 30, Fitch calculates that Boyd had roughly $2.76 billion in liquidity including $2.7 billion available on its credit revolver, $153 million in cash, and offset by an estimated $97 million in cage cash. In addition, Borgata has roughly $200 million available on its $850 million credit facility as it had $656 million of debt outstanding as of September 30th. The company has effectively pushed out debt maturities to 2012 and beyond. Debt outstanding totaled $2.2 billion as of September 30. Spending on Echelon should drive higher debt balances later in 2008, but more significantly in 2009-2010, which is incorporated into current ratings. Current Fitch-adjusted LTM leverage and coverage were roughly 3.9 times -4.0x and 4.0x, respectively as of September 30th. Fitch estimates peak leverage during the Echelon development cycle could approach 6.5x-7.0x depending on the company's other development plans, while Boyd's credit facility allows for increasing leverage up to 7.5x in 2010. Fitch's ratings incorporate only one notch differential on the subordinated debt relative to the IDR because Fitch believes there is significant asset value and over collateralization of debt. Fitch's ratings also incorporate a one notch differential on the bank debt relative to the IDR because of over-collateralization with security in the form of capital stock of Boyd's subsidiaries. That is a weaker form of collateral than the previous credit facility, which had security in all of Boyd's real and personal property including each of its wholly-owned casino properties. Positive rating actions or change in outlook could be triggered by: -- an equity offering or other capital raising activity that reduces the debt-supported funding requirements of Echelon; -- a meaningful re-acceleration of growth in the Las Vegas locals market with a near-term improvement in the local economy; -- better-than-expected operating results at the Borgata and Blue Chip. Negative rating actions or change in outlook could be triggered by: -- a sizable share repurchase program or substantial dividend increase (although this is limited by BYD's credit agreement); -- a significant increase in Echelon development cost; -- worse-than-expected operating pressure at the Borgata and Blue Chip; -- project costs for the development of North Las Vegas or Dania Jai Alai meaningfully beyond Fitch's current expectations. BROTMAN MEDICAL: Section 341(a) Meeting Scheduled for January 8 --------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a hearing of creditors of Brotman Medical Center Inc. on Jan. 8, 2008, at 11:00 a.m., 725 S. Figueroa St., Room 2610 in Los Angeles, California. 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. 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). The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. CABLE & CO: Continues Efforts to Meet AMEX Requirements ------------------------------------------------------- In support of the definitive agreement to acquire INmarketing Group Inc., Cable & Co. Worldwide Inc. planned to submit an application to the American Stock Exchange for membership during the year 2008. Actual timing of the application will depend upon various factors, including the completion of audited financials for 2007 and planned acquisitions. As part of the process to uplist from the pink sheets onto a major exchange, the company is considering submission of an application for uplisting to OTC.BB while it continues efforts to meet qualification requirements for the AMEX. "It is important to us and to our shareholders that Cable begin compliance with AMEX requirements immediately," Gary Stein, president of Cable, stated. "We believe that we will meet most of the listing requirements of the AMEX but for the share price. However, we believe that a case can be presented to waive the $3 threshold given the fact that we believe we meet each of the other criteria." "Cable is current in its SEC filing requirements and our Annual Report on Form 10-K which is due next month will include audited financials and all required disclosure with respect to our acquisitions," Mr. Stein further stated. "While recognizing that Cable meets the minimum profitability and shareholder equity requirements to qualify, we also recognize that uplisting to the American Stock Exchange is not going to happen overnight, as several things need to occur." "Additional news, regarding our subsidiary LifeHealthCare Inc. will be provided in the coming weeks, beginning mid-week next week, and of course we will keep you apprised," Mr. Stein concluded. About Inmarketing Group Inc. Based in New Jersey, InMarketing Group Inc. -- http://www.inmarketinggroup.com/-- is an incentive industry that deploys its exclusive, database-driven, web-enabled application to reward program strategies. INmarketing develops sales incentive programs, a safety incentive program, service award, recognition programs or customer loyalty programs for its customers. About Cable & Co. Headquartered in New York City, Cable & Co. Worldwide Inc. (Other OTC: CCWW.PK) was a manufacturer, designer, importer and wholesaler of men's shoes. In 1997, the company filed for bankruptcy chapter 11 protection in the Southern District of New York. Shortly after its filing, the company ceased all operations. While its bankruptcy filing was active, the company turned over title to all of its assets to its secured lender Heller Financial, Inc. Subsequently, the bankruptcy court closed the company's case on June 3, 1999. On Mar. 28, 2006, the company acquired all the stock of LifeHealth Care Inc., by issuing 600,000,000 shares of the company's common stock. LifeHealth is a startup company focused on dental and healthcare marketplace that has no revenues or tangible assets. Going Concern Doubt Chisholm, Bierwolf & Nilson LLC, in Bountiful, Utah, expressed substantial doubt about Cable & Co. Worldwide Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Sept. 30, 2006. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. CANADA 3000: PwC Holds $758,000 Ready for Distribution ------------------------------------------------------ Six years after Canada 3000 Holidays ceased operating due to bankruptcy, approximately $758,000 being held for refund to ticket holders who did not get their vacations remains unclaimed, according to PricewaterhouseCoopers Inc., the court-appointed judicial trustee for Canada 3000 Holidays. These funds are held in trust by PwC for distribution to legitimate claims holders of Canada 3000 Holidays, also known as C3 Aventure Limitee/C3 Leisure Limited. These funds are not available to claims against other entities that were part of the bankrupt Canada 3000 group. People in the target provinces with legitimate claims for a refund from Canada 3000 Holidays were issued a claim reference code beginning with the letter "V". Refund claims against other Canada 3000 entities were given reference codes beginning with different letters. PwC has successfully processed about 40,000 refunds to customers of the former Canada 3000 Holidays since November 2001, refunding 100 cents on the dollar. Mail and checks to about 2,700 legitimate claimants have been returned as undeliverable. These are people who have likely moved or changed their name and have not been successfully tracked down. As judicial trustee, PwC would like to get these funds into the hands of the people who paid for vacation travel that was never realized. The list of people with unsettled claims is posted to PwC's Web site at -- http://www.pwc.com/brs-canada3000 People on this list are urged to contact the Canada 3000 Holidays Claim Centre toll-free number at: 1 (888) 689-8233. Background: Timeline Nov. 8, 2001 Canada 3000 Airlines grounds its planes. Nov. 9, 2001 Canada 3000 Airlines and related entities cease operations. Nov. 16, 2001 Canada 3000 Holidays files for bankruptcy. Nov. 22, 2001 The British Columbia Court appoints PwC as Judicial Trustee of Canada 3000 Holidays. April 30, 2002 Deadline for Canada 3000 Holiday ticket holders to file a claim for refund. November 2002 The courts authorize payment of $0.40 on the dollar of proven claims against Canada 3000 Holidays. April 6, 2004 The courts authorize a further distribution of $0.10 on the dollar of proven claims. Dec. 9, 2005 The courts authorize PwC, as Judicial Trustee, to pay 100% of all proven claims against Canada 3000 Holidays. To arrange an interview with a PwC spokesperson to discuss this update or the claims process, please contact: Jim Nelson, Esq., at PwC, through telephone numbers (604) 806-7047. About Canada 3000 Holidays C3 Aventure Limitee/C3 Leisure Limited, dba Canada 3000 Holidays, is a tour operator. Its parent company is Canada 3000 Inc., which operates airlines and travel agencies. Other subsidiaries and affiliates of Canada 3000 Inc. are Canada 3000 Airlines Limited/ Lignes Aeriennes Canada 3000 Limitee, Royal Aviation Inc., Holiday Travel Consultants Ltd. (dba Canada 3000 Tickets), Canada 3000 Sales Limited, Canada 3000 Airport Services Limited, and Royal Handling Inc. On Nov. 9, 2001, Canada 3000 Airlines ceased operations. Following this date, Canada 3000 Airlines Limited and several related companies went bankrupt. PricewaterhouseCoopers Inc. was appointed judicial trustee in bankruptcy of the companies. C3 Leisure Limited, Holiday Travel Consultants Ltd. and Canada 3000 Sales Limited, in certain circumstances, were required to put into trust monies received from customers for services not yet provided. CARDTREND INTERNATIONAL: Posts $1,049,738 Net Loss in Third Qtr. ---------------------------------------------------------------- Cardtrend International Inc. reported a net loss of $1,049,738 on net revenue of $447,336 for the third quarter ended Sept. 30, 2007, compared with a net loss of $1,194,154 on net revenue of $12,911 for the same period last year. The improvement of the net revenue was due to the net revenues generated by Cardtrend Systems Sdn. Bhd and Payment Business Solutions Sdn Bhd which the company acquired at the end of October 2006 and early December 2006, respectively. The decrease in net loss was mainly due to decrease in stock based compensation and the gain in derivative liabilities. At Sept. 30, 2007, the company's consolidated balance sheet showed $7,706,614 in total assets, $1,193,144 in total liabilities, and $6,513,470 in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $631,898 in total current assets available to pay $1,150,404 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?259d Going Concern Doubt RBSM LLP, in New York, expressed substantial doubt about Cardtrend International Inc., formerly Asia Payment Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of Dec. 31, 2006, and 2005. The auditing firm reported that the company is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. As of Sept. 30, 2007, the company had a working capital deficit of $518,506 and an accumulated deficit of $13,205,760 since inception of its business. About Cardtrend International Headquartered in Seattle, Cardtrend International Inc. (OTC BB: CDTR) -- http://www.cardtrend.com/-- is the parent company of a group of payment and loyalty-reward related services companies. CATHOLIC CHURCH: Davenport Unable to File Plan by Nov. 16 Deadline ------------------------------------------------------------------ The Diocese of Davenport did not deliver its plan of reorganization to the U.S. Bankruptcy Court for the Southern District of Iowa by the November 16, 2007 deadline. According to reports, the Diocese's spokesman, Deacon David Montgomery, said on November 16 it was his understanding that the plan would be filed later in the day. However, the Diocese issued a press release in the afternoon saying it had agreed with its Official Committee of Unsecured Creditors to delay filing of the plan. "The parties are continuing with mediation to reach a settlement of the bankruptcy case," the release said, reports The Associated Press. The Diocese offered little explanation for missing the deadline, the AP added. As a result, Judge Jackwig notified parties-in-interest that he will convene a hearing on December 5, 2007, at 1:30 p.m. to determine why the Diocese's disclosure statement and plan of reorganization have not been filed. Judge Jackwig added that should the Plan and Disclosure Statement be filed in the interim, the status conference will focus in particular, on setting: (a) deadlines for filing objections to the Plan and Disclosure Statement and for filing ballots on the Plan; and (b) hearing dates related to the Plan and Disclosure Statement. Judge Jackwig directed parties to promptly advise the courtroom deputy of any settlement, scheduling conflict, or change in attorney handling the hearing. The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., of Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. Davenport's exclusive period to file a plan expired on Nov. 16, 2007. (Catholic Church Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Dismissal Order Issued in San Diego's Ch. 11 Case ------------------------------------------------------------------ the Hon. Louise DeCarl Adler of the U.S. Bankruptcy Court for the Southern District of California dismissed The Roman Catholic Bishop of San Diego's reorganization case effective November 1, 2007. The Court discharged (i) the Diocese from any further duties in the case, except to the extent of reserved matters, and (ii) the Official Committee of Unsecured Creditors from any further duties. Judge Adler held that upon dismissal, except as may be provided in the bankruptcy settlement agreement or the Order, none of the Diocese, the Creditors Committee or their members and representatives, will have any liability to any holder of a claim, asserted against the Diocese for any act or omission in connection with the case. However, the Order has no effect on any claims for sexual abuse, if any, that may have arisen during the reorganization case. The U.S. District Court for the Southern District of California and United States Magistrate Judge Leo S. Papas will retain jurisdiction in deciding all disputes regarding settlement terms and the interpretation and meaning of the Settlement Agreement. None of the professionals appointed by the Bankruptcy Court will be required to file any final fee applications, Judge Adler said. The Court directed the Diocese to pay: (a) these unpaid professionals fees and reimburse expenses, including the 20% holdback: Fees and Additional Firm/Professional Expenses Fees ----------------- -------- ---------- Pachulski Stang Ziehl $297,059 - & Jones LLP Deloitte Financial 124,814 $28,987 Advisory Services LLP Morgan, Lewis & 63,394 9,491 Bockius LLP (b) the final fees and costs of all other professionals retained in the Case, including the 20% holdback; and (c) the U.S. Trustee's quarterly fees through October 31, 2007. Morgan Lewis' and Deloitte Financial's rights to seek additional fees, representing fees for travel time, are reserved, Judge Adler held. The fees and expenses incurred by Father Thomas Doyle will be determined later based on certain billing detail from Pachulski Stang. The Order does not determine or affect the request of Pachulski Stang for a fee enhancement, which will be heard on December 6, 2007 at 10:30 a.m. Judge Adler directed the Diocese to prepare and file a summary report on its total disbursements of for the months of September and October 2007. All actions, which have been removed from any state court to the Bankruptcy Court, will be remanded to the state court, Judge Adler ruled. However, the Order will not apply to any actions removed to the District Court prior to February 27, 2007, she said. All objections to dismissal of the Reorganization Case were overruled. Prior to the entry of the Dismissal Order, Steven J. Katzman, the United States Trustee for Region 15, reminded the Court that the Order should include a provision for the payment of statutory U.S. trustee quarterly fees up until the dismissal of the case. About the San Diego Diocese The Roman Catholic Diocese of San Diego in California -- http://www.diocese-sdiego.org/-- employs approximately 3,000 people in various areas of work. The Diocese filed for Chapter 11 protection just before commencement of the first of court proceedings for 140 sexual abuse lawsuits filed against the Diocese. Authorities of the San Diego Diocese said they were not in favor of litigating their cases. The San Diego Diocese filed for chapter 11 protection on Feb. 27, 2007 (Bankr. S.D. Calif. Case No. 07-00939). Gerald P. Kennedy, Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents the Diocese. Attorneys at Pachulski Stang Ziehl & Jones LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Diocese listed total assets of $152,510,888 and total liabilities of $72,754,092. On March 27, 2007, the Debtor filed its plan and disclosure statement. On November 1, The Court dismissed the San Diego's bankruptcy proceeding. (Catholic Church Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CHAMPION PARTS: Taps McDermott Will as Special Counsel ------------------------------------------------------ Champion Parts Inc. asks the United States Bankruptcy Court for the Western District of Arkansas for permission to employ McDermott Will & Emery LLP as its special counsel. McDermott Will is expected to a) handle several ongoing environmental matters, including a matter regarding environmental clean up that the Debtor solely responsible for and is subject to government order; and b) negotiate with one of the Debtor's insurance carriers regarding coverage for various environmental and liabilities claims of more than $1 million which was about to bring substantial funds to the Debtor. The Debtor tells the Court that the firm requested a $10,000 retainer fee. Todd R. Weiner, Esq., an attorney of the firm, charges $695 per hour and the firm's other attorneys bill between $300 and $600 per hour. Mr. Weiner assure the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Hope, Arkansas, Champion Parts Inc. (OTC:CREBQ) -- http://www.championparts.net/-- remanufactures fuel system components, air conditioning compressors, front wheel drive assemblies, and other underhood electrical and mechanical products for the passenger car and light truck, agricultural, heavy-duty truck and marine parts aftermarket. The company filed for chapter 11 bankruptcy protection on Oct. 10, 2007 (Bankr. W.D. Ark. Case No. 07-73253). James F. Dowden, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $26,389,000 and total debts of $25,251,000. CHAMPION PARTS: U.S. Trustee Unable to Appoint Creditors Committee ------------------------------------------------------------------ The U.S. Trustee for Region 16 was unable to appoint creditors to serve on an Official Committee of Unsecured Creditors for Champion Parts Inc.'s Chapter 11 case due to lack of interest at a meeting held on Nov. 19, 2007. According to the U.S. Trustee, the Debtor's unsecured creditors were advised of the time, place and purpose of the meeting by mail. Headquartered in Hope, Arkansas, Champion Parts Inc. (OTC:CREBQ) -- http://www.championparts.net/-- remanufactures fuel system components, air conditioning compressors, front wheel drive assemblies, and other underhood electrical and mechanical products for the passenger car and light truck, agricultural, heavy-duty truck and marine parts aftermarket. The company filed for chapter 11 bankruptcy protection on Oct. 10, 2007 (Bankr. W.D. Ark. Case No. 07-73253). James F. Dowden, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $26,389,000 and total debts of $25,251,000. CITIGROUP COMMERCIAL: Fitch Holds 'BB+' Ratings on Two Classes -------------------------------------------------------------- Fitch Ratings has affirmed Citigroup Commercial Mortgage Trust, series 2006-FL2 as: -- $85.4 million class A-1 at 'AAA'; -- $237.2 million class A-2 at 'AAA'; -- Interest-Only class X-1 at 'AAA'; -- Interest-Only class X-2 at 'AAA'; -- Interest-Only class X-3 at 'AAA'; -- $17.9 million class B at 'AAA'; -- $20.9 million class C at 'AAA'; -- $38.8 million class D at 'AA+'; -- $26.9 million class E at 'AA-'; -- $26.9 million class F at 'A+'; -- $23.9 million class G at 'A'; -- $20.9 million class H at 'A-'; -- $22.4 million class J at 'BBB+'; -- $22.4 million class K at 'BBB'; -- $23.9 million class L at 'BBB-'; -- $817,531 class CAC-1 at 'BBB+'; -- $560,072 class CAC-2 at 'BBB'; -- $651,240 class CAC-3 at 'BBB-'; -- $1.9 million class CAN-1 at 'BBB+'; -- $2.8 million class CAN-2 at 'BBB'; -- $5.4 million class CAN-3 at 'BBB-'; -- $10.6 million class CNP-1 at 'BBB-'; -- $20.1 million class CNP-2 at 'BBB-'; -- $5.2 million class CNP-3 at 'BB+'; -- $1 million class DSG-1 at 'BBB-'; -- $5.8 million class MVP at 'BBB-'; -- $2 million class RAM-1 at 'BBB-'; -- $2.4 million class RAM-2 at 'BB+'. Fitch does not rate classes DHC-1, DHC-2, DHC-3, DSG-2, PHH-1, PHH-2, and SRL. Classes HFL, HGI-1, HGI-2, HMP-1, HMP-2, HMP-3, WBD-1, WBD-2 and WPP have paid in full. The affirmations are the result of stable pool performance since issuance and ongoing stabilization of the underlying assets. Nine of the original 16 loans remain in the trust. The Westport Plaza loan has paid in full since Fitch's last review. In addition, the outstanding principal balances of the Mervyn's Portfolio (13.8%), CarrAmerica National Pool Portfolio (5.9%), and CarrAmerica CARP Pool Portfolio (0.7%) loans have been reduced due to partial releases. As of the November 2007 distribution date, the transaction's aggregate certificate balance has decreased 52.6% to $624.9 million from $1.3 billion at issuance. Fitch reviewed the most recent servicer-provided operating statement analysis reports for the remaining loans. All pooled senior participations included in the trust maintain their investment-grade shadow ratings. The largest loan, City National Plaza (56.8%), is secured by 2.6 million square feet (sf) of office space in two 51-story office towers, a three-story office building, 404 on-site below-ground parking spaces, and a freestanding 2,485 space parking structure all located in downtown Los Angeles, California. Major tenants include City National Bank (rated 'A-' by Fitch); Paul, Hastings, Janofsky & Walker LLP; and Jones Day. The property benefits from the experienced sponsorship of CalSTRS, the third largest pension fund in the U.S. The loan matures July 17, 2008 and has two one- year extension options. As of June 30, 2007 occupancy has increased to 75.3% from 63.3% at issuance. The second largest loan, Mervyn's Portfolio (12.9%), was originally secured by 13.6 million sf in 144 retail properties, four distribution properties, and one office building located throughout the U.S. The loan consists of three pari passu A notes: the $99.2 million A-1 (included in GSMSC 2006-GSFL VIII), the $100.7 million A-2 (included in GCCF 2006-FL4 and rated by Fitch) and the A-3, which is included in this transaction, and has an outstanding balance of $80.6 million. As of Nov. 2007, 28 stores have been released from the collateral, resulting in a reduction of the loan's outstanding principal balance. The loan matures Jan. 1, 2008 and has three one-year extension options. As of Sept. 30, 2007, the portfolio's occupancy is 89% compared to 100% at issuance. CITIGROUP COMMERCIAL: Fitch Holds Low-B Ratings on Six Classes -------------------------------------------------------------- Fitch Ratings has affirmed Citigroup Commercial Mortgage Securities Inc. commercial mortgage pass-through certificates, series 2006-C5 as: -- $53.7 million class A-1 at 'AAA'; -- $236.8 million class A-2 at 'AAA'; -- $93.8 million class A-3 at 'AAA'; -- $92.8 million class A-SB at 'AAA'; -- $774.3 million class A-4 at 'AAA'; -- $228.3 million class A-1A at 'AAA'; -- $212.4 million class A-M at 'AAA'; -- $172.6 million class A-J at 'AAA'; -- Interest-only class XP at 'AAA'; -- Interest-only class XC at 'AAA'; -- $42.5 million class B at 'AA'; -- $21.2 million class C at 'AA-'; -- $26.5 million class D at 'A'; -- $29.2 million class E at 'A-'; -- $26.5 million class F at 'BBB+; -- $21.2 million class G at 'BBB'; -- $21.2 million class H at 'BBB-'; -- $8 million class J at 'BB+'; -- $8 million class K at 'BB'; -- $8 million class L at 'BB-'; -- $2.7 million class M at 'B+'; -- $8 million class N at 'B'; -- $2.7 million class O at 'B-'; -- $40 million class AMP-1 at 'BBB+'; -- $48 million class AMP-2 at 'BBB'; -- $27 million class AMP-3 at 'BBB-'. Fitch does not rate the $26.5 million class O certificates. The rating affirmations reflect the stable pool performance and minimal paydown since issuance. As of the October 2007 distribution date, the transaction has paid down 0.3% to $2.232 billion from $2.239 billion at issuance. There are currently five loans (1.6%) in special servicing. The first specially serviced loan (0.7%) is secured by a 276-unit multifamily property in Seabrook, Texas. The loan was transferred to the special servicer due to a monetary default. The special servicing is working with the borrower to bring the loan current but has also started the foreclosure process. The second specially serviced loan (0.5%) is secured by a 160-unit multifamily property in Humble, Texas. The loan was transferred to the special servicer due to a monetary default. The borrower filed bankruptcy shortly before the scheduled foreclosure hearing. Fitch has reviewed the shadow ratings of the Tower 67 and the Ala Moana Portfolio loans. Both loans maintain investment grade shadow ratings due to their stable performance. Tower 67 (4.7%) is secured by a 449-unit multifamily property in New York City. As of June 29, 2007, the occupancy decreased to 90% from 97% at issuance. Ala Moana (4.5%) is secured by a 1,989,759 square-foot retail and office property in Honolulu, Hawaii. The whole loan consists of eight pari passu A notes totaling $1.2 billion and subordinate debt totaling $300 million. Only the A1 note is included in the pooled trust. A portion of the subordinate debt totaling $115 million is structured as the stand alone raked classes. Occupancy as of November 2007 increased to 97% from 96% at issuance. COINMACH SERVICE: S&P Retains Negative Watch on Completed Deal -------------------------------------------------------------- Standard & Poor's Ratings Services said that the corporate credit rating on Plainview, New York-based Coinmach Service Corp. remains on CreditWatch with negative implications following the announcement that the acquisition of CSC by Babcock & Brown Ltd., together with a group of financiers, for $13.55 per share in cash has been completed. All of the company's debt ratings, including those for its operating company, Coinmach Corp., have been removed from CreditWatch and withdrawn as this debt has been repaid as part of the transaction. "The CreditWatch listing on the corporate credit rating continues to reflect our expectation that leverage for CSC has increased following the transaction, even though financing terms have yet to be disclosed," said Standard & Poor's credit analyst Jean Stout. To resolve the CreditWatch listing, Standard & Poor's will evaluate the ultimate financing and terms of this LBO. CONCHITA SUPERMARKET: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Conchita Supermarket Ave. Santa Rosa 18 Altos Tienda Conchita Centro Comercial Las Cumbres San Juan, PR 00969 Bankruptcy Case No.: 07-06722 Chapter 11 Petition Date: November 13, 2007 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Francisco R. Moya Huff, Esq. Bco Popular Building Suite 401 Tetuan 206 San Juan, PR 00901-1802 Tel: (787) 723-0714 (787) 724-2447 Fax: (787) 725-3685 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Eurobank $2,901,551 P.O. Box 191009 San Juan, PR 00919-1009 Collateral: $1,175,000 Unsecured: $1,249,600 Banco Popular de Puerto Rico $2,651,740 P.O. Box 362708 San Juan, PR 00936-3969 Collateral: $194,000 Unsecured: $421,000 Packers Provisions of PR $616,290 P.O. Box 363969 San Juan, PR 00936-3969 Suiza Dairy Corp. $407,679 Coca-Cola Puerto Rico $269,980 V. Suarez & Co. $183,558 Holsum de PR $175,352 Mendez & Co. $120,705 Pan Pepin, Inc. $116,839 Malgor & Co. Inc. $105,039 Municipality of San Juan $103,418 Ballester Hermanos, Inc. $101,235 Herba de Puerto Rico LLC $94,644 Herba de Puerto Rico $94,644 Internal Revenue Services $93,000 CONSTAR INT'L: Moody's Revises Outlook to Negative from Stable -------------------------------------------------------------- Moody's Investors Service changed the ratings outlook for Constar International Inc. to negative from stable. Concurrently, Moody's affirmed Constar's B3 Corporate Family Rating and other instrument ratings. The change in outlook to negative reflects material operating underperformance relative to expectations and the company's failure to transition to higher margin customer products in the anticipated time frame. The company's credit metrics have deteriorated over the last twelve months as a result of pricing pressure, delays in product launches for new custom products and the recall of a major customer's product. Mitigating factors include a good liquidity profile, contractually guaranteed price increases in 2008 and potential growth in custom products. The current ratings and outlook leave no room for any further negative variance in operating performance. Moody's affirmed these ratings: -- $220 million floating rate first mortgage note, due 2012, rated B2 (LGD3, 34%) -- $175 million 11% senior subordinated notes, due 2012, rated Caa2 (LGD5, 87%) -- Corporate Family Rating, rated B3 -- Probability of Default Rating, rated B3 The ratings outlook has been revised to negative. Based in Philadelphia, Constar International Inc. is a global producer of PET (polyethylene terephthalate) plastic containers for food, soft drinks, and water. Consolidated revenue for the twelve months ended Sept. 30, 2007 was approximately $870 million. DELTA FUNDING: Fitch Cuts Rating on Class B Trust to B from BB- --------------------------------------------------------------- Fitch Ratings has taken rating actions on these Delta Funding Corporation home equity issues: Delta 2001-2 -- Class M-1 affirmed at 'AAA'; -- Class M-2 affirmed at 'BBB+'; -- Class B downgraded to 'B' from 'BB-'. Renaissance 2002-1 -- Class M-1 affirmed at 'AA'; -- Class M-2 rated 'BBB-', placed on Rating Watch Negative; -- Class B downgraded to 'CC/DR4' from 'B'. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $24.4 million of outstanding certificates. The downgrades, affecting $5.4 million of outstanding certificates, reflect deterioration in the relationship of CE to future loss expectations. For both transactions, losses have exceeded excess spread for 11 of the last twelve months, causing overcollateralization to fall below its target level. In addition, both transactions have 60day+ delinquencies (including loans in foreclosure, bankruptcy and real-estate owned) over 40% of the current pool balance. As a result, the triggers on these trusts are failing and principal is being distributed sequentially to the classes. While this helps protect the mezzanine classes, the failed triggers will extend the life of the subordinate bonds and increase the risk at the bottom of the capital structure. Class M-2 from Renaissance 2002-1 was placed on Rating Watch Negative due trends in serious delinquency and losses. Over the last twelve months, losses have exceeded excess spread by an average of approximately $100,000 per month. As a result, OC is well below its target and the class B bond, which provides protection for the M-2 bond, is in danger of taking a principal writedown. Fitch will monitor this transaction over the next six months to see if this trend continues before taking a long term rating action on class M-2. The underlying collateral for the mortgage transactions listed above consist of both fixed- and adjustable-rate mortgage loans secured by first and second liens on residential mortgages extended to subprime borrowers. As of the October 2007 distribution date, Delta 2001-2 and Renaissance 2002-1 are seasoned 72 and 67 months, respectively, and the pool factor (current outstanding collateral balance as a percentage of original collateral balance) is 11% for both transactions. The mortgage loans are being serviced by Ocwen Financial Corp. (rated 'RPS2' by Fitch). DONALD COON: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Donald Eugene Coon May Florence Quinones Coon 80 Sedona Court Palm Desert, CA 92211 Bankruptcy Case No.: 07-17567 Chapter 11 Petition Date: November 20, 2007 Court: Central District Of California (Riverside) Judge: Meredith A. Jury Debtor's Counsel: George Hanover, Esq. Law Offices of George Hanover 73-710 Fred Waring Drive, Suite 100 Palm Desert, CA 92260 Tel: (760) 862-1982 Fax: (760) 776-6555 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Saxon Mortgage Service Residence $149,979 4708 Mercantile Drive North Secured: Fort Worth, TX 76137 $550,000 Senior Lien: $594,078 Residence $594,078 Secured: $550,000 Joyce Coon Personal Loan $40,000 420 Madison Avenue Cape Canaveral, FL 32920-2243 Bank of America Credit Card $36,514 P.O. Box 85520 Richmond, VA 23285 Jerry and Connie Lightcap Personal Loan $25,000 Wells Fargo Line of Credit Credit Account $20,564 Toyota Motor Credit Co. Leasehold Interest $20,349 Capital One Bank Credit Card $19,993 Wells Fargo Equipment Express Credit Account $16,031 Chase Credit Card $12,740 Riverside County Tax Collector Residence $10,052 Secured: $550,000 Senior Lien: $546,532 Wells Fargo Bank Credit Card $5,769 American Express Misc. Charges $3,472 Washington Mutual Credit Card $3,429 Wells Fargo Business Card Credit Card $3,402 Southern California Edison Service Charges $3,000 American Express - Corporate Misc. Charges $1,841 DUNMORE HOMES: Gets Interim Nod for Pachulski Stang as Counsel -------------------------------------------------------------- Dunmore Homes Inc., sought and obtained the authority of the United States Bankruptcy Court for the Southern District of New York to employ, on an interim basis, Pachulski Stang Ziehl & Jones LLP, as its bankruptcy counsel, nunc pro tunc to Nov. 8, 2007. According to Doug Strauch, vice president of finance of Dunmore Homes Inc., Pachulski has extensive knowledge of the Debtor's business and financial affairs, as well as extensive general experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. Mr. Strauch disclosed that Pachulski has represented Dunmore California and its subsidiaries since August 2007. Following the closing on the sale of Dunmore California's assets, the firm began representing the Debtor and ceased representation of Dunmore California. "The firm is very familiar with the Debtor's business and affairs and many of the potential legal issues which may arise in the context of this chapter 11 case," Mr. Strauch said. As the Debtor's counsel, Pachulski will: (a) provide legal advice to the Debtor with respect to its powers and duties as a debtor in possession in the continued operation of its business and management of its property; (b) take all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, the negotiation of disputes in which the Debtor is involved, and the preparation of objections to the claims filed against the Debtor's estate; (c) assist the Debtor in obtaining approval of disclosure statement and confirmation of its Chapter 11 plan of reorganization; (d) prepare on behalf of the Debtor necessary application, motions, answers, orders, reports and other legal papers; (e) appear in Court and to protect the interest of the Debtor before the Court; and (f) perform all other legal services for the Debtor that may be necessary and proper in this proceeding. Pachulski will be paid pursuant to its customary hourly rates, plus reimbursement of actual, necessary expenses and other charges. The firm's principal attorneys designated to represent the Debtor and their current standard hourly rates are: Attorneys Hourly Rate --------- ----------- Richard M. Pachulski, Esq. $795 Debra I. Grassgreen, Esq. $575 Maria A. Bove, Esq. $395 Debra I. Grassgreen, Esq., a partner at the firm, disclosed that Pachulski has received $452,112 from the Debtor during the year prior to the bankruptcy filing, including a $1,039 filing fee, in connection with the firm's prepetition representation of the Debtor. Ms. Grassgreen also noted that the firm was retained as counsel to represent Indymac Bank F.S.B., as purchaser of assets in the Chapter 11 cases of American Home Mortgage Holdings, Inc., et al. pending in the United States Bankruptcy Court for the District of Delaware. Indymac is a lender to and creditor of Dunmore. The representation of Indymac in the American Home cases is wholly unrelated to the Debtor's case, Ms. Grassgreen attested. The firm has not and will not represent Indymac or any of its affiliates in any actions that Indymac or any of its affiliates may bring against the Debtor. The firm has a conflicts waiver from Indymac, she added. Ms. Grassgreen assured the Court that Pachulski 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. Judge Glenn has directed the Debtor to employ conflicts counsel to represent it to the extent any conflicts arise in connection with (i) intercompany claims among the Debtor and its non-debtor subsidiaries, or (ii) the Dunmore California sale transaction. 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: Has Until Dec. 20 to File Schedules & Statements --------------------------------------------------------------- The Hon. Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York has, at the behest of Dunmore Homes Inc., extended to Dec. 20, 2007, the deadline for the filing of the Debtor's Schedules and Statements, without prejudice to the its right to seek further extensions. Doug Strauch, vice president of finance of Dunmore Homes Inc., told the Court that due to the voluminous amount of information, the nature of the Debtor's business, its reduced workforce and the upcoming holidays, it anticipates that it will need an additional 45 days beyond the initial 15-day period to accurately and completely assemble the Schedules and Statements. "The additional time will also ensure that the documents are as accurate as possible," Mr. Strauch said. "Rushing to complete the Schedules and Statements would likely compromise the completeness and accuracy of such documents." 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). ENVIRONMENTAL TECTONICS: Restatement Cues Default on PNC Bank Pact ------------------------------------------------------------------ Environmental Tectonics Corporation reported that on Nov. 14, 2007, its audit committee, in consultation with management, determined that the company will need to restate its previously issued consolidated financial statements for prior periods, including the periods ended Nov. 24, 2006 and Feb. 23, 2007. The restatement, according to the company, was required due to errors in accounting with respect to accounts receivable related to the carrying value of a claims receivable booked in connection with a contract with the Department of the Navy for a submarine decompression chamber project. As a result of the restatement, the company is not in compliance with a credit agreement with PNC Bank, National Association, which requires the company's financial statements as set forth in the company's annual report on Form 10-K for the fiscal year ended Feb. 23, 2007 to be true, complete and accurate in all material respects and to fairly present the financial condition, assets and liabilities, whether accrued, absolute, contingent or otherwise, and the results of operations of the company for the periods in the Form 10-K. H. F. Lenfest, a member of the company's board of directors and a significant shareholder of the company, has guaranteed all of the company's obligations to PNC under the credit agreement. Additionally, as a result of the restatement, the company will not have been in compliance as of Feb. 23, 2007 with the consolidated tangible net worth covenant contained in a letter agreement dated as of Nov. 16, 2006, between the company and PNC. The bank agreement was in effect at that time. The company has requested a waiver from PNC with respect to this covenant violation. Credit Agreement with PNC Bank On July 31, 2007, the company completed a refinancing of its indebtedness with PNC Bank in the aggregate amount of up to $15 million. The company's breach of the credit agreement results in an event of default under the promissory note the company issued to PNC relating to the credit agreement. As a result of the event of default, PNC is not obligated to make further advances to the company or issue any additional letters of credit under the credit agreement or the note. Additionally, PNC has the right to demand immediate payment of all principal and interest due under the note. As of Nov. 19, 2007, $14.3 million had been utilized under the PNC agreement, $7.8 million to support international letters of credit and $6.5 cash borrowings, should default be declared and repayment be demanded by PNC. Further, upon an event of default, PNC has the right to increase the annual interest rate on amounts borrowed under the note to the default rate. PNC also has the right to exercise any other remedies available to it. The company is currently in discussions with PNC with respect to the restatement and has asked PNC to provide a waiver with respect to any breaches to the credit agreement and other documents executed in connection with the credit agreement resulting from the restatement. Subordinated Convertible Debt Default Also, on Feb. 18, 2003, the company entered into a convertible note and warrant purchase agreement with Mr. Lenfest pursuant to which Mr. Lenfest provided to the company subordinated convertible debt financing in the principal amount of $10 million. In connection with the subordinated credit agreement, the company executed a senior subordinated convertible note in favor of Mr. Lenfest. As a result of the restatement, an event of default has occurred under the subordinated credit agreement. The subordinated credit agreement provides that an event of default will be deemed to have occurred when any representation or warranty made by the company in certain financial statements furnished by the company to Mr. Lenfest will prove to have been false or misleading in any material respect as of the time made or furnished. Mr. Lenfest has agreed to waive the subordinated event of default. Restatements As a result of the tentative settlement agreement reached with the Government's Department of the Navy, during the first fiscal quarter of fiscal 2008 the company recorded a pre-tax charge which included the value of the Navy contract claim receivable of $3.1 million. It has now been determined that this claim receivable was impaired in value in prior periods, including the periods ended Nov. 24, 2006 and Feb. 23, 2007 and that reserves of all or a substantial portion of the value of the recorded claim receivable should have been established. The company is in the process of determining if these errors in accounting affected additional periods prior to the fiscal quarter ended Nov. 24, 2006, including the fiscal years ended Feb. 28, 2003, Feb. 27, 2004, Feb. 25, 2005 and Feb. 24, 2006. As a result, the company's financial reports as filed with the Securities and Exchange Commission for these periods should not be relied upon until the company completes this process. This claim receivable was first recorded beginning in the first fiscal quarter of fiscal 2002. It is not expected that this restatement will have any impact on the company's net equity position as of the most current fiscal period end, namely fiscal second quarter 2008 which ended Aug. 24, 2007. The Audit Committee in consultation with management has also determined that disclosure concerning the contract dispute with the Government as included in the quarterly report on Form 10-Q for the period ended Nov. 24, 2006 and the annual report on Form 10-K for the period ended Feb. 23, 2007, should have disclosed the possibility of a loss contingency with respect to pending or threatened litigation or claims. In November 2006, the Government's trial attorney expressed an intent to seek authorization to assert counterclaims against the company in the absence of a settlement. The counterclaims, if filed and proved, could have led to a substantial judgment against the company. In November 2006 management was aware of these potential counterclaims; however, the audit committee and the independent registered public accounting firm were not aware of them. As previously disclosed in the company's annual report on Form 10- K for the year ended Feb. 23, 2007, in May 2003, the company filed a certified claim with the Government seeking costs totaling in excess of $5.0 million in connection with a contract for submarine rescue decompression chambers. As of Feb. 23, 2007, the company had recorded $3.0 million in claims receivable for this claim. The company also previously disclosed that on June 14, 2007, the Government had amended its answer to the company's claim to add counterclaims. On June 27, 2007, the company and the Government filed a joint motion to dismiss with prejudice all of the company's claims against the Government in connection with this contract. The joint motion to dismiss was granted on June 28, 2007. In June 2007, the company reached a tentative settlement, subject to necessary governmental approvals, regarding the Government's counterclaims, whereby the company agreed to pay to the Government $3.3 million and transfer the submarine rescue decompression chambers to the Government, at which time the company would have no further obligations or claims under this contract. In September 2007, at the Government's request, the company agreed to increase the amount to be paid to the Government from $3.3 to $3.55 million. In October 2007, the company transferred the submarine decompression chambers to the Government. The tentative settlement is now under review by the Government. It is not known at this time how long the approval process will take and there can be no assurance that the settlement will be finalized or approved. In the event that the settlement is not approved, the litigation regarding the Government's counterclaims will continue. In connection with the settlement agreement, the company recorded a net pre-tax charge of $5.9 million in the first quarter of fiscal 2008, comprised of $6.4 million of claims costs partially offset by $.5 million of previously reserved contract revenue. An additional $250,000 charge was recorded in the second quarter of fiscal 2008 following the company's agreement to increase the settlement payment to the Government from $3.3 million to $3.55 million. The audit committee has discussed these matters with Grant Thornton LLP, the company's independent registered public accounting firm. The company expects that these adjustments will not materially affect the company's current cash position or financial condition. The impact of these matters on the company's internal control over reporting and disclosure controls and procedures is being evaluated by the company. The company plans to work diligently to complete any amendments as quickly as possible but at this time cannot predict when all changes will be complete. About Environmental Tectonics Southampton, Pennsylvania-based Environmental Tectonics Corporation (AMEX: ETC) -- http://www.etcusa.com/-- designs, develops, installs and maintains aircrew training systems (aeromedical, tactical combat and general), disaster management training systems and services, entertainment products, sterilizers (steam and gas), environmental testing products, hyperbaric chambers and related products for domestic and international customers. EXIDE TECHNOLOGIES: Improved Financials Cue S&P to Lift Rating -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Exide Technologies to 'B-' from 'CCC+' because of the company's improved financial results, which Exide has achieved despite sharply higher lead prices. The outlook is stable. Alpharetta, Georgio-based Exide, a manufacturer of automotive and industrial batteries, has total debt of about $1.1 billion, including Standard & Poor's adjustments for underfunded retiree benefit liabilities, operating leases, and trade receivables sold. "The rating action reflects Standard & Poor's view that a default by Exide is unlikely over the next 12-18 months," said Standard & Poor's credit analyst Gregg Lemos Stein. Exide's financial profile remains highly leveraged, but credit measures have improved meaningfully over the past several quarters as a result of steadily increasing EBITDA. Prices for lead have more than tripled since mid-2006, leading to sharply higher working capital and negative free cash flow. However, Exide has been able to blunt most of the impact on profitability by passing along higher costs to its customers. The outlook is stable. S&P could revise the outlook to negative or lower the ratings if free operating cash flow fails to turn positive, if recent improvements in Exide's pricing environment prove unsustainable, or if lead costs continue to increase dramatically and liquidity diminishes. S&P could revise the rating to positive if leverage continues to moderate substantially and the company demonstrates consistent and sustainable positive free cash flow generation, allowing for permanent debt reduction. FIELDSTONE MORTGAGE: Fitch Cuts Rating on $7.5MM Trust to BB ------------------------------------------------------------ Fitch Ratings has taken rating actions on Fieldstone Mortgage Investment Trust, series 2005-1. Affirmations total $119.6 million and downgrades total $7.5 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Fieldstone 2005-1 -- $22 million class M1 affirmed at 'AA+' (BL: 95.60, LCR: 7.46) -- $25.1 million class M2 affirmed at 'AA' (BL: 79.84, LCR: 6.23) -- $15.3 million class M3 affirmed at 'AA-' (BL: 69.13, LCR: 5.40) -- $13.5 million class M4 affirmed at 'A+' (BL: 59.67, LCR: 4.66) -- $12 million class M5 affirmed at 'A' (BL: 51.21, LCR: 4.00) -- $12 million class M6 affirmed at 'A-' (BL: 36.50, LCR: 2.85) -- $9.7 million class M7 affirmed at 'BBB+' (BL: 26.42, LCR: 2.06) -- $9.7 million class M8 affirmed at 'BBB' (BL: 18.55, LCR: 1.45) -- $7.5 million class M9 downgraded to 'BB' from 'BBB-' (BL: 12.88, LCR: 1.01) Summary -- Originators: (100% Fieldstone); -- 60+ day Delinquency: 34.10%; -- Realized Losses to date (% of Original Balance): 0.99%; -- Expected Remaining Losses (% of Current Balance): 12.81%; -- Cumulative Expected Losses (% of Original Balance): 3.51%. 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. FOOT LOCKER: Posts $33 Mil. Net Loss in Quarter ended Sept. 30 -------------------------------------------------------------- Foot Locker Inc. reported net loss of $33 million for the third quarter ended Nov. 3, 2007, compared with net income of $65 million for the same period last year. This year's results included a non-cash impairment charge to write down long-lived assets for the company's U.S. store operations pursuant to SFAS No. 144 and expenses associated with closing unproductive stores, totaling $66 million, after tax. Third quarter net income, before the non-cash impairment charge and the incremental expenses of closing stores, was $33 million. "Our third quarter sales were disappointing, reflecting a challenging external environment and the lack of exciting fashion trends in athletic footwear and apparel," Matthew D. Serra, Foot Locker Inc.'s chairman and chief executive officer, stated. "While our sales results fell short of our expectations, third quarter markdowns were approximately 12% lower than last year. Additionally, we continued to focus diligently on expense management." For the first nine months of the year, the company reported a net loss of $34 million compared with net income of $138 million last year. This year's results included a non-cash impairment charge pursuant to SFAS No. 144 and expenses associated with closing unproductive stores, totaling $66 million, after tax. Last year's results included an impairment charge pursuant to SFAS No. 144 of $12 million, after tax. Year-to-date net income, before the non-cash impairment charges in 2006 and 2007, and the expenses of closing unproductive stores in 2007, was $32 million versus $150 million last year. Year-to-date, the company has opened 112 new stores, and remodeled or relocated 179 stores. During the month of September, the company opened its first store in Istanbul, Turkey. The company also closed 158 stores during the first nine months of this year, including 13 unproductive stores during the third quarter prior to normal lease expiration. At Nov. 3, 2007, the company operated 3,896 stores in 21 countries in North America, Europe and Australia. In addition, 10 franchised stores are currently operating in the Middle East and South Korea. Financial Position At the end of the third quarter, the company's cash and short-term investments totaled $332 million. The company's total cash position, net of debt, at the end of the third quarter increased by $70 million versus last year. Merchandise inventory was slightly higher at the end of the third quarter versus the comparable period of last year, less than one percent. Stated in constant currency dollars, the Company's merchandise inventory decreased by approximately three% versus last year. At November 3, 2007, the company's balance sheet showed total assets of $3.3 billion, total liabilities of $1.1 billion, and total shareholders' equity of 2. 2 billion. About Foot Locker Headquartered in New York, Foot Locker, Inc. (NYSE: FL) --- http://www.footlocker-inc.com/-- is a retailer of athletic footwear and apparel, operated 3,942 primarily mall-based stores in the United States, Canada, Europe, Australia, and New Zealand as of Feb. 3, 2007. * * * As reported in the Troubled Company Reporter on Oct. 11, 2007, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured ratings on New York City-based Foot Locker Inc. to 'BB' from 'BB+'. S&P have removed the ratings from CreditWatch, where they were placed with negative implications on Aug. 18, 2006. The outlook is negative. FORD MOTOR: Al Ver to Retire as ACH CEO, COO and Vice President --------------------------------------------------------------- Al Ver, Ford Motor Company vice president and CEO and COO, Automotive Components Holdings (ACH), has elected to retire at the end of the year, after a 35-year career with the Ford Motor Company. Mr. Ver joined Ford in 1972 as a manufacturing process engineer at the Mt. Clemens (Michigan) Paint Plant. He has held a number of engineering and manufacturing positions within Ford and its component operations during his career. Prior to his current assignment, Mr. Ver served as vice president for Ford's Advanced Manufacturing Engineering organization. As the head of ACH, he reported to Mark Fields, executive vice president and president, The Americas. "Al has consistently contributed to Ford's engineering and manufacturing organizations throughout his career and most recently has done an outstanding job in leading ACH through its transition," Mr. Fields said. "We wish Al and his family well as they move into the next phase of their lives." Mr. Ver will be succeeded by Bill Connelly, who has been named chief executive officer, ACH. Mr. Connelly will retain his CFO responsibilities for ACH. During the transition, Al Ver will report to Alan Mulally, president and CEO, for a special project. Mr. Connelly will lead the Ford-managed, temporary business entity comprised of former Visteon Corp. plants and facilities in the U.S. and Mexico, as it continues preparing the operations for sale or closure by the end of 2008. He will report to Joe Hinrichs, vice president, North America Manufacturing. "Bill has been with ACH from the start and knows the component businesses within the group, as well as the component industry," Mr. Fields said. "We continue to operate in a very challenging environment, and having Bill at the helm is reassuring to me and everyone on the team." Mr. Connelly, a U.S. Marine Captain, joined Ford's Finance staff in 1972. Throughout his career, he has held a variety of positions within Finance, including controller of Ford's North America Automotive Operations and Ford Customer Service Division, and director of the company's Investor Relations department. Mr. Connelly was instrumental in the negotiations to form ACH in 2005, and as its CFO, he has significantly reduced operating costs and helped to progress ACH's 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: Russian Plant Workers Resume Strike ----------------------------------------------- Workers at Ford Motor Co.'s manufacturing plant in Vsevolozhsok, Russia, resumed their strike on Nov. 20, 2007, demanding higher wages and reduction of night shifts from March 2008, published reports say. According to reports, workers held a 19-hour strike on Nov. 6, 2007, after management repeatedly rejected their pay hike demands. They returned to work after a court ordered the union to postpone further action until Nov. 20, 2007. In a report by RIA Novosti, Yekaterina Kulinenko, a public relations manager at Ford said that the strike could disrupt car deliveries to Russian customers. "The cars that were ordered earlier will be produced later and, correspondingly, their delivery will be delayed due to the strike," Mr. Kulinenko was quoted by RIA Novosti, adding that the plant's daily output was 300 Ford Focus vehicles. Mr. Kulinenko added the company's management was prepared to hold talks with the plant's trade union only after the strike was over. 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. GARY KIMBERLIN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtors: Gary L. Kimberlin Rebecca D. Kimberlin 122 Buttonwood Drive Aliquippa, PA 15001 Bankruptcy Case No.: 07-21168 Chapter 11 Petition Date: November 7, 2007 Court: District of Maryland (Greenbelt) Judge: Paul Mannes Debtors' Counsel: Glenn D. Solomon, Esq. 8 Park Center Court, Suite 200 Owings Mills, MD 21117-3754 Tel: (443) 738-1500 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtors' list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ MATSCO Dental equipment $718,713 2000 Powell Street, 4th Floor financing Emeryville, CA 94608 Wells Fargo Mortgage $409,841 P.O. Box 11701 Newark, NJ 07101-4701 Mesa Bank Loan $113,475 63 East Main Street, Suite 100 Mesa, AZ 85201 Citibank Home equity line $83,544 of credit Bank of America Credit card $54,627 Bankers Healthcare Group Working capital $38,394 loan Stanley Farrelll Accounts $30,000 receivables loan Citicorp Vendor Fin. Working capital $26,000 loan Capital One Working capital $19,342 loan IRS Taxes $13,000 HTS Loan Servicing Time share $9,000 GE Money Bank $9,000 Steve Allen Dental services $9,000 Burkhart Dental Dental supplies $7,470 Chase Credit card $6,520 Beneficial Loan $6,135 Discover Credit card $4,936 Dex Media Yellow pages $4,547 advertisement Excel Dental Lab Dental lab bill $3,670 Dynamic Dental Lab Dental lab bill $2,521 GENERAL GROWTH: Fitch Affirms 'BB' Issuer Default Rating -------------------------------------------------------- Fitch Ratings has affirmed General Growth Properties and its subsidiaries as: General Growth Properties, Inc. -- Issuer Default Rating 'BB'; -- Revolving credit facility 'BB'; -- Term loan 'BB'; -- Exchangeable senior notes 'BB'; -- Perpetual preferred stock (indicative) 'B+'. The Rouse Company LP -- IDR 'BB' -- Senior unsecured notes 'BB'. Price Development Company, L.P. -- IDR 'BB+' -- Senior unsecured notes 'BB+'. Fitch's actions affect approximately $5.8 billion of securities. The Rating Outlook is Stable. Fitch's rating affirmations reflect the solid performance of GGP's portfolio of over 200 regional shopping malls in 45 states. The portfolio is diversified by geographic location and tenant, and also features a smooth, long-term lease maturity schedule. GGP has generated consistent comparable property NOI growth, demonstrated recently by a 3.4% increase for the nine months ended Sept. 30, 2007 over the comparable period ended Sept. 30, 2006. Overall portfolio occupancy, which was 93.2% as of Sept. 30, 2007, has been above 92.0% since GGP's acquisition of the Rouse Company, L.P. in late 2004. The ratings are also bolstered by the strength and experience of GGP's management team, including senior officers as well as property managers. Management has recently focused its growth efforts on both ground-up development and redevelopment of existing centers. This effort includes redevelopment of anchor space which has led to the repositioning and strengthening of many assets in GGP's portfolio. Fitch's credit concerns revolve around certain of GGP's financial metrics. Due primarily to its utilization of substantial leverage in acquiring Rouse, GGP's book value-based leverage is high, and fixed charge coverage is low, for the 'BB' rating category. GGP's leverage, defined as debt plus preferred stock divided by undepreciated book capital, stood at 82% as of Sept. 30, 2007. While leverage may fluctuate around this level over time, Fitch expects this metric to remain in the high 70% to low 80% range. As a significant component of GGP's assets were purchased in the past three years, Fitch does not believe that the disparity between book value and market value is as large for GGP as it is for some other issuers and, as a result, Fitch places significant weight on leverage metrics utilizing book value. The company's risk-adjusted capitalization ratio is only 0.3 times as of Sept. 30, 2007, due to the company's high leverage and the addition of significant development and joint venture assets over the past few years. GGP has a sizable future development pipeline, including projects that are currently under construction as well as planned, of over $2 billion. This pipeline represents 6.3% of GGP's total undepreciated assets, up from 3.4% as of Dec. 31, 2006. While development activities contain risks not present in ownership of stabilized retail assets, these risks are somewhat offset by the fact that GGP's development track record is well-established. GGP's operational credit metrics have declined from 2004 levels largely due to the Rouse acquisition, but have stabilized since that time. For the 12 months ended Sept. 30, 2007, on a risk- adjusted basis, Fitch calculates GGP's fixed charge coverage ratio (defined as adjusted EBITDA less straight-line rents less tenant improvements, divided by interest expense, capitalized interest and preferred distributions) was 1.3x, compared with 1.3x and 1.4x for calendar years 2006 and 2005, respectively. The use of secured debt in the capital structure encumbering substantially all assets serves to limit flexibility in a more difficult capital raising environment. Given the recent liquidity stress in the commercial mortgage-backed securities market, Fitch remains concerned that GGP may face challenges in accessing the CMBS market on advantageous terms. This concern is offset to a degree by management's intention to refinance many of its properties' maturing mortgages with lower loan-to-value mortgages, as opposed to stretching for maximum loan proceeds with attendant higher spreads. Additionally, management has established a meaningful track record accessing other sources of secured financing. Price Development Company, L.P. senior unsecured notes are notched above GGP's IDR as a result of structural characteristics that place Price noteholders in a superior security position relative to investors in other parts of GGP's capital structure. Specifically, the unencumbered asset maintenance covenant results in adequate entity-level unencumbered assets that could serve as a source of contingent liquidity for Price noteholders. The Rouse notes do not receive the same notching benefit of the Price notes because of the potential for consolidation in a liquidation scenario. In addition, the financial covenants contained in Rouse's note indentures do not explicitly require the maintenance of unencumbered assets, although the Rouse notes provide a degree of noteholder protection via secured debt and total debt limitations within Rouse. The Stable Outlook reflects continued growth in GGP's comparable property net operating income. Moreover, although U.S. retail sales have slowed in recent months, Fitch expects GGP's business platform to remain solid in future periods. GGP is a Chicago-based REIT engaged in acquiring, developing, renovating and managing regional malls in major and middle markets throughout the United States. GGP also has investments in commercial office buildings and community development projects purchased in connection with the Rouse acquisition in 2004. As of Sept. 30, 2007, the company owned interests in over 200 million square feet of properties and had $31.9 billion in total undepreciated book assets. GENERAL MOTORS: UAW Members Wary on GM's Exposure to ResCap Woes ---------------------------------------------------------------- UAW President Ron Gettelfinger wants an audience with General Motors Corp.'s chief financial officer Frederick A. Henderson to seek transparency in the carmaker's vulnerability to the financial woes of Residential Capital LLC, which it has a 49% stake, Reuters reports. The UAW leader disclosed that union members are wary of the huge drop in GM shares this week. ResCap is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. As reported in yesterday's Troubled Company Reporter, according to Gimme Credit analyst Kathleen Shanley, GMAC Financial Services and Cerberus Management Capital LP, which owns 51% stake in ResCap, could likely place ResCap into bankruptcy due to ResCap's exposure to homebuilders. ResCap is currently under restructuring as severe weakness in the housing market and mortgage industry continues to prevail. ResCap will streamline its operations and revise its cost structure, which will enhance its flexibility, allowing it to scale operations up or down more rapidly to meet changing market conditions. GMAC Financial Services and ResCap continue to investigate strategic alternatives, 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. Reuters adds that JPMorgan analyst, Himanshu Patel, said that a ResCap bankruptcy could cost GM shareholders about $2.65 a share. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. (Delphi Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GEORGE PHILLIPS: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------------- Debtor: George D. Phillips, Sr. 5201 Holly Court Morehead City, NC 28557 Bankruptcy Case No.: 07-04263-8 Chapter 11 Petition Date: November 9, 2007 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: 252 633-9600 Estimated Assets: $1 Million to $100 Million Estimated Debts: Less than $50,000 Debtor's list of his two Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Carteret Co. Tax Collect $3,050 Attn: Manager or Agent Courthouse Square Beaufort, NC 28516 Morehead City Tax Collect $2,908 Attn: Manager or Agent 706 Arendell Street Morehead City, NC 28557 GHI AUTOMOTIVE: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: GHI Automotive Services, Inc. dba GHI, Inc. dba Hitches by George, Inc. dba George's Hitch, Inc. 3038 Eastern Avenue Southeast Grand Rapids, MI 49508 Bankruptcy Case No.: 07-08649 Chapter 11 Petition Date: November 20, 2007 Court: Western District of Michigan (Grand Rapids) Judge: Scott W. Dales Debtor's Counsel: Martin L. Rogalski, Esq. Martin L Rogalski P.C. 1881 Georgetown Center Jenison, MI 49428 Tel: (616) 457-4410 Fax: (616) 457-6944 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ford Credit Inventory $358,498 Department 267901 P.O. Box 55000 Detroit, MI 48255-2679 Curt Manufacturing Inventory $173,463 6208 Industrial Drive Eau Claire, WI 54701 FH Partners L.P. All Assets $526,809 P.O. Box 30018 Secured: Hartford, CT 06150-0018 $159,000 Internal Revenue Service Withholding Taxes $150,361 for 3rd & 4th Qtr. Capital One Small Bus. Services Loan $88,566 George E. Stanley Trust Back Rent on $33,079 Building Leases Property Taxes $31,595 Michigan Dept. of Treasury 2007 State $21,255 Sales Tax 2007 State $8,408 Withholding Taxes Clark Brothers Sales Inventory $23,158 Citi Business Card Credit Card $21,165 Cequent Towing Products Inventory $19,056 Cardmember Service Inventory $18,172 Capital One Credit Card $18,000 AT&T Yellow Pages Advertising $15,386 Global Accessories Inventory $11,824 Audiovox Inventory $11,506 FIA Card Services Rn. Credit Card $11,435 Directed Electronics Inventory $10,414 Altron International Inventory $11,101 HARBORVIEW MORTGAGE: Fitch Holds 'BB' Rating on Class B-11 Loan --------------------------------------------------------------- Fitch Ratings has affirmed these classes of Harborview Mortgage Loan Trust 2005-9: Series 2005-9 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-2 affirmed at 'AA+'; -- Class B-3 affirmed at 'AA+'; -- Class B-4 affirmed at 'AA+'; -- Class B-5 affirmed at 'AA'; -- Class B-6 affirmed at 'AA-'; -- Class B-7 affirmed at 'A+'; -- Class B-8 affirmed at 'A'; -- Class B-9 affirmed at 'A-'; -- Class B-10 affirmed at 'BBB-'; -- Class B-11 affirmed at 'BB'. The affirmations affect approximately $919.1 million in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The collateral for the pool consists of adjustable-rate mortgage loans with interest rates that generally have an initial fixed rate period of one, two or three months and thereafter adjust on a monthly basis, secured by first liens on one- to four-family residential properties. The mortgage loans were originated and are serviced by Washington Mutual Bank. The servicer is rated 'RPS2+' by Fitch. Fitch will continue to closely monitor this transaction. If credit enhancement continues to deteriorate, further rating action may be necessary. HOMETOWN COMMERCIAL: Fitch Holds 'B-' Rating on $559,000 Certs. --------------------------------------------------------------- Fitch Ratings has affirmed Hometown Commercial Capital Trust 2006- 1, commercial mortgage pass-through certificates, as: -- $107.7 million class A at 'AAA'; -- Interest-only class X at 'AAA'; -- $3.4 million class B at 'AA'; -- $1.7 million class C at 'AA-'; -- $3.2 million class D at 'A'; -- $4.3 million class E at 'BBB+'; -- $1.5 million class F at 'BBB'; -- $1.9 million class G at 'BBB-'; -- $1.1 million class H at 'BB+'; -- $560,000 class J at 'BB'; -- $746,000 class K at 'BB-'; -- $372,000 class L at 'B+'; -- $560,000 class M at 'B'; -- $559,000 class N at 'B-'. The $3.7 million class O is not rated by Fitch. The rating affirmations reflect the transaction's stable performance, scheduled loan amortization and paydown since issuance. As of the November 2007 distribution date, the pool's aggregate collateral balance has been reduced by 12% to $131.2 million from $149.2 million at issuance. There are currently two loans (2.1%) in special servicing. The largest loan (1.2%) is secured by a limited-service hotel located in Waco, Texas. The loan payments are current and the transfer to special servicing occurred as a result of the borrower losing the Best Western Franchise. The other specially serviced loan (0.9%) is secured by an office property located in Plantation, Forida and is current. The loan was recently transferred to the special servicer on Nov. 2, 2007 due to imminent default. Fitch identified 14 loans (45.7%) as loans of concern for declining performance and occupancy. Fitch will continue to closely monitor these loans for any further declines and additional transfers to the special servicer. IKON OFFICE: $500MM Stock Repurchase Cues Moody's Rating Review --------------------------------------------------------------- Moody's Investors Service placed the ratings of IKON Office Solutions under review for possible downgrade. The action was prompted by the company's announcement that its Board of Directors has approved the repurchase of $500 million of its common stock of which up to $295 million is intended to be repurchased through a modified "Dutch Auction" self-tender offer with the balance repurchased during fiscal 2008. The company plans to fund the repurchase with cash and incremental borrowings. Ratings under review include: -- Corporate Family Rating of Ba2; -- Probability of Default Rating of Ba2; -- Senior unsecured $14 million, notes due 2008 at Ba3, LGD 4, 64%; -- Senior unsecured $225 million, notes due 2015 at Ba3, LGD 4, 64%; -- Senior unsecured $260 million notes due 2025 at Ba3, LGD 4, 64%; -- Senior unsecured $95 million notes due 2027 at Ba3, LGD 4, 64%. The review will focus on the company's capital structure and liquidity profile pro forma the announced tender offer as well as the company's prospects to profitably grow revenues on a sustained basis in the competitive and slow growth office equipment sector. An ongoing challenge is to grow revenues, which have declined between 1% and 2% year over year for the last several quarters, although the most recent quarter showed slight growth. Additionally, gross margins remain under modest pressure. Gross margins declined to 33.2% in fiscal 2007 compared to 34.1% in fiscal 2006 as a result of some product mix shifts to lower margin equipment, pricing pressure to win the installed base that generally leads to recurring streams of aftermarket service and supplies revenue, as well as a lower level of used equipment sales which carry higher gross margins. While installed base activity has shown signs of progress, Moody's notes that IKON's revenue per page and page volumes have actually declined modestly. The review will examine these trends and the prospects for the company to generate improved post sale revenue streams. Management has effectively countered these operational challenges with steady productivity improvements and expense control, with SG&A expenses down to 28.3% from 29.6% in fiscal 2006. As a result, operating margins continued their slight expansion, reaching 4.9% in fiscal 2007. IKON's liquidity profile is good currently, as reflected in its SGL-1 speculative grade liquidity rating. The review will also consider the implications of the use of cash to effect part of the tender offer, which would consume some of the company's financial flexibility. IKON Office Solutions, headquartered in Valley Forge, Pennsylvania is the largest independent copier distributor in North America and the United Kingdom with revenues of $4.2 billion. IKON OFFICE: $500 Mil. Stock Purchase Cues S&P's Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' corporate credit rating on Malvern, Pennsylvania-based IKON Office Solutions Inc. on CreditWatch with negative implications. The CreditWatch listing reflects the company's recent announcement that its board of directors has approved the repurchase of $500 million of its common stock. IKON intends to repurchase up to $295 million of stock through an immediate tender offer and the balance during fiscal 2008. "The CreditWatch listing reflects our expectation that IKON will use incremental debt financing and existing cash to finance the share repurchases, thereby increasing leverage and reducing financial flexibility," said Standard & Poor's credit analyst Molly Toll-Reed. As of Sept. 30, 2007, IKON had total adjusted debt to EBITDA of 3.5x and cash and investments of $349 million. S&P will assess the company's financial policy with respect to balancing its financial profile, shareholder returns, and strategic growth objectives before resolving the CreditWatch. IKON is the leading independent provider of document management systems and services, with fiscal 2007 revenues of $4.2 billion. INDYMAC ABS: Fitch Holds Junk Ratings on Three Cert. Classes ------------------------------------------------------------ Fitch has taken rating actions on IndyMac ABS Inc. Home Equity transactions: Series SPMD 2000-A Group 1: -- Class AF-3 affirmed at 'AAA'; -- Class R affirmed at 'AAA'; -- Class MF-1 affirmed at 'BBB-'; -- Class MF-2 remains at 'CC/DR2'; -- Class BF remains at 'C/DR5'. Series SPMD 2000-A Group 2: -- Class AV-1 affirmed at 'AAA'; -- Class MV-1 affirmed at 'AA'; -- Class MV-2 downgraded to 'BBB+' from 'A+'; -- Class BV downgraded to 'BB' from 'BBB'. Series SPMD 2001-B Groups 1 & 2: -- Class R affirmed at 'AAA'; -- Class MF-1 downgraded to 'A' from 'AA' and placed on Rating Watch Negative; -- Class MF-2 downgraded to 'BB' from 'BBB-'; -- Class BF remains at 'CC/DR3'. The affirmations reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $11.3 million in outstanding certificates, as of the Oct. 25, 2007 distribution date. The downgrades are due to deterioration in the relationship between CE and expected losses and affect approximately $14.8 million in outstanding certificates. This number includes $11.7 million of certificates that have also been placed on Rating Watch Negative. The mortgage loans in these transactions were originated or acquired by IndyMac Bank, FSB which is also the master servicer for these loans. The collateral in the above transactions consists of fixed-rate and adjustable-rate subprime loans secured by first or second liens on one- to four-family residential properties These transactions are seasoned 90 months and 76 months, respectively. The pool factors (i.e., current mortgage loans outstanding as a percentage of the initial pool) range from 4% to 6%. The cumulative losses, as a percentage of the original collateral balances, range from 2.73% to 4.79%. As of the October 25, 2007 distribution date, the overcollateralization for series 2000-A Group 1 was zero versus a target of $600,970. The 60+ delinquencies are 11.93% of current collateral balance. This includes foreclosures and real estate owned of 4.78% and 2.87%, respectively. The OC for Group 2 was $752,281 versus a target of $774,030. The 60+ delinquencies are 41.05% of current collateral balance. This includes foreclosures and real estate owned of 29.57% and 7.28%, respectively. The OC for series 2001-B was $31,706 versus a target of $1,750,000. The 60+ delinquencies are 51.99% of current collateral balance. This includes foreclosures and REO of 20.03% and 9.91%, respectively. INNOVA ROBOTICS: Sept. 30 Balance Sheet Upside-Down by $4.06 Mil. ----------------------------------------------------------------- Innova Robotics & Automation Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $1,075,383 in total assets and $5,137,563 in total liabilities, resulting in a $4,062,180 total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $198,945 in total current assets available to pay $3,924,123 in total current liabilities. The company reported a net loss of $367,614 on revenues of $1,056,456 for the third quarter ended Sept. 30, 2007, compared with a net loss of $2,977,488 on revenues of $255,717 in the same period last year. The decrease in net loss is due primarily to derivative income of $1,564,535 recorded in the 2007 period compared to a derivative loss of $766,290 recorded in the 2006 period. The derivative income in the 2007 period resulted from a reduction in the derivative liability which is inversely proportional to the company's stock price. The derivative loss in the 2006 period resulted from the initial recording of the $2,825,000 Cornell convertible debenture financing in July 2006. 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?25a3 Going Concern Doubt LBB & Associates Ltd. LLP, in Houston, expressed substantial doubt about Innova Robotics & Automation Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2007. About Innova Robotics Headquartered in Ft. Myers, Florida, Innova Robotics & Automation Inc. (INRA.OB) -- http://www.innovaroboticsautomation.com/ -- provides innovative solutions for customers in the software, aerospace, research, and service industries. INROB TECH: Sept. 30 Balance Sheet Upside-Down by $896,291 ---------------------------------------------------------- InRob Tech Ltd.'s consolidated balance sheet at Sept. 30, 2007, showed $5,864,049 in total assets and $6,760,340 in total liabilities, resulting in a $896,291 total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $4,812,369 in total current assets available to pay $5,212,657 in total current liabilities. The company reported a net loss of $891,434 on total revenues of $440,639 for the third quarter ended Sept. 30, 2007, compared with a net loss of $269,434 on total revenues of $182,225 in the same period in 2006. The overall increase in revenues resulted primarily from an increase in product sales from $69,519 in 2006 to $379,938 in 2007. Service revenues decreased from $112,706 in 2006 to $60,701 in 2007, a decrease of 46.1%. 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?25a8 Going Concern Doubt Davis Accounting Group P.C., in Cedar City, Utah, expressed substantial doubt about InRob Tech Ltd.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company has experienced operating losses, and has negative working capital. The company has incurred significant operating losses through Sept. 30, 2007, and has insufficient revenues to cover its ongoing operating costs. About Inrob Tech Headquartered in Las Vegas, Nevada, InRob Tech Ltd. (OTC BB: IRBL.OB) -- http://www.inrobtech.com/-- is an Israeli-based high- tech company specializing in the planning, manufacturing and service support of advanced wireless and remote control systems, operating all types of robots and other vehicles. The company is Israel's leader in its field, and supports the Israeli Defense Forces, Israeli police, and other military and civilian companies dealing with security. Founded in 1988, the company works closely with other high-tech companies to provide the most advanced and comprehensive UGV solutions to the market. INTERACT HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $2.5 Mil. -----------------------------------------------------------------= Interact Holdings Group Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $3,639,906 in total assets and $6,165,602 in total liabilities, resulting in a $2,525,696 total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $1,001,467 in total current assets available to ay $2,102,828 in total current liabilities. The company reported net income of $108,551 on revenues of $1,112,078 for the third quarter ended Sept. 30, 2007, compared with a net loss of $759,411 on revenues of $938,706 in the same period last year. The increase in revenues is primarily due to the acquisitions of DNI and UTSI, as well as an overall increase in sales. The company reported an operating profit of $330,117 for the three months ended Sept. 30, 2007, compared to an operating loss of $450,042 for the corresponding period in 2006. 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?25a4 Going Concern Doubt Gruber & Company LLC, in Lake Saint Louis, Missouri, expressed substantial doubt about Interact Holdings Group Inc.'s (formerly The Jackson Rivers Company) ability to continue as a going concern after auditing the company's consolidated financial statements as of the year ended Dec. 31, 2006. The auditing firm pointed to the company's retained deficit of $4,562,376 as of Dec. 31, 2006. About Interact Holdings Headquartered in Houston, Texas, Interact Holdings Group, Inc. -- (OTC BB: IHGR.OB) -- http://interactholdings.com/-- through its operating subsidiaries, provides technology and services to the petroleum, utility and communications industries. Interact Holdings maintains two operating subsidiaries, Diverse Networks and UTSI International. The company's current services include Supervisory Control and Data Acquisition (SCADA), Machine- to-Machine (M2M) technology and services, engineering, consulting, network and operations management support. JACK TAYLOR: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Jack R. Taylor 168 Naomi Road Belle Vernon, PA 15012 Bankruptcy Case No.: 07-27146 Chapter 11 Petition Date: November 9, 2007 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Gary William Short, Esq. 436 Seventh Avenue 2317 Koppers Building Pittsburgh, PA 15219 Tel: (412) 765-0100 Fax: (412) 765-2211 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file the list of its twenty largest unsecured creditors. JUDY ROSS: Case Summary & Eight Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Judy E. Ross 100 Beechdale Court Accokeek, MD 20607 Bankruptcy Case No.: 07-21693 Chapter 11 Petition Date: November 20, 2007 Court: District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Kimberly D. Marshall, Esq. 603 Post Office Road Suite 306 Waldorf, MD 20602 Tel: (301) 893-2311 Fax: (301) 893-0392 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtor's list of its Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mortgage Service Center $418,161 4001 Leadenhall Road Mount Laurel, NJ 08054 Pentagon F.C.U. $198,367 P.O. Box 1432 Alexandria, VA 22314 U.S. Department of Education Student Loan $109,571 501 Bleecker Street Utica, NY 13501 Huntington Mortgage Co. $108,865 Bank of America $28,451 Portfolio Recovery & Affiliated $22,078 Discover Financial Services $13,704 Sallie Mae Servicing Student Loan $11,131 JULIA JACKSON: Case Summary & Nine Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Julia Mae Jackson 7829 South Essex Chicago, IL 60649 Bankruptcy Case No.: 07-21162 Chapter 11 Petition Date: November 12, 2007 Court: Northern District of Illinois (Chicago) Judge: Carol A. Doyle Debtor's Counsel: Robert R. Benjamin, Esq. Querrey & Harrow, Ltd. 175 West Jackson Boulevard Suite 1600 Chicago, IL 60604 Tel: (312) 540-7000 Fax: (312) 540-0578 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of her nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bayview Loan Servicing 1st mortgage $938,000 P.O. Box 331409 7847-53 S. Essex Miami, FL 33233 Chicago, IL ($937,500 secured) Waltner Posner 2nd mortgage $100,000 c/o William F. Sullivan 7819 S. Essex & Assoc. Chicago, IL ($0 secured) 3425 West Dempster Street 7829 S. Essex Skokie, IL 60076 Chicago, IL 7831 S. Essex Chicago, IL Harrah's Entertainment Judgment lient $75,000 c/o Blatt, Hasenmiller, dated 4/9/07 Leibsrer & 7819 S. Essex ($0 secured) 2 North LaSalle, Suite 900 7829 S. Essex Chicago, IL 7831 S. Essex Eddie C. Matthews Material supplies $20,000 and construction costs for 7819 S. Essex Chicago, IL Cook County Treasurer 2006 second $4,711 installment property taxes 7831 S. Essex Chicago, IL 2006 second $4,632 installment property taxes 7819 S. Essex Chicago, IL 2006 second $4,715 installment property taxes 7829 S. Essex Chicago, IL Mr. C. Construction Bathroom $12,300 construction 7829 S. Essex Chicago, IL Mega Volts Electrical services $11,500 at 7847-53 S. Essex Chicago, IL City of Chicago Housing code $4,000 violation 7847-53 S. Essex Chicago, IL Climateguard Design & Mechanics lien $2,379 Installation dated 1/16/07 7829 S. Essex ($0 secured) Chicago, IL LARRY MORINIA: Case Summary & Eight Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Larry L. Morinia dba LBM Trucking, Larry Lloyd Morinia Brenda Joyce Morinia fdba More Than Digital 6400 Prarie Dunes Northeast Albuquerque, NM 87111 Bankruptcy Case No.: 07-12803 Chapter 11 Petition Date: November 7, 2007 Court: New Mexico (Albuquerque) Judge: James S. Starzynski Debtor's Counsel: Arin Elizabeth Berkson, Esq. Moore, Berkson & Gandarilla, P.C. P.O. Box 216 Albuquerque, NM 87103-0216 Tel: (505) 242-1218 Fax : 505-242-2836 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Eight Largest Unsecured Creditors: Entity Claim Amount ------ ------------ MBNA America Bank $12,790 P.O. Box 15027 Wilmington, DE 19850 AT & T Wireless $2,000 c/o Palisades Collection LLC 210 Sylan Avenue Englewood, NJ 07632 Credit One Bank, NA $597 P.O. Box 98873 Las Vegas, NV 89193 GEMB/JCP $486 Alltel $404 Asset Acceptance LLC $348 HSBC NV $101 Comcast of Albuquerque $47 LB-UBS COMMERCIAL: Stable Performance Cues Fitch to Hold Ratings ---------------------------------------------------------------- Fitch has affirmed LB-UBS Commercial Mortgage Trust 2006-C7, commercial mortgage pass-through certificates, as: -- $36.5 million class A-1 at 'AAA'; -- $624 million class A-2 at 'AAA'; -- $54 million class A-AB at 'AAA'; -- $968.1 million class A-3 at 'AAA'; -- $427.6 million class A-1A at 'AAA'; -- $302 million class A-M at 'AAA'; -- $294.4 million class A-J at 'AAA'; -- $22.6 million class B at 'AA+'; -- $30.2 million class C at 'AA'; -- $30.2 million class D at 'AA-'; -- $26.4 million class E at 'A+'; -- $26.4 million class F at 'A'; -- Interest-only class X-CP at 'AAA'; -- Interest-only class X-CL at 'AAA'; -- Interest-only class X-W at 'AAA'; -- $26.4 million class G at 'A-'; -- $30.2 million class H at 'BBB+'; -- $26.4 million class J at 'BBB'; -- $26.4 million class K at 'BBB-'; -- $7.5 million class L at 'BB+'; -- $3.8 million class M at 'BB'; -- $11.3 million class N at 'BB-'; -- $3.8 million class P at 'B+'; -- $3.8 million class Q at 'B'; -- $3.8 million class S at 'B-'. Fitch does not rate the $30.2 million class T certificates. The rating affirmations are the result of stable pool performance and minimal pay down since issuance. As of the November 2007 distribution date, the pool's aggregate principal balance has decreased 0.1% to $3.020 billion from $3.015 billion at issuance. Interest only loans comprise 55.8% of the pool and an additional 32.5% of the pool is comprised of partial interest only loans. One loan (0.3%), secured by a 38,592 square foot office property in Orlando, Florida, is currently in special servicing and is 60 days delinquent. The special servicer is working with the borrower to bring the loan current. Losses are currently not expected. Fitch reviewed the most recent servicer provided operating statement analysis reports for the four shadow rated loans: 520 Madison Avenue (15.8%), 1211 Avenue of the Americas (9.1%), Valley Manor Nursing & Rehabilitation Center (8.3%) and Reston Town Center (4.0%). Based on their stable performance since issuance the loans maintain their investment grade shadow ratings. The largest shadow rated loan, 520 Madison Avenue (15.8%), is secured by a 994,757 sf class A office building located in the Plaza District submarket of Midtown Manhattan, New York. Major tenants include Jefferies & Company, Inc. (rated 'BBB+' by Fitch), Mitsubishi (rated 'A+' by Fitch), Metallgesellschaft and CA, Inc. (rated 'BBB-' by Fitch). Occupancy as of June 30, 2007 is 99.8% compared to 99.5% at issuance. The second largest shadow rated loan, 1211 Avenue of the Americas (15.8%), is secured by a 1.9 million sf class A office building located in Midtown Manhattan, New York. The $275 million pari passu A-1 note is included in this transaction. The $400 million pari passu A-2 note is included in the LB-UBS 2006-C6 transaction (not rated by Fitch). Major tenants include News America (rated 'BBB' by Fitch), Ropes & Gray, Westdeutsche Landesbank (rated 'A+' by Fitch) and JP Morgan Chase (rated 'AA-' by Fitch). Occupancy as of June 30, 2007 is 100% compared to 99.9% at issuance. LEVITT AND SONS: Can Hire Kurtzman Carson as Claims Agent --------------------------------------------------------- The Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida gave authority to Levitt and Sons LLC and its debtor-affiliates to hire Kurtzman Carson Consultants LLC as their notice, claims and balloting agent, nunc pro tunc to the Nov. 9, 2007. The Debtors believe that approval of their agreement with KCC and the firm's appointment as notice, claims, and balloting agent of the Court will facilitate the orderly and efficient management of their Chapter 11 cases. KCC is expected to: -- prepare and serve required notices in the Debtors' cases; -- receive, examine and maintain copies of all proofs of claim and proofs of interest filed; -- maintain official claims registers as well as an up-to-date mailing lists for all entities that have filed proofs of claim or proofs of interest; -- implement necessary security measures to ensure the completeness and integrity of the claims registers; -- provide the Clerk of Court with a copy of the claims registers; -- provide access to the public for examination of copies of proofs of claim or interest filed; -- record all transfers of claims; -- provide temporary employees to process claims as necessary; and -- provide balloting and other related administrative services, including printing of and sending out ballots for the solicitation of votes on the Debtors' Chapter 11 plan and preparing voting reports. The Debtors will pay KCC in accordance with the firm's customary rates. A copy of KCC's fee schedule is available at no charge at http://researcharchives.com/t/s?255f KCC will not withdraw from the Debtors' Chapter 11 cases without the Court's permission. Judge Ray also modified certain provisions in KCC's retention agreement to: -- strike any reference to late charges or interest; -- provide that, to the extent that upon conversion of the instant case, KCC's employment will terminate unless extended by Court order; and -- provide that the Limitations of Liability will not apply in the case of gross negligence or willful misconduct of the firm. Sheryl R. Betance, director of restructuring services at KCC, assures the Court that her firm has not represented and has no relationship with the Debtors, their creditors and equity security holders, and any other interested parties in the case, in any matters relating to the bankruptcy cases. KCC, Ms. Betance says, is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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. Levitt Corp., the parent company, is not included in the bankruptcy filing. 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: Court Okays Berger Singerman as Bankr. Counsel --------------------------------------------------------------- Levitt and Sons LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Berger Singerman, P.A., as their counsel, nunc pro tunc to Nov. 9, 2007. Berger Singerman is expected to: (a) advise the Debtors with respect to their responsibilities in complying with the United States Trustee's Guidelines and Reporting Requirements and with the rules of the Court; (b) prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the Debtors' Chapter 11 cases; (c) protect the interests of the Debtors in all matters pending before the Court; and (d) represent the Debtors in negotiations with their creditors and in the preparation of a plan. Berger Singerman's hourly rates, subject to adjustments, are: Professionals Hourly Rate ------------- ----------- Paul Singerman, Esq. $475 Jordi Guso, Esq. $435 Leslie Gern Cloyd, Esq. $435 Associate attorneys $250 - $370 Legal assistants and paralegals $75 - $160 Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, an attorney at and shareholder of the firm, disclosed that the firm's conflicts check system revealed certain parties represented, or is being represented, by the firm, none of which impairs the firm's disinterestedness or constitutes any conflict of interest. Berger Singerman neither holds nor represents any interest adverse to the Debtors and is a "disinterested person" within the scope and meaning of Section 101(14) of the Bankruptcy Code, Mr. Singerman stated. Neither he nor the firm has or will represent any other entity in connection with the Debtors' Chapter 11 cases and accept any fee from any other party or parties, except the Debtors, unless otherwise authorized by the Court, he continues. The Debtors retained Berger Singerman to act as their legal counsel in connection with restructuring matters on Aug. 28, 2007. Since then, the firm has provided prepetition services to the Debtors. Mr. Singerman disclosed that a total of $1,526,271 was received between the period September 25 and Nov. 8, 2007. According to Mr. Singerman, the firm has applied the amount in payment in full of its prepetition fees and expenses, and after doing so, $825,000 will be held by Berger Singerman as security for the fees and costs that may be awarded to it by the Court -- $750,000 as fee retainer, and $75,000 as cost deposit. 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. Levitt Corp., the parent company, is not included in the bankruptcy filing. 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: Wants to Abandon Bank Collateral and Properties ---------------------------------------------------------------- Levitt and Sons, LLC, and certain of its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to abandon certain real properties in which they "have no equity and which are financially burdensome to maintain." As disclosed at the "first day hearings" in their Chapter 11 cases, the Debtors have been in discussions with their senior lenders regarding the willingness to provide additional financing to complete vertical construction necessary to complete sales of homes, including homes that are currently under contract. The Debtors also announced that if they and their lenders could not reach mutually acceptable agreements regarding the terms of additional financing, the Debtors would seek authority to promptly abandon the collateral securing debt owed to lenders with which the Debtors do not have agreements. As of Nov. 16, 2007, the Debtors tell the Court that they have not reached separate agreements with Bank of America, N.A., KeyBank, N.A., and Wachovia Bank, N.A., on the terms of such financing. If the Debtors and the Banks have not reached agreement by the requested November 27 hearing on the Motion, the Debtors will prosecute the motion and seek authority to immediately abandon the collateral. BOA and KeyBank Collateral On the Debtors' behalf, Jordi Guso, Esq., at Berger Singerman, P.A., in Miami, Florida, relates that pursuant to a credit facility dated as of Oct. 6, 2005, as amended from time to time, among BOA, as lender; Levitt & Sons and GC LLC, as borrowers; and Levitt & Sons at Hawk's Haven, LLC, Levitt & Sons at Hunter's Creek, LLC, Levitt & Sons of Lake County, LLC, Levitt & Sons of Seminole County, LLC, Levitt & Sons of Osceola County, LLC, and Levitt & Sons of Flagler County, LLC, as guarantors, BOA provided a $125,000,000 revolving line of credit to the borrowers. In addition, pursuant to an Aug. 9, 2005 credit facility, as amended, among KeyBank, as lender; Levitt & Sons, as borrower; and Levitt & Sons at Tradition, LLC, Levitt & Sons of Hernando County, LLC, and Levitt & Sons of Lee County, as guarantors, KeyBank provided a $125,000,000 revolving acquisition and development loan to the borrower. Mr. Guso informs the Court that, as of Sept. 30, 2007: (a) borrowings under the BOA Credit Facility, which is secured by mortgage liens on the real property owned by the BOA Guarantors, totaled approximately $103,000,000, plus interests, costs and attorneys' fees; and (b) borrowings under the KeyBank Credit Facility, which is secured by, inter alia, first priority mortgage liens on the real property owned by the KeyBank Guarantors, totaled approximately $95,000,000, plus interests, costs and attorneys fees. The BOA and KeyBank Debtors insist that the Court should authorize them to abandon their right, title and interest in all of the banks' Collateral, including their right title and interest in the properties pursuant to Section 554(a) of the Bankruptcy Code. The BofA properties include: -- Cascades at River Hall, (Hawks Haven) Lee County; -- Hunter's Creek Charter Gardens, Orange County; -- Cascades at Groveland, Lake County; -- Turtle Creek, Osceola County; -- Hunter's Creek, Orange County; -- Cascades at Grand Landings, Flagler County; and -- Jesups Landing, Jesup Reserve and Reserve at Sanford, Seminole County. A full-text copy of the legal description of the BOA Collateral is available for free at: http://researcharchives.com/t/s?25a0 The KeyBank properties are: -- Seasons at Tradition, St. Lucie County; -- Cascades at Southern Hills, Hernando County; and -- San Simeon/Bonita Springs, Lee County. A full-text copy of the legal description of the KeyBank Collateral is available for free at: http://researcharchives.com/t/s?25a1 Moreover, in a separate filing, KeyBank seeks immediate relief from the automatic stay to, inter alia, secure and complete the properties as may be necessary to preserve their value, to obtain the production of documents from the KeyBank Debtors specifically related to each construction project so that the build-out can be completed, and to foreclose their liens and liquidate the KeyBank Collateral as it sees fit. Phillip M. Hudson, III, Esq., at Arnstein & Lehr LLP, in Miami, Florida, states, on KeyBank's behalf, that as of the Petition Date, the KeyBank Debtors owe KeyBank roughly $96,000,000. To secure these debt obligations, KeyBank holds property perfected, first priority liens on the undeveloped home sites, home sold and in production, and quick delivery homes, and other real and personal property. The KeyBank Collateral is in various stages of build-out, Mr. Hudson notes, adding that a significant number of the homes old and in production are not completed and are subject to damage or loss due to weather, theft, and vandalism. Although KeyBank does not object to the KeyBank Debtors' proposed abandonment of the KeyBank Collateral, the bank seeks that the Court provide language in the Abandonment Order directing any other holder of a claim asserting a claim against the KeyBank Collateral to first file with the Court a motion for relief from stay to prevent a "race to courthouse" by other creditors and to prevent unnecessary interference by the estate's creditors. Wachovia Collateral Mr. Guso states that Wachovia has provided working capital and acquisition and development loans to Levitt & Sons; Bellaggio by Levitt and Sons, LLC; Levitt and Sons at World Golf Village, LLC; Levitt and Sons of Manatee County, LLC; Levitt and Sons of Cherokee County, LLC; Levitt and Sons of Hall County, LLC; Levitt and Sons of Paulding County, LLC; and Levitt and Sons of Horry County, LLC: A. Wachovia Rio Mar Credit Facility Pursuant to an acquisition, development and construction revolving loan facility, dated Sept. 5, 2002, as amended, among Wachovia, as lender, LAS Manatee County and Bellagio, as borrowers, and Levitt & Sons, as guarantor, Wachovia provided a $40,000,000 credit facility to the Debtors. As of Sept. 30, 2007, borrowings under the Wachovia Rio Mar Credit Facility totaled $9,600,000. The credit facility is secured by first priority mortgage liens on the real property owned by LAS Manatee County. B. Wachovia A&D Credit Facility Pursuant to a residential acquisition, development and construction revolving loan facility, dated May 31, 2006, as amended, amongst Wachovia, as lender, Levitt & Sons, as borrower, and LAS Hall County, LAS Cherokee County, LAS Paulding County, LAS Horry County, as guarantors, Wachovia provided a $125,000,000 credit facility to the Borrowers. As of September 30, borrowings under the Wachovia A&D Credit Facility aggregated $102,000,000. The Wachovia A&D Credit Facility is secured by, inter alia, mortgage liens on the real property owned by the Wachovia Guarantors. C. Wachovia World Golf Village Facility Pursuant to a Sept. 29, 2004 credit facility among Wachovia, as lender, LAS and LAS World Golf Village, as borrowers, Wachovia provided a $26,500,000 credit facility. As of Sept. 30, 2007, total borrowings under the Wachovia World Golf Village Facility totaled $8,600,000. The credit facility is secured by, inter alia, a mortgage lien on the real property owned by LAS World Golf Village. Mr. Guso informs the Court that Wachovia asserts first priority liens on, and security liens in, substantially all of the Wachovia Guarantors and LAS World Golf Village's assets, both tangible and intangible, real and personal, and the proceeds and recoveries of the other collaterals. Each of the credit facilities provided by Wachovia is cross-defaulted and cross collaterized, he says. Mr. Guso contends that the if the Debtors and Wachovia have not reached agreement by November 27, the Debtors will prosecute the Motion and seek authority to immediately abandon the collateral, including these properties: -- Cascades at World Golf Village, St. Johns County; -- Seasons at Laurel Canyon, Cherokee, Georgia; -- Seasons on Lake Lanier, Hall, Georgia; -- Seasons at Prince Creek, Horry, South Carolina; -- Seasons/Waterstone at Seven Hills, Paulding, Georgia; and -- Cascades Sarasota, Manatee County. A detailed description of the properties is available for free at http://researcharchives.com/t/s?25a2 Value of Collateral is Less than Indebtedness Rate The Abandoned Collateral of the three banks is burdened by a debt so large that there is no "equity value" therein, Mr. Guso asserts, citing In re Resource Technology Corp., 430 F.3d 884, 887 (7th Cir. 2005). Mr. Guso notes that Section 554(a) provides that, "[a]fter notice and a hearing, the [debtor in possession] may abandon property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate." It is undisputed that the BOA, KeyBank and Wachovia Debtors have no equity in the Abandoned Collateral, Mr. Guso maintains, adding that continued maintenance of the Abandoned Collateral is burdensome to the Debtors' estates. Abandonment is in the best interest of the estates because the BOA, KeyBank and Wachovia Debtors will no longer be forced to incur or pay the carrying costs, including taxes, insurance and other expenses necessary to maintain the Abandoned Collateral, Mr. Guso contends. He adds that abandonment will release the Abandoned Collateral from the estates, that is, make them available to BOA, KeyBank and Wachovia, and possibly other secured creditors that hold or may claim interests in the Abandoned Collateral to foreclose their interests in the collateral and liquidate their claims. Upon Court approval of the abandonment, the automatic stay will be terminated so as to permit BOA, KeyBank and Wachovia, and any other party-in-interest to enforce the interest under applicable non-bankruptcy law. 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. Levitt Corp., the parent company, is not included in the bankruptcy filing. 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: U.S. Trustee Balks at Jones Day Retention ----------------------------------------------------------- Diana G. Adams, the United States Trustee for Region 2, objects to PLVTZ Inc., dba Levitz Furniture Inc.'s employment of Jones Day as bankruptcy counsel because Jones Day fails to meet one of the most significant and important requirements of Section 327(a) of the Bankruptcy Code -- disinterestedness, Paul K. Schwartzberg, trial attorney for Ms. Adams, tells the U.S. Bankruptcy Court for the Southern District of New York. "Indeed, Jones Day holds several adverse interests," asserts Mr. Schwartzberg. Jones Day represents General Electric Capital Corporation, the Debtor's prepetition lender and most significant creditor, Mr. Schwartzberg notes. The retention of Jones Day by GECC specifically states that Jones Day may not be adverse -- and therefore sue -- GECC, he says. According to Mr. Schwartzberg, Jones Day currently represents Levitz Home Furnishings, Inc. and its affiliated entities in its pending bankruptcy cases. The Debtor, PLVTZ Inc., purchased substantially all of its assets from LHFI less than two years ago. "Jones Day was Levitz's bankruptcy counsel on all matters, including the sale of its assets to the Debtor," Mr. Schwartzberg tells Judge Gerber. Moreover, Jones Day negotiated the DIP financing with GECC in the Levitz bankruptcy, Mr. Schwartzberg states. Currently, the firm also represents several of the Debtor's landlords, he says. A partner at Jones Day, Brian M. Poissant, whose role in the Debtors' Chapter 11 proceedings is not clear, is the brother- in-law of the Debtors' Chief Merchandising Officer, Mr. Schwartzberg further discloses. "These connections cast doubt on all of Jones Day's prepetition negotiations as well as all postpetition acts Jones Day would take on behalf of the Debtor," Mr. Schwartzberg contends. "Allowing Jones Day to represent the Debtor undermines the aura of transparency and integrity that every bankruptcy case must have." Against this backdrop, Ms. Adams asks the Court to deny the Debtors' application to employ Jones Day as its Bankruptcy counsel. As reported in the Troubled Company Reporter on Nov. 14, 2007, the Debtors asked the Court for authority to employ Jones Day as its counsel, nunc pro tunc to the bankruptcy filing. Kathleen M. Guinnessey, chief financial officer of PLVTZ, told the Court that Jones Day is familiar with the Debtor's business, having assisted the Debtor with its preparations to commence bankruptcy protection. In addition, Jones Day represented Levitz Home Furnishings Inc. and its affiliated debtors, during their Chapter 11 cases, noted Ms. Guinnessey. 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). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. 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. 30; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEVITZ FURNITURE: U.S. Trustee Forms Seven-Member Creditors Panel ----------------------------------------------------------------- Diana G. Adams, United States Trustee for Region 2, appointed seven members to the Official Committee of Unsecured Creditors in the Chapter 11 case of PLVTZ Inc., dba Levitz Furniture Inc., and its debtor-affiliates. The Creditors Committee members are: 1. Haining Mengnu Group, Co., Ltd. c/o Li & Fun USA 1359 Broadway New York, NY 10018 Attn: Marty Leder Tel.: (646) 839-7007 2. Decoro 1403 Eastchester Dr. #104 High Point, NC 27265 Attn: Heath M.Corso Tel.: (336) 885-9440 Ext. 202 3. Prime Resources International LLC. 100 Shepard Avenue Wheeling, IL 60090 Attn: Kevin B. Gallagher Tel.: (847) 291-4200 4. Legacy Classic Furniture 2575 Penny Road High Point, NC 27265 Attn: Doug Jermyn Tel.: (336) 449-4600 Ext. 282 5. Collezione Europa 145 Cedar Lane Englewood, NJ 07631 Attn: Paul B. Frankel Tel.: (201) 541-8600 6. Home Meridian International One Pulaski Square P.O. Box 1371 Pulaski, VA 24333 Attn: Brian K. Spencer Tel.: (540) 994-5911 7. Breakaway Staffing, Inc. 893 South Broad Street Trenton, NJ 08611 Attn: Sean P. Boyle Tel.: (215) 858-0024 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). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. 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. 30; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEVITZ FURNITURE: Wants to Hire FTI Consulting as Crisis Manager ---------------------------------------------------------------- PLVTZ Inc., dba Levitz Furniture Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to employ FTI Consulting Inc. as their crisis manager, nunc pro tunc to Nov. 8, 2007. The Debtors have determined that the size and complexity of its business operations require them to employ an experienced crisis manager in connection with its chapter 11 proceedings. Pursuant to an engagement letter between FTI Consulting and the Debtor dated Nov. 15, 2007, FTI Consulting will provide the Debtor crisis management services in connection with contingency planning and restructuring efforts. Specifically, FTI Consulting will: (a) assist the Debtors in the preparation of a rolling 13-week cash forecast to be used to evaluate and project liquidity needs; (b) advise and assist the Debtors in their review of existing and proposed systems and controls, including but not limited to, cash management; (c) together with Asset Disposition Advisors LLC and Rodman & Renshaw LLC, assist the Debtors in the marketing of their assets to bulk inventory disposition firms and other parties interested in the assets, including coordinating a "363 sale process", contacting potential buyers, facilitating due diligence requests, negotiating asset purchase agreements and conducting a final auction; (d) advise and assist the Debtors in the process of identifying and reviewing debtor-in-possession financing; (e) advise and assist the Debtors in their preparation, analysis and monitoring of historical, current and projected financial affairs, including without limitation, (i) schedules of assets and liabilities, (ii) statements of financial affairs, (iii) periodic operating reports, (iv) analyses of cash receipts and disbursements, (v) analyses of cash flow forecasts, (vi) analyses of various asset and liability accounts, (vii) analyses of any unusual or significant transactions between themselves and any other entities, (viii) and analyses of proposed restructuring transactions; (f) assist the Debtors in the valuation of businesses and in the preparation of a liquidation valuation for a reorganization plan and disclosure purposes; (g) advise and assist the Debtors in their assessment of any bonus, incentive or severance plans; (h) advise and assist the Debtors in reviewing executory contracts and providing recommendations to assume or reject; (i) advise and assist the Debtors in reviewing and evaluating the claims process; and (j) advise and assist the Debtors regarding various reorganization tax issues, including calculating net operating loss carryforwards, and the tax consequences of any proposed plans of reorganization. FTI Consulting will be paid at its customary hourly rates: Professional Hourly Rate ------------ ----------- Senior Managing Directors $615 - $675 Directors/Managing Directors $440 - $590 Consultants/Senior Consultants $225 - $420 Administrative/Paraprofessionals $95 - $180 The Debtors will also reimburse FTI Consulting's reasonable out- of-pocket expenses incurred. Robert J. Duffy, senior managing director of FTI Consulting, 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). Paul D. Leake, Esq., and Brad B. Erens, Esq., at Jones Day represents the Debtors in their restructuring efforts. 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. 30; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). LIFECARE HOLDINGS: Posts $13MM Net Loss in Qtr. ended Sept. 30 -------------------------------------------------------------- LifeCare Holdings Inc. reported operating results for the three- and nine-month periods ended Sept. 30, 2007. The company reported $13.2 million net loss for three months ended Sept. 30, 2007, compared to a $3.4 million net loss for the same period in the previous year. For the nine-months ended September 30, 2007, the company has a net loss of $20.1 million as compared to a net loss of $21.2 million for the same period in 2006. The net loss for the 2007 period included a $3.8 million impairment charge and the net loss for the 2006 period included a $24.6 million impairment charge. Additionally, during the nine months ended Sept. 30, 2006, the company, received $12.4 million related to a refund of 2005 federal income tax payments. This tax benefit was the result of expenses recorded related to the merger during the year ended Dec. 31, 2005. During the nine months ended Sept. 30, 2006, the company also received $7 million in business interruption proceeds as a result of the impact of Hurricane Katrina on its New Orleans operations. Liquidity and Capital Resources The company's primary sources of liquidity were cash on hand, expected cash flows generated by operations, potential availability of borrowings under a revolving credit facility, and funds available under the Master Lease. The company's primary liquidity requirements were for debt service on its senior secured credit facilities and the notes, capital expenditures and working capital. At Sept. 30, 2007, its debt structure consisted of $147 million aggregate principal amount of senior subordinated notes, a senior secured credit facility, consisting of a $249.9 million term loan facility, which matures on Aug. 11, 2012, and a $75 million revolving credit facility subject to availability, including sub-facilities for letters of credit and swingline loans, which matures on Aug. 11, 2011. During the nine months ended Sept. 30, 2006, the company repurchased $3 million face value of its senior subordinated notes for approximately $1.5 million. Accordingly, it recorded a gain on early extinguishment of debt, net of write-off of capitalized financing costs, of approximately $1.3 million during this period. At Sept. 30, 2007, the company's balance sheet showed total assets of $528.1 million, total liabilities of $493.4 million and total shareholders' equity of $34.7 million. About LifeCare Holdings Headquartered in Plano, Texas, LifeCare Holdings Inc. -- http://www.lifecare-hospitals.com/-- operates 19 long term acute care hospitals located in nine states. Long term acute care hospitals specialize in the treatment of medically complex patients who typically require extended hospitalization. * * * As reported in the Troubled Company Reporter on Nov. 21, 2007, Standard & Poor's Ratings Services lowered LifeCare Holdings Inc.'s corporate credit rating to 'CCC+' from 'B-'. The outlook is negative. LONG BEACH: Fitch Downgrades Ratings on $695.4 Million Certs. ------------------------------------------------------------- Fitch Ratings has taken rating actions on Long Beach mortgage pass-through certificates. Affirmations total $3.3 billion and downgrades total $695.4 million. In addition, approximately $26.7 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 2005-1 -- $90.2 million class A affirmed at 'AAA' (BL: 95.06, LCR: 8.54) -- $159.2 million class M-1 affirmed at 'AA+' (BL: 74.91, LCR: 6.73) -- $99.7 million class M-2 affirmed at 'AA' (BL: 60.6, LCR: 5.44) -- $61.2 million class M-3 affirmed at 'AA-' (BL: 49.44, LCR: 4.44) -- $61.2 million class M-4 affirmed at 'A+' (BL: 38.22, LCR: 3.43) -- $43.7 million class M-5 affirmed at 'A' (BL: 22.47, LCR: 2.02) -- $42 million class M-6 affirmed at 'A-' (BL: 19.95, LCR: 1.79) -- $35 million class M-7 affirmed at 'BBB' (BL: 17.89, LCR: 1.61) -- $35 million class M-8 affirmed at 'BBB-' (BL: 15.87, LCR: 1.43) -- $35 million class M-9 affirmed at 'BB' (BL: 13.88, LCR: 1.25) -- $35 million class B-1 affirmed at 'BB-' (BL: 11.95, LCR: 1.07). Deal Summary -- Originators: Long Beach (100%); -- 60+ day Delinquency: 23.21%; -- Realized Losses to date (% of Original Balance): 1.51%; -- Expected Remaining Losses (% of Current Balance): 11.13%; -- Cumulative Expected Losses (% of Original Balance): 3.93%. Series 2005-2 -- $24.3 million class A affirmed at 'AAA' (BL: 99.16, LCR: 5.98) -- $137.5 million class M1 affirmed at 'AA+' (BL: 83.08, LCR: 5.01) -- $128.7 million class M2 affirmed at 'AA' (BL: 60.81, LCR: 3.67) -- $40 million class M3 affirmed at 'AA' (BL: 56.67, LCR: 3.42) -- $66.2 million class M4 affirmed at 'A+' (BL: 46.58, LCR: 2.81) -- $43.7 million class M5 affirmed at 'A' (BL: 37.07, LCR: 2.23) -- $30 million class M6 affirmed at 'A' (BL: 32.21, LCR: 1.94) -- $42.5 million class M7 downgraded to 'BBB-' from 'BBB+' (BL: 19.59, LCR: 1.18) -- $27.4 million class M8 downgraded to 'BB+' from 'BBB-' (BL: 17.41, LCR: 1.05) -- $30 million class M9 downgraded to 'BB-' from 'BB' (BL: 14.95, LCR: 0.9) -- $32.5 million class B1 downgraded to 'B' from 'BB-' (BL: 12.40, LCR: 0.75) -- $25 million class B2 downgraded to 'CC/DR4' from 'B+' . Deal Summary -- Originators: Long Beach (100%); -- 60+ day Delinquency: 27.99%; -- Realized Losses to date (% of Original Balance): 2.31%; -- Expected Remaining Losses (% of Current Balance): 16.59%; -- Cumulative Expected Losses (% of Original Balance): 6.64%. Series 2005-3 -- $457.6 million class A affirmed at 'AAA' (BL: 41.18, LCR: 2.62) -- $41.2 million class M-1 affirmed at 'AA+' (BL: 35.3, LCR: 2.25) -- $38.9 million class M-2 affirmed at 'AA' (BL: 29.63, LCR: 1.89) -- $26.7 million class M-3 rated 'AA-', placed on Rating Watch Negative (BL: 25.72, LCR: 1.64) -- $19.8 million class M-4 downgraded to 'A-' from 'A+' (BL: 22.79, LCR: 1.45) -- $18.3 million class M-5 downgraded to 'BBB' from 'A' (BL: 20.08, LCR: 1.28) -- $15.2 million class M-6 downgraded to 'BBB-' from 'A-' (BL: 17.77, LCR: 1.13) -- $15.2 million class M-7 downgraded to 'BB' from 'BBB+' (BL: 15.38, LCR: 0.98) -- $12.2 million class M-8 downgraded to 'B+' from 'BBB' (BL: 13.45, LCR: 0.86) -- $11.4 million class M-9 downgraded to 'C/DR5' from 'BBB-'. Deal Summary -- Originators: Long Beach (100%); -- 60+ day Delinquency: 28.26%; -- Realized Losses to date (% of Original Balance): 1.22%; -- Expected Remaining Losses (% of Current Balance): 15.7%; -- Cumulative Expected Losses (% of Original Balance): 8.26%. Series 2005-WL2 -- $451.8 million class A affirmed at 'AAA' (BL: 71.2, LCR: 3.92) -- $144.6 million class M-1 affirmed at 'AA+' (BL: 50.2, LCR: 2.76) -- $84 million class M-2 affirmed at 'AA' (BL: 43.15, LCR: 2.37) -- $55.1 million class M-3 affirmed at 'AA' (BL: 37.92, LCR: 2.09) -- $41.3 million class M-4 affirmed at 'A+' (BL: 33.97, LCR: 1.87) -- $41.3 million class M-5 affirmed at 'A' (BL: 29.99, LCR: 1.65) -- $37.2 million class M-6 downgraded to 'A-' from 'A' (BL: 26.34, LCR: 1.45) -- $34.4 million class M-7 downgraded to 'BBB' from 'A-' (BL: 22.85, LCR: 1.26) -- $28.9 million class M-8 downgraded to 'BB+' from 'BBB+' (BL: 19.90, LCR: 1.09) -- $27.5 million class M-9 downgraded to 'BB-' from 'BBB' (BL: 17.00, LCR: 0.93) -- $22 million class M-10 downgraded to 'B' from 'BBB-', and removed from Rating Watch Negative (BL: 14.65, LCR: 0.81) -- $27.5 million class B-1 downgraded to 'C/DR5' from 'BB+' -- $28.9 million class B-2 downgraded to 'C/DR5' from 'B' . Deal Summary -- Originators: Long Beach (100%); -- 60+ day Delinquency: 28.17%; -- Realized Losses to date (% of Original Balance): 1.28%; -- Expected Remaining Losses (% of Current Balance): 18.19%; -- Cumulative Expected Losses (% of Original Balance): 8.26%. Series 2005-WL3 -- $583.7 million class A affirmed at 'AAA' (BL: 58.23, LCR: 3.06) -- $108.4 million class M1 affirmed at 'AA+' (BL: 46.77, LCR: 2.46) -- $106.2 million class M2 affirmed at 'AA' (BL: 37.98, LCR: 2) -- $35 million class M3 affirmed at 'AA-' (BL: 34.86, LCR: 1.83) -- $52.5 million class M4 downgraded to 'A' from 'A+' (BL: 30.15, LCR: 1.59) -- $33.9 million class M5 downgraded to 'A-' from 'A' (BL: 27.09, LCR: 1.43) -- $26.2 million class M6 downgraded to 'BBB+' from 'A-' (BL: 24.66, LCR: 1.3) -- $33.9 million class M7 downgraded to 'BBB-' from 'BBB+' (BL: 21.41, LCR: 1.13) -- $25.1 million class M8 downgraded to 'BB' from 'BBB' (BL: 19.03, LCR: / 1) -- $24.1 million class M9 downgraded to 'B+' from 'BBB-', and removed from Rating Watch Negative (BL: 16.78, LCR: 0.88) -- $21.9 million class B1 downgraded to 'B' from 'BB+' (BL: 14.84, LCR: 0.78) -- $21.9 million class B2 downgraded to 'C/DR5' from 'B+' . Deal Summary -- Originators: Long Beach (100%); -- 60+ day Delinquency: 26.65%; -- Realized Losses to date (% of Original Balance): 1.38%; -- Expected Remaining Losses (% of Current Balance): 19.01%; -- Cumulative Expected Losses (% of Original Balance): 11.15%. LONG BEACH: Fitch Junks Ratings on Two Certificate Classes ---------------------------------------------------------- Fitch Ratings has taken rating actions on Long Beach Mortgage Loan Trust residential mortgage-backed securities transactions: Long Beach Mortgage Loan Trust, Series 2003-2 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 rated 'BBB+', placed on Rating Watch Negative; -- Class M-4 downgraded to 'B' from 'BBB-'; -- Class M-5 downgraded to 'CCC/DR1' from 'BB+'. Long Beach Mortgage Loan Trust, Series 2004-2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'A'; -- Class M-4 affirmed at 'A-'; -- Class M-5 affirmed at 'BBB+'; -- Class M-6 rated 'BBB', placed on Rating Watch Negative; -- Class M-7 downgraded to 'BB-' from 'BBB-'; -- Class B downgraded to 'CCC/DR1 from 'BB'. All of the mortgage loans in the aforementioned transactions were either originated or acquired by Long Beach Mortgage Company. The mortgage loans consist of fixed- and adjustable-rate subprime mortgage loans and are secured by first- and second-lien mortgages or deeds of trust on residential properties. As of the October 2007 distribution date, series 2003-2, 2004-2 are 54 and 41 months seasoned, respectively. The pool factors are approximately 8% (series 2003-2) and 16% (series 2004-2). Washington Mutual Mortgage Securities Corporation, rated 'RMS2+' is the master servicer for all of the transactions detailed above. The affirmations, affecting approximately $288.8 million in outstanding certificates, reflect adequate levels of credit enhancement relative to expected losses. The downgrades, affecting approximately $15.8 million, are the result of deterioration in the relationship between CE and expected losses. The affected bonds have serious delinquencies (loans delinquent more than 60 days, inclusive of loans in foreclosure, bankruptcy, and real estate owned) of 22.49% (2003-2) and 14.26% (2004-2) and current cumulative losses of 2.89% (2003- 2) and 1.18% (2004-2). Class M-3 from 2003-2 was placed on Rating Watch Negative due to trends in serious delinquencies and losses. The transaction has serious delinquencies of 22.49% of the current pool balance. Losses have exceeded excess spread for the last five out of six months, by an average of approximately $254,000 per month. Class M-6 from 2004-2 was also placed on Rating Watch Negative due to trends in serious delinquencies and losses. The transaction has serious delinquencies of 14.26% of the current pool balance. Losses have exceeded excess spread for the last five out of six months, by an average of approximately $538,000 per month. Fitch will monitor this transaction over the next six months to see how loans move through the delinquency pipeline. If credit enhancement continues to deteriorate, further rating actions may be necessary. MAAX HOLDINGS: Adopts Management Retention Plan ----------------------------------------------- MAAX Holdings Inc. and several of its affiliated companies adopted a management retention plan in an effort to retain key employees of the MAAX corporate family. Concurrently with the adoption of the retention plan, MAAX Corp. amended its existing credit facility to reflect and accommodate the adoption of the retention plan. "Retaining our management team is vital to our continued success," Paul Golden, president of MAAX Corp. and president and chief executive officer of the company, said. "Our employees bring value to our company, and we are pleased to take this step toward keeping this talented group of individuals in the MAAX organization." The company is exploring strategic alternatives to improve its capital structure and increase its liquidity for general corporate purposes. Strategic alternatives being explored by the company include: -- operational enhancements; -- cost reduction programs; -- refinancing or repayment of debt and issuance of new debt or equity. The company stated that there can be no assurance that the exploration of strategic alternatives will result in any transaction. The company remains committed to improving its overall operations and enhancing its market position. About MAAX Holdings Headquartered in Brooklyn Park, Minnesota, MAAX Holdings Inc. -- http://www.maax.com/-- is a North American manufacturer of bathroom products, and spas for the residential housing market. MAAX offerings are available through plumbing wholesalers, bath, and spa specialty boutiques and home improvement centers. The company currently operates 18 manufacturing facilities and independent distribution centers throughout North America and Europe. MAAX Corporation is a subsidiary of Beauceland Corporation, itself a wholly owned subsidiary of the company. The company's consolidated balance sheet at Aug. 31, 2007, showed $507.5 million in total assets, $604.5 million in total liabilities, and $7.0 million in redeemable preferred stock, resulting in a $104.0 million total shareholders' deficit. * * * Maax Holdings Inc. still carries Standard & Poor's Ratings Services' CCC- long-term corporate credit rating. MARATHON CORP: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Marathon Financial Corporation 26999 Central Park Boulevard. Suite S. 375 Southfield, MI 48076 Bankruptcy Case No.: 07-61722 Chapter 11 Petition Date: November 26, 2007 Court: Eastern District of Michigan (Detroit) Judge: Marci B. McIvor Debtor's Counsel: Jay S. Kalish, Esq. 28592 Orchard Lake Road Suite 360 Farmington Hills, MI 48334 Tel: (248) 932-3000 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Federal National Mortgage Potential $0 Association deficiency 1 Wacker Drive ($0 secured) Suite 3100 Chicago, IL 60606 Government National Mortgage Potential $0 Association deficiency 451 7th Street Southwest ($0 secured) Room B133 Washington, DC 20410 National City Bank Loan $0 101 South 5th Street Loc. 31-T06P ($0 secured) Louisville, KY 40202 Lakeshore Plaza, LLC Lessor Unknown Etkin Equities Lessor Unknown SKB Properties, LLC Lessor Unknown MARCELLA MCCARTHY: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Marcella Louise McCarthy aka Marcie McCarthy, Marcella Downing McCarthy P.O. Box 16929 Fort Worth, TX 76162 Bankruptcy Case No.: 07-44915 Chapter 11 Petition Date: November 5, 2007 Court: Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: St. Clair Newbern, III, Esq. Law Offices of St. Clair Newbern III, P.C 1701 River Run, Suite 1000 Fort Worth, TX 76107 Tel: (817) 870-2647 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of her 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mann Bracken LLC Collecting for - $45,306 5400 LBJ Freeway, #1540 Target National Bank MBNA American Credit card $25,258 P.O. Box 15025 Wilmington, DE 19850-5025 Capital Management Srvcs. Inc. Collecting for - $11,875 726 Exchange Street, Chase business Suite 700 Buffalo, NY 14210 Arrow Financial Services Collecting for - $11,221 Chase Platinum Discover Credit card $9,263 Chase Credit card $9,234 Janice Simpson Personal loan $7,500 Target National Bank Credit card $4,808 Providian Financial Collecting for - $3,900 Washington Mutual Merry Davis Personal loan $3,000 Capital One Credit card $2,494 MBS-LODGE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: MBS-Lodge at Stone Oak, Ltd. 1 Galleria Place Suite 1950 Metairie, LA 70001 Bankruptcy Case No.: 07-12292 Type of Business: M.B.S. Management Services, Inc., an affiliate of the Debtor, filed for Chapter 11 protection on November 5, 2007 (Bankr. E.D. La. Case No. 07-12151). Chapter 11 Petition Date: November 20, 2007 Court: Eastern District of Louisiana (New Orleans) Debtor's Counsel: Douglas S. Draper, Esq. Heller Draper Hayden Patrick & Horn, LLC 650 Poydras Street Suite 2500 New Orleans, LA 70130 Tel: (504) 299-3300 Fax: (504) 299-3399 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ City of Austin Utilities $33,776 P.O. Box 2267 Austin, TX 78783-2267 Wilmar Supply Co., Inc. $17,482 200 East Park Drive, Suite 200 Mt. Laurel, NJ 00854 Rasa Floors $17,324 P.O. Box 619130 Dallas, TX 75261-9130 Landscapes USA $16,757 Jonny Rooter Plumbing, Inc. $5,927 PowerHouse Carpet Cleaning $4,898 Waste Management $4,554 G.T. Carpet Care $4,126 Master Touch Carpet Care $1,864 Worldwide Pest Control Inc. $1,486 Sanivac/Davis MFG $1,413 Champion Submetering Solutions, LLC $1,116 Signius $1,085 Sparkletts and Sierra Springs $1,075 Austin 360 Apartments dba Allaco Investments $810 Presidio Group, Realtors $806 Steven Nichols Texas Real Estate Broker $599 Leslie's Pool Supplies, Inc. $595 Martin, Disiere, Jefferson & Wisdom $460 Apartment Experts North $398 MCCLATCHY CO: Low Revenue Cues S&P to Cut Rating to BB from BB+ --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on The McClatchy Co. and removed them from CreditWatch, where they were placed with negative implications Oct. 17, 2007. The corporate credit rating was lowered to 'BB' from 'BB+', and the rating outlook is negative. "The rating downgrade is a result of sharply lower advertising revenue in the company's portfolio of newspapers and lower-than- expected cash flow generation over the intermediate term, notwithstanding a meaningful amount of expected debt repayment in 2008," explained Standard & Poor's credit analyst Emile Courtney. The 'BB' rating reflects high debt leverage and negative operating trends in McClatchy's newspaper business, even though the company is expected to repay more than $450 million in debt balances in 2008. The rating incorporates S&P's expectation, which factors in current trends in the company's business, that McClatchy could experience advertising and total revenue declines in the mid-to- high single-digit area, and EBITDA declines in the high-single- digit area through 2008. The drivers for the expected decline in cash flow generation over the intermediate term include: -- Ongoing weakness in classified advertising revenue (which represented 33% of total revenue in the nine months ended September 2007) and circulation revenue (12%); -- Higher expected newsprint pricing in 2008; and -- Only moderate levels of additional expected compensation expense reductions in 2008 compared with recently completed acquisition-related cost synergies. These trends partly reflect the secular transition of advertising revenue toward alternative forms of media, and partly the advertising cycle, most notably in the real estate category. In addition, retail advertising (which represented 37% of total revenue in the nine months ended September 2007) declined a relatively modest 3.0% year to date in 2007, versus a total revenue decline of 7.5% during the period. In the event that McClatchy's retail advertising revenue faces weakness in 2008 due to a slowdown in the economy, the company's profitability would be negatively affected. Although EBITDA declined only 2% to $415 million in the nine months ended September 2007, cash expenses declined by 9%, partly related to cost synergies stemming from the Knight Ridder acquisition, which closed in June 2006. MORGAN STANLEY: Limited Pay Down Cues Fitch to Affirm Ratings ------------------------------------------------------------- Fitch Ratings has affirmed Morgan Stanley Dean Witter Capital I Trust, series 2001-TOP1, as: -- $12.2 million class A-2 at 'AAA'; -- $12.2 million class A-3 at 'AAA'; -- $576.0 million class A-4 at 'AAA'; -- Interest Only classes X-1 and X-2 at 'AAA'; -- $34.7 million class B at 'AAA'; -- $31.8 million class C at 'AA'; -- $11.6 million class D at 'AA-'; -- $27.5 million class E at 'BBB+'; -- $10.1 million class F at 'BBB'; -- $18.8 million class G at 'BB'; -- $8.7 million class H at 'B+'; -- $5.8 million class J at 'B-'. In addition, Fitch maintains Distressed Recovery ratings on these classes: -- $5.8 million class K at 'CCC/DR1'; -- $6.6 million class L at 'C/DR4'. Class A-1 is paid in full. The ratings affirmation are the result of limited pay down and stable performance since Fitch's last rating action. As of the November 2007 distribution date, the transaction's aggregate principal balance decreased 34.1% to $761.7 million from $1.16 billion at issuance. To date, 19 loans (10.4%) have defeased. Nineteen loans (18.8%) are considered Fitch Loans of Concern due to decreases in debt service coverage ratio and occupancy or other performance issues. These loans' higher likelihood of default has been incorporated into Fitch's analysis. Currently, one asset (1.0%) is in special servicing. The asset is collateralized by an office property in Robinson Township, PA and is real estate owned. Fitch anticipates losses for the loan upon liquidation, which will reduce the balance of class L. Three loans were shadow rated investment grade at issuance. One loan, Federal Express (5.4%) has shown stable performance since issuance and is 100% occupied as of June 2007. The loan continues to maintain an investment grade shadow rating. The remaining two shadow-rated loans, Santa Monica Place and Richfield Portfolio, are no longer considered investment grade. The Santa Monica Place loan (10.3%), the largest loan in the pool, located in Santa Monica, California, is currently under a planned redevelopment by the Macerich Company, an affiliate of the borrower. The Santa Monica retail market remains strong with the subject's location one of the more popular shopping/tourist destinations in the Los Angeles area. The Richfield Portfolio loan (4.3%) is secured by five multifamily apartment facilities located in Houston, Texas. MOVIE GALLERY: Judge Tice Approves Store Closing Sales Procedures ----------------------------------------------------------------- The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the Eastern District of Virginia permitted Movie Gallery, Inc. and its debtor-affiliates to conduct, in their sole discretion, the store closing sales procedures. However, that in the event the Debtors and each landlord reach an agreement with respect to the procedures applicable to specific store locations, and to the extent that conflict between the agreement and the procedures arises, the agreement takes full control with respect to all store locations it covers. Subject to the Debtors' compliance with the procedures, and to the right of parties to object, landlords at or lessors of the Debtors' store locations are enjoined from interfering with or restricting in any way the Debtors' ability to conduct the closing sales. State and local governments are also enjoined from directly or indirectly interfering with, and restricting or penalizing the conduct of the Debtors and the landlords at store locations relating to, or arising out of, the closing sales. The Court also authorized the Debtors to pay limited liquidation and closure performance bonuses and payments pursuant to a severance plan, provided that for the duration of the store closing sales, the liquidation, and bonuses do not not exceed: (a) $1.00 per hour worked per store-level employee; (b) $100 per week per store director or store manager; and (c) $2,000 in total per district manager. The Debtors are authorized, in their sole discretion, to provide severance payments to eligible store managers. No liquidation, severance payments, and bonuses will be paid to an "insider" of the Debtors within the meaning of Section 503(c) of the Bankruptcy Code. In addition, the first $261,000 of proceeds received or will be received by the Debtors from closing sales taking place in "Texas Political Subdivisions", will be deemed segregated. All liens, claims and encumbrances of the Subdivisions, including but not limited to 2007 and 2008 property taxes, will be of the same validity, extent, and priority as the segregated proceeds. The proceeds may not be distributed except by a Court-approved agreement between the Subdivisions and the Debtors. Accordingly, all segregated proceeds exceeding the amounts asserted by the Subdivisions' valid secured claims will be subject to the terms of the DIP Credit Agreement. Objections Withdrawn As previously reported, various Landlords asked the Court to modify the Procedures to, among others, (i) require the Debtors to designate a business contact, instead of an attorney, to attend to any issues that may arise during the closing sales; and (ii) allow the Landlords to file and have heard any closing sales disputes on an expedited basis upon five days' notice. ADLP-L&M, LLC, and Vision Broadway, LLC, joined the handful of objecting landlords with respect to certain procedures in the conduct of the Debtors' closing sales. In light of separate settlement agreements reached with the Debtors, these landlords withdrew their objections to the Debtors' store closing sales procedures without prejudice: * Plaza Associates, a successor in interest to KZ Holdings, LLC, composed of The Bender Family Trust, Morton Bender and Joyce Bender, Trustees, The Debra Colman 2003 Trust, Robert Kroll, Trustee, and Robert and Nancy Kroll; * West Acres, LLC, Centre At Woodstock, LLC, Gr/Fenkell Associates, LLC, and Romeo Retail, LLC; * Clairmont Center, LLC; * McLaren Investment, LLC, as an assignee from Ferrari Investment, LLC; * BTS Boonton, L.L.C., Grove Hall Retail Center, LLC, and Highlands Plaza LLC; * The Marver Trust; * Cole MT Wayland MI, LLC; * Darien Associates, LP; * F.I. Mentor Commons, Ltd.; * Aronov Realty Management, Centro Properties Group, Developers Diversified Realty Corporation, Federal Realty Investment Trust, General Growth Management, Inc., Levin Management Corporation, The Morris Companies Affiliates and Regency Centers L.P.; * FC Pikesville LLC; * Gibraltar Management, Kimco Realty Corporation, Realty Income Corporation, Weingarten Realty Investors, RMC Property Group, Basser Kaufman, Ltd., Realty Income Texas Properties, L.P., BC Wood Properties, Holiday CVS, L.L.C., Massachusetts CVS Pharmacy, L.L.C., Louisiana CVS Pharmacy, L.L.C., Arbor Drugs, Inc, Sunrise Plaza Associates, L.P., Oekos Management Corporation), on behalf of CVS Pharmacy and affiliates, BC Wood Properties, Basser-Kaufman, Gibraltar Management, Kimco Realty Corporation, King Entertainment Okeechobee, Inc., King Entertainment, Inc., Oekos Management Corporation, RMC Property Group, Realty Income Corporation, Realty Income Texas Properties, L.P., Sunrise Plaza Associates, L.P., and Weingarten Realty Investors; * Wal-Mart Stores, Inc.; * GE Commercial Finance Business Property Corporation; * HRE Properties, Inc. and Scarborough Associates, LP; * Safeway, Inc.; and * MDMK Farmington LLC 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. NEPHROS INC: Appoints James S. Scibetta as Director --------------------------------------------------- Nephros Inc. has appointed James S. Scibetta to serve on its board of directors on Nov. 16, 2007. Mr. Scibetta is a healthcare industry executive with more than 19 years of experience in corporate management. "We are pleased to welcome such an experienced healthcare industry executive to our board of directors," Norman J. Barta, chairman and chief executive officer of Nephros, said. "Jim brings to Nephros substantial industry knowledge and management experience. As we continue our transition and drive our development and marketing programs forward, Jim's experience and proven track record in corporate strategy will be a valuable asset to the company's board." Mr. Scibetta was the chief financial officer of Bioenvision Inc. from December 2006 until its acquisition by Genzyme Inc. in October 2007. From September 2001 to November 2006, Mr. Scibetta was executive vice president & CFO of Merrimack Pharmaceuticals Inc., a biopharmaceutical company focused on discovery and development of novel therapies for autoimmune disease and cancer, and he was a member of the board of directors of Merrimack from April 1998 to March 2004. Mr. Scibetta formerly served as a senior investment banker at Shattuck Hammond Partners LLC from 1997 to 2001 and PaineWebber Inc. from 1988 to 1997, providing capital acquisition, M&A and strategic advisory services to healthcare companies. Mr. Scibetta is currently a member of the board of directors and audit committee chairman of Labopharm Inc., an international specialty pharmaceutical company focused on improving existing drugs by incorporating its proprietary, advanced controlled- release technologies. "I am honored to join Nephros' board of directors," said Mr. Scibetta. "I look forward to working actively with the entire Nephros management team as they move the company's products forward and advance the Company's strategic business objectives." Mr. Scibetta holds a B.S. in Physics from Wake Forest University, and an M.B.A. in Finance from the University of Michigan. He completed executive education studies in the Harvard Business School Leadership & Strategy in Pharmaceuticals and Biotechnology program. AMEX Listing Compliance On Sept. 27, 2007, Nephros received a warning letter from the American Stock Exchange stating that the staff of the Amex Listing Qualifications Department has determined that Nephros was not in compliance with Section 121B(2)(c) of the Amex Company Guide, requiring that at least 50% of the directors of the board of directors of Nephros are independent directors. Pursuant to the warning letter, the AMEX allowed Nephros until Dec. 26, 2007 to regain compliance with the independence requirement. As a result of the appointment of Mr. Scibetta as an independent Director to Nephros' board, the company relates that it now fulfills the requirements of Section 121B(2)(c) of the Amex Company Guide. About Nephros Inc. Headquartered in New York, Nephros Inc. (Amex: NEP) -- http://www.nephros.com/-- is a medical device company developing and marketing products designed for the End-Stage Renal Disease (ESRD) patient. Nephros also markets a line of water filtration products, the Dual Stage Ultrafilter (DSU). At June 30, 2007, the company's consolidated financial statements for the quarter ended June 30, 2007, showed $2.4 million in total assets, $7.4 million in total liabilities, and $5 million in total stockholders' deficit. Going Concern Doubt Deloitte & Touche LLP expressed substantial doubt about Nephros Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. In addition, as reported in the Troubled Company Reporter on Aug. 9, 2007, the company has received on July 23, 2007, a letter from representatives of Marty Steinberg Esq., as Receiver for Lancer Offshore Inc., notifying it of its failure to pay the third installment under the Settlement entered into on Nov. 8, 2005, between the Receiver and the company. NEUROBIOLOGICAL TECH: Regains Nasdaq Listing Compliance ------------------------------------------------------- Neurobiological Technologies Inc. was notified on Nov. 19, 2007, by The NASDAQ Stock Market that it has regained compliance with applicable NASDAQ Capital Market continued listing standards. Previously, the NASDAQ Listing Qualifications Department had notified NTI that it was not in compliance with the $35 million market value of listed securities continued listing requirement. NTI regained compliance after the closing on Nov. 2, 2007, of its underwritten stock offering, in which it raised gross proceeds of $60 million and net proceeds of approximately $55 million through the offering and sale of 21,818,181 shares of common stock. Headquartered in Emeryville, California, Neurobiological Technologies Inc. (NASDAQ:NTIID) -- http://www.ntii.com/-- is a biotechnology company engaged in the business of acquiring and developing central nervous system-related drug candidates. The company is focused on therapies for neurological conditions that occur in connection with ischemic stroke, brain cancer, Alzheimer's disease and dementia. NTI has one product candidate in clinical development, Viprinex. It is developing Viprinex for the treatment of acute ischemic stroke. At June 30, 2007, the company's balance sheet showed total assets of $10,921,087 and total liabilities of $33,014,125, resulting to a shareholders' deficit of $22,093,038. Going Concern Doubt Odenberg Ullakko Muranishi & Co. LLP in San Francisco, California, raised substantial doubt about Neurobiological Technologies Inc.'s ability to continue as a going concern, after auditing the company's financilas statements for periods ending June 30, 2007, and 2006. The auditors pointed to the company's recurring operating losses, negative cash flows from operations, negative working capital position and stockholders' deficit. * * * As reported in the Troubled Company Reporter on Aug. 8, 2007, Standard & Poor's Ratings Services said that its 'B-' corporate credit rating and other ratings on Intertape Polymer Group Inc. remain on CreditWatch with negative implications. NEW CENTURY: Unlikely to File September 30 Quarterly Report ----------------------------------------------------------- New Century Financial Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that it is unable to timely file its quarterly report for the quarter ended Sept. 30, 2007, without unreasonable effort and expense. Holly Etlin, president, chief executive officer, and chief restructuring officer of New Century, explains that since the bankruptcy filing, the company has been immersed in bankruptcy- related matters. New Century was not able to file its annual report for the year ended Dec. 31, 2006, or its quarterly reports for March 31, 2007, and June 30, 2007. The results of New Century's operations for the quarter ended Sept. 30, 2007, will change significantly from those for the quarter ended Sept. 30, 2006, Ms. Etlin says. Ms. Etlin discloses that prior to the completion of its financial statements for the year ended Dec. 31, 2006, and each of the quarters ended March 31, 2007, June 30, 2007 and Sept. 30, 2007, the company is unable to assess the amount by which its results of operations for the quarter ended Sept. 30, 2007, will change from its results of operations for the quarter ended Sept. 30, 2006. Ms. Etlin points out that in New Century's report, filed with the SEC on February 7, it said it will restate its consolidated financial results for the quarters ended March 31, June 30, and Sept. 30, 2006, to correct the errors in its accounting and financial reports. Also, in a May 24 SEC filing, it said that its financial statements for the fiscal year ended Dec. 31, 2005, should not be relied upon. Ms. Etlin notes that KPMG LLP, New Century's independent accounting firm, has resigned. Due to the resignation, and the additional time required to complete the financial statements, New Century will not be able to file the report without unreasonable effort or expense. According to Ms. Etlin, it is unlikely that New Century will ever be able to file its financial statements. 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). NY RACING: Amended Ch. 11 Plan to Pay Unsecured Creditors in Full ----------------------------------------------------------------- The New York Racing Association Inc. filed with the United States Bankruptcy Court for the Southern District of New York its Amended Chapter 11 Plan of Reorganization and Amended Disclosure Statement describing that Plan. Under the Amended Plan, Class 2 Secured Claim holders will receive 100% of their allowed claim amount through any of these distributions: a) payment of allowed secured claim in full, in cash; b) sale or disposition proceeds of the property securing any allowed secured claim to the extent of the value of their respective interests in the property; or c) surrender to the holder or holders of any allowed aecured claim of the property securing the claim. Commencing on the effective date of the Plan, Unsecured Claims will receive payments in full and in cash. Holders of Insured Litigation Claims are entitled to: -- proceed with the liquidation of their claims, including any litigation pending as of the Debtor's bankruptcy filing; and -- seek recovery from applicable insurance carrier. Pursuant to the terms of a settlement agreement, all State Claims will be deemed allowed and each State Claims holder, other than the holder of the New York State Tax Claim, will not be entitled to, and will not receive or retain, any property or interest in property on account of such Allowed State Claims under the Plan. On or prior to the effective date of the Plan, the Debtor or the Reorganized Debtor will make these payments to its benefit plans: 1) funding deficiencies for the years ended on or prior to Dec. 31, 2006; and 2) normal costs for the year ended Dec. 31, 2007. By those payments, the Debtor's benefit plans will be deemed cured and the Pension Benefit Guaranty Corporation's claims will be deemed satisfied in full. The Internal Revenue Service will receive a promissory note in the amount of its allowed claim, which will bear interest at the rate of 8% per annum, payable in 15 equal quarterly installments commencing on March 31, 2008. Each holder of an Allowed Penalty Claim will be entitled to receive a pro rata share of cash available for distribution after all allowed unsecured claims have been paid in full. Equity Interests in the Debtor will be cancelled and holders of such interests will not receive any distribution under the Plan. A full-text of the Amended Chapter 11 Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=071122203646 A full-text of the Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=071122203447 About New York Racing Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. Edward M. Fox, Esq., Eric T. Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. NY RACING: Plainfield's Motion to Terminate Excl. Periods Denied ---------------------------------------------------------------- The Honorable James M. Peck of the United States Bankruptcy Court for the Southern District of New York denied the emergency motion of Plainfield Special Situations Master Fund Limited to terminate The New York Racing Association Inc.'s exclusive period to solicit acceptances of the Debtor's Chapter 11 Plan of Reorganization. Court documents did not disclose reasons for the denial. Plainfield Special is a private fund managed by Plainfield Assets Management LLC, who holds a substantial equity stake in Capital Play Inc., one of four qualified bidders for the Debtor's racing franchise. As reported in the Troubled Company Reporter on Nov. 20, 2007, Plainfield told the Court that the Debtor's Plan is predicated on the State legislature awarding the Debtor a new franchise for an additional 30-year period on Governor Eliot Spitzer's recommendation. Hence, Plainfield argued that in light of the recent statements of leading State legislators that the plan to award the Debtor the franchise is effectively "dead on arrival," it would appear highly unlikely that the Debtor will be awarded the franchise. Plainfield warned that if the exclusivity is extended, and the Debtor is not awarded the franchise by Dec. 31, 2007, the Debtor's Plan will not be consummated, creditors will not get paid, and horse racing in New York may abruptly end on Jan. 1, 2008, with no other alternatives on the table. "This is the paradigmatic situation of creditors and other parties being 'held hostage' by an extension of the exclusivity period," Plainfield counsel Edward S. Weisfelner, Esq., at Brown Rudnick Berlack Israels LLP said. To maximize value for the benefit of the Debtor's creditors, Mr. Weisfelner suggested that alternative plans, including Plainfield's, be considered. Mr. Weisfelner stated that Plainfield is proposing a plan that will: (i) enable all interested parties to make informed decisions in the best interests of creditors, the New York State, and the racing industry; and (ii) provide for a contingency plan for the operation of the racetracks under a management and consulting agreement should the State legislature not award the franchise prior to Dec. 31, 2007. "Allowing [Plainfield] to file its plan will afford the State legislature the flexibility to be able to move ahead with its deliberations knowing that, if they decide not to award the franchise to [the Debtor], [its] creditors will not be left in the cold with no alternatives," Mr. Weisfelner averred. Exclusivity Period Hearing Deferred As reported in the Troubled Company Reporter on Nov. 20, 2007, the Court continued the hearing to consider extension of the Debtor's exclusivity periods to Dec. 12, 2007, 10:00 a.m., at Courtroom 601. Days prior to expiration of its exclusive period to file a plan on Nov. 15, 2007, the Debtor sought further extension of its exclusive periods to: a. file a Chapter 11 plan until March 14, 2008; and b. solicit acceptances of that plan until May 13, 2008. The Debtor said it needs more time to continue to work on a settlement with the State of New York, the result of which is crucial to the confirmation of its Chapter 11 Plan of Reorganization dated Oct. 23, 2007. On Sept. 4, 2007, after a negotiation and execution of a memorandum of understanding, Governor Spitzer recommended to the New York State Legislature that the Debtor be awarded a franchise to operate racing for an additional 30 years. Legislative approval of Governor Spitzer's recommendation remains pending to date. The Debtor averred that with its Plan and Disclosure Statement on file and with the ongoing negotiations and documentation, termination of its exclusivity periods could destroy the substantial progress made in its chapter 11 case and would discourage all parties from maintaining a dialogue to continue to resolve any remaining issues. About New York Racing Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. Edward M. Fox, Esq., Eric T. Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. OLEN CRAWFORD: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Olen Earl Crawford Cendee Lee Crawford 768 Loper Lane Guntersville, AL 35976 Bankruptcy Case No.: 07-42016-11 Chapter 11 Petition Date: November 5, 2007 Court: Northern District of Alabama (Anniston) Debtors' Counsel: Harry P Long, Esq. P.O. Box 1468 Anniston, AL 36202 Tel: (256) 237-3266 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtors' list of their Six Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Regions Bank $1,410,000 400 Embassy Row, #110 Atlanta, GA 30238 Secured value: $10,700,000 Target National Bank Visa $7,636 P.O. Box 59317 Minneapolis, MN 55459 Parisian $2,824 P.O. Box 960012 Orlando, FL 32896 Neiman Marcus $2,594 Dillard's $1,320 Capital One $994 OSCAR ROJAS: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Oscar Vaz Rojas #25 Calle Almanciga Seccion Cautiva Hacienda San Jose Caguas, PR 00725 Bankruptcy Case No.: 07-06593 Chapter 11 Petition Date: November 7, 2007 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Carlos Rodriguez Quesada, Esq. Law Office of Carlos Rodriguez Ques P.O. Box 9023115 San Juan, PR 00902-3115 Tel: (787) 724-2867 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of his Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Maritza Villamil Conjugal property $969,881 Cond. Playa Serena settlement 7063 Carr. 187 Apt. 503 Carolina, PR 00979-7033 Turaser Inc. Loan $406,514 Calle Beleares #352 - Altos Esquina FD Roosevelt San Juan, PR 00920 Viajes Galiana, Inc. Loan $229,985 P.O. Box 195499 First Bank Credit card $54,078 Dova Construction Civil Action $23,000 Banco Popular de Puerto Rico Credit card $10,781 BBVA Credit card $1,109 PATHEON INC: Wesley Wheeler Appointed as Chief Executive Officer ---------------------------------------------------------------- The board of directors of Patheon Inc. appointed pharmaceutical industry executive Wesley P. Wheeler as chief executive officer effective Dec. 10, 2007. Mr. Wheeler will succeed Riccardo Trecroce, who plans to leave Patheon in the new year, after a transition period. "With Patheon's restructuring initiatives well underway, we are focused on taking the company forward to the next phase of growth and profitability," Ramsey Frank, managing director of JLL Partners, the company's largest shareholder, and chairman of Patheon Inc.'s corporate governance committee, said. "Wes Wheeler is a highly experienced pharmaceutical executive with a proven record of leading successful, international businesses. His in-depth knowledge of the industry and breadth of pharmaceutical experience will serve Patheon well as we move forward to grow and deliver improved value to our stakeholders," Mr. Frank added. "We would like to thank Riccardo Trecroce for his commitment and contributions to Patheon over his seven years with the company," Peter Green, chairman of Patheon's board of directors, said. "Riccardo led Patheon through a particularly challenging time in its evolution, successfully recapitalizing the company earlier this year and launching restructuring and operational initiatives to improve the company's profitability. We thank him for his dedication and wish him every success in his future endeavours." Mr. Wheeler's 29-year career includes multinational experience in pharmaceutical manufacturing, sales and marketing, R&D and engineering with three global pharmaceutical companies. He joins Patheon from Valeant Pharmaceuticals International, a California- based specialty pharmaceutical company, where he served as president, North America, R&D and Global Manufacturing. Prior to joining Valeant in 2003, Mr. Wheeler served as president and chief executive officer of DSM Pharmaceuticals Inc., a contract pharmaceutical manufacturer, where he led the organization through a business turnaround, significantly increasing new business, compliance and profitability in approximately 13 months. Prior to DSM, Mr. Wheeler was senior vice-president of logistics and strategy for GlaxoSmithKline plc. In this role, Mr. Wheeler was responsible for managing the manufacturing rationalization of Glaxo Wellcome and SmithKline Beecham, which included a supply network of over 100 plants in 41 countries. Previous to his manufacturing role, Mr. Wheeler was vice president of marketing for Glaxo Wellcome, responsible for antibiotic, antiviral, gastrointestinal and metabolic products. In addition to brand marketing, he was instrumental in developing the marketing services infrastructure for Glaxo Wellcome. Mr. Wheeler joined Glaxo in 1989 after a 12-year career at Exxon Research & Engineering Co. Mr. Wheeler holds a bachelor of science degree in mechanical engineering from Worcester Polytechnic Institute and a master of business administration degree from California Lutheran University. "Patheon is a well-positioned, global service provider to the pharmaceutical industry," Mr. Wheeler said. "The company has developed a solid foundation for growth and I intend to work closely with its many clients, its board of directors and its employees to deliver continued results for our industry." "I look forward to building on Patheon's track record of success and ultimately increasing value for its shareholders." About Patheon Inc. Headquartered in Mississauga, Ontario, Patheon Inc. (TSX: PTI) -- http://www.patheon.com/-- provides drug development and manufacturing services to the international pharmaceutical companies located primarily in North America, Europe and Japan. It produces both prescription and over-the-counter drugs for its clients. Patheon provides manufacturing services for a range of products in many dosage forms and packaging, such as compressed tablets, hard-shell capsules, liquids and powders filled in ampoules, vials, bottles or pre-filled syringes. The pharmaceutical development services provided by Patheon include dosage form development services, scale-up and technology transfer services, and manufacturing of pilot batches of drugs. * * * Moody's Investor Services placed Patheon Inc.'s long term corporate family and probability of default ratings at 'B2' in April 2007. The ratings still hold to date with a stable outlook. PATIENT PORTAL: Posts $675,992 Net Loss in 3rd Qtr. Ended Sept. 30 ------------------------------------------------------------------ Patient Portal Technologies Inc. reported a net loss of $675,992 on net sales of $347,421 for the third quarter ended Sept. 30, 2007, compared with a net loss of $35,000 on $0 of revenues in the same period last year. The company reported no revenue for the three months ended Sept. 30, 2006, due to the divestiture of its former operating subsidiary in September 2005. In December 2006, the company acquired a new operating subsidiary, Patient Portal Connect Inc., and the revenues for this reporting period reflect the revenues of this operating subsidiary. At Sept. 30, 2007, the company's consolidated balance sheet showed $2,731,805 in total assets, $760,561 in total liabilities, $1,100 in redeemable preferred stock, and $1,971,244 in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $159,438 in total current assets available to pay $721,167 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?25a5 Going Concern Doubt Walden Certified Public Accountant P.A., in Sunny Isles, Florida, expressed substantial doubt about Patient Portal Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. About Patient Portal Based in Palm Beach Gardens, Florida, Patient Portal Technologies Inc. (Other OTC: PPRG.PK) -- http://www.patientportal.com/-- through its newly acquired subsidiary, Patient Portal Connect Inc., provides integrated workflow solutions in the healthcare industry. Its proprietary systems were developed in close coordination with hospital industry partners to provide multi- layer functionality across a wide spectrum of critical patient- centric workflows that result in immediate improvements in cost savings, patient outcomes, and revenue growth for hospitals. PETRO ACQUISITIONS: Files for Chapter 11 in Ohio ------------------------------------------------ Petro Acquisitions Inc. filed Wednesday a voluntary petition under Chapter 11 of the Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of Ohio. As reported in the Troubled Company Reporter on Nov. 20, 2007, Judge Mallory of the Court of Common Pleas in Hamilton County, Ohio, at the behest of Walnut Investment Partners, L.P., orginally appointed Leonard Z. Eppel, of Financial Resource Associates, as receiver. Judge Mallory had ruled that Walnut, as a minority shareholder in the company, has an interest in the company's assets and stocks. Judge Mallory further said that the company's assets was in danger of being lost, removed, or materially injured as a result of claims made on those assets by various creditors of Petro. Mr. Eppel however, resigned as receiver citing lenders involved in the case did not want to work with him. As a result, Richard D. Nelson, Esq., was appointed as the new receiver. As receiver, Mr. Nelson was granted specific authority to file bankruptcy petitions on behalf the company. Mr. Nelson, as the new receiver, had already put some of the company's subsidiaries under Chapter 11 of the Bankruptcy Code. About Petro Located in West Chester, Ohio, Petro Acquisitions Inc., operates and franchises 140 AmeriStop gas stations and convenience stores in Ohio, Kentucky and Indiana. PETRO ACQUISITIONS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Lead Debtor: Petro Acquisitions, Inc. 3955 Alexandria Pike Cold Spring, KY 41076 Bankruptcy Case No.: 07-15723 Debtor-affiliates filing separate Chapter 11 petitions on Nov. 17, 2007: Entity Case No. ------ -------- Waco Acquisitions, Inc. 07-15630 A.F.M. 802, Inc. 07-15631 A.F.M. 803, Inc. 07-15632 A.F.M. 804, Inc. 07-15634 A.F.M. 808, Inc. 07-15635 A.F.M. 809, Inc. 07-15636 A.F.M. 811, Inc. 07-15637 A.F.M. 813, Inc. 07-15638 A.F.M. 817, Inc. 07-15639 Debtor-affiliates filing separate Chapter 11 petitions on Nov. 12, 2007: Entity Case No. ------ -------- A.F.M. 805, Inc. 07-15511 A.F.M. 806, Inc. 07-15512 A.F.M. 807, Inc. 07-15513 A.F.M. 810, Inc. 07-15514 A.F.M. 812, Inc. 07-15515 A.F.M. 814, Inc. 07-15516 A.F.M. 815, Inc. 07-15517 A.F.M. 816, Inc. 07-15518 Ohio Valley A.F.M., Inc. 07-15506 Debtor-affiliates filing separate Chapter 11 petitions on Nov. 5, 2007: Entity Case No. ------ -------- Gillespie Acquisition, Inc. 07-15378 Gillespie Wholesale, Inc. 07-15379 A.F.M. 711, Inc. 07-15381 A.F.M. 712, Inc. 07-15383 A.F.M. 713, Inc. 07-15384 A.F.M. 714, Inc. 07-15386 A.F.M. 716, Inc. 07-15388 Jackson Center 717, Inc. 07-15389 A.F.M. 717, Inc. 07-15390 A.F.M. 720, Inc. 07-15392 A.F.M. 721, Inc. 07-15393 A.F.M. 722, Inc. 07-15394 A.F.M. 723, Inc. 07-15396 Type of Business: Petro Acquisitions Inc., operates and franchises 140 AmeriStop gas stations and convenience stores in Ohio, Kentucky and Indiana. The company's wholly-owned subsidiary Gillespie Acquisition, Inc. filed for Chapter 11 protection with 13 affiliates on November 5 (Bankr. S.D. Ohio Lead Case No. 07-15378). Waco Acquisitions, Inc., another of Petro's wholly-owned subsidiary, filed for bankruptcy with eight affiliates on November 17 (Bankr. S.D. Ohio. Lead Case No. 07-15630 A.F.M. 805, Inc. and eight affiliates, are subsidiaries of Waco Acquisition and filed for Chapter 11 on November 12 (Bankr. S.D. Ohio Lead Case No. 07-15511). Ohio Valley A.F.M., Inc., a subsidiary of OV Acquisition, which in turn is a subsidiary of Waco Acquisition, also filed for bankruptcy of November 12 (Bankr. S.D. Ohio under Case No. 07-15511). The case summaries of the bankruptcy petitions of Petro's subsidiaries was published in the Troubled Company Reporter on Nov. 20, 2007. Chapter 11 Petition Date: November 21, 2007 Court: Southern District of Ohio (Cincinnati) Debtors' Counsel: Ronald E. Gold, Esq. Frost, Brown, Todd L.L.C. 2200 P.N.C. Center 201 East Fifth Street Cincinnati, OH 45202 Tel: (513) 651-6800 Fax: (513) 651-6981 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not submit a list of its 20 largest unsecured creditors. POPE & TALBOT: Delays Filing of September 30 Form 10-Q ------------------------------------------------------ Pope & Talbot Inc. disclosed in a regulatory filing with the United States Securities and Exchange Commission that the filing of its quarterly financial report on Form 10-Q for the period ended Sept. 30, 2007, will be delayed. The company has also been unable to complete an evaluation of its long-lived assets for impairment in relation to its current financial situation and the commencement of its CCAA proceedings, Mr. R. Neil Stuart, vice president and chief financial officer of Pope & Talbot Inc., noted. In the third quarter of 2006, Pope & Talbot reported an operating loss of $1,700,000, a net loss of $12,900,000, and a net loss per share of $0.79. "Without giving effect to any impairment charge the company may be required to recognize for its long-lived assets once an impairment analysis is completed, the company expects to report an operating loss moderately greater than that reported in the third quarter of 2006 and a net loss significantly greater than that reported in the corresponding prior year period," according to Mr. Stuart. Mr. Stuart revealed that the preliminary results for the third quarter of 2007 include amortization of debt issuance costs of $19,600,000, substantially all of which related to an acceleration of costs relating to Pope & Talbot's senior secured credit agreement. Another significant item in the third quarter of 2007 that affected operating results was the deferral of the annual maintenance shutdown of the Mackenzie pulp mill to October 2007 resulting in no shutdown maintenance costs in the third quarter of 2007 as compared to $7,400,000 in the third quarter of 2006 and $12,000,000 in the second quarter of 2007, Mr. Stuart added. Pope and Talbot and its subsidiaries continue to operate their businesses as debtor companies in accordance with the applicable provisions of the Companies' Creditors Arrangement Act of Canada under the jurisdiction of the Superior Court of Justice (Commercial List) for the Province of Ontario. "The Company has not developed a plan of reorganization for its emergence from the protections of the CCAA, and continues to seek buyers for its assets as a source of funds to repay creditors," Mr. Stuart relates. 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 Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. If the Belgian court grants Pope & Talbot Europe's application, it is expected it will be liquidated through the bankruptcy proceeding. (Pope & Talbot Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPE & TALBOT: CCAA Proceedings Transferred to British Columbia --------------------------------------------------------------- The Honorable Justice Geoffrey B. Morawetz at the Superior Court of Justice (Commercial List) for the Province of Ontario, in Canada, approved the request of Pope & Talbot Inc. and its debtor affiliates to transfer the venue of the Applicants' CCAA proceedings to the British Columbia Supreme Court. Accordingly, the Ontario Court asked the British Columbia Supreme Court to: -- accept the transfer and continuation of the Applicants' proceedings; -- recognize Mr. Justice Morawetz's Initial Order dated Oct. 29, 2007, approving a stay of proceedings to November 23; -- recognize all subsequent Ontario Court orders for all purposes; and -- assume primary jurisdiction of the Applicants' CCAA proceedings. The Ontario Court will maintain jurisdiction over the Applicants' CCAA proceedings until the British Columbia Supreme Court assumes primary jurisdiction, Mr. Justice Morawetz clarified. The Applicants' request, dated Nov. 19, 2007, came at the heels of similar filings made by the province of British Columbia, Wells Fargo Financial Corporation Canada, as agent for the Revolving Credit Facility Lenders, and Ableco Finance LLC, as Agent for the Term Loan B Lenders. Her Majesty the Queen in Right of the Province of British Columbia asked Justice Morawetz to: (a) declare that the British Columbia Supreme Court is the "forum conveniens" for the Companies' Creditors Arrangement Act proceedings of Pope & Talbot Ltd. and its subsidiaries; (b) request the British Columbia Supreme Court to accept the continuation of the CCAA proceedings; recognize Justice Morawetz's Initial Order dated Oct. 29, 2007, and all subsequent orders for all purposes; and assume primary jurisdiction; and (c) stay the CCAA Proceedings in Ontario pending continuation of the proceedings in the British Columbia Supreme Court. In the alternative, British Columbia asked Mr. Justice Morawetz to declare that the Ontario Superior Court does not have jurisdiction to receive the Applicants' CCAA Application. Douglas Knowles, Esq., at Fraser Milner Casgrain LLP, in Vancouver, British Columbia, noted that approximately one month before the CCAA bankruptcy filing, the Applicants changed their registered office to the offices of Stikeman Elliott LLP in Toronto, Ontario. Prior to that, the Applicants' registered office was located in Vancouver, British Columbia at the office of its counsel Stikeman Elliot. The corporate filings of the Applicants in British Columbia indicate that its registered head offices, as of Oct. 29, 2007, was the office of its counsel Stikeman Elliot in British Columbia, Mr. Knowles disclosed. The Applicants have more than 1,700 employees and significant assets in British Columbia, Mr. Knowles pointed out. The Applicants' chief and only place of business in Canada is British Columbia, he adds. The Applicants, Mr. Knowles stated, conduct their business in a "complex resource industry" which is subject to numerous statutes and regulations of the Province of British Columbia, with respect to matters including the environment, water, forests, pensions, workers compensation, employment standards and labor relations. Disputes arising from the statutes and regulations which govern the Company's business operations, Mr. Knowles asserted, are subject to determination or adjudication by ministerial officials, tribunals located in British Columbia, and by the British Columbia Supreme Court. Mr. Knowles added that some of the property and rights owned and enjoyed by the Applicants in British Columbia are in areas which may be subject to native land claims, which are also subject to adjudication in British Columbia. There is no evidence, Mr. Knowles argued, that: (a) the Applicants have any employees or assets or any place of business in Ontario, other than one bank account; and (b) any of the Applicants' creditors are located in Ontario. Rather, majority of the Applicants' creditors are located in British Columbia. Moreover, the vast majority of the stakeholders which will be affected by the CCAA proceedings are in British Columbia, Mr. Knowles maintained. Mr. Knowles furnished the Court with various sworn affidavits to support the Jurisdiction Transfer Request, including the affidavits of: 1. Fran Thibodeau, legal secretary of Fraser Milner Casgrain LLP, solicitors for her Majesty the Queen in Right of the Province of British Columbia; 2. Gary Townsend, assistant deputy minister of the Integrated land Management Bureau of the Ministry of Agriculture and Lands; 3. Michael Peters, executive director at the office of the Superintendent of Pensions; 4. Glen Davidson, director of the management and Standards, Water Stewardship Branch of the Ministry of Environment; 5. Richard Butler, a lawyer who represents the Attorney General of British Columbia on almost all major commercial insolvencies; 6. Pat Plunkett, director of the Forest Revenue Branch of the British Columbia Ministry of Small Business and Revenue; 7. Brad Harris, senior timber tenure forester of the Resource Tenures and Engineering Branch of the Ministry of Forests and Range for the Province of British Columbia; 8. Julian Paine, assistant deputy minister of the Strategic Initiatives Division of the British Columbia for the Ministry of Aboriginal Relations and Reconciliation; 9. Melanie Dovey, legal secretary of the Legal Services Branch of the British Columbia Ministry of Attorney General; 10. Julia Brooke, senior environmental protection officer with the Environmental Protection Division of the Environmental Management Branch for the Ministry of Environment for the Province of British Columbia; 11. Elan Symes, assistant deputy minister of the Revenue Programs Division of the Ministry of Small Business and Revenue; 12. David Morel; and 13. Steve Willick, president of Newland Enterprises Ltd. Representing the Attorney General of British Columbia, Mr. Butler identified certain jurisdictional or constitutional issues that could arise in the course of the Applicants' CCAA proceedings, including conflicts from initial orders, conflicts in vesting orders, and conflicts in arrangement and final orders. The Attorney General, Mr. Butler averred, has taken the position that orders in insolvency proceedings can only override the operation of provincial laws on constitutional grounds. On the Attorney General's behalf, Mr. Butler asserts that it is contrary to the interest of the British Columbia public in the appropriate ongoing operation of laws governing the activities of Pope & Talbot in British Columbia to have the CCAA proceedings continue in the courts of Ontario. The Attorney General further believes that it would be cumbersome and costly and would involve additional delay to force statutory decision-makers, third parties whose rights or interests are protected by statute, or would-be applicants for judicial review in British Columbia to apply to and appear in the Ontario court seeking: -- a determination of whether the stay under the initial order applies to a particular regulatory process; or -- if it does, to have the stay lifted. It would be particularly difficult, if not impossible, to do so in a timely way in response to emergency situations which may arise, the Attorney General added. On the other hand, Mr. Thibodeau attested that a detailed search of various Web sites indicate that the Applicants have no place of business in Ontario. 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 Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. If the Belgian court grants Pope & Talbot Europe's application, it is expected it will be liquidated through the bankruptcy proceeding. (Pope & Talbot Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPULAR ABS: Fitch Affirms 'BB-' Rating on $2.2 Million Certs. -------------------------------------------------------------- Fitch Ratings has affirmed these Popular ABS mortgage pass-through certificates. Affirmations total $483.6 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Series 2005-1 -- $119.1 million class A affirmed at 'AAA' (BL: 61.02, LCR: 7.64); -- $44 million class M-1 affirmed at 'AA' (BL: 40.33, LCR: 5.05); -- $34.3 million class M-2 affirmed at 'A' (BL: 26.16, LCR: 3.28); -- $9.6 million class M-3 affirmed at 'A-' (BL: 23.03, LCR: 2.88); -- $9 million class M-4 affirmed at 'BBB+' (BL: 20.25, LCR: 2.54); -- $6.2 million class B-1 affirmed at 'BBB' (BL: 16.34, LCR: 2.05); -- $5 million class B-2 affirmed at 'BBB-' (BL: 17.13, LCR: 2.15); -- $6.2 million class B-3 affirmed at 'BB+' (BL: 18.84, LCR: 2.36); -- $2.5 million class B-4 affirmed at 'BB' (BL: 46.24, LCR: 5.79). Deal Summary -- Originator: Equity One (100%); -- 60+ day Delinquency: 12.01%; -- Realized Losses to date (% of Original Balance): 0.69%; -- Expected Remaining Losses (% of Current Balance): 7.98%; -- Cumulative Expected Losses (% of Original Balance): 3.97%. Series 2005-2 -- $146.6 million class A affirmed at 'AAA' (BL: 49.03, LCR: 6.85); -- $37.1 million class M-1 affirmed at 'AA' (BL: 34.57, LCR: 4.83); -- $27.5 million class M-2 affirmed at 'A' (BL: 23.97, LCR: 3.35); -- $4.7 million class M-3 affirmed at 'A-' (BL: 22.15, LCR: 3.1) -- $7.4 million class M-4 affirmed at 'BBB+' (BL: 19.35, LCR: 2.7); -- $4.2 million class M-5 affirmed at 'BBB' (BL: 17.81, LCR: 2.49) -- $6 million class M-6 affirmed at 'BBB-' (BL: 15.68, LCR: 2.19); -- $6.3 million class B-1 affirmed at 'BB+' (BL: 11.04, LCR: 1.54); -- $5.7 million class B-2 affirmed at 'BB' (BL: 11.46, LCR: 1.6); -- $2.2 million class B-3 affirmed at 'BB-' (BL: 13.30, LCR: 1.86). Deal Summary -- Originator: Equity One (100%); -- 60+ day Delinquency: 9.93%; -- Realized Losses to date (% of Original Balance): 0.51%; -- Expected Remaining Losses (% of Current Balance): 7.16%; -- Cumulative Expected Losses (% of Original Balance): 4.04%. PRUDENTIAL'S ROCK: Fitch Affirms 'B-' Rating on $4.5MM Certs. ------------------------------------------------------------- Fitch has affirmed Prudential's ROCK commercial mortgage pass- through certificates, series 2001-C1, as follows: -- $56.5 million class A-1 at 'AAA'; -- $536.1 million class A-2 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $27.2 million class B at 'AAA'; -- $38.6 million class C at 'AAA'; -- $9.1 million class D at 'AAA'; -- $11.4 million class E at 'AAA'; -- $15.9 million class F at 'AAA'; -- $13.6 million class G at 'AAA'; -- $13.6 million class H at 'AA'; -- $22.7 million class J at 'BBB+'; -- $6.8 million class K at 'BBB-'; -- $4.5 million class L at 'BB+'; -- $9.1 million class M at 'B'; -- $4.5 million class N at 'B-'. Fitch does not rate the $7.6 million class O certificates. The rating affirmations are the result of stable performance. As of the October 2007 distribution date, the pool's aggregate principal balance has decreased 14.4%, to $777.2 million from $908.2 million at issuance. In total, 43% of the pool has defeased. There are currently no loans in special servicing. One loan, the RREEF America II Portfolio, representing approximately 11.7% of the pool, maintains an investment grade shadow rating due to stable performance. The $155.4 million loan is split into an A and B note. The $91 million A note, which is included in this transaction, and the $64.4 million B note is held outside the trust. The loan is secured by a portfolio of industrial, retail, office and multifamily properties located in Delaware, Texas, California, Florida, Georgia, and Arizona. There is approximately 3.7 million square feet of commercial space and 176 multifamily units. The weighted average portfolio occupancy is 97.4% as of June 2007. QUEBECOR WORLD: Market Status Cues Refinancing Plan Withdrawal -------------------------------------------------------------- Quebecor World Inc. has withdrawn its refinancing plan involving an offer of approximately CDN$250 million of its equity shares, an offer on a private placement basis of an aggregate of $500 million of new debt securities and amendments to the company's secured credit facilities. The company has decided to withdraw the refinancing plan due to adverse current financial market conditions. The company will continue to evaluate financing alternatives, including the issuance of equity and debt securities when conditions are more favourable, asset sales and sale leaseback transactions and explore other alternatives. To that effect, the board will hire independent financial advisors. In this connection, Quebecor Inc. has taken note of and agreed with the decision by Quebecor World to withdraw its refinancing plan. As the controlling shareholder, Quebecor Inc. related that it will cooperate in the exploration of other alternatives. About Quebecor World Inc. Headquartered in Montreal, Quebec, Quebecor World Inc. (TSX: IQW)(NYSE:IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. * * * As reported in the Troubled Company Reporter on Nov. 15, 2007, Moody's Investors Service rated Quebecor World Inc.'s new $400 million senior unsecured note issue Caa1. At the same time, ratings for about $1.6 billion of existing senior unsecured notes for QWI and its wholly-owned subsidiary companies, Quebecor World Capital Corporation and Quebecor World Capital ULC, were downgraded to Caa1 from B3. Standard & Poor's assigned its 'B' debt rating to Quebecor World's proposed $400 million senior unsecured notes due 2014. The 'B' debt rating will be placed on CreditWatch with negative implications. RELIANT ENERGY: To Pay $10 Million to Equistar Under Agreement -------------------------------------------------------------- Reliant Energy Channelview LP and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to approve an Amended Settement Agreement they entered into with Equistar Chemical LP pursuant to Bankruptcy Rule 9019. The salient terms of the Amended Settlement Agreement are: i) The Debtors agreed to pay or cause to be paid to Equistar the amount of $10 million, with the payment to be made within three business days after, and conditional on, receipt of the proceeds from the sale of either of the Debtors as a direct or indirect equity sale or substantially all the assets of the Debtors. ii) Upon execution of the Amended Settlement Agreement, Equistar agreed to cease all activity in connection with the litigation. Equistar further agreed that, upon Equistar's receipt of the settlement payment, the Debtors and Equistar would seek entry of a final judgement. iii) Equistar also agreed to, among others: a) permit the disclosure statement of the steam agreement and ESA to potential bidders that execute a confidentiality agreement; and b) otherwise cooperate in good faith in the sale process, subject to the limitations stated in the Amended Settlement Agreement. iv) The Debtor and Equistar agreed to promptly commence the design, engineering and installation of a centrifugal pump and agree to share certain costs related to same. In a Court filing on Nov. 15, 2007, the Debtors relate to the Court that a dispute arose between Equistar with regard to the calculation of damages under the second amended and restated energy supply agreement dated Dec. 15, 1999, resulting from the March 2006 steam outage. The Debtors further say that on Nov. 1, 2006, Equistar filed a petition in the District Court of Harris County in Texas against the Debtors to recover approximately $37 million allegedly incurred in connection with the steam outage. Mark D. Collins, Esq., at Richards Layton & Finger, P.A., saidn that the Debtors and Equistar agreed to enter into a settlement agreement after the Debtors informed Equistar of the intention to sell the Debtors' business. A hearing has been scheduled on Dec. 10, 2007, at 10:30 a.m., to consider the Debtors' request. 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). Thomas E. Patterson, Esq., at Klee Tuchin Bogdanoff & Stern LLP, represents the Debtors in their restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as its claims and noticing agent. The U.S. Trustee for Region 16 appointed nine creditors to serve on an Official Committee of Unsecured Creditors in this case. Benjamin S. Seigel, Esq., and Paul S. Arrow, Esq., at Buchalter Nemer, represent the Official Committee of Unsecured Creditors. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. RELIANT PHARMA: Agrees to Sell Assets to GSK for $1.65 Bil. Cash ---------------------------------------------------------------- GlaxoSmithKline and Reliant Pharmaceuticals Inc. had reached an agreement under which Reliant will be acquired by GSK for $1.65 billion (GBP800 million) in cash. Reliant, a privately held specialty pharmaceutical company focused on cardiovascular therapies, recorded net sales of $341 million in the nine months ending Sept. 30, 2007, an increase of 62% over the comparable time period a year earlier. GSK expects the transaction will be slightly accretive to earnings in 2008, excluding integration costs, and will create additional value in following years. Through its strategic in-licensing and development strategy, Reliant has developed a portfolio of specialty medicines combating heart disease, including US rights to Lovaza(TM) (omega-3-acid ethyl esters), a treatment for adult patients with very high levels of triglycerides. Triglycerides are fatty substances in the blood associated with increased risks of coronary artery disease. Lovaza is indicated as an adjunct to diet to reduce triglyceride levels in adults with very high (500 mg) triglyceride levels. High lipid levels continue to be a growing health problem in the United States, with up to 5 million people having triglyceride levels classified as very high. Lovaza is the only prescription omega-3 medicine approved by the US Food and Drug Administration for the treatment of very high triglycerides, and remains the only omega-3 medicine that, along with diet and exercise, has been clinically proven to provide a 45% reduction in triglycerides in adult patients with very high triglyceride levels. Launched in late 2005, Lovaza (formerly known as Omacor(R)) achieved rapid uptake among patients and health care professionals. In the nine months ending Sept. 30, 2007, net sales were $206 million, an increase of 115% over the first nine months of 2006. Lovaza competes in the non-statin dyslipidemia segment of the US cardiovascular market, where it had achieved a 10% market share of total prescriptions as of Sept. 30, 2007. Sales in the non-statin dyslipidemia market totaled approximately $2.2 billion in 2006 and are expected to grow in excess of 20% a year. GSK believes there is significant opportunity for future growth of Lovaza in this market segment. Reliant licensed the rights to Lovaza in the US and Puerto Rico from Pronova BioPharma ASA (Oslo: PRON), a publicly traded Norwegian company that will continue to supply the product\u2019s primary material. Rights to Lovaza in other markets have been licensed by Pronova to several other companies. "The addition of Lovaza to the GSK portfolio adds a new driver of sales growth in the US business," Chris Viehbacher, President, US Pharmaceuticals, GSK, said. "It represents a strong strategic fit, complementing Coreg CR(R), a leading treatment for heart failure and hypertension, and adds to our growing profile in the cardiovascular disease area." "Today is a momentous date for Reliant," Bradley T. Sheares, CEO of Reliant, said. "We are very proud of the work that our employees have done to build this company, particularly the energy and perseverance of our sales teams, who have demonstrated their worth in building a formidable Lovaza franchise in less than 24 months. We see great additional potential through this acquisition for Lovaza and the patients who could benefit from it." The acquisition is subject to approval by the US Federal Trade Commission and is expected to conclude before year-end. In addition to Lovaza, Reliant Pharmaceuticals, based in Liberty Corner, New Jersey, currently markets three other in-licensed cardiovascular products -- high blood pressure treatments DynaCirc CR(R) (isradipine) and InnoPran XL(R) (propanolol HCl), as well as Rythmol SR(R) (propafenone), which treats abnormal heart rhythms, or arrhythmia. About GSK GlaxoSmithKiline -- http://www.gsk.com/-- is a research-based pharmaceutical and healthcare company that is committed to improving the quality of human life by enabling people to do more, feel better and live longer. About Reliant Pharmaceuticals Inc. Based in Liberty Corner, New Jersey, Reliant Pharmaceuticals Inc. is a pharmaceutical company that specializes in the development, commercialization and marketing of prescription therapeutic products. Reliant currently markets four cardiovascular products in the United States and focuses on promoting its products to targeted primary care and specialty physicians, well as selected hospitals and academic centers in the United States. Reliant's sales force infrastructure is comprised of approximately 875 sales and marketing professionals nationwide. * * * As reported in the Troubled Company Reporter on Feb. 20, 2007, Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Reliant Pharmaceuticals Inc. The rating outlook is stable. At the same time, Standard & Poor's assigned its loan and recovery ratings to the company's senior secured financing, consisting of a $215 million term loan due 2012. The term loan has a first-lien interest in all assets of the company except accounts receivable, in which it holds a second-lien interest. The term loan is rated 'B+' with a recovery rating of '3', indicating the expectation for meaningful recovery of principal in the event of payment default. RESIDENTIAL ASSET: Fitch Cuts Ratings on $13 Mil. Certificates -------------------------------------------------------------- Fitch Ratings has taken these rating actions on one Residential Asset Mortgage Product mortgage pass-through certificate. Affirmations total $278 million, and downgrades total $13 million. In addition, $3.7 million is placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: RAMP 2005-RS3 -- $184.9 million class A affirmed at 'AAA' (BL: 43.59, LCR: 5.87); -- $20.4 million class M-1 affirmed at 'AA+' (BL: 37.38, LCR: 5.04); -- $18.6 million class M-2 affirmed at 'AA' (BL: 31.22, LCR: 4.21); -- $9.3 million class M-3 affirmed at 'AA-' (BL: 28.06, LCR: 3.78); -- $11.1 million class M-4 affirmed at 'A+' (BL: 24.23, LCR: 3.26); -- $7.4 million class M-5 affirmed at 'A' (BL: 21.68, LCR: 2.92); -- $9.3 million class M-6 affirmed at 'A-' (BL: 18.43, LCR: 2.48); -- $5.5 million class M-7 affirmed at 'BBB+' (BL: 16.37, LCR: 2.21); -- $5.9 million class M-8 affirmed at 'BBB' (BL: 14.14, LCR: 1.90); -- $5.2 million class M-9 affirmed at 'BBB-' (BL: 12.08, LCR: 1.63); -- $3.7 million class B-1 rated 'BB+', and placed on Rating Watch Negative (BL: 10.60, LCR: 1.43); -- $5.5 million class B-2 downgraded to 'B' from 'BB' (BL: 8.49, LCR: 1.14); -- $7.4 million class B-3 downgraded to 'CCC/DR2' from 'BB-', and removed from Rating Watch Negative (BL: 6.99, LCR: 0.94). Deal Summary -- Originators: 100% GMAC RFC; -- 60+ day Delinquency: 15.26%; -- Realized Losses to date (% of Original Balance): 1.65%; -- Expected Remaining Losses (% of Current Balance): 7.42%; -- Cumulative Expected Losses (% of Original Balance): 4.60%. 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 2006 and late 2005 with regard to continued poor loan performance and home price weakness. RESIDENTIAL ASSET: Fitch Holds 'BB+' Ratings on Two Classes ----------------------------------------------------------- Fitch Ratings has taken rating actions on three Residential Asset Securities Corporation mortgage pass-through certificates. Affirmations total $482.2 million and downgrades total $19.4 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: RASC 2005-KS1 -- $28.5 million class A affirmed at 'AAA' (BL: 92.09, LCR: 9.64); -- $48.6 million class M-1 affirmed at 'AA+' (BL: 63.06, LCR: 6.6); -- $37.0 million class M-2 affirmed at 'A+' (BL: 23.26, LCR: 2.43); -- $10.8 million class M-3 affirmed at 'A' (BL: 20.43, LCR: 2.14); -- $9.7 million class M-4 affirmed at 'A-' (BL: 17.85, LCR: 1.87); -- $8.6 million class M-5 affirmed at 'BBB' (BL: 15.45, LCR: 1.62); -- $7.2 million class M-6 affirmed at 'BBB-' (BL: 13.44, LCR: 1.41); -- $7.2 million class B affirmed at 'BB+' (BL: 12.21, LCR: 1.28). Deal Summary -- Originators: 100% GMAC RFC; -- 60+ day Delinquency: 26.42% -- Realized Losses to date (% of Original Balance): 1.42%; -- Expected Remaining Losses (% of Current Balance): 9.56%; -- Cumulative Expected Losses (% of Original Balance): 3.65%. RASC 2005-KS4 -- $41.0 million class A affirmed at 'AAA' (BL: 75.75, LCR: 7.8); -- $20.9 million class M-1 affirmed at 'AA' (BL: 58.71, LCR: 6.04); -- $17.4 million class M-2 affirmed at 'AA-' (BL: 41.83, LCR: 4.31); -- $7.8 million class M-3 affirmed at 'A' (BL: 37.45, LCR: 3.86); -- $5.5 million class M-4 affirmed at 'A' (BL: 32.84, LCR: 3.38); -- $7.0 million class M-5 affirmed at 'BBB+' (BL: 18.19, LCR: 1.87); -- $4.3 million class M-6 affirmed at 'BBB' (BL: 16.31, LCR: 1.68); -- $5.1 million class M-7 affirmed at 'BBB' (BL: 13.90, LCR: 1.43). -- $5.8 million class B-1 affirmed at 'BB+' (BL: 11.60, LCR: 1.19). Deal Summary -- Originators: 100% GMAC RFC; -- 60+ day Delinquency: 22.49% -- Realized Losses to date (% of Original Balance): 1.63%; -- Expected Remaining Losses (% of Current Balance): 9.71%; -- Cumulative Expected Losses (% of Original Balance): 4.52%. RASC 2005-KS6 -- $96.7 million class A affirmed at 'AAA' (BL: 66.62, LCR: 5.71); -- $19.7 million class M-1 affirmed at 'AA+' (BL: 57.93, LCR: 4.97); -- $21.8 million class M-2 affirmed at 'AA+' (BL: 48.25, LCR: 4.14); -- $7.1 million class M-3 affirmed at 'AA' (BL: 42.39, LCR: 3.63); -- $15.8 million class M-4 affirmed at 'AA-' (BL: 37.49, LCR: 3.21); -- $9.8 million class M-5 affirmed at 'A+' (BL: 33.10, LCR: 2.84); -- $7.1 million class M-6 affirmed at 'A' (BL: 29.84, LCR: 2.56); -- $11.0 million class M-7 affirmed at 'A' (BL: 24.74, LCR: 2.12). -- $7.4 million class M-8 affirmed at 'BBB+' (BL: 16.73, LCR: 1.43); -- $6.5 million class M-9 affirmed at 'BBB' (BL: 14.83, LCR: 1.27); -- $5.9 million class M-10 downgraded to 'BBB-' from 'BBB', and removed from Rating Watch Negative (BL: 12.94, LCR: 1.11); -- $5.9 million class M-11 downgraded to 'BB' from 'BBB-', and removed from Rating Watch Negative (BL: 11.20, LCR: 0.96); -- $4.4 million class B-1 downgraded to 'B' from 'BB' (BL: 10.35, LCR: 0.89). -- $2.9 million class B-2 downgraded to 'B' from 'BB-' (BL: 10.14, LCR: 0.87). Deal Summary -- Originators: 100% GMAC RFC; -- 60+ day Delinquency: 23.91% -- Realized Losses to date (% of Original Balance): 1.47%; -- Expected Remaining Losses (% of Current Balance): 11.68%; -- Cumulative Expected Losses (% of Original Balance): 5.88%. 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 2006 and late 2005 with regard to continued poor loan performance and home price weakness. RESIDENTIAL ASSET: Fitch Lowers Ratings on Two Classes to BB ------------------------------------------------------------ Fitch has taken rating actions on these five Residential Asset Securities Corporation mortgage pass-through certificates: RASC, Series 2003-KS3 Total Group 1 & 2 -- Class A affirmed at 'AAA'; -- Class M-1 downgraded to 'A+' from 'AA+', and remains on Rating Watch Negative; -- Class M-2 downgraded to 'BBB-' from 'A', and placed on Rating Watch Negative. RASC, Series 2004-KS3 Group 1 -- Class A affirmed at 'AAA'; -- Class M-I-1 affirmed at 'AA'; -- Class M-I-2 affirmed at 'A; -- Class M-I-3 affirmed at 'BBB'. RASC, Series 2004-KS3 Total 2-3 -- Class M-II-1 affirmed at 'AA'; -- Class M-II-2 rated 'A+', and placed on Rating Watch Negative; -- Class M-II-3 downgraded to 'BB' from 'BBB', and placed on Rating Watch Negative. RASC, Series 2004-KS8 Group 1 -- Class A affirmed at 'AAA'; -- Class M-I-1 affirmed at 'AA'; -- Class M-I-2 affirmed at 'A; -- Class M-I-3 affirmed at 'BBB'. RASC, Series 2004-KS8 Group 2 -- Class M-II-1 affirmed at 'AA'; -- Class M-II-2 rated 'A', and placed on Rating Watch Negative; -- Class M-II-3 downgraded to 'BB' from 'BBB'. RASC, Series 2004-KS11 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; -- Class M-6 rated 'BBB-', and placed on Rating Watch Negative; -- Class B downgraded to 'B' from 'BB+'. The affirmations, affecting approximately $339.4 million of the outstanding balances, are taken as a result of a satisfactory relationship of credit enhancement to expected losses. The downgrades, affecting approximately $25.9 million of the outstanding balances, are taken as a result of a deteriorating relationship between expected losses and credit enhancement. The assignment of Rating Watch Negative affects $53.2 million of outstanding certificates and reflects deterioration in the relationship between CE and future loss expectations. The collateral of transactions aforementioned consists of fixed and adjustable-rate subprime mortgage loans secured by first and second liens on residential properties. As of the October 2007 distribution date, delinquencies (loans delinquent more than 60 days, inclusive of loans in foreclosure, bankruptcy, and real estate owned) range from 6.68% (2004-KS8 Group 1) to 41.73% (2003- KS3) with current cumulative losses between 1.04% (2004-KS3 Group 1) and 1.91% (2004-KS3 Total 2-3). The above transactions are seasoned from 35 (2004-KS11) to 54 (2003-KS3) months. The pool factors (current mortgage loans outstanding as a percentage of the initial pool) range from 6% (2003-KS3) to 44% (2004-KS8 Group 1). The loans are serviced by Homecomings Financial Network, LLC (rated 'RPS2+' by Fitch). GMAC- RFC (rated 'RMS2+' by Fitch) is the master servicer of the transactions. RESIDENTIAL CAPITAL: Mulls Merger with U.K. Lender Northern Rock ---------------------------------------------------------------- Residental Capital LLP, a GMAC Financial Services subsidiary, is considering a merger with a large non-U.S. lending institution, which sources say, is U.K. lender Northern Rock plc, as part of its strategic initiatives to improve liquidity and to fend off bankruptcy rumors, various sources report. As reported in yesterday's Troubled Company Reporter ResCap is currently under restructuring as severe weakness in the housing market and mortgage industry continues to prevail. ResCap will streamline its operations and revise its cost structure, which will enhance its flexibility, allowing it to scale operations up or down more rapidly to meet changing market conditions. On Oct. 15, 2007, a restructuring plan was approved that will include ResCap reducing its current worldwide workforce of 12,000 associates by approximately 25%, or by approximately 3,000 associates, with the majority of reductions occurring in the fourth quarter of 2007. In addition, ResCap has offered to purchase up to $750 million notes through a cash tender offer to boost shareholder value. 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. Northern Rock's Troubles As reported in the TCR, the Board of Northern Rock received indicative expressions of interest from bidders including Cerberus. The proposals received Northern Rock are of two types: (i) proposals to invest in the Company (including through an injection of assets as well as new capital); and (ii) proposals to acquire parts of the business or assets of the Company. However, the Board of Directors of Northern Rock expects more proposals from interested parties in the next few days. The Board believes that the range of values for the existing equity implied by the proposals is materially below the market price at the close of business on Nov. 16, 2007. In September 2007, Northern Rock plc and its regulators were pushing to sell the mortgage lender after shares plunged due to the exodus of clients who, as a whole, have taken back about GBP2 billion in funds, The Financial Times reports. As depositors scramble to withdraw their funds from the mortgage lender, fearing a collapse, Northern Rock and its advisers are trying to find a "commercial solution" that would allow it to be sold as a going concern, FT states. About Northern Rock plc Headquartered in Newcastle upon Tyne, England, Northern Rock plc -- http://www.northernrock.co.uk/mortgages-- is currently the 5th largest UK mortgage lender, the largest financial institution based in the North East of England and one of the most cost efficient UK mortgage lenders based on key performance ratios. The company had more than US$200 billion in assets at the end of June 2007. 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. RICHARD ZUCARO: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Richard James Zucaro, Jr. aka Zeke Zucaro, an officer of MegaZee Inc., and ZMGA LLC Megan Elizabeth Zucaro aka Megan Elizabeth Polley, Megan Elizabeth Johnson, an offier of MegaZee Inc., and ZMGA LLC 5715 Denmans Loop Belton, TX 76513 Bankruptcy Case No.: 07-61085 Chapter 11 Petition Date: November 5, 2007 Court: Western District of Texas (Waco) Judge: Frank R. Monroe Debtors' Counsel: John A. Montez, Esq. 3809 W. Waco Drive Waco, TX 76710 Tel: (254) 759-8600 Fax: (254) 759-8700 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtors' list of their 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Michael Zucaro Loan $228,000 6 Garretson Avenue Islip, NY 11751 Leasing Services Other $99,000 3980 Union Boulevard #600 Lakewood, CO 80228 Heartland Business Credit Judgment $70,319 390 Union Boulevard Suit 600 Lakewood, CO 80228 American Express Credit cards $42,442 Allied Interstate Other $41,330 Wells Fargo Business Line Credit cards $36,000 Bank of America Business debt $35,670 Sarma Other $35,000 Internal Revenue Service Other $35,000 Value: $0 United Recovery System/ Credit cards $32,000 American Express FIA CSNA Credit cards $30,349 CBC Novis Business debt $22,000 First Equity Credit cards $14,500 Chase Credit cards $13,919 Sams Credit cards $12,000 Capital One Bank Business debt $10,822 Citibank Credit cards $10,821 First Command Bank Credit cards $10,200 Discover Cards Credit cards $7,675 ROBERTO MARTINS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtors: Roberto M. Martins Maria V. Martins dba Top Line Dairy 160 East Jackson Road Lake Arthur, NM 88253 Bankruptcy Case No.: 07-12902 Chapter 11 Petition Date: November 16, 2007 Court: District of New Mexico (Albuquerque) Judge: James S. Starzynski Debtors' Counsel: Robert H. Jacobvitz, Esq. Jacobvitz, Thuma and Walker, P.C. 500 Marquette Northwest, Suite 650 Albuquerque, NM 87102-5309 Tel: (505) 766-9272 Fax: (505) 766-9287 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtors' list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ S.O.O. Trucking Co. $242,557 P.O. Box 528 Okeene, OK 73763 Veterinary Pharmaceuticals, Inc. Trade $136,014 13159 13th Road West Hanford, CA 93230-9666 IVESCO, LLC Trade $19,412 P.O. Box 8232 Des Moines, IA 50301 Jordan Dairy Service Trade $18,037 Rocky Mountain Trade $16,433 Pharmaceuticals, Inc. KSS, Inc. Trade $12,052 Glorieta Geoscience, Inc. Trade $11,572 Central Valley Utilities $11,118 Electric Coop, Inc. Monsanto Company Trade $10,818 Valley Dairy Products, Inc. Trade $9,479 Central Valley Dairy Breeders Trade $7,915 Precision Electric Inc. Trade $6,348 First Insurance Funding Corp. Insurance $6,199 Western Environmental Trade $5,750 Daubert Oil & Gas, LLC Trade $5,329 Lykins Tire Trade $4,738 Alvin Souza Dairy Trade $3,845 Parts Center Inc. Trade $3,695 Portales Livestock Trade $3,432 Artesia Building Supply Trade $2,273 SAKS INC: Earns $21.6 Million in Third Quarter Ended Nov. 3 ----------------------------------------------------------- Saks Incorporated disclosed Tuesday results for the third quarter and nine months ended Nov. 3, 2007. The company sold its Saks Department Store Group businesses in 2005 and 2006, and the sold SDSG businesses are presented as "discontinued operations" in the prior year period. Saks Fifth Avenue and Club Libby Lu are reflected in the company's continuing operations. Saks recorded net income of $21.6 million on net sales of $796.1 million for the third quarter ended Nov. 3, 2007, compared with net income of $6.2 million on net sales of $697.0 million in the same period ended Oct. 28, 2006. The third quarter included the following after-tax items totaling $4.3 million: -- expenses of approximately $500,000 for retention, severance, and transition costs related to the company's downsizing and consolidation following the disposition of its SDSG businesses, -- $300,000 related to asset impairments and dispositions, -- expenses of approximately $800,000 due to an increase in income tax reserves related to certain tax examinations, and -- expenses of approximately $2.7 million associated with the previously disclosed investigation by the Securities and Exchange Commission and the investigation by the Office of the United States Attorney for the Southern District of New York as well as the settlement of two related vendor lawsuits. For the prior year third quarter ended Oct. 28, 2006, the company recorded income from continuing operations of $12.5 million. After recognition of the company's after-tax loss from discontinued operations of $6.3 million, net income totaled $6.2 million for the prior year third quarter. The prior year third quarter included the following after-tax items netting $4.2 million: -- expenses of approximately $4.9 million for retention, severance, and transition costs, -- expenses of approximately $400,000 associated with the aforementioned investigations, -- $1.5 million related to asset impairments and dispositions, and -- a gain of approximately $2.6 million related to a one-time gain on modifications made to SFA's pension plan. Overview of Results for the Nine Months Saks recorded net income of $8.0 million on net sales of $2.28 billion for the nine months ended Nov. 3, 2007, compared with net income of $32.2 million on net sales of $1.99 billion for the same period ended Oct. 28, 2006. The nine months included the following after-tax items totaling $26.6 million: -- expenses of approximately $16.2 million for retention, severance, and transition costs, -- a loss on extinguishment of debt totaling $3.4 million related to the repurchase of $106.3 million of senior notes, -- $2.5 million related to asset impairments and dispositions, -- expenses of approximately $0.8 million due to an increase in income tax reserves related to certain tax examinations, and -- expenses of approximately $3.7 million associated with the aforementioned investigations and settlements. For the prior year nine months ended Oct. 28, 2006, the company recorded a loss from continuing operations of $29.0 million. After recognition of the company's after-tax gain from discontinued operations of $61.2 million, net income totaled $32.2 million for the prior year nine months. The prior year nine months included the following after-tax items netting $27.3 million: -- a $12.8 million non-cash charge related to the treatment under Financial Accounting Standard 123(r) of the anti- dilution adjustment made to outstanding options related to the company's $4 per share dividend paid in May 2006, -- expenses of approximately $12.4 million for retention, severance, and transition costs, -- $4.9 million related to asset impairments and dispositions, -- expenses of approximately $2.3 million associated with the aforementioned investigations, -- income of approximately $2.5 million due to the favorable conclusion of certain tax examinations, and -- a gain of $2.6 million related to a one-time gain on modifications made to SFA's pension plan. Balance Sheet At Nov. 3, 2007, the company's consolidated balance sheet showed $2.44 billion in total assets, $1.31 billion in total liabilities, and $1.13 billion in total shareholders' equity. Comments on the Quarter Stephen I. Sadove, chairman and chief executive officer of the company, noted, "We are pleased with the year-over-year improvement in our third quarter operating results which primarily was driven by strong comparable store sales growth and expense leverage. "Our third quarter comparable store sales increase of 11.4% indicates that our customers are continuing to respond to our strengthened merchandise selections, service initiatives, and innovative marketing." Sadove continued, "Many of our merchandise categories performed very well in the quarter, including handbags; women's shoes; jewelry; and men's apparel, accessories, and shoes. We generated solid performance across all geographies and store sizes. Our strong sales performance was achieved in spite of disruption associated with several major remodeling projects including our South Coast Plaza store in Los Angeles and our Palm Beach Gardens and Naples stores in Florida. Our New York City flagship location once again outperformed the company average and was the beneficiary of increased store traffic driven in part by the opening of 10022-SHOE and robust tourism (even though the 8th floor was closed for renovation part of the quarter). The number of transactions and the average dollars per transaction rose during the quarter. "The growth of Saks Direct continues to substantially outpace the company average as we add more new vendors and merchandise and customers respond to our recently completed total redesign and upgrade of the e-commerce site. The Direct business generated an approximate 40% sales increase over last year's third quarter. "Off 5th is continuing to show improvement as we further refine the merchandise assortments with more direct purchases from core vendors and as we introduce additional private brand product to the stores." Sadove also noted, "Our 11.4% comparable store sales increase for the quarter exceeded our expectations and is even more noteworthy given our 8.8% comp growth in last year's third quarter. However, we began to experience a more challenging promotional and overall macroeconomic environment. This resulted in modest downward pressure on our merchandise margins which was offset by the impact of unredeemed gift cards, producing a flat year-over-year gross margin rate for the quarter. In last year's third quarter, we were able to expand our gross margin rate by 100 basis points." At quarter end, the company had approximately $63.5 million of cash on hand and $25 million of direct outstanding borrowings on its $500 million revolving credit facility. The revolving credit facility borrowings were used to fund third quarter working capital needs and have subsequently been repaid. Funded debt, which includes capitalized leases, at Nov. 3, 2007, totaled approximately $599 million, and debt-to-capitalization was 34.7%. The company has remaining availability of approximately 35.7 million shares under its existing repurchase authorization programs. The company repurchased approximately 1.7 million shares of common stock at an average price of $15.95 during the quarter. Kevin Wills, executive vice president and chief financial officer, commented, "We believe that our invested cash, our improving cash flows, and the unfunded liquidity in our revolving credit facility will provide flexibility for additional investments in our business and may provide opportunities to further strengthen our balance sheet and to purchase additional common stock." About Saks Inc. Headquartered in New York, Saks Incorporated (NYSE: SKS) -- http://saksincorporated.com/-- operates Saks Fifth Avenue and Off Fifth and Club Libby Lu. Saks Fifth Avenue stores are principally freestanding stores in exclusive shopping destinations or anchor stores in upscale regional malls, and the stores typically offer an assortment of luxury fashion apparel, shoes, accessories, jewelry, cosmetics and gifts. Off Fifth is intended to be the luxury off-price retailer in the United States and provides an outlet for the sale of end-of-season clearance merchandise. The company currently operates Saks Fifth Avenue which is comprised of 54 Saks Fifth Avenue stores, 49 Saks Off 5th stores, and saks.com. The company also operates Club Libby Lu specialty stores. * * * As reported in the Troubled Company Reporter on Nov. 1, 2007, Standard & Poor's Ratings Services revised the CreditWatch implications for Saks Inc. to developing from positive. This action follows a Schedule 13D disclosure by Iceland-based Baugur Group hf. that it has the right to acquire an approximate 8.5% stake in Saks' common stock and that it is considering making a joint bid (with Milestone Resources Group Ltd.) to acquire the company. Currently, Saks Inc. carries Standard & Poor's 'B+' long term foreign issuer credit and 'B+' long term local issuer credit ratings which were placed on Oct. 30, 2007. SAKS INC: Settles IDC Lawsuit on Improper Chargebacks ----------------------------------------------------- Saks Inc. confirmed Wednesday that it has settled a dispute regarding abusive "markdown allowances" with International Design Concepts, Vanessa O'Connell of The Wall Street Journal reports. "The case is officially over. The money has been paid," WSJ cited plaintiff attorney Donald L. Kreindler, as saying. Amount of the settlement was not disclosed, however, Julia Bentley, a spokesperson for Saks Inc. told WSJ that "a vast majority of the settlement had been reserved for." On May 17, 2005, IDC sued Saks alleging breach of contract, fraud and unjust enrichment. The suit, filed with the U.S. District Court for the Southern District of New York, specifically alleged that from 1996 to 2003, Saks improperly took chargebacks and deductions for vendor markdowns, which resulted in IDC going out of business. The suit sought damages in the amount of the unauthorized chargebacks and deductions. IDC filed a second amended complaint on June 14, 2005, asserting an additional claim for damages under the Uniform Commercial Code for vendor compliance chargebacks. About Saks Saks Incorporated -- http://saksincorporatedcom/-- operates Saks Fifth Avenue and Off Fifth and Club Libby Lu. Saks Fifth Avenue stores are principally freestanding stores in exclusive shopping destinations or anchor stores in upscale regional malls, and the stores typically offer an assortment of luxury fashion apparel, shoes, accessories, jewelry, cosmetics and gifts. Off Fifth is intended to be the luxury off-price retailer in the United States and provides an outlet for the sale of end-of-season clearance merchandise. Previously, the company operated Saks Department Store Group, which consisted of Proffitt's and McRae's which was sold to Belk, Inc. in July 2005. * * * As reported in the Troubled Company Reporter on Nov. 1, 2007, Standard & Poor's Ratings Services revised the CreditWatch implications for Saks Inc. to developing from positive. The action followed a Schedule 13D disclosure by Iceland-based Baugur Group hf. that it has the right to acquire an approximate 8.5% stake in Saks' common stock and that it is considering making a joint bid (with Milestone Resources Group Ltd.) to acquire the company. "Although there is no certainty of a bid, we would expect that acquisition of the company would result in a significant addition to leverage," said Standard & Poor's credit analyst Gerald A. Hirschberg," and that Saks' margin of cash flow to cover interest would be substantially diminished." SALANDER-O'REILLY: Gets Interim Nod for Triax as Contractor ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave its interim nod for Salander-O'Reilly Galleries LLC to Triax Capital Advisors LLC as an independent contractor to provide management services. The Debtor discloses that Joseph E. Sarachek, a managing director at Triax, will be named as the Debtor's Chief Restructuring Officer. The Debtor tells the Court that among the first orders of business, the CRO shall undertake a comprehensive and detailed inventory of the Debtor's assets including artwork wherever located. The CRO will also undertake any and all actions necessary to assemble the Debtor's books and records to enable the Debtor to once again conduct its business. Among the issues raised in a number of the litigations concerns the nature and extent of ownership rights asserted in various pieces of artwork. Absent a resolution of these competing interests to the Debtor's primary and most valuable assets, its ability to continue to operate will be severely hampered. Thus, it is the CRO's intention to implement procedures necessary to efficiently address and resolve the competing ownership interests in the various pieces of artwork, the Debtor adds. The Debtor reminds the Court that it intends to use the Chapter 11 process to: (a) resolve its litigation disputes, (b) resolve any financing issues, (c) conduct a review of its business, and (d) negotiate and confirm a plan that maximizes assets values for the benefit of the Debtor's estate and creditors. Specifically, as CRO, Mr. Sarachek responsibilities will include: a. oversight of all aspects of the management and operations of the Debtor's business, in a manner as he deems necessary or appropriate; b. communicate with creditors of the Debtor and meet with representatives of such constituents; and c. report to the Court and will have the sole authority to make decisions with respect to all aspects of management of the Debtor's business including, but not limited to, operations and employment matters and oversight of the bankruptcy process including, but not limited to, Bankruptcy Court reporting requirements, development of a Plan of Reorganization and Disclosure Statement, claims management, and managing outside professionals in other areas as the CRO may identify in such a manner as the CRO deems necessary or appropriate in the CRO's sole discretion consistent with the business judgment rule, subject to applicable state law and the Bankruptcy Court. The Debtor adds that Triax will cause Mr. Sarachek to devote sufficient time to complete the services contemplated by the Management Agreement for the Debtor on behalf of Triax and additionally Triax will have the right to use additional professionals that may be necessary to carry out the scope of services outlined in the Management Agreement. Triax will also advise the Debtor in connection with various financial advisory matters including, but not limited to, inventory of the Debtor's artwork collection and other assets, assembling books and records of the Debtor, evaluating any competing claims to property of the estate, evaluating the Debtor's strategic alternatives and formulating a business plan for selling or hypothecating the Debtor's assets, e.g., paintings and other objects of art. As payment for services rendered, the Debtor discloses that Mr. Sarachek will be $50,000 paid per month payable on the first of each month in advance. Fees for other Triax personnel shall be billed at $250 per hour. Triax will also review its level of effort with the Bankruptcy Court and the secured creditor, First Republic Bank, on a monthly basis and if necessary, adjust the monthly fee accordingly, all in accordance with the Bankruptcy Code and Rules, and subject to Bankruptcy Court approval. In addition, Triax will provide FRB with a monthly budget estimating the anticipated services to be rendered by hourly personnel. In addition to monthly fees, the Debtor will also pay Triax a reorganization incentive fee payable upon the earlier of: (i) the sale or monetization of all or substantially all of the assets or equity of the Debtor in one or more transactions; (ii) the merger or consolidation of the Debtor with or into any other entity in one or more transactions; (iii) the effective date of a chapter 11 plan of reorganization for the Debtor, with the Debtor, or a substantial portion thereof, surviving as an ongoing entity; (iv) the refinancing or pay down of the existing lender group; or (v) the liquidation of substantially all of the Debtor's assets. Subject to Bankruptcy Court approval, the amount of the Reorganization Fee will be based on the recovery to creditors and shall be 1.5 % of the recovery to creditors, provided, however, that the Reorganization Fee will not be paid out of the cash collateral of FRB. In lieu of paying Triax a retainer, the Debtor will further prepay Triax's first Monthly Fees in the sum of $50,000 upon execution of the Management Agreement. To the best of the Debtor's knowledge, Triax and Mr. Sarachek do not represent any interests adverse to the Debtor or its estates. 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). Alan D. Halperin, Esq., at Halperin Battaglia Raicht, LLP, represents the gallery. 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 Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed 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. SCENIC HOLLOW: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Scenic Hollow Investments, LLC dba Skylane Mobile Home Park P.O. Box 236 Horn Lake, MS 38637 Bankruptcy Case No.: 07-14133 Chapter 11 Petition Date: November 8, 2007 Court: Northern District of Mississippi (Aberdeen) Judge: David W. Houston III Debtor's Counsel: Michael P. Coury, Esq. Suite 2000 40 South Main Street Memphis, TN 38103 Tel: (901) 259-7100 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Holland and Hollard Services rendered $135,000 Excavating Inc. 6409 C.R. 216 Oakland, MS 38948 Adelino C. Sousa Loan $100,000 8911 Chambary Road Elk Grove, CA 95624 Dale Morrow Salary $90,000 7725 Goodman Road Walls, MS 38680 Houston Engineering Services rendered $40,000 The Real Estate Movement, Inc. Services rendered $35,000 Jackson Partners Lease arrearage $25,000 Edith C. Williams Loan $20,000 Equity Trust Company Goods and/or $5,000 services Mississippi Dept. of Health Notice purposes only Unknown Mississippi State Notice purposes only Unknown Tax Commission SCOTTS MIRACLE: Moody's Withdraws Ratings for Business Reasons -------------------------------------------------------------- Moody's Investors Service withdrew The Scotts Miracle-Gro Company's ratings. Moody's has withdrawn these ratings for business reasons. Specifically, the ratings were withdrawn because the company has no rated debt outstanding. These ratings have been withdrawn: The Scotts Miracle-Gro Company -- Corporate Family Rating of Ba2; -- Probability of Default Rating of Ba2; -- Speculative Grade Liquidity Rating of SGL-2. The Scotts Miracle-Gro Company, with headquarters in Marysville, Ohio, is a leading manufacturer and marketer of consumer lawn care and garden products, primarily in North America and in Europe. The company's sales were approximately $2.9 billion for the twelve months ended Sept. 30, 2007. ST ALBANS: Case Summary & 12 Largest Unsecured Creditors -------------------------------------------------------- Debtor: St. Albans Outreach Day Care Center, Inc. 109-45 Farmers Boulevard Saint Albans, NY 11412 Bankruptcy Case No.: 07-46018 Type of Business: The Debtor is a provider of day care and child care services in Queens County, New York. Chapter 11 Petition Date: November 2, 2007 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: John W Freeman, Esq. 111-36 Farmers Boulevard Jamaica, NY 11412 Tel: (347) 581-4485 Fax: (917) 386-2569 Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million Debtor's list of its 12 Largest Unsecured Creditors: Entity ------ New York State Department of Labor 138-60 Berkley Avenue Flushing, NY 11355 Robert Murray 109-45 Farmers Boulevard St. Albans, NY 11412 New York State Workers Compensation Board 55 Broadway New York, NY 10006 New York State Division of Taxation & Finance Ricoh The City of New York Con Edison JAF Station Keyspan Energy Delivery Internal Revenue Service Dell Financial Services Receivables Management Srvc TARRAGON CORP: Must File June & Sept. Form 10-Q's by December 31 ---------------------------------------------------------------- The Nasdaq Listing Qualifications Panel has granted Tarragon Corporation's request for an extension to file its Form 10-Qs for the quarters ended June 30 and Sept. 30, 2007. Pursuant to the extension, Tarragon's common stock will continue to be listed on the Nasdaq Global Select Market subject to the filing of the above referenced reports with the SEC by Dec. 21, 2007. Based in New York City, Tarragon Corporation (NASDAQ:TARR) -- http://www.tarragoncorp.com/-- develops multifamily housing for rent and for sale. Tarragon's operations are concentrated in the Northeast, Florida, Texas and Tennessee. * * * As reported in the Troubled Company Reporter on Aug. 20, 2007, Tarragon Corp. disclosed in a regulatory filing with the Securities and Exchange Commission that it received a notice of default and demand from Barclays Capital Real Estate Inc. related to six promissory notes made in favor of Barclays by certain direct or indirect wholly owned subsidiaries of the company (the "Group I Subsidiaries"). THINKPATH INC: Sept. 30 Balance Sheet Up-Side-Down by $2.3 Mil. --------------------------------------------------------------- Thinkpath Inc. reported financial results for the three and nine months ended Sept. 30, 2007. Net loss for the three months ended Sept. 30, 2007, was $520,000, compared to a net loss of $380,000 for the same period last year. Net loss for the nine months ended Sept. 30, 2007, was $450,000, compared to $1,720,000 for the same 2006 period. Included in interest charges for the three and nine months ended Sept. 30, 2007 are accrued fees and penalties of approximately $300,000 and $670,000, related to the company's debt agreements with its primary lender. Specifically, the company's failure to file and effect a registration statement registering the shares underlying the warrants granted to the lender. Subsequent to the quarter end, the lender agreed to forgive these fees, waive additional fees and postpone the filing deadline until March 31, 2008. Debt forgiveness of approximately $670,000 will be recognized by the company in the fourth quarter this year. At Sept. 30, 2007, the company's balance sheet showed total assets of 5.6 million and total liabilities of $7.9 million resulting to a shareholders' deficit of $2.3 million. About Thinkpath Inc. Headquartered in Toronto, Ontario, Thinkpath Inc. (OTC BB: THPHF) -- http://www.thinkpath.com/-- provides engineering design services and on-site engineering support. Customers include defense contractors, aerospace, logistics, healthcare, pharmaceutical and manufacturing companies, including Johnson and Johnson, Lockheed Martin, General Dynamics, Siemens, Federal Express, L-3 Communications, and Cummins Engines. Going Concern Doubt Schwartz Levitsky Feldman LLP, in Toronto, expressed substantial doubt about Thinkpath Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and negative working capital. TRICADIA CDO: S&P Places 'BB' Rating Under Negative CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class A-X, A-2, B, C, D, E, and F notes issued by Tricadia CDO 2006-7 Ltd. on CreditWatch with negative implications. Tricadia CDO 2006-7 Ltd. triggered an event of default under section 5.1(j) of the indenture dated Jan. 23, 2007, when a ratio calculated by dividing the net outstanding asset balance by the sum of the aggregate principal amount of the class A and B notes was less than 100%. When Standard & Poor's receives EOD notices, S&P place all affected note ratings on CreditWatch with negative implications. Ratings Placed on Creditwatch Negative Tricadia CDO 2006-7 Ltd. Rating ------ Class To From ----- -- ---- A-X AAA/Watch Neg AAA A-2 AAA/Watch Neg AAA B AA/Watch Neg AA C A/Watch Neg A D BBB/Watch Neg BBB E BBB-/Watch Neg BBB- F BB/Watch Neg BB Other Outstanding Ratings Tricadia CDO 2006-7 Ltd. Class Rating ----- ------ A-1 unfunded AAA A-1 funded AAA UNITED RENTALS: Files Lawsuit Against Cerberus Capital ------------------------------------------------------ United Rentals Inc. has filed a lawsuit against RAM Holdings Inc. and RAM Acquisition Corp., acquisition vehicles formed by Stephen A. Feinberg's Cerberus Capital Management L.P. to acquire United Rentals. The lawsuit, filed in the Delaware Court of Chancery, seeks to compel the Cerberus acquisition vehicles to complete the agreed- upon transaction. United Rentals received a letter from RAM, repudiating the merger agreement even though there has been no material adverse change in United Rentals' business. The letter was sent after a meeting led by Mr. Feinberg at which RAM informed United Rentals' advisors that RAM did not want to force its financing sources to fulfill their commitments, even though the merger agreement requires them to do so. At the meeting, Cerberus specifically confirmed that there has not been a material adverse change. United Rentals related that the repudiation, which is unwarranted and incompatible with the covenants of the merger agreement, is nothing more than a naked ploy to extract a lower price at the expense of United Rentals' shareholders. The lawsuit asserts that the "Specific Performance" provision of the merger agreement, which states that "irreparable damage would occur in the event that any of the provisions of the Agreement were not performed in accordance with their specific terms or were otherwise breached," explicitly gives United Rentals the right to compel consummation of the merger in the present situation. The lawsuit contends that the Cerberus acquisition vehicles are directly violating the merger agreement and acting in bad faith, and do not have the right to pay a reverse break-up fee and simply walk away. There is no financing barrier to completing the merger, as RAM has binding commitment letters from its financing sources to provide financing for the transaction. United Rentals stated that the financing sources stand ready to fulfill their contractual obligations. As described in the lawsuit, the Specific Performance provision of the merger agreement requires RAM to draw down the committed financing and consummate the merger under precisely these circumstances. The lawsuit also contends that the Cerberus acquisition vehicles sought to further their scheme to buy United Rentals for less by taking advantage of the dramatic stock price drop that occurred after their intention to walk away from their obligation to consummate the merger was leaked to a news organization. The lawsuit asks the Court to award United Rentals specific performance of the merger agreement to consummate the merger in accordance with its terms. The United Rentals Board believes it is in the best interest of the Company and its stockholders to bring this action to enforce their contractual rights, and looks forward to prevailing in court. The New York law firm of Orans, Elsen & Lupert LLP and the Wilmington, Delaware law firm of Rosenthal, Monhait & Goddess, P.A. is representing United Rentals in this litigation. About United Rentals United Rentals Inc. -- http://www.unitedrentals.com/-- (NYSE: URI) is an equipment rental company with an integrated network of over 690 rental locations in 48 states, 10 Canadian provinces and one location in Mexico. The company's approximately 11,500 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers for rent over 20,000 classes of rental equipment with a total original cost of $4.3 billion. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Standard & Poor's Ratings Services said that its 'BB-' corporate credit ratings on United Rentals Inc. and its wholly owned subsidiary United Rentals Inc. remain on CreditWatch with negative implications. VALLEY HEALTH: Airs Cost-Cutting Plans; Intends to Cut Jobs by 2% ----------------------------------------------------------------- Valley Health System plans to reduce its 2,000 work force by about 2%, or 41 heads, and renegotiate agreements in order to mitigate financial distress and a possible bankruptcy, various reports relate, citing chief executive officer Fred Harder. The lay offs will realize about $2 million to $4 million in savings per year for the ailing hospital chain, J.P. Crumrine writes for Idyllwild Town Crier. This is Valley Health's next move after the trashing of Measure G which proposed to sell the Valley Health to Select HealthCare Solutions for $135 million, reports say. Other cost-cutting efforts include shutting down of non- performing assets and raising hospital charges, according to the reports. About Valley Health System Valley Health System, -- http://www.valleyhealthsystem.com/-- a California Local Health Care District, owns and operates three acute hospitals and a skilled nursing facility; Hemet Valley Medical Center, a 340-bed facility located in Hemet, Menifee Valley Medical Center an 84-bed facility located in Sun City, and Moreno Valley Community Hospital a 95-bed facility located in the city of Moreno Valley. Hemet Valley HealthCare Center, a 113-bed skilled nursing facility located in Hemet. Currently the District encompasses approximately 882 square miles in the San Jacinto Valley in west central Riverside County. It includes the City of Hemet, the City of San Jacinto, the City of Sun City, and the surrounding unincorporated areas. Population of the District is approximately 360,000, however Moreno Valley and its primary service area are located outside the boundaries of the District. The District was formed in 1946 and purchased as existing 18-bed hospital from the City of Hemet. Since then, Hemet Valley Medical Center has undertaken a number of projects in expanding to its present 240 licensed bed capacity. Menifee Valley Medical Center and Moreno Valley Community Hospital were opened in 1989 and 1990 respectively. * * * Valley Health, according to Measure G proposal at its Web site, has been facing several financial problems which includes the investment in Moreno Valley Hospital that, since its inception 17 years ago, has never had a positive bottom line. Measure G also mentions the constant turmoil and recall in the District's board, the failure of the bond issue in 2006 (Measure I) that aimed to replace several buildings that won't meet State seismic codes in 2013, and the escalating employee salaries, wages and benefits costs that rose rapidly over the past two years, leading to operating deficits. The District discloses it has been running out of cash reserves and is losing about $1 million to $2 million per month. VIRGIN MOBILE: S&P Assigns 'B-' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Warren, New Jersey-based Virgin Mobile USA Inc. The outlook is stable. At the same time, S&P assigned a bank loan rating of 'CCC', two notches below the corporate credit rating on Virgin Mobile, and a '6' recovery rating to Virgin Mobile USA LP's existing $282.7 million senior secured credit facility. The '6' recovery rating indicates expectations for negligible (0%-10%) recovery in the event of payment default. "The ratings on Virgin Mobile are constrained by a high degree of risk in a prepaid wireless phone business with little room for execution missteps," said Standard & Poor's credit analyst Naveen Sarma. The company's target market has generally lower average revenue per user and higher churn than postpaid customers. In addition, the ratings reflect a leveraged financial profile and potential liquidity pressures if operating performance falters. Tempering factors include strong brand recognition, nationwide coverage through Sprint Nextel Corp.'s wireless network, and favorable operating and capital spending characteristics from the Sprint Nextel relationship. Virgin Mobile, which operates as a mobile virtual network operator by leasing capacity on the Sprint Nextel wireless network, provides prepaid wireless services to about 4.9 million customers in the U.S. as Sept 30, 2007. The company, which completed its IPO on Oct. 11, 2007, targets the youth and prepaid, or pay-as- you-go, markets. For the 12 months ended Sept. 30, 2007, revenues were $1.3 billion, while consolidated debt, pro forma for the IPO, was about $338 million, adjusted for operating leases. Virgin Mobile's unique strategy of targeting the prepaid and youth markets entails significant risk, leaving little room for execution missteps. Competition in the U.S. wireless sector is quite intense and will likely increase as the industry matures and growth slows. The prepaid segment is less mature than the larger, traditional postpaid segment and S&P expect it to grow at a faster rate than the overall industry. While Virgin Mobile's focus on this prepaid segment suggests that the company could exhibit healthier customer growth than the overall industry, the business already has competitors such as Leap Wireless International Inc. and MetroPCS Communications Inc. In addition, this market could be more aggressively targeted by the national carriers through their prepaid offerings, including AT&T Inc.'s GoPhone, Verizon Communications Inc.'s INpulse, Sprint's Boost Mobile, and T-Mobile USA Inc.'s T-Mobile To-Go. WASTE TO CHARITY: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Waste to Charity, Inc 5654 Lawton Drive Sarasota, FL 34233 Tel: (941) 355-9609 Bankruptcy Case No.: 07-10816 Chapter 11 Petition Date: November 8, 2007 Court: Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Paul DeCailly, Esq. DeCailly PLC 3111 West Martin Luther King Blvd Suite 100 Tampa, FL 33607 Tel: (813) 286-2909 Fax: (866) 906-5977 Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million The Debtor did not file the list of its 20 largest unsecured creditors. WASHINGTON MUTUAL: Moody's Downgrades Ratings on 34 Tranches ------------------------------------------------------------ Moody's Investors Service has downgraded the ratings of 34 tranches and has placed under review for possible downgrade the ratings of 7 tranches from 8 deals issued by Washington Mutual in 2006 and late 2005. The collateral backing these classes consists of primarily first lien, fixed and 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: WaMu Mortgage Pass-Through Certificates, WMALT Series 2005-10 Trust -- Cl. B-3, Downgraded to Baa3, previously Baa2. Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-6 Trust -- Cl. L-B-1 Currently Aa2 on review for possible downgrade, -- Cl. L-B-2, Downgraded to Ba1, previously A2, -- Cl. L-B-3, Downgraded to B3, previously Baa2. Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-7 -- Cl. M-1 Currently Aa2 on review for possible downgrade, -- Cl. M-2 Currently Aa3 on review for possible downgrade, -- Cl. M-3, Downgraded to A3, previously A1, -- Cl. M-4, Downgraded to Baa2, previously A2, -- Cl. B-1, Downgraded to Ba1, previously A3, -- Cl. B-2, Downgraded to Ba3, previously Baa2, -- Cl. B-3, Downgraded to B3, previously Baa3, -- Cl. B-4, Downgraded to Ca, previously Ba3. Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-8 -- Cl. M-2 Currently Aa3 on review for possible downgrade, -- Cl. M-3, Downgraded to A2, previously A1, -- Cl. M-4, Downgraded to Baa1, previously A2, -- Cl. B-1, Downgraded to Baa2, previously Baa1, -- Cl. B-2, Downgraded to Ba1, previously Baa2, -- Cl. B-3, Downgraded to Ba3, previously Baa3. Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-9 Trust -- Cl. M-4, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa2, previously Baa1, -- Cl. B-2, Downgraded to Ba1, previously Baa2, -- Cl. B-3, Downgraded to Ba3, previously Baa3, -- Cl. B-4, Downgraded to B3, previously Ba3. Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-4 Trust -- Cl. 3-M-2, Downgraded to A3, previously A2, -- Cl. 3-M-3, Downgraded to Ba1, previously Baa2, -- Cl. 3-M-4, Downgraded to Ba2, previously Baa3, -- Cl. 3-B-1, Downgraded to B3, previously Ba2, -- Cl. 3-B-2, Downgraded to Caa1, previously Ba3. Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-5 Trust -- Cl. 3-M-1 Currently Aa1 on review for possible downgrade, -- Cl. 3-M-2 Currently Aa2 on review for possible downgrade, -- Cl. 3-M-3 Currently Aa3 on review for possible downgrade, -- Cl. 3-M-4, Downgraded to A2, previously A1, -- Cl. 3-M-5, Downgraded to Baa1, previously A2, -- Cl. 3-M-6, Downgraded to Baa2, previously A2, -- Cl. 3-B-1, Downgraded to Baa3, previously A3, -- Cl. 3-B-2, Downgraded to Ba2, previously Baa1, -- Cl. 3-B-3, Downgraded to B1, previously Baa2, -- Cl. 3-B-4, Downgraded to B3, previously Ba1, -- Cl. 3-B-5, Downgraded to Caa2, previously Ba2. Issuer: WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR10 Trust -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba2, previously Baa3. WATERFORD EQUITIES: Connecticut Wants Chapter 11 Trustee Appointed ------------------------------------------------------------------ The State of Connecticut, as creditor and party-in-interest, through Attorney General Richard Blumenthal, Esq., asks the U.S. Bankruptcy Court for the District of Connecticut for the appointment of a Chapter 11 Trustee in Waterford Equities, LLC and its debtor-affiliates' bankruptcy proceedings. According to Mr. Blumenthal, the "Haven Healthcare" entities of the Debtors grossly mismananged millions of dollars of government funds intended for patients, including the diversion of federal and state money intended for patient services to improper investment in a record company and personal real estate. Mr. Blumenthal further says that this mismanagement has jeopardized the health, safety and welfare of patients at all Haven Health Care nursing homes in Connectiut. By appointing a Trustee, the financial stability and adequate care for nursing homes across Connecticut is ensured, Mr. Blumenthal contends. Further, Mr. Blumenthal adds, the "Haven" entities have run roughshod not only the goverment interest but also that of their largest creditors over aperiod of several years. If appointed, the Trustee could take charge of the operations of the "Haven" entities and take immediate action to ensure responsible business management mindful of the significant interest in protecting the health and safety of nearly 2000 residents of the Haven facilities and of all unsecured creditors. Based in Middletown, Connecticut, Waterford Equities, L.L.C., provides nursing care to the elderly in New England, Connecticut. The company operates health centers and assisted living facilities and specialize in short-term rehabilitative care and long-term care. The company and 44 of its affiliates filed for Chapter 11 protection on Nov. 20, 2007 (Bankr. D. Conn. Lead Case No. 07-32719). Robert S. Hoff, Esq., and Sharyn B. Zuch, Esq., at Wiggin & Dana, represent the Debtors. When the Debtors filed for protection from their creditors, the disclosed estimated assets and debts between $1 million and $100 million. The Debtors' consolidated list of their 50 largest unsecured creditors showed total claims of more than $20 million. WENTWORTH ENERGY: Posts $2 Million Net Loss in Third Quarter ------------------------------------------------------------ Wentworth Energy Inc. reported a net loss of $2.0 million on total revenue of $534,041 for the third quarter ended Sept. 30, 2007, compared with a net loss of $85.2 million on total revenue of $1.1 million in the same period last year. The net loss during the third quarter of 2006 included a loss of $79.9 million resulting from changes in fair value on derivative contracts. The large fluctuations in the derivative contract liabilities and the related impact on the interim consolidated statements of operations arise from the application of the prescribed accounting treatment for derivatives under EITF 00-19 and are not directly related to operational matters. Revenues from the oil and gas production segment increased in the third quarter to approximately $355,000 compared to $64,000 in the corresponding prior year quarter. The increase was due to natural gas production from wells in Freestone County. Revenues from the drilling operations segment in the third quarter were $179,000 compared to $1.0 million in the corresponding prior year's quarter, due to the curtailment of drilling operations late in the first quarter of 2007, when a significant customer of Barnico suspended its drilling operations in East Texas. In addition, the company lacked adequate funding to drill on its own properties during the third quarter. At Sept. 30, 2007, the company's consolidated balance sheet showed $46.1 million in total assets, $29.2 million in total liabilities, and $16.9 million in total shareholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $880,486 in total current assets available to pay $28.9 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?259f Liquidity The company successfully restructured its convertible notes and convertible debentures, which provided additional capital of $5,000,000 and pre-payment of interest on the convertible notes until March 31, 2008, by the issuance of additional Series A warrants. With the reduction in operating and overhead expenses, the company believes there will be adequate funds to continue current operations at least until end of first quarter of 2008. During the first nine months of 2007, the company used $4.6 million of cash from operations compared to $2.7 million of cash used during the first nine months of 2006. Cash used during the first nine months of 2007 was higher than anticipated on-going cash requirements due primarily to legal and other professional services related to potential debt refinancing and restructuring of the company's convertible notes and convertible debentures, and for the preparation and review of SEC filings, including assistance with amendments and restatements of prior filings. Going Concern Doubt As reported in the Troubled Company Reporter on May 10, 2007, Hein & Associates LLP, in Dallas, Texas, expressed substantial doubt about Wentworth Energy Inc.'s ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006. Hein reported that the company is uncertain whether it will be able to achieve profitable operations, successfully restructure its debt or raise additional capital. About Wentworth Energy Headquartered in Palestine, Texas, Wentworth Energy Inc. (OTC BB: WNWG) -- http://www.wentworthenergy.com/-- is an independent exploration and production company focused on developing North American oil and natural gas reserves. The company owns a 27,557- acre mineral block in east central Freestone County and west central Anderson County in the active East Texas Basin, as well as an active oil and gas contract drilling company, Barnico Drilling Inc., which has serviced East Texas drilling demand since the late 1970s. WESTLAKE DEVELOPMENT.: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Westlake Development, Inc. 47515 Ryan Road Shelby Twp., MI 48317 Bankruptcy Case No.: 07-62797 Chapter 11 Petition Date: November 8, 2007 Court: Eastern District of Michigan (Detroit) Judge: Phillip J. Shefferly Debtor's Counsel: Robert N. Bassel, Esq. 201 West Big Beaver 6th Floor Troy, MI 48099 Tel: (248) 528-1111 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file the list of its 20 largest unsecured creditors. WHITING PETROLEUM: Registers Initial Public Offer of Units ---------------------------------------------------------- Whiting Petroleum Corporation and Whiting USA Trust I have filed a registration statement with the Securities and Exchange Commission relating to a proposed initial public offering of units of beneficial interest in Whiting USA Trust I. Whiting Petroleum Corporation has formed Whiting USA Trust I and plans to contribute a term net profits interest in certain of its oil and natural gas properties in exchange for trust units. Whiting Petroleum intends to use the net proceeds from this offering to repay a portion of the debt outstanding under its credit agreement. Raymond James & Associates, Inc. will act as book-running manager for the offering. The offering will be made only by means of a prospectus, a copy of which may be obtained, when available, from: Raymond James & Associates Inc. No. 880 Carillon Parkway St. Petersburg, FL 33716 About Whiting Petroleum Corporation Based in Denver, Colorado, Whiting Petroleum Corporation, (NYSE: WLL) -- http://www.whiting.com/-- is an independent oil and gas company that acquires, exploits, develops and explores for crude oil, natural gas and natural gas liquids primarily in the Permian Basin, Rocky Mountains, Mid-Continent, Gulf Coast and Michigan regions of the United States. * * * Whiting Petroleum Corp. continues to carry Moody's Investor Services' 'Ba3' rating on its long term corporate family and probability of default ratings. WHITNEY SMITH: Case Summary & Largest Unsecured Creditor -------------------------------------------------------- Debtor: Whitney Smith 1049 West Conway Drive Northwest Atlanta, GA 30327-3639 Bankruptcy Case No.: 07-78497 Chapter 11 Petition Date: November 5, 2007 Court: Northern District of Georgia (Atlanta) Judge: James Massey Debtor's Counsel: Evan M. Altman, Esq. Bldg. 2 - Northridge 400 8325 Dunwoody Place Atlanta, GA 30350 Tel: (770) 394-6466 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's list of her Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Shapiro & Swertfeger LLP Bank loan $2,587,092 Duke Building, Suite 100 2872 Woodcock Boulevard Collateral: Atlanta, GA 30341 $3,000,000 Unsecured: $0 WHOLE FOODS: Board Increases January 22 Dividend by 11% ------------------------------------------------------- Whole Foods Market Inc.'s board of directors declared an 11% increase in the company's dividend to $0.20 per share, payable on Jan. 22, 2008, to shareholders of record as of Jan. 11, 2008. This is the company's fifth dividend increase since the first cash dividend of $0.075 per share (split-adjusted) was declared in November 2003. Founded in 1980 in Austin, Texas, Whole Foods Market, Inc. (NASDAQ: WFMI) -- http://www.wholefoodsmarket.com/-- was a natural and organic foods supermarket. In fiscal year 2006, the company had sales of $5.6 billion and had more than 190 stores in the United States, Canada, and the United Kingdom. * * * In September 2007, Moody's Investors Service downgraded Whole Foods Market Inc.'s corporate family rating to Ba1 from Baa3 reflecting the deterioration in the company's debt protection measures following the debt-financed acquisition of Wild Oats Markets Inc. The rating outlook is stable. In August 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Whole Foods Market Inc. to 'BB+' from 'BBB-'. At the same time, S&P removed the ratings from CreditWatch, where they were placed with negative implications on Feb. 22, 2007. The action followed the company's acquisition of Wild Oats Markets Inc. The outlook is negative. WHOLE FOODS: Earns $34 Million in Quarter ended September 30 ------------------------------------------------------------ Whole Foods Market Inc. reported sales and earnings for the 13-week fourth quarter and 53-week fiscal year ended Sept. 30, 2007. During the quarter, net income was approximately $34 million. The company produced approximately $97 million in cash flow from operations and received approximately $7 million in proceeds from the exercise of stock options. Capital expenditures in the quarter were approximately $147 million of which $116 million was for new stores. In addition, the company paid approximately $25 million in cash dividends to shareholders in the quarter. Pre-opening and relocation costs were approximately $70 million compared to $37 million in the prior year. Approximately $34 million relating to share-based compensation, pre-opening rent and accelerated depreciation was expensed for accounting purposes but was non-cash, compared to $26 million, or $0.11 per diluted share, in the prior year. For the fiscal year, net income was approximately $183 million. The company produced approximately $399 million in cash flow from operations and received approximately $54 million in proceeds from the exercise of stock options. Capital expenditures for the year totaled approximately $530 million of which $389 million was for new stores. The company also paid out approximately $596 million for Wild Oats Markets Inc., including $34 million in direct transaction costs. In addition, the company paid approximately $97 million in cash dividends to shareholders and repurchased approximately 2.5 million shares, or approximately $100 million, of common stock on the open market. At the end of the year, the company had $2 million in restricted cash and total debt of approximately $761 million. This included a $700 million term loan used to finance the Wild Oats acquisition, approximately $22 million in Wild Oats and $3 million in Whole Foods Market convertible debentures, approximately $19 million in capital lease obligations, and $17 million in borrowings on the company's credit line. Subsequent to the close of the year, the company received approximately $165 million in proceeds from the sale of the Henry's and Sun Harvest stores and paid off the $22 million in remaining Wild Oats convertible debentures and the $17 million credit line balance. Currently, the company has approximately $162 million available on its $250 million credit line, net of outstanding letters of credit. At Sept. 30, 2007, the company's balance sheet showed total assets of $3.2 billion, total liabilities of $1.8 billion and total shareholders' equity of $1.4 billion. About Whole Foods Market Founded in 1980 in Austin, Texas, Whole Foods Market, Inc. (NASDAQ: WFMI) -- http://www.wholefoodsmarket.com/-- was a natural and organic foods supermarket. In fiscal year 2006, the company had sales of $5.6 billion and had more than 190 stores in the United States, Canada, and the United Kingdom. * * * In September 2007, Moody's Investors Service downgraded Whole Foods Market Inc.'s corporate family rating to Ba1 from Baa3 reflecting the deterioration in the company's debt protection measures following the debt-financed acquisition of Wild Oats Markets Inc. The rating outlook is stable. In August 2007, Standard & Poor's Ratings Services lowered its corporate credit rating on Whole Foods Market Inc. to 'BB+' from 'BBB-'. At the same time, S&P removed the ratings from CreditWatch, where they were placed with negative implications on Feb. 22, 2007. The action followed the company's acquisition of Wild Oats Markets Inc. The outlook is negative. * Continued Credit Deterioration Leads Fitch to Review CDO's ------------------------------------------------------------ Continued credit deterioration with respect to underlying collateral has led Fitch to initiate a formal review of collateralized debt obligations backed all or in part by trust preferred securities issued by real estate investment trusts, homebuilders and financial institutions specializing in residential mortgage lending. As a result, Fitch has placed $5.4 billion of rated liabilities, across 120 classes of 15 TruPS CDOs, on Rating Watch Negative. With respect to five of the 15 transactions affected, Fitch has placed the entire capital structure on Rating Watch Negative. Fitch's rating actions follow those undertaken in September and August of this year, which reflected credit deterioration experienced up to that point in time with respect to underlying collateral. A complete list of transactions and classes placed on Rating Watch Negative is listed at the end of this rating action commentary. Fitch's rating actions reflect continued deterioration in the credit quality of underlying issuers of trust preferred securities and subordinated debt. In particular, the credit profiles of many homebuilders, mortgage REITs and specialty finance companies continue to decline. Fitch currently maintains a Negative Rating Outlook on the homebuilder, residential and commercial mortgage REIT sectors. The challenges facings these sectors are expected to be even more pronounced with respect to the smaller-sized, shadow-rated entities which typically characterize REIT TruPS CDO portfolios. Based on public and shadow ratings performed by Fitch, it is estimated that an average of 22.9% of the portfolios underlying the 15 CDOs are currently rated 'CCC+' or below, ranging between 6.6% and 45.8%. Since Fitch's last review of REIT TruPS CDOs in September, six underlying issuers representing a total exposure of $524.5 million have been identified by Fitch as exhibiting heightened credit risk, having either experienced a default or deferral on issued securities, a technical default, or ratings migrating to 'CC' or below, indicating that a default of some kind appears probable. Among these six identified credit risk securities is an underlying homebuilder which filed for bankruptcy protection on Nov. 9, 2007. REIT TruPS CDOs exhibit varying levels of credit enhancement and other structural protections to rated noteholders. In addition, the magnitude of exposure to troubled issuers varies transaction- to-transaction. While this makes comparisons across transactions difficult, Fitch expects that potential downgrades with respect to classes currently rated 'AAA' and 'AA' will be approximately one to two rating categories, remaining in the investment grade range and reflecting an increased probability of default as opposed to an expectation of a principal loss to such noteholders. Fitch expects potential rating actions with respect to more junior classes to be more pronounced, reflecting an increased expectation of potential principal loss to noteholders as a result of collateral defaults and deterioration. The credit risk to junior classes is likely to be exacerbated by the fact that collateral defaults and deterioration, in addition to reducing the principal balance available to support such notes, often enact cash trapping mechanisms which divert interest payments to senior classes from junior classes. Fitch has placed these REIT TruPS CDOs on Rating Watch Negative: Attentus CDO I, Ltd./LLC (Attentus I) -- $277,979,197 class A-1 'AAA'; -- $20,000,000 class A-2 'AAA'; -- $65,000,000 class B 'AA'; -- $10,000,000 class C-1 'AA-'; -- $35,000,000 class C-2A 'A-'; -- $30,000,000 class C-2B 'A-'; -- $20,000,000 class D 'BBB-'; -- $16,000,000 class E 'BB-'. Attentus CDO II, Ltd./LLC (Attentus II) -- $233,413,552 class A-1 'AAA'; -- $60,000,000 class A-2 'AAA'; -- $55,000,000 class A-3A 'AAA'; -- $5,000,000 class A-3B 'AAA'; -- $20,000,000 class B 'AA'; -- $32,000,000 class C 'A'; -- $29,000,000 class D 'BBB+'; -- $16,000,000 class E-1 'BBB-'; -- $2,000,000 class E-2 'BBB-'; -- $13,344,182 class F-1 'B+'; -- $5,128,687 class F-2 'B+'; -- $40,000,000 subordinated notes 'CCC'. Attentus CDO III, Ltd./LLC (Attentus III) -- $100,000,000 class A-2 'AAA'; -- $34,000,000 class B 'AA'; -- $16,000,000 class C-1 'A'; -- $15,000,000 class C-2 'A'; -- $10,000,000 class D 'A-'; -- $15,000,000 class E-1 'BBB'; -- $7,000,000 class E-2 'BBB'; -- $24,000,000 class F 'BB-'. Kodiak CDO I, Ltd./Inc. (Kodiak I) -- $83,000,000 class B 'AA'; -- $30,000,000 class C 'AA'; -- $13,000,000 class D-1 'AA-'; -- $5,000,000 class D-2 'AA-'; -- $29,000,000 class D-3 'AA-'; -- $5,000,000 class E-1 'A'; -- $29,000,000 class E-2 'A'; -- $7,000,000 class F 'BBB+'; -- $50,000,000 class G 'BB'; -- $27,706,772 class H 'B-'. Kodiak CDO II, Ltd./Inc. (Kodiak II) -- $81,000,000 class B-1 'AA+'; -- $5,000,000 class B-2 'AA+'; -- $38,000,000 class C-1 'AA-'; -- $2,000,000 class C-2 'AA-'; -- $36,000,000 class D 'A'; -- $35,000,000 class E 'BBB'; -- $43,000,000 class F 'BB'. Taberna Preferred Funding I, Ltd. (Taberna I) -- $320,495,956 class A-1A 'AAA'; -- $13,504,043 class A-1B 'AAA'; -- $87,000,000 class A-2 'AA'; -- $64,000,000 class B-1 'AA'; -- $10,000,000 class B-2 'AA'; -- $37,750,000 class C-1 'A'; -- $25,750,000 class C-2 'A'; -- $4,500,000 class C-3 'A'; -- $13,500,000 class D 'BBB+'; -- $29,888,477 class E 'BBB'. Taberna Preferred Funding II, Ltd. (Taberna II) -- $379,205,399 class A-1A 'AAA'; -- $100,963,435 class A-1B 'AAA'; -- $9,480,135 class A-1C 'AAA'; -- $86,500,000 class A-2 'AAA'; -- $120,500,000 class B 'AA'; -- $73,750,000 class C-1 'BBB+'; -- $26,000,000 class C-2 'BBB+'; -- $15,000,000 class C-3 'BBB+'; -- $31,823,490 class D 'BBB'; -- $30,490,189 class E-1 'BB'; -- $10,213,826 class E-2 'BB'; -- $43,612,981 class F 'B'. Taberna Preferred Funding III, Ltd. (Taberna III) -- $91,250,000 class B-1 'AA'; -- $7,500,000 class B-2 'AA'; -- $36,500,000 class C-1 'A-'; -- $52,000,000 class C-2 'A-'; -- $43,750,000 class D 'BBB-'; -- $32,504,510 class E 'B+'. Taberna Preferred Funding IV, Ltd. (Taberna IV) -- $45,000,000 class C-1 'A-'; -- $20,000,000 class C-2 'A-'; -- $35,000,000 class C-3 'A-'; -- $21,000,000 class D-1 'BBB-'; -- $13,000,000 class D-2 'BBB-'; -- $24,375,000 class E 'B+'. Taberna Preferred Funding V, Ltd. (Taberna V) -- $60,000,000 class A-1LB 'AAA'; -- $90,000,000 class A-2L 'AA'; -- $50,000,000 class A-3L 'BBB'; -- $35,000,000 class A-3FV 'BBB'; -- $25,000,000 class A-3FX 'BBB'; -- $40,500,000 class B-1L 'B+'; -- $23,581,074 class B-2L 'CCC+'; -- $5,122,890 class B-2FX 'CCC+. Taberna Preferred Funding VI, Ltd. (Taberna VI) -- $49,490,200 class A-1A 'AAA'; -- $301,890,218 class A-1B 'AAA'; -- $90,000,000 class A-2 'AAA'; -- $18,000,000 class B 'AA+'; -- $97,000,000 class C 'AA'; -- $43,000,000 class D-1 'A-'; -- $10,000,000 class D-2 'A-'; -- $17,350,653 class E-1 'BBB-'; -- $17,354,535 class E-2 'BBB-'; -- $15,373,858 class F-1 'B+'; -- $10,251,050 class F-2 'B+'. Taberna Preferred Funding VII, Ltd. (Taberna VII) -- $50,000,000 class A-2LB 'AA'; -- $57,000,000 class A-3L 'A'; -- $40,000,000 class B-1L 'BBB'; -- $30,000,000 class B-2L 'BB-'. Taberna Preferred Funding VIII, Ltd. (Taberna VIII) -- $37,000,000 class E 'BBB'; -- $43,000,000 class F 'BB'. Trapeza CDO X, Ltd./Inc. (Trapeza X) -- $69,000,000 class A-2 'AAA'; -- $31,000,000 class B 'AA'; -- $21,000,000 class C-1 'A-'; -- $35,000,000 class C-2 'A-'; -- $22,000,000 class D-1 'BBB-'; -- $22,000,000 class D-2 'BBB-'; -- $39,500,000 subordinate notes 'B+'. Trapeza CDO XI, Ltd./Inc. (Trapeza XI) -- $53,000,000 class A-2 'AAA'; -- $20,000,000 class A-3 'AAA'; -- $25,000,000 class B 'AA'; -- $33,000,000 class C 'A'; -- $22,500,000 class D-1 'A-'; -- $18,500,000 class D-2 'A-'; -- $13,000,000 class E-1 'BBB'; -- $5,000,000 class E-2 'BBB'; -- $10,000,000 class F 'BB'. * Fitch Downgrades Ratings on $29.8 Bil. of Structured Finance CDO ------------------------------------------------------------------ Derivative Fitch has downgraded $29.8 billion (U.S. dollar and U.S. dollar equivalent) and affirmed $3.8 billion (U.S. dollar and U.S. dollar equivalent) of structured finance collateralized debt obligations across 74 transactions. These rating actions, in combination with those announced by Fitch on Nov. 12, 2007, reflect the review of all cash and synthetic SF CDOs with exposure to U.S. residential mortgage-backed securities placed on Rating Watch Negative by Fitch on Oct. 29, 2007. Fitch's global review of SF CDOs resulted in aggregate downgrades of $67 billion and aggregate affirmations of $10.7 billion, across 158 transactions. Fitch's rating actions are based on the continued credit deterioration of the underlying collateral, as well as changes to the default forecasting assumptions underlying Fitch's Default VECTOR Model. The updated assumptions reflect increased probabilities of default, reduced recovery assumptions and increased correlation with respect to recent vintage subprime RMBS and SF CDOs. * Fitch Says US CMBS Deliquencies Fall to 0.28% in October 2007 --------------------------------------------------------------- U.S. CMBS delinquencies fell by one basis point to 0.28% in October 2007, according to the latest loan delinquency index from Fitch Ratings. The most notable decline was among hotel properties. 'As a percentage of the delinquent loan population, hotels fell to 5.4% of the total in October from 13.6% in September,' said Director Michelle Bayard. The decline in hotel delinquency was driven primarily by the resolution of a large hotel in New Orleans, as the hotel's $83.3 million loan was assumed and brought current, though it has yet to be transferred back to the master servicer. Fitch analyzed delinquency by vintage for all sectors, and found that 1998 and 1999 securitizations accounted for 33.2% of all delinquencies as of October, though the vintages accounted for only 10.8% of Fitch-rated transactions. Furthermore, as a percent of the 1998 and 1999 vintage universe, the October 2007 delinquencies account for 0.86%, significantly higher than the overall index. 'The delinquencies in 1998 and 1999 vintages are consistent with historic loan delinquency patterns,' said Bayard. 'Delinquencies typically peak in the eighth year after issuance. However, Fitch is concerned that most of these 1998 and 1999 loans are scheduled to mature within the next two years.' For the fourth month in a row, the multifamily sector experienced a rise in delinquencies. In October, the net increase of $42.2 million (8.5%) for this property type was due to 29 newly delinquent loans that collectively comprised $96.3 million. The newly delinquent multifamily loans were concentrated by geography and vintage; the three states with the highest concentration were Texas (51.5%), Michigan (15.4%), and Oklahoma (14.2%); the vintages with the highest concentration were 2006 (24.2%), 2005 (17%), and 2002 (13.5%). Another sector that experienced an increase in delinquencies was health care, which ended October with $19.5 million in delinquent loans, up from $5.7 million in September. Three non-performing matured loans were added in October. The seasoned delinquency index, which omits transactions with less than one year of seasoning, dropped by three basis points to 0.35% in October. The seasoned index is also affected by the addition of deals as they age. In October, six transactions totaling $13 billion became newly seasoned. None of the newly-seasoned transactions have delinquent loans. * Moody's Takes Rating Actions on Various Classes -------------------------------------------------- Moody's Investors Service has issued press releases on these rating actions Downgrades CITIC Ka Wah Bank Limited -- $2.42B affected -- Senior Unsecured ... to Baa2 from Baa1 -- LT Bank Deposits ... to Baa2 from Baa1 -- Bank Financial Strength ... to D+ from C- -- Subordinate ... to Baa3 from Baa2 CKWH-UT2 Limited -- $250.00M affected -- BACKED Junior Subordinate ... to Baa3 from Baa2 GMAC-RFC (Servicer) -- Servicer Quality Rating -- Master Servicer/Mortgages ... to SQ1- from SQ1 Homecomings Financial, LLC (Servicer) -- Servicer Quality Rating -- Primary Servicer/Mortgages - High LTV ... to SQ2- from SQ2+ -- Servicer Quality Rating -- Primary Servicer/Mortgages - Prime ... to SQ2 from SQ2+ -- Servicer Quality Rating -- Primary Servicer/Mortgages - Second Liens ... to SQ2- from SQ2+ -- Servicer Quality Rating -- Primary Servicer/Mortgages - Subprime ... to SQ2- from SQ2 -- Servicer Quality Rating -- Special Servicer/Mortgages ... to SQ2- from SQ2 WaMu Mortgage Pass-Through Certificates, WMALT Series 2005-10 Trust -- $40.28M affected -- STRUCT. Subordinate ... to Baa3 from Baa2 WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-4 -- S$40.77M affected -- STRUCT. Senior Subordinate ... to A3 from A2 -- STRUCT. Senior Subordinate ... to Ba1 from Baa2 -- STRUCT. Senior Subordinate ... to Ba2 from Baa3 -- STRUCT. Subordinate ... to Caa1 from Ba3 WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-5 -- $88.30M affected -- STRUCT. Senior Subordinate ... to A2 from A1 -- STRUCT. Senior Subordinate ... to Baa1 from A2 -- STRUCT. Senior Subordinate ... to Baa2 from A2 -- STRUCT. Subordinate ... to Baa3 from A3 -- STRUCT. Subordinate ... to Ba2 from Baa1 -- STRUCT. Subordinate ... to B1 from Baa2 -- STRUCT. Subordinate ... to B3 from Ba1 -- STRUCT. Subordinate ... to Caa2 from Ba2 WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-6 -- $29.13M affected -- STRUCT. Subordinate ... to Ba1 from A2 -- STRUCT. Subordinate ... to B3 from Baa2 WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-7 -- $39.62M affected -- STRUCT. Senior Subordinate ... to A3 from A1 -- STRUCT. Senior Subordinate ... to Baa2 from A2 -- STRUCT. Subordinate ... to Ba1 from A3 -- STRUCT. Subordinate ... to Ba3 from Baa2 -- STRUCT. Subordinate ... to B3 from Baa3 -- STRUCT. Subordinate ... to Ca from Ba3 WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-8 -- $25.15M affected -- STRUCT. Senior Subordinate ... to A2 from A1 -- STRUCT. Senior Subordinate ... to Baa1 from A2 -- STRUCT. Subordinate ... to Baa2 from Baa1 -- STRUCT. Subordinate ... to Ba1 from Baa2 -- STRUCT. Subordinate ... to Ba3 from Baa3 WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-9 -- $17.50M affected -- STRUCT. Senior Subordinate ... to Baa1 from A3 -- STRUCT. Subordinate ... to Baa2 from Baa1 -- STRUCT. Subordinate ... to Ba1 from Baa2 -- STRUCT. Subordinate ... to Ba3 from Baa3 -- STRUCT. Subordinate ... to B3 from Ba3 WaMu Mortgage Pass-Through Certificates, WMALT Series 2006-AR10 -- $7.77M affected -- STRUCT. Subordinate ... to Baa3 from Baa1 -- STRUCT. Subordinate ... to Ba2 from Baa3 Upgrades BANK OF TOKYO-MITSUBISHI UFJ SYN CDO START-HU -- $47.52M affected -- STRUCT. Senior Subordinate ... to Baa1 from Baa3 BANK OF TOKYO-MITSUBISHI UFJ SYNTHETIC CDO, START-KAZE CDS -- $49.49M affected -- STRUCT. Senior Subordinate ... to Baa1 from Baa3 BANK OF TOKYO-MITSUBISHI UFJ SYNTHETIC CDO, START-SORA CDS -- $62.48M affected -- STRUCT. Senior Subordinate ... to Baa1 from Baa3 Review for Possible Downgrade GMAC-RFC -- Servicer Quality Rating -- Master Servicer/Mortgages ... SQ1- Homecomings Financial, LLC (Servicer) -- Servicer Quality Rating -- Primary Servicer/Mortgages - High LTV ... SQ2- -- Servicer Quality Rating -- Primary Servicer/Mortgages - Prime ... SQ2 -- Servicer Quality Rating -- Primary Servicer/Mortgages - Second Liens ... SQ2- -- Servicer Quality Rating -- Primary Servicer/Mortgages - Subprime ... SQ2- -- Servicer Quality Rating -- Special Servicer/Mortgages ... SQ2- IKON Office Solutions, Inc. -- $1.16B may be affected -- LT Corporate Family Ratings ... Ba2 -- Senior Unsecured ... Ba3 -- IOS Capital, LLC -- $27.60M may be affected -- BACKED Senior Unsecured ... Ba3 WaMu Mortgage Pass-Thru WMALT Ctfs 2006-5 -- $19.35M may be affected -- STRUCT. Senior Subordinate ... Aa1 -- STRUCT. Senior Subordinate ... Aa2 -- STRUCT. Senior Subordinate ... Aa3 WaMu Mortgage Pass-Thru WMALT Ctfs 2006-6 -- $9.46M may be affected -- STRUCT. Subordinate ... Aa2 WaMu Mortgage Pass-Thru WMALT Ctfs 2006-7 -- $19.13M may be affected -- STRUCT. Senior Subordinate ... Aa2 -- STRUCT. Senior Subordinate ... Aa3 WaMu Mortgage Pass-Thru WMALT Ctfs 2006-8 -- $2.62M may be affected -- STRUCT. Senior Subordinate ... Aa3 Assignments Accelerator Fund 3 (Proprietary) Limited -- Rand 163.50M D PASS-THRU CTFS due 2014 ... (P)Ba3 -- Rand 186.00M B PASS-THRU CTFS due 2014 ... (P)Aa2 -- Rand 31.50M E PASS-THRU CTFS due 2014 ... (P)Caa1 -- Rand 279.00M C PASS-THRU CTFS due 2014 ... (P)Baa1 -- Rand 358.80M A4 PASS-THRU CTFS due 2014 ... (P)Aaa -- Rand 585.60M A5 PASS-THRU CTFS due 2014 ... (P)Aaa -- Rand 585.60M A6 PASS-THRU CTFS due 2014 ... (P)Aaa -- Rand 225.00M A1S PASS-THRU CTFS due 2008 ... (P)P-1 -- Rand 235.00M A2S PASS-THRU CTFS due 2008 ... (P)P-1 -- Rand 350.00M A3S PASS-THRU CTFS due 2008 ... (P)P-1 Canadian Revolving Auto Floorplan Trust, Series 2007-D -- CDN$200,000,000 Series 2007-D1 Floating Rate Notes due 2010 ... Aaa -- CDN$450,000,000 Series 2007-D2 Receivables-Backed Notes due 2010 ... Aaa -- CDN$250,000,000 Series 2007-D3 Receivables-Backed Notes due 2010 ... Aaa Fukuoka Prefecture -- JpnY 15000.00M 1.20% Ser. 19-7 JAPAN BONDS due 2012 ... Aa1 -- GAT FTGENCAT 2007, FTA -- EUR 18.80M E PASS-THRU CTFS due 2049 ... (P)C -- EUR 33.80M C PASS-THRU CTFS due 2049 ... (P)A3 -- EUR 11.60M B PASS-THRU CTFS due 2049 ... (P)Aa3 -- EUR 22.10M D PASS-THRU CTFS due 2049 ... (P)Baa3 -- EUR 276.70M A1 PASS-THRU CTFS due 2049 ... (P)Aaa -- EUR 280.80M A2(G) PASS-THRU CTFS due 2049 ... (P)Aaa Mitsubishi Corporation -- JpnY 30000.00M Ser. 7 TERM LOAN due 2012 ... (P)A2 Newgate Funding PLC: Series 2007-3 -- GBP 31.45M C COLL NOTES due 2050 ... (P)A3 -- GBP 11.50M E COLL NOTES due 2050 ... (P)Ba3 -- GBP 61.20M B COLL NOTES due 2050 ... (P)Aa2 -- GBP 12.75M D COLL NOTES due 2050 ... (P)Baa3 -- GBP 0.00M MERC COLL NOTES due 2050 ... (P)Aaa -- GBP 148.10M A3 COLL NOTES due 2050 ... (P)Aaa -- GBP 285.00M A2 COLL NOTES due 2050 ... (P)Aaa -- GBP 300.00M A1 COLL NOTES due 2050 ... (P)Aaa -- GBP 300.00M A1 COLL NOTES due 2050 ... (P)P-1 Tisbury Credit I B.V -- EUR 232,500,000 Senior Secured COLL NOTES due 2013 ... Aa2 Withdrawals Arlington Funding Company, LLC -- STRUCT. Commercial Paper ... Formerly P-1 Four Winds Funding Corporation -- STRUCT. Commercial Paper ... Formerly P-1 Four Winds Funding LLC -- STRUCT. Commercial Paper ... Formerly P-1 Mortgage Interest Networking Trust -- STRUCT. Commercial Paper ... Formerly P-1 -- STRUCT. Other Short Term ... Formerly P-1 Scotts Miracle-Gro Company (The) -- LT Corporate Family Ratings ... Formerly Ba2 -- Speculative Grade Liquidity Rating ... Formerly SGL-2 Outlook Actions Constar International, Inc. -- To Negative ... from Stable IKON Office Solutions, Inc. -- To Rating(s) Under Review ... from Stable IOS Capital, LLC -- 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 Lowers Ratings on 136 Tranches from 28 U.S. Hybrid CDO ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 136 tranches from 28 U.S. cash flow and hybrid collateralized debt obligation transactions. At the same time, S&P affirmed its ratings on another 53 tranches from these transactions. The downgraded tranches have a total issuance amount of $5.025 billion, and all are from CDOs of asset-backed securities collateralized by structured finance securities, including U.S. residential mortgage-backed securities. All but 16 of the lowered ratings were on CreditWatch with negative implications before the downgrades. Fifty-eight tranche ratings either remain on CreditWatch negative or were placed on CreditWatch today, indicating a high likelihood of future downgrades on these tranches. To date, including the CDO tranches listed below and including actions on both publicly and confidentially rated tranches, S&P have lowered its ratings on 367 tranches from 72 U.S. cash flow and hybrid CDO of ABS transactions as a result of exposure to U.S. RMBS securities that have seen negative credit migration. Additionally, 574 tranche ratings from 157 U.S. cash flow and hybrid CDO transactions are currently on CreditWatch negative. S&P have also lowered 46 ratings on nine U.S. trust preferred REIT CDO transactions because of stress in the residential mortgage markets, and another 11 ratings from five of these transactions are on CreditWatch negative. In all, the 413 downgraded cash flow and hybrid CDO tranches represent an issuance amount of $17.103 billion; the 585 cash flow and hybrid CDO tranches with ratings on CreditWatch negative represent an issuance amount of $24.020 billion. In addition to these actions on U.S. cash flow and hybrid CDO transactions, S&P have also lowered 226 ratings on U.S. non- excess-spread synthetic CDO transactions as a result of negative credit migration in U.S. RMBS securities referenced by the transactions, and one rating from one non-excess-spread synthetic CDO transaction is currently on CreditWatch negative. In all, the affected public and confidentially rated synthetic CDO tranches represent an issuance amount of $5.783 billion. Standard & Poor's will continue to monitor its rated CDO transactions and take rating actions when appropriate. Additionally, Standard & Poor's will continue to review its current criteria assumptions in light of the recent performance of RMBS assets and CDOs. Rating and Creditwatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- ACA ABS 2005-2 Ltd. A-1J AA+/Watch Neg AAA/Watch Neg ACA ABS 2005-2 Ltd. A-2V A/Watch Neg AA/Watch Neg ACA ABS 2005-2 Ltd. A-2F A/Watch Neg AA/Watch Neg ACA ABS 2005-2 Ltd. A-3 BBB-/Watch NegA-/Watch Neg ACA ABS 2005-2 Ltd. B BB-/Watch Neg BBB/Watch Neg ACA ABS 2005-2 Ltd. Combo B-/Watch Neg BBB-/Watch Neg Sec Adams Square Funding II Ltd. A2 AA- AAA/Watch Neg Adams Square Funding II Ltd. A3 BBB AA/Watch Neg Adams Square Funding II Ltd. B BB A/Watch Neg Adams Square Funding II Ltd. C CCC+ BBB/Watch Neg Adams Square Funding II Ltd. D CCC BBB-/Watch Neg Adams Square Funding II Ltd. E CCC- BB+/Watch Neg Ansley Park ABS CDO Ltd. D BBB-/Watch NegBBB/Watch Neg Cetus ABS CDO 2006-3 Ltd. A-1B AA+ AAA/Watch Neg Cetus ABS CDO 2006-3 Ltd. A-2 A+ AA+/Watch Neg Cetus ABS CDO 2006-3 Ltd. B A- AA-/Watch Neg Cetus ABS CDO 2006-3 Ltd. C-1 BB+ BBB+/Watch Neg Cetus ABS CDO 2006-3 Ltd. C-2 BB- BBB/Watch Neg Cetus ABS CDO 2006-3 Ltd. D-1 CCC+ BB+/Watch Neg Cetus ABS CDO 2006-3 Ltd. D-2 CCC BB/Watch Neg Cetus ABS CDO 2006-3 Ltd. E CCC- BB-/Watch Neg Cetus ABS CDO 2006-3 Ltd. X BB- BBB-/Watch Neg Cherry Creek CDO I Ltd. A-2 AA/Watch Neg AA Cherry Creek CDO I Ltd. A-3 BBB/Watch Neg A/Watch Neg Cherry Creek CDO I Ltd. B B-/Watch Neg BB+/Watch Neg Dutch Hill Funding I Ltd. B AA- AA/Watch Neg Dutch Hill Funding I Ltd. C BBB A/Watch Neg Dutch Hill Funding I Ltd. D-1L B+ BBB/Watch Neg Dutch Hill Funding I Ltd. D-1X B+ BBB/Watch Neg Dutch Hill Funding I Ltd. D-2 B- BBB-/Watch Neg Dutch Hill Funding I Ltd. E CCC+ BB+/Watch Neg Gemstone CDO III Ltd. D BB+ BBB/Watch Neg Gemstone CDO III Ltd. E B BB/Watch Neg Gemstone CDO VII Ltd. A-1b AAA/Watch Neg AAA Gemstone CDO VII Ltd. A-2 AA-/Watch Neg AAA Gemstone CDO VII Ltd. B BBB/Watch Neg AA Gemstone CDO VII Ltd. C B-/Watch Neg A/Watch Neg Gemstone CDO VII Ltd. D CCC+/Watch NegBBB/Watch Neg Gemstone CDO VII Ltd. E CCC/Watch Neg BB+/Watch Neg GSC ABS CDO 2006-4u Ltd. A1 AA- AAA/Watch Neg GSC ABS CDO 2006-4u Ltd. A2 BBB+ AA/Watch Neg GSC ABS CDO 2006-4u Ltd. A3 B A-/Watch Neg GSC ABS CDO 2006-4u Ltd. B CCC+ BBB-/Watch Neg GSC ABS CDO 2006-4u Ltd. C CCC- BB/Watch Neg Gulf Stream-Atlantic A-2 AA+ AAA CDO 2007-1 Ltd. Gulf Stream-Atlantic B A- AA CDO 2007-1 Ltd. Gulf Stream-Atlantic C BBB- A/Watch Neg CDO 2007-1 Ltd. Gulf Stream-Atlantic D BB- BBB+/Watch Neg CDO 2007-1 Ltd. Gulf Stream-Atlantic E B- BBB/Watch Neg CDO 2007-1 Ltd. Gulf Stream-Atlantic F CCC+ BBB-/Watch Neg CDO 2007-1 Ltd. Gulf Stream-Atlantic G CCC BB+/Watch Neg CDO 2007-1 Ltd. Gulf Stream-Atlantic Sb Nt CCC- B/Watch Neg CDO 2007-1 Ltd. Independence VII CDO Ltd. A-2 AAA/Watch Neg AAA Independence VII CDO Ltd. B AA/Watch Neg AA Independence VII CDO Ltd. C A/Watch Neg AA- Independence VII CDO Ltd. D BBB+/Watch NegA- Independence VII CDO Ltd. E BBB-/Watch NegBBB/Watch Neg Independence VII CDO Ltd. F BB/Watch Neg BB+/Watch Neg Ivy Lane CDO Ltd. B BBB A Ivy Lane CDO Ltd. C B- BBB/Watch Neg Jupiter High-Grade CDO V Ltd.B AA-/Watch Neg AA/Watch Neg Jupiter High-Grade CDO V Ltd.C BBB/Watch Neg A/Watch Neg Jupiter High-Grade CDO V Ltd.D B+/Watch Neg BBB/Watch Neg Kefton CDO I Ltd. II AA+ AAA/Watch Neg Kefton CDO I Ltd. III A+ AA/Watch Neg Kefton CDO I Ltd. IV A- AA-/Watch Neg Kefton CDO I Ltd. V BBB- A/Watch Neg Kefton CDO I Ltd. VI B+ BBB/Watch Neg Kefton CDO I Ltd. VII CCC+ BB+/Watch Neg Kleros Real Estate A-1B AA+/Watch Neg AAA CDO II Ltd. Kleros Real Estate A-2 A/Watch Neg AAA/Watch Neg CDO II Ltd. Kleros Real Estate B BBB/Watch Neg AA/Watch Neg CDO II Ltd. Kleros Real Estate C BB+/Watch Neg AA-/Watch Neg CDO II Ltd. Kleros Real Estate D B-/Watch Neg BBB/Watch Neg CDO II Ltd. Kleros Real Estate E CCC/Watch Neg BB/Watch Neg CDO II Ltd. Kleros Real Estate A-2 A+/Watch Neg AA/Watch Neg CDO III Ltd. Kleros Real Estate A-3 A-/Watch Neg A/Watch Neg CDO III Ltd. Kleros Real Estate B BB-/Watch Neg BBB-/Watch Neg CDO III Ltd. Kleros Real Estate C B/Watch Neg BB/Watch Neg CDO III Ltd. Lexington Capital A-3 AA+ AAA Funding III Ltd. Lexington Capital B A+ AA Funding III Ltd. Lexington Capital C BBB AA-/Watch Neg Funding III Ltd. Lexington Capital D BB+ A/Watch Neg Funding III Ltd. Lexington Capital E B A-/Watch Neg Funding III Ltd. Lexington Capital F B- BBB/Watch Neg Funding III Ltd. Lexington Capital G CCC BBB-/Watch Neg Funding III Ltd. Lexington Capital H CCC BBB-/Watch Neg Funding III Ltd. Lexington Capital A-3 AA+ AAA Funding V Ltd. Lexington Capital B A- AA/Watch Neg Funding V Ltd. Lexington Capital C BB A/Watch Neg Funding V Ltd. Lexington Capital D B- BBB/Watch Neg Funding V Ltd. Lexington Capital E CCC BBB-/Watch Neg Funding V Ltd. Longport Funding III Ltd. A2B AA+ AAA Longport Funding III Ltd. B A+ AA/Watch Neg Longport Funding III Ltd. C BBB A/Watch Neg Longport Funding III Ltd. D BB BBB/Watch Neg Longport Funding III Ltd. E B- BBB-/Watch Neg Longport Funding III Ltd. Sb Nt CCC BB/Watch Neg Montrose Harbor CDO I Ltd. C A-/Watch Neg A Montrose Harbor CDO I Ltd. D BB/Watch Neg BBB/Watch Neg Mugello ABS CDO 2006-1 Ltd. A-1 AA+ AAA Mugello ABS CDO 2006-1 Ltd. A-2 A+ AA/Watch Neg Mugello ABS CDO 2006-1 Ltd. B BB+ A/Watch Neg Mugello ABS CDO 2006-1 Ltd. C B- BBB/Watch Neg Palmer ABS CDO 2007-1 Ltd. A-2 AA- AA Palmer ABS CDO 2007-1 Ltd. B BBB- A/Watch Neg Palmer ABS CDO 2007-1 Ltd. C BB BBB/Watch Neg Palmer ABS CDO 2007-1 Ltd. D B+ BB+/Watch Neg Sherwood III ABS CDO Ltd. A1J AA+/Watch Neg AAA/Watch Neg Sherwood III ABS CDO Ltd. A2 BBB/Watch Neg AA/Watch Neg Sherwood III ABS CDO Ltd. A3 B/Watch Neg A/Watch Neg Sherwood III ABS CDO Ltd. B CCC/Watch Neg BBB/Watch Neg Sherwood III ABS CDO Ltd. C CCC-/Watch NegBB/Watch Neg South Coast Funding IX Ltd. B A AA/Watch Neg South Coast Funding IX Ltd. C BB A/Watch Neg South Coast Funding IX Ltd. D B- BBB/Watch Neg South Coast Funding IX Ltd. E CCC+ BBB-/Watch Neg South Coast Funding IX Ltd. F CCC BB+/Watch Neg Stack 2006-1 Ltd. IV A+ AA-/Watch Neg Stack 2006-1 Ltd. V A- A/Watch Neg Stack 2006-1 Ltd. VI BB+ BBB/Watch Neg Stack 2006-1 Ltd. VII BB BB+/Watch Neg Trainer Wortham First A-2 AA/Watch Neg AAA/Watch Neg Rep CBO III Ltd. Trainer Wortham First B BBB+/Watch NegAA/Watch Neg Rep CBO III Ltd. Trainer Wortham First C BB+/Watch Neg A/Watch Neg Rep CBO III Ltd. Trainer Wortham First D B-/Watch Neg BBB/Watch Neg Rep CBO III Ltd. Trainer Wortham First PrfSh CCC/Watch Neg BB/Watch Neg Rep CBO III Ltd. Volans Funding 2007-1 Ltd. A-2 AA AAA Volans Funding 2007-1 Ltd. B A- AA/Watch Neg Volans Funding 2007-1 Ltd. C BBB- A/Watch Neg Volans Funding 2007-1 Ltd. D BB BBB/Watch Neg Volans Funding 2007-1 Ltd. E B- BBB-/Watch Neg Volans Funding 2007-1 Ltd. F B- BBB-/Watch Neg Webster CDO I Ltd. A-1LB AA/Watch Neg AAA/Watch Neg Webster CDO I Ltd. A-2L A-/Watch Neg AA/Watch Neg Webster CDO I Ltd. A-3L BBB-/Watch NegA/Watch Neg Webster CDO I Ltd. A-4L BB/Watch Neg BBB+/Watch Neg Webster CDO I Ltd. B-1L BB-/Watch Neg BBB/Watch Neg Webster CDO I Ltd. B-2L B/Watch Neg BBB-/Watch Neg Webster CDO I Ltd. B-3L B-/Watch Neg BB+/Watch Neg Ratings Affirmed Transaction Class Rating ----------- ----- ------ ACA ABS 2005-2 Ltd. A-1S AAA Adams Square Funding II Ltd. A1 AAA Adams Square Funding II Ltd. S AAA Ansley Park ABS CDO Ltd. A-1 AAA Ansley Park ABS CDO Ltd. X AAA Cetus ABS CDO 2006-3 Ltd. A-1A AAA Cetus ABS CDO 2006-3 Ltd. S AAA Cherry Creek CDO I Ltd. A1S AAA Cherry Creek CDO I Ltd. A1J AAA Dutch Hill Funding I Ltd. A-1A AAA Dutch Hill Funding I Ltd. A-1B AAA Dutch Hill Funding I Ltd. A-2L AAA Dutch Hill Funding I Ltd. A-2X AAA Gemstone CDO III Ltd. A-1 AAA Gemstone CDO III Ltd. A-2 AAA Gemstone CDO III Ltd. A-3 AAA Gemstone CDO III Ltd. B AA Gemstone CDO III Ltd. C A Gemstone CDO VII Ltd. A-1a AAA GSC ABS CDO 2006-4u Ltd. A-S1VF AAA Gulf Stream-Atlantic CDO 2007-1 Ltd. A1-VF AAA Independence VII CDO Ltd. A-1A AAA Independence VII CDO Ltd. A-1B AAA Ivy Lane CDO Ltd. A-1 AAA Ivy Lane CDO Ltd. A-2 AAA Ivy Lane CDO Ltd. A-3 AA Ivy Lane CDO Ltd. S AAA Jupiter High-Grade CDO V Ltd. A-1 AAA Kleros Real Estate CDO II Ltd. A-1A AAA Kleros Real Estate CDO III Ltd. A-1A AAA Kleros Real Estate CDO III Ltd. A-1B AAA Lexington Capital Funding III Ltd. A-1 AAA Lexington Capital Funding III Ltd. A-2 AAA Lexington Capital Funding V Ltd. A-1 AAA Lexington Capital Funding V Ltd. A-2 AAA Longport Funding III Ltd. A1-VFN AAA Longport Funding III Ltd. A2A AAA Montrose Harbor CDO I Ltd. A-1 AAA Montrose Harbor CDO I Ltd. A-2 AAA Montrose Harbor CDO I Ltd. B-1 AA Montrose Harbor CDO I Ltd. B-2 AA- Palmer ABS CDO 2007-1 Ltd. A-1 AAA Sherwood III ABS CDO Ltd. A1SA AAA Sherwood III ABS CDO Ltd. A1SB AAA South Coast Funding IX Ltd. A1A AAA South Coast Funding IX Ltd. A1B AAA South Coast Funding IX Ltd. A2 AAA Stack 2006-1 Ltd. I AAA Stack 2006-1 Ltd. II AAA Stack 2006-1 Ltd. III AA Trainer Wortham First Rep CBO III Ltd. A-1 AAA Volans Funding 2007-1 Ltd. A-1 AAA Webster CDO I Ltd. A-1LA AAA Other Ratings Outstanding Deal Class Rating ---- ----- ------ Ansley Park ABS CDO Ltd. A-2 AAA/Watch Neg Ansley Park ABS CDO Ltd. B AA-/Watch Neg Ansley Park ABS CDO Ltd. C A/Watch Neg Jupiter High-Grade CDO V Ltd. A-2 AAA/Watch Neg * BOOK REVIEW: Building American Cities: The Urban Real Estate Game -------------------------------------------------------------- Author: Joe R. Feagin and Robert E. Parker Publisher: Beard Books Paperback: 332 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587981483/internetbankrupt This book is a volatile story of social conflict that rends the very fabric of our society, but in the end gives shape to our urban centers. This second edition is the startling story of how American cities emerge, grow, change, contract, decay, and become resuscitated. With keen insight, the authors analyze urban social processes, such as population migration to suburbia and the effect of foreign capital investment on U.S. real estate ventures. Examining patterns in the location, development, financing, and construction decisions of small and large corporations, the book looks at the interplay of industrial and development corporations with various levels of government. In addition to political aspects, it reflects on the social costs of unbridled urban growth and decline, pollution, wasted energy, congestion, and the negative impact on minorities. ********* 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 ***