/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071205.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 5, 2007, Vol. 11, No. 288 Headlines 1031 TAX GROUP: Extra Expenses Tied to Mr. Okun's Yacht 1031 TAX GROUP: Sale Protocol on Transferred Assets Proposed 1755 AQUA: Court Approves Scott Alan Orth as Counsel ACA ABS: Increased Expected Loss Cues Moody's Ratings Downgrades ACE SECURITIES: Moody's Lowers Ratings on Two Cert. Classes to B2 ADAMS SQUARE: Moody's Lowers Rating on $342MM Senior Swap to B3 ADELPHIA COMMUNICATIONS: Court Awards Comcast $9 Million AEGIS ASSET: Moody's Downgrades Ratings on 20 Cert. Classes AEGIS MORTGAGE: Countrywide Wants Stay Lifted to Pursue Actions AEGIS MORTGAGE: BoNY Wants Stay Lifted to Pursue Civil Actions AFFILIATED COMPUTER: Fitch Removes Ratings from Negative Watch AMERICAN MEDIA: Sept. 30 Balance Sheet Upside-Down by $355 Million AMERISOURCEBERGEN: Extends Long-Term Tie-Up with Medco Health ASC INC: Plan Proponents Have Until Feb. 1 to Settle Disputes ASHTON WOODS: Moody's Cuts Corp. Family Rating to B3 from B2 BEA CBO: Fitch Retains Junk Rating on $20MM Class A-3 Notes BEAR STEARNS: Moody's Lowers Ratings on 41 Certificate Classes BEAR STEARNS: Stable Performance Cues Fitch to Affirm Ratings BEARINGPOINT INC: Board Names F. Edwin Harbach as CEO and Pres. BLACKHAWK AUTOMOTIVE: Court OKs Morris-Anderson as Fin'l Advisor BLACKHAWK AUTOMOTIVE: Can Hire W.Y. Campbell as Investment Banker BLACKHAWK AUTOMOTIVE: Court Approves Equipment Buy Pact w/ Stopol BOYS DAY OUT: Voluntary Chapter 11 Case Summary C-BASS MORTGAGE: Moody's Cuts Rating on Cl. M-4 Certificates to B1 CALPINE CORP: Various Parties Object to Plan Confirmation CALPINE CORP: Wants to Liquidate $144.25 Million ULC1 Notes CALUMET LUBRICANTS: Moody's Rates $385 Million Term Loan at B1 CAMPBELL RESOURCES: MSV Resources Completes Obligations to Lenders CATHOLIC CHURCH: Davenport Inks $37 Mil. Settlement with Victims CENTERSTAGING CORP: Sept. 30 Balance Sheet Upside-Down by $15.8 MM CHINA HEALTH: Posts $141,918 Net Loss in Third Quarter CHRYSLER LLC: Downsizing Plan Effectuates, Salaried Workers Leave CITGO PETROLEUM: Moody's Rates Revenue Bonds at Ba1 CLEAR CHANNEL: Gets FCC Approval for $1.3 Bil. Sale to Newport TV CLEAR CHANNEL: Provides Update on Bain Capital/THLP Merger CLEAR CHANNEL: Paying $0.1875 Quarterly Dividend January 15 COINSTAR INC: Moody's Withdraws Ba2 Corporate Family Rating COLUMBIA AIRCRAFT: Completes Asset Sale to Textron's Cessna COUNTRYWIDE FINANCIAL: CEO Mozilo Says Bankruptcy Not Likely CSFB ADJUSTABLE: Moody's Downgrades Ratings on 14 Tranches CWABS: Moody's Cuts Ratings on Two Cert. Classes to Ba1 from A3 EXCELLENCY INVESTMENT: Has Equity Deficit of $7.9 Mil. at Sept. 30 FAIRFAX FINANCIAL: Fitch Lifts Issuer Default Rating to BB+ FEDDERS CORPORATION: Wants March 4, 2008 Set as Claims Bar Date FIRST MAGNUS: Wants Court to Vacate Order Rejecting Trinity Deals FIRST MAGNUS: Countrywide, et al., Balk at Disclosure Statement FREEDOM COMMS: Weak Performance Cues Moody's to Cut Rating to Ba3 FREMONT HOME: Moody's Cuts Rating on Class SL-A Certs. to B3 GDSP SHIVA: Voluntary Chapter 11 Case Summary GIGABEAM CORP: Posts $4,120,967 Net Loss in Third Quarter GOODYEAR TIRE: James A. Firestone Elected to Goodyear Board GREEN TREE: Fitch Holds Junk Ratings as Part of Surveillance GROWERS DIRECT: Posts $2,464,180 Net Loss in Third Quarter GUAM ECONOMIC: Fitch Will Rate $439,680 Series 2007C Bonds at BB HANCOCK FABRICS: Wants Until May 30 to File Chapter 11 Plan HANCOCK FABRICS: Court Okays Claims Resolution Procedures HOVNANIAN ENT: Ends $20 Million Redevelopment Project at Wildwood INTERACTIVE TV: Sept. 30 Balance Sheet Upside-Down by $14 Million INTERNATIONAL NORCENT: Wants February 19 Set as Claims Bar Date INTERNATIONAL NORCENT: Taps Connoly as Special Litigation Counsel INTERSTATE BAKERIES: Plea for Details of Teamster Pact Denied INTERSTATE BAKERIES: Wants DIP Financing Maturity Extended INTERSTATE HOTELS: Completes $118 Million Buyout of Three Hotels ISLE OF CAPRI: Posts $24.6 Million Net Loss in 2008 Second Quarter J CREW OPERATING: Strong Performance Cues Moody's to Lift Rating JP MORGAN: Fitch Affirms 'B-' Rating on $5.2MM Class N Certs. KIMBALL HILL: Moody's Lowers All Ratings with Negative Outlook LE-NATURE'S: Files Second Amended Disclosure Statement and Plan LE-NATURE'S: Hearing on 2nd Amended Disclosure Statement is Jan. 3 LONG BEACH: Moody's Cuts Rating on Cl. A-1 Certs. to Ba1 from A3 LYNN KASEL: Case Summary & 11 Largest Unsecured Creditors MASTR SECOND: Low Credit Enhancement Cues Moody's to Cut Ratings MCMILLIN COS: Moody's Junks Ratings with Negative Outlook MERRILL LYNCH: Moody's Downgrades Ratings on 43 Tranches MIDTOWN MANOR: Case Summary & 21 Largest Unsecured Creditors MITCHELL DEUTSCH: Voluntary Chapter 11 Case Summary MONEY CENTERS: Sept. 30 Balance Sheet Upside-Down by $6.8 Million MORGAN STANLEY: Fitch Holds 'B' Rating on $7.9MM Class K Certs. MORGAN STANLEY: Fitch Holds 'BB-' Rating on $9.5MM Class H Certs MORGAN STANLEY: Moody's Cuts Rating on Cl. B4 Certs. to C from Ca MORTGAGE LENDERS: Has Until February 4 to Remove Actions NATCO INT'L: Sept. 30 Balance Sheet Upside-Down by $1,056,256 NEW CENTURY: Moody's Lowers Rating on Cl. A-2b Certs. to Ba1 NOMURA ASSET: Moody's Junks Ratings on 19 Certificate Classes NOVASTAR MORTGAGE: Moody's Downgrades Ratings on Nine Classes OPTIGENEX INC: Sept. 30 Balance Sheet Upside-Down by $5,958,008 OWENS CORNING: Court Approves Settlement Pact with Ohio PAMPELONNE CDO: Moody's Junks Rating on Four Note Classes PERFORMANCE TRANS: Taps FTI Consulting as Financial Advisor PERFORMANCE TRANS: Taps Sitrick as Communications Consultants PERFORMANCE TRANS: Wants Imperial Capital as Investment Banker PILGRIM'S PRIDE: Paying Quarterly Dividend on December 14 POPE & TALBOT: Asks B.C. Court for Authority to Sell Surplus Lands POPE & TALBOT: Wants to Implement Cross-Border Insolvency Protocol POPE & TALBOT: Selects KPMG LLP as Independent Auditor PROJECT FUNDING: Moody's Lowers Rating on $537.08MM Notes to Ba2 QWEST COMMS: Fitch Affirms 'BB' Issuer Default Rating RAFAELLA APPAREL: Moody's Holds B1 CFR and Revises Outlook RENT-A-CENTER: To Close 280 Stores as Part of Consolidation Plan RENT-A-CENTER: Earns $25 Million in Quarter Ended September 30 REUNION INDUSTRIES: Inks $15 Million DIP Pact with Wachovia RHODES COMPANIES: Moody's Puts Ca Rating on Sr. Secured Loan ROUGE INDUSTRIES: Has Until January 18 to File Liquidating Plan SALANDER-O'REILLY: Sotheby's Wants to Auction 29 Art Pieces SECURITIZED ASSET: Moody's Lowers Ratings on 41 Tranches SOLAR STAMPING: Court Converts Reorganization Case to Chapter 7 SOLUTIA INC: Noteholders to Appeal Ruling on Claim SPRINGWOOD CLIFFS: Case Summary & 30 Largest Unsecured Creditors STANLEY-MARTIN: Moody's Junks Corporate Family Rating SVI MEDIA: Sept. 30 Balance Sheet Upside-Down by $18.6 Million TABS 2006-5: Moody's Cuts Rating on $950MM Notes to Ba2 from A3 TENNECO INC: Completes Partial Offering of 10-1/4% Senior Notes THOMAS EDWARDS: Voluntary Chapter 11 Case Summary THORPE INSULATION: Futures Representative Wants Fergus as Counsel THORPE INSULATION: Futures Rep Wants Hamilton as Consultant TRUMP ENTERTAINMENT: Earns $6.6 Million in Quarter Ended Sept. 30 TRUMP ENTERTAINMENT: CFO & EVP Dale Black To Resign on Dec. 14 UAP HOLDING: Selling Stake to Agrium Inc. Through Tender Offer UAP HOLDING: $2.65 Bil. Agrium Deal Cues Moody's Ratings Review UNIVERSAL ENERGY: Posts $4,319,107 Net Loss in Third Quarter VERIFONE HOLDINGS: To Restate Financial Statements in Prior Qtrs. VESCOR DEVELOPMENT: U.S. Trustee Can Appoint Chapter 11 Trustee WATERFORD EQUITIES: Wants to Hire Moses & Singer as Counsel WATERFORD EQUITIES: Taps Wiggin and Dana as Special Counsel WILLIAM LYON: Negative Cash Flow Cues Moody's Ratings Downgrades WILLIAM WORTHY: Voluntary Chapter 11 Case Summary XEROX CORP: Names New Senior Leadership in North America YOUR BLACK MUSLIM: NCK LLC Wins Auction With $1,052,000 Offer * Euler Hermes Says Credit Index Shows Economic Contraction * Mintz Levin Forms Group to Address Subprime Market Crisis * Fitch Says Neg. Performance in RMBS and SF CDO Leads to EOD * Fitch Says Real Estate Loan CDO Delinquencies Increased * Fitch Says US Paper Industry Was Stymied By Housing Downturn * Moody's Lowers Ratings on Six Rated Homebuilders Companies * Upcoming Meetings, Conferences and Seminars ********* 1031 TAX GROUP: Extra Expenses Tied to Mr. Okun's Yacht ------------------------------------------------------- Gerard A. McHale, Jr., the Chapter 11 Trustee for The 1031 Tax Group LLC and its debtor-affiliates, is seeking authority from the U.S. Bankruptcy Court for the Southern District of New York to pay for additional expenses tied to a yacht transferred to the Debtors by their former executive, Edward H. Okun, according to Bill Rochelle of Bloomberg News. Bloomberg relates that the cost includes payment of: -- $24,000 a month for the crew on the yacht; -- $17,400 a month for insurance; and -- $42,000 in past-due rent on the dock for the yacht. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier LLP, represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Gerard A. McHale, Jr., was appointed as the Debtors' Chapter 11 trustee on Oct. 25, 2007. Jonathan L. Flaxer, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP represents Mr. McHale. 1031 TAX GROUP: Sale Protocol on Transferred Assets Proposed ------------------------------------------------------------ Gerard A. McHale, Jr., the Chapter 11 Trustee for The 1031 Tax Group LLC and its debtor-affiliates, seeks the U.S. Bankruptcy Court for the Southern District of New York's approval of a proposed procedure for the sale of the assets acquired from the Debtors' former executive, Edward H. Okun. Specifically, Mr. McHale proposes: -- a sale of individual assets for amounts of $10,000 or less, subject to an overall cap of $50,000 upon three business days' notice to the United States Trustee and the Official Committee of Unsecured Creditors; -- that upon notification, if the U.S. Trustee or the Committee objects within that three businesse days, then the Chap. 11 Trustee will not proceed with the proposed sale, and may seek approval of the sale before the Court; -- sale of an older model Dodge Intrepid car for $1,000 to a ready buyer; and -- sale of a trailer at an annual race car-related auction in Indiana. As reported in the Troubled Company Reporter on Oct. 29, 2007, the Court approved an agreement entered into by the 1031, its debtor-affiliates, the Official Committee of Unsecured Creditors, and Mr. Okun, which provides for the transfer of al of Mr. Okun's assets to the Debtors. Under the agreement, the assets to be transferred won't include: -- two automobiles retained for Mr. Okun's personal use; -- Mr. Okun's residence at 394 South Hibiscus Drive in Miami, Florida; -- Mr. Okun's residence at 39 and 49 Aaron Road in Wolfeboro, New Hampshire; and -- customary and usual contents of Mr. Okun's residences (but excluding any property not of a personal nature). The assets subject of the transfer are tied to a series of unsecured promissory notes Mr. Okun had issued to the Debtors during the course of the Debtors' business. The aggregate principal amount of the notes is approximately $130 million with approximately $18.8 million in accrued, unpaid interest as of Sept. 30, 2007, which interest amount increases at the approximate rate of $1.5 million per month. According to the Debtors, the notes are among the few remaining assets in their estate. The Debtors contended that the agreement is the most efficient way to achieve maximum creditor recovery and contemplate that the operation and eventual liquidation of the assets would form the structural underpinning of a plan of liquidation they may file later. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to service real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier LLP, represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. Gerard A. McHale, Jr., was appointed as the Debtors' Chapter 11 trustee on Oct. 25, 2007. Jonathan L. Flaxer, Esq., at Golenbock Eiseman Assor Bell & Peskoe LLP represents Mr. McHale. 1755 AQUA: Court Approves Scott Alan Orth as Counsel ---------------------------------------------------- 1755 Aqua Vista II LLC obtained authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ the Law Offices of Scott Alan Orth, PA, as its counsel. Scott Orth will: a. advise the Debtor with respect to its powers and duties as debtors and the continued management of business operations; b. advise the Debtor with respect to its responsibilities in complying with the United States Trustee's operating guidelines and reporting requirements and with the rules of the Court; c. prepare motions, pleadings, orders, applications adversary proceedings, and other legal documents necessary in the administration of the case; d. protect the interest of the Debtor in all matters pending before the Court; and e. represent the Debtor in negotiations with its creditors in the preparation of sale papers and a chapter 11 plan. The Debtor has agreed to pay Scott Alan on an hourly basis: Professional Rate ------------ ---- Scott Orth, Esq. $325 John Penson, Esq. $265 Other attorneys and paralegals will render services to the Debtor as needed. The Debtor related to the Court that its principal has paid Mr. Orth a $10,000 retainer. The the best of the Debtor's knowledge, Scott Orth does not represent any interest adverse to it or its estate. The firm can be reached at: Scott Alan Orth, Esq. The Law Offices of Scott Alan Orth, PA 9999 Northeast, 2 Avenue #204 Miami Shores, FL 33138 Tel: (305) 757-3300 About 1755 Aqua Vista North Miami, Florida-based 1755 Aqua Vista II LLC owns and develops real estate in North Bay Village in Miami-Dade County, Florida. The Debtor filed for chapter 11 bankruptcy on Oct. 24, 2007 (Bankr. S.D. Fl. Case No. 07-19056). Scott Alan Orth, Esq. at The Law Offices of Scott Alan Orth, PA, represents the Debtor in its restructuring efforts. North Bay Village Investment Trust LLC, formerly Peninsula Bank, is the Debtor's largest secured creditor with an $8 million claim under a final judgment of mortgage foreclosure issued by the Miami-Dade Circuit Court. North Bay holds a first priority lien on the Debtor's real property. James B. Miller, Esq., is North Bay's counsel. The Debtor's schedules show total assets of $14,000,000 and total liabilities of $6,140,958. ACA ABS: Increased Expected Loss Cues Moody's Ratings Downgrades ---------------------------------------------------------------- Moody's Investors Service downgraded ratings of six classes of notes issued by ACA ABS 2007-1, Ltd. and left on review for possible further downgrade ratings of three of these classes of notes. The notes affected by these rating action are as: Class Description: $930,000,000 Class A1S Variable Funding Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $125,000,000 Class A1J Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $198,000,000 Class A2 Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $72,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Ca Class Description: $30,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca Class Description: $40,000,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: Ca The rating actions reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on Nov. 15, 2007, of an event of default caused by a failure of the Senior Adjusted Credit Ratio to equal or exceed 100%, as required under Section 5.1(h) of the Indenture dated Mar. 8, 2007. ACA ABS 2007-1, Ltd is a collateralized debt obligation backed primarily by a portfolio of RMBS and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Senior Adjusted Credit Ratio failed to meet the required level. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The expected losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the Class A1S, Class A1J and the Class A2 Notes remain on review for possible downgrade pending the receipt of definitive information. ACE SECURITIES: Moody's Lowers Ratings on Two Cert. Classes to B2 ----------------------------------------------------------------- Moody's Investors Service has downgraded 34 certificates and placed on review for possible downgrade eight certificates from five transactions issued by Ace Securities Corp. Home Equity Loan Trust. All transactions are backed by second lien loans. The certificates were downgraded and placed on review for possible downgrade because the bonds' credit enhancement levels, including excess spread and subordination, were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months in many of the deals have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipelines will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- ASL1 -- Cl. M-3, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. M-4, Downgraded to Baa1 from A1 -- Cl. M-5, Downgraded to Baa2 from A2 -- Cl. M-6, Downgraded to Ba1 from A3 -- Cl. M-7, Downgraded to Ba3 from Baa1 -- Cl. M-8, Downgraded to B3 from Ba1 -- Cl. M-9, Downgraded to Caa2 from Ba2 -- Cl. M-10, Downgraded to Ca from B2 Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL1 -- Cl. M-2, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M-3, Downgraded to Baa3 from A2 -- Cl. M-4, Downgraded to Ba3 from Baa1 -- Cl. M-5, Downgraded to Caa1 from Ba1 -- Cl. M-6, Downgraded to Ca from Ba3 -- Cl. M-7, Downgraded to C from B3 -- Cl. M-8, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL2 -- Cl. A, Downgraded to Baa3 from A1 -- Cl. M-1, Downgraded to Ba3 from Baa1 -- Cl. M-2A, Downgraded to Caa1 from Ba1 -- Cl. M-2B, Downgraded to Caa1 from Ba1 -- Cl. M-3, Downgraded to Ca from Ba3 -- Cl. M-4, Downgraded to C from B1 -- Cl. M-5, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL3 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-2, Downgraded to Baa3 from A2 -- Cl. M-3, Downgraded to Ba3 from Baa1 -- Cl. M-4, Downgraded to B2 from Baa2 -- Cl. M-5, Downgraded to Ca from Baa3 -- Cl. M-6, Downgraded to C from Ba1 -- Cl. M-7, Downgraded to C from B1 -- Cl. M-8, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL4 -- Cl. M-1, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-2, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M-3, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. M-4, Downgraded to Baa3 from A1 -- Cl. M-5, Downgraded to Ba2 from A2 -- Cl. M-6, Downgraded to B2 from A3 -- Cl. M-7, Downgraded to Caa2 from Baa1 -- Cl. M-8, Downgraded to Ca from Ba1 -- Cl. M-9, Downgraded to C from B1 -- Cl. M-10, Downgraded to C from Ca ADAMS SQUARE: Moody's Lowers Rating on $342MM Senior Swap to B3 --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the rating of a super senior swap transaction entered into by Adams Square Funding I, Ltd. as: (1) $342,000,000 Super Senior Swap Transaction * Prior Rating: Ba2, on review for possible downgrade * Current rating: B3, on review for possible downgrade The rating addresses the likelihood that, and the extent to which, Adams Square Funding I, Ltd. as seller of protection, will receive Floating Payments from and be required to pay Fixed Payments to the buyer of protection. The rating action reflects severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Oct. 12, 2007, as reported by the Trustee on Oct. 18, 2007, of an event of default caused by a failure of the Class A Overcollateralization Ratio to equal or exceed 100%, as required under Section 5.1(h) of the Indenture dated December 15, 2006. Adams Square Funding I, Ltd. is a hybrid collateralized debt obligation backed primarily by a portfolio of RMBS securities, CDO securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus the Class A Overcollateralization Ratio failed to meet the required level. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard, Moody's has received notification from the Trustee that the Supersenior Swap Counterparty has directed the Trustee to liquidate Cash Assets and terminate Credit Default Swaps existing under the Indenture. The rating downgrade taken today reflects the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The expected losses of certain tranches may be different, however, depending on the outcome of the liquidation. Because of this uncertainty, the ratings assigned by Moody's to the Super Senior Swap Transaction, Class A Notes, Class B-1 Notes and Class B-2 Notes remain on review for possible downgrade pending the receipt of definitive information. ADELPHIA COMMUNICATIONS: Court Awards Comcast $9 Million -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York awarded Comcast Corp. $9,000,000 in lieu of all distributions to which Comcast would otherwise have been entitled to under Reorganized Adelphia Communications Corp.'s First Modified Fifth Amended Joint Plan of Reorganization on account of: -- the Retained Claims as defined in the April 20, 2005 Asset Purchase Agreement, as amended, between Adelphia Communications Corp. and Comcast; and -- Comcast's Claim Nos. 16336, 16337, 16342, 16343, 16344, and 16345 related to three joint ventures between the ACOM Debtors, on the one hand, and Comcast, TCI Adelphia Holdings, LLC, and TCI California Holdings, LLC, on the other hand. The Comcast Joint Venture Claims will be deemed Allowed Subsidiary Debtor Other Unsecured Claims under the Plan, the Court clarifies. Comcast, along with Time Warner Cable, acquired substantially all of ACOM's assets in July 2006 for approximately $12.5 billion in cash and approximately 16% of the equity of Time Warner's cable subsidiary. With the exception of any claims under the Comcast APA, the ACOM Debtors and and the Adelphia Recovery Trust are deemed to have released any and all claims against the Joint Ventures, TCI Adelphia Holdings, and TCI California Holdings that arose on or prior to November 26, 2007. The Reorganized ACOM Debtors had objected to more than 100 claims filed by Comcast, asserting that the Comcast Claims: -- are not reflected in their books and records; -- do not contain adequate information or documentation supporting the claim amounts; or -- are duplicative to other claims. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 180; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AEGIS ASSET: Moody's Downgrades Ratings on 20 Cert. Classes ----------------------------------------------------------- Moody's downgrades twenty two classes of certificates from six deals issued by Aegis Asset-Backed Securities Trust in 2004 and 2005. Moody's Investors Service has downgraded twenty two classes of certificates from six deals issued by Aegis Asset-Backed Securities Trust. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to expected losses. The transactions are backed by subprime, fixed and adjustable-rate mortgage loans. These deals have already stepped down except for Aegis Asset- Backed Securities Trust, Series 2004-6 and 2005-1 which will step down in December and March if they pass performance triggers. The deals that have already stepped down have also lost credit enhancement provided by subordination due to stepdown. For all deals, losses have already begun to erode the overcollateralization leaving the rated bonds less protected. Complete rating actions are: Issuer: Aegis Asset-Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2004-1 -- Class M-3, downgraded from A3 to Baa2; -- Class B-1, downgraded from Baa1 to Ba2; -- Class B-2, downgraded from Baa2 to B3; -- Class B-3, downgraded from B3 to Ca; Issuer: Aegis Asset-Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2004-2 -- Class M-3, downgraded from A3 to Baa2; -- Class B-1, downgraded from Baa1 to Ba1; -- Class B-2, downgraded from Baa2 to B1; -- Class B-3, downgraded from Baa3 to Caa1; Issuer: Aegis Asset-Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2004-3 -- Class M-3, downgraded from A3 to Baa2; -- Class B-1, downgraded from Baa1 to Ba1; -- Class B-2, downgraded from Baa2 to B1; -- Class B-3, downgraded from Baa3 to B3; Issuer: Aegis Asset-Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2004-5 -- Class M-3, downgraded from A3 to Baa3; -- Class B-1, downgraded from Baa1 to Ba1; -- Class B-2, downgraded from Baa2 to Ba3; -- Class B-3, downgraded from Baa3 to B3; Issuer: Aegis Asset-Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2004-6 -- Class B-2, downgraded from Baa2 to Ba1; -- Class B-3, downgraded from Baa3 to Ba2; Issuer: Aegis Asset-Backed Securities Trust, Mortgage Pass-Through Certificates, Series 2005-1 -- Class M-6, downgraded from A3 to Baa2; -- Class B-1, downgraded from Baa1 to Baa3; -- Class B-2, downgraded from Baa2 to Ba1; -- Class B-3, downgraded from Baa3 to Ba3. AEGIS MORTGAGE: Countrywide Wants Stay Lifted to Pursue Actions --------------------------------------------------------------- Countrywide Home Loans Inc. asks the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay so that it may exercise its rights on four more real properties in California. The properties are located at: -- 647 Wheeler Street in Santa Rosa; -- 6524 Trailride Way in Citrus Heights; -- 1323 Dunning Drive in Laguna Beach; and -- 6062 East Spring Street in Long Beach. Countrywide is currently the holder of the notes and mortgage executed by the borrowers with respect to the properties. The notes and mortgage were first delivered by the borrowers to Aegis Wholesale Corporation and Express Capital Lending, and were later transferred to Countrywide. The borrowers defaulted on their payment obligation, according to Countrywide. Based on estimates by brokers, the value of the properties ranges from $380,000 to $1,330,000, before deducting costs of sale, broker's fees, and other fees that might be incurred in the liquidation of the properties. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan expires on Dec. 11, 2007. (Aegis Bankruptcy News, Issue No. 12, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AEGIS MORTGAGE: BoNY Wants Stay Lifted to Pursue Civil Actions -------------------------------------------------------------- Bank of New York, as Trustee c/o Countrywide Home Loans, asks the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay so that it may exercise its rights on two more real properties located at: (i) 8750 Buckeye Court in Fontana, California, and (ii) 21 Stony Point Road, in Clinton, Connecticut. BoNY is the holder of the notes and mortgage executed by the borrowers with respect to the properties. The notes and mortgage were first delivered by the borrowers to Aegis Wholesale Corporation and America's Wholesale Lender, which were later transferred to BoNY. The borrowers are presently in default of their payment obligation, according to BoNY. Based on estimate by a broker, the value of the Fontana property is worth about $340,000, before deducting costs of sale, broker's fees, and other fees that might be incurred in the liquidation of the property. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan expires on Dec. 11, 2007. (Aegis Bankruptcy News, Issue No. 12, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AFFILIATED COMPUTER: Fitch Removes Ratings from Negative Watch -------------------------------------------------------------- Fitch Ratings has removed Affiliated Computer Services, Inc. from Rating Watch Negative and affirmed these ratings: -- Issuer Default Rating 'BB'; -- Senior secured revolving credit facility at 'BB'; -- Senior secured term loan at 'BB'; -- Senior notes at 'BB-'. The Rating Outlook is Stable. Approximately $3.4 billion of debt, including the $1 billion revolving credit facility, is affected by Fitch's action. Fitch's removal of ACS from Rating Watch Negative reflects the conclusion of the company's review of strategic alternatives, which ultimately resulted in no modification of the existing capital structure attributable to a leveraged buyout or other change of ownership. The ratings are supported by ACS': -- Consistent free cash flow due to a significant recurring revenue base from long-term outsourcing contracts (85% of total revenue); -- Diverse business lines, several of which are insulated or countercyclical to U.S. economic growth, with minimal exposure (5%-10% of revenue) to discretionary IT spending, such as consulting; -- Solid growth prospects for the business process outsourcing services market (75% of total revenue); -- Established and geographically diverse offshore delivery model that reduces the effect of currency fluctuations and/or salary inflation in individual offshore markets; and -- Material and sustained improvement in renewal rates. Rating concerns continue to center on: -- The lack of visibility with respect to ACS' long-term capital structure plans, which could include further debt- financed stock buybacks; -- ACS' acquisitive nature, which could be debt-financed going forward; -- Decline of new commercial contract bookings (60% of revenues), which fell approximately 30% year-over-year for the latest 12 months ended Sept. 30, 2007; -- The ongoing Securities and Exchange Commission and Department of Justice investigations, and several derivative lawsuits, all of which relate to the company's timing of historical stock option grants. The ratings may be downgraded in the event of: -- Aggressive resumption of debt-financed share buybacks. Although Fitch believes some flexibility exists in the current ratings for incremental debt-financed share repurchases, full utilization of the company's remaining $2 billion uncommitted term loan accordion feature to buy back shares would lead to negative rating actions. -- A material reduction of liquidity if the pending court decision rules that ACS' failure to timely file its 10-K for fiscal year 2006 constitutes an event of default for the senior notes; and -- Continued declines in new commercial contract bookings. The ratings may be upgraded in the event of: -- Greater company transparency with respect to long-term capital structure targets; -- Material debt reduction; and -- Strong and sustainable growth of free cash flow. The rating of 'BB-' for the senior notes incorporates the fact that the secured credit facilities have the sole rights to ACS' accounts receivable, which represented approximately 23% of total assets and 46% of tangible assets as of Sept. 30, 2007, despite the notes being equally and ratably secured with the senior secured credit facilities under the terms of the related indenture. The credit facility is secured by a first priority perfected pledge of all notes owned by the borrowers and guarantors, all capital stock of predominantly all domestic subsidiaries and certain foreign subsidiaries of ACS, and a first priority perfected security interest in all other assets owned by ACS, including tangible and intangible assets. As of June 30, 2007, the financial covenant ratios contained in the credit facility, which are based on a quarterly schedule that becomes more restrictive over time relative to the amount of covenant adjusted debt outstanding, consist of bank-defined maximum consolidated senior leverage ratio of 3 times, maximum consolidated total leverage ratio of 4x and interest coverage covenant of 4.5x. Fitch estimates leverage (total debt/operating EBITDA) declined slightly year-over-year to 2.3x as of Sept. 30, 2007 from 2.5x due to growth in operating EBITDA. Fitch estimates interest coverage (operating EBITDA/ gross interest expense) declined to 5.8x for the LTM ended Sept. 30, 2007 compared with nearly 10x in the year-ago period due to increased interest expense from higher average debt levels. Fitch believes ACS' liquidity is adequate and was supported by approximately $246 million of cash at Sept. 30, 2007 and $818 million of availability on its $1 billion secured revolving credit facility expiring 2012. The credit facility also includes an uncommitted accordion feature enabling ACS to increase the size of the revolver by up to $750 million for general corporate purposes under certain circumstances. Liquidity is further supported by ACS' consistent free cash flow, which increased to $378 million in fiscal 2007 despite increased interest expense. Total debt as of Sept. 30, 2007 was approximately $2.4 billion, consisting primarily of $1.8 billion of secured term loans due 2013 and $250 million of senior notes due in June 2010 and June 2015. ACS' near-term debt maturities are manageable as the next material debt obligations of $275 million occur in fiscal year 2010. However, if ACS' failure to timely file its 10-K for fiscal 2006 is ruled an event of default by the court, Fitch believes ACS will utilize its $1 billion revolver to refinance the $500 million of senior notes that would become immediately due at par value plus accrued interest. AMERICAN MEDIA: Sept. 30 Balance Sheet Upside-Down by $355 Million ------------------------------------------------------------------ American Media Operations Inc. released its financial results for the quarter ended Sept. 30, 2007. At Sept. 30, 2007, the company's balance sheet total assets of $969.2 million and total liabilities of $1.3 billion, resulting in a stockholders' deficit of $355.0 million. Deficit at March 31, 2007, was $334.4 million. The company reported a net loss of $17.7 million in the three months ended Sept. 30, 2007, compared with a net loss of $4.3 million for the same period last year. Total operating revenue was $131.9 million and $124.8 million for the fiscal quarters ended Sept. 30, 2007 and 2006, respectively, representing an increase in revenue of $7.1 million, or 5.7%. The increase was primarily attributable to a $5.1 million increase in the company's Women's Health and Fitness Publications, a $4.0 million increase in the company's Corporate/Other segment and a $400,000 increase in net operating revenues relating to its Distribution Services. These items were partially offset by a $2.0 million decrease in the company's Celebrity Publications and a $500,000 decrease in its Tabloid Publications. Total operating revenue was $253.0 million and $239.3 million for the two fiscal quarters ended Sept. 30, 2007 and 2006, respectively, representing an increase in revenue of $13.7 million, or 5.7%. The increase was primarily attributable to a $900,000 increase in the company's Celebrity Publications, a $6.8 million increase in its Women's Health and Fitness Publications, a $5.6 million increase in its Corporate/Other segment and a $900,000 increase in net operating revenues relating to its Distribution Services. Liquidity and Capital Resources The company's primary sources of liquidity are cash generated from operations and amounts available to be borrowed under its credit agreement dated as of Jan. 30, 2006. As of Sept. 30, 2007, the company had cash and cash equivalents of $54.5 million, $60.0 million outstanding on the revolving credit facility under the 2006 Credit Agreement (which represents the full amount available to be borrowed under the revolving credit facility), and a working capital deficit of $3.7 million. The decrease in working capital deficit of $14.1 million from $17.8 million at March 31, 2007 to $3.7 million at Sept. 30, 2007, primarily resulted from: (i) a $7.2 million decrease in accrued interest, which occurred because the 2006 Credit Agreement requires it to pay interest at least every 90 days, or sooner if its interest lock-in period is less than 90 days, which increased the amount of cash interest paid during the two fiscal quarters ended Sept. 30, 2007, (ii) a $5.9 million increase in trade receivables primarily as a result of the increase in its advertising revenues, (iii) a $4.3 million decrease in current accrued expenses and other liabilities, (iv) a $1.3 million decrease in accounts payable, and (v) a $1.8 million increase in prepaid expenses and other current assets. These items were partially offset by a $5.9 million decrease in cash and cash equivalents. American Media Headquartered in Boca Raton, Florida, American Media Operations Inc., publishes celebrity, health and fitness, and Spanish language magazines, including Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. AMI also owns Distribution Services Inc. * * * American Media Operations Inc. carries Moody's Investors Service's B2 ratings on the company's $60 million Senior Secured Revolving Credit Facility Due 2012 and $450 million Senior Secured Term Loan Due 2013. It also carries Moody's Caa3 ratings on its $150 million 8.875% Senior Subordinated Notes Due 2011 and $400 million 10.25% Senior Subordinated Notes Due 2009. AMERISOURCEBERGEN: Extends Long-Term Tie-Up with Medco Health ------------------------------------------------------------- AmerisourceBergen Corporation has signed a letter of intent with Medco Health Solutions Inc. confirming the selection of AmerisourceBergen as Medco's prime vendor for PBM mail-order wholesaler services, pending the completion of a new five-year contract. AmerisourceBergen's current five-year contract with Medco was due to end March 31, 2008. In fiscal year 2007, the Medco contract represented approximately 8% of AmerisourceBergen's $61.6 billion of operating revenue and approximately 90% of its $4.4 billion bulk revenue. "We are very excited about continuing our relationship with Medco, the nation's leading pharmacy benefit manager, and providing them with even more value and service," R. David Yost, AmerisourceBergen President and Chief Executive Officer, said. AmerisourceBergen also continues to expect fiscal 2008 diluted earnings per share to be in the range of $2.77 to $2.95. The diluted earnings per share range represents an increase of approximately 13% to 20% over the $2.46 earnings per share from continuing operations for fiscal year 2007, which excludes the $0.09 benefit from special items and the $0.08 contribution from PharMerica Long-Term Care, a business spun off July 31, 2007. As the Company indicated in early November when it announced expectations for fiscal year 2008, the December quarter remains the most difficult quarter of the 2008 fiscal year due to the comparison with the very strong December quarter in the previous year. Operating revenue growth in the December quarter is expected to be below the 5% to 7% range expected for the entire 2008 fiscal year due to the negative impact from lower sales of anemia pharmaceuticals, the loss of a large specialty customer because of its acquisition by a competitor, and the company's loss of a large retail customer in January 2007. AmerisourceBergen expects diluted earnings per share in the December quarter of fiscal 2008 to be similar to the same quarter last fiscal year, which was $0.62, excluding the impact of special items and the contribution from PharMerica Long-Term Care, due primarily to the anticipated shift of price increases by a major branded pharmaceutical manufacturer from the December to the March quarter, as well as fewer generic launches and a slower flu season compared with last year's December quarter. "With the strong March quarter ahead, the anniversary of the slowdown in anemia drug sales later in the fiscal year, the increase in new generic launches in the second half of the fiscal year, and the continued benefit from our stock repurchase program, we continue to expect to have a strong fiscal 2008 with diluted earnings per share 13 percent to 20 percent ahead of last year," Mr. Yost said. About AmerisourceBergen Headquartered in Valley Forge, Pennsylvania, AmerisourceBergen Corporation (NYSE:ABC) -- http://www.amerisourcebergen.com/-- is one of the pharmaceutical services companies serving the United States, Canada and selected global markets. AmerisourceBergen's service solutions range from pharmacy automation and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education. AmerisourceBergen employs more than 14,000 people. * * * To date, AmerisourceBergen still holds Moody's Investor Services' Ba1 long term corporate family and Ba1 probability of default ratings. The outlook is positive. ASC INC: Plan Proponents Have Until Feb. 1 to Settle Disputes ------------------------------------------------------------- The proponents of three competing Chapter 11 plans for ASC Inc. have until Feb. 1, 2008, to complete a mediation process with regards to their disputes, Bill Rochelle of Bloomberg News reports. ASC Inc. first filed its plan but further extension of its exclusive plan filing period was denied by the U.S. Bankruptcy Court for the Eastern District of Michigan. ASC's parent, American Specialty Cars Holdings Inc., and the Official Committee of Unsecured Creditors subsequently filed separate plans. The results of the mediation process will determine the fate of the Debtor's bankruptcy case. Headquartered in Southgate, Michigan, ASC Incorporated -- http://www.ascglobal.com/-- is a supplier of highly engineered roof systems and of design services for the world's automakers. The company filed for Chapter 11 protection on May 2, 2007, (Bankr. E.D. Mich. Case No. 07-48680). Gary H. Cunningham, Esq. and Sean M. Walsh, Esq. at Giarmarco, Mullins & Horton P.C. represent the Debtor in its restructuring efforts. Christopher Grosman, Esq., at Carson Fischer, P.L.C., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed assets and debts from $1 million to $100 million. ASHTON WOODS: Moody's Cuts Corp. Family Rating to B3 from B2 ------------------------------------------------------------ Moody's Investors Service lowered the ratings of Ashton Woods USA, LLC, including the company's corporate family rating to B3 from B2 and senior subordinated notes ratings to Caa2 from Caa1. The ratings outlook is negative. The downgrade and negative outlook reflect Moody's expectation that: (i) the macro housing environment will remain unsupportive into 2009, with any recovery likely to be very measured at first, thus prolonging the company's underperformance on key financial metrics vs. prior expectations; (ii) covenant compliance could become problematic in 2008; and (iii) the company's relatively small size and scale and somewhat limited geographic, product and price point diversity exacerbate the risk of localized down cycles. Going forward, the company's outlook could stabilize if Moody's were to project the company's cash flow to become robust and permit substantial debt paydown. The ratings could decline further if Moody's were to expect the following: (i) the company to have difficulties in obtaining covenant amendments, if needed; (ii) adjusted debt leverage to increase above 65% in fiscal 2008; or (iii) cash flow generation on a trailing twelve month basis to turn negative. These ratings were changed: -- Corporate Family Rating lowered to B3 from B2; -- Probability of Default Rating lowered to B3 from B2; -- Senior Subordinated Notes, lowered to Caa2 (LGD-5, 87%) from Caa1 (LGD-5, 87%). Begun in 1989, headquartered in Roswell, Georgia, and privately- owned by six Canadian families, Ashton Woods USA, LLC builds single-family detached homes, townhomes, and stacked-flat condominiums, with operations in seven U.S. cities. Homebuilding revenues and total pretax income for the trailing twelve month period ended Aug. 31, 2007 were $522 million and $2.6 million, respectively. BEA CBO: Fitch Retains Junk Rating on $20MM Class A-3 Notes ----------------------------------------------------------- Fitch has affirmed two classes of notes issued by BEA CBO 1998-2 Ltd. These rating actions are effective immediately: -- $5,602,773 class A-1 notes affirmed at 'AAA'; -- $8,816,791 class A-2 notes affirmed at 'AAA'; -- $20,000,000 class A-3 notes remain at 'C/DR5.' BEA 2 is a collateralized debt obligation that closed on Dec. 3, 1998 and is managed by Credit Suisse Asset Management. BEA 2 exited its revolving period in 2003 and now has a static portfolio composed primarily of high yield bonds. BEA 2 has been in an event of default since 2002 when the overcollateralization ratio fell below 90.0%. The class A-1 and A-2 notes are insured by Financial Security Assurance Inc., which is rated 'AAA' by Fitch. The affirmations are the result of Fitch's regular review process. Since the last rating action on May 10, 2005, the A-1 and A-2 notes have continued to pay down, and the A-3 notes have continued to defer interest due to the event of default. The credit quality of the collateral has declined such that currently about 42% of the collateral pool is made up of defaulted assets, versus 35% at last review. The class A OC ratio has declined to 47.6% from 84.5%. Additionally, assets rated 'CCC' or lower represented approximately 55%, of the collateral pool. The ratings on the class A-1, A-2 and A-3 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. BEAR STEARNS: Moody's Lowers Ratings on 41 Certificate Classes -------------------------------------------------------------- Moody's Investors Service has downgraded 41 certificates and placed on review for possible downgrade nine certificates from six transactions issued by Bear Stearns Mortgage Funding Trust. All transactions are backed by second lien loans. The certificates were downgraded and placed on review for possible downgrade because the bonds' credit enhancement levels, including excess spread and subordination, were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipelines will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: Bear Stearns Mortgage Funding Trust 2006-SL1 -- Cl. A, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. M-1, Downgraded to Ba1 from A2 -- Cl. M-2, Downgraded to Caa2 from Baa2 -- Cl. M-3, Downgraded to Ca from Ba1 -- Cl. M-4, Downgraded to C from Ba3 -- Cl. M-5, Downgraded to C from Ca Issuer: Bear Stearns Mortgage Funding Trust 2006-SL2 -- Cl. A, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-1, Downgraded to Baa3 from A1 -- Cl. M-2, Downgraded to B2 from A2 -- Cl. M-3, Downgraded to Ca from Baa1 -- Cl. M-4, Downgraded to C from Baa3 -- Cl. M-5, Downgraded to C from Ba3 -- Cl. M-6, Downgraded to C from Ca Issuer: Bear Stearns Mortgage Funding Trust 2006-SL3 -- Cl. A, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M-1, Downgraded to Baa2 from A1 -- Cl. M-2, Downgraded to B1 from A2 -- Cl. M-3, Downgraded to Caa2 from Baa1 -- Cl. M-4, Downgraded to C from Baa3 -- Cl. M-5, Downgraded to C from Ba1 -- Cl. M-6, Downgraded to C from B1 -- Cl. B-1, Downgraded to C from Ca Issuer: Bear Stearns Mortgage Funding Trust 2006-SL4 -- Cl. A, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-1, Placed on Review for Possible Downgrade, currently Aa3 -- Cl. M-2, Downgraded to Ba1 from A1 -- Cl. M-3, Downgraded to B2 from A2 -- Cl. M-4, Downgraded to Ca from Baa2 -- Cl. M-5, Downgraded to C from Baa3 -- Cl. M-6, Downgraded to C from Ba1 -- Cl. B-1, Downgraded to C from B3 Issuer: Bear Stearns Mortgage Funding Trust 2006-SL5 -- Cl. I-A, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. II-A, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M-1, Downgraded to Baa2 from A1 -- Cl. M-2, Downgraded to Ba2 from A2 -- Cl. M-3, Downgraded to B2 from A3 -- Cl. M-4, Downgraded to Caa2 from Baa2 -- Cl. M-5, Downgraded to Ca from Baa3 -- Cl. M-6, Downgraded to C from Ba1 -- Cl. B-1, Downgraded to C from Ba2 -- Cl. B-2, Downgraded to C from B3 Issuer: Bear Stearns Mortgage Funding Trust 2006-SL6 -- Cl. I-A, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. II-A, Placed on Review for Possible Downgrade, currently Aa2 -- Cl. M-1, Downgraded to Baa1 from A1 -- Cl. M-2, Downgraded to Baa3 from A2 -- Cl. M-3, Downgraded to B1 from A3 -- Cl. M-4, Downgraded to Caa1 from Baa2 -- Cl. M-5, Downgraded to Caa3 from Baa3 -- Cl. M-6, Downgraded to Ca from Ba1 -- Cl. B-1, Downgraded to C from Ba2 -- Cl. B-2, Downgraded to C from Ba3 -- Cl. B-3, Downgraded to C from Caa1 BEAR STEARNS: Stable Performance Cues Fitch to Affirm Ratings ------------------------------------------------------------- Fitch Ratings has affirmed Bear Stearns Commercial Mortgage Securities Inc., commercial mortgage pass-through certificates, series 2000-WF1, as : -- $33.2 million class A-1 at 'AAA'; -- $455.0 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $31.1 million class B at 'AAA'; -- $35.5 million class C at 'AAA'; -- $8.9 million class D at 'AAA'; -- $26.6 million class E at 'AAA'; -- $8.9 million class F at 'AAA'; -- $15.5 million class G at 'A+'; -- $13.3 million class H at 'BBB+'. -- $6.7 million class I at 'BBB-'; -- $5.6 million class J at 'BB'; -- $8.9 million class K at 'B'; -- $3.3 million class L at 'B-'. Fitch does not rate the $3.3 million class M. The rating affirmations are the result of stable performance of the remaining pool. As of the October 2007 distribution date, the pool's aggregate principle balance has decreased 26% to $655.8 million at issuance. In total 58 loans (53.5%) have defeased, including the largest loan in the pool, 650 Townsend Center (8.3%). There are currently no loans in special servicing. 2.25% of the transaction is scheduled to mature in 2008 and 30.8% matures in 2009. The largest Fitch Loan of Concern (1.44%) is a multifamily property located in Durham, North Carolina. The property is located in the Research Triangle submarket which has suffered from low occupancy and concessions. The year end, servicer reported debt service coverage ratio is .67 and the June 2007 occupancy was 89%. BEARINGPOINT INC: Board Names F. Edwin Harbach as CEO and Pres. --------------------------------------------------------------- BearingPoint Inc.'s board of directors has named Ed Harbach as president and chief executive officer and a member of the board of directors. Mr. Harbach, who has more than 28 years of experience in the consulting industry, has been the company's president and chief operating officer since Jan. 2007. Harry L. You, who was chief executive officer since March 2005, is leaving the company to pursue other opportunities and will be succeeded by Mr. Harbach. Mr. You led BearingPoint through an important period of rebuilding and improved financial management. The company also filed its third-quarter Form 10-Q making it current and up-to-date in its periodic filings with the Securities and Exchange Commission. "BearingPoint continues to make great progress," Roderick McGeary, chairman of the board, stated. "Harry helped to build the financial foundation necessary to position us for future success. The board and Harry agreed that this is the perfect time for a change in leadership. We are thrilled that Ed will lead the company into the next, critical phase of achieving strategic and operational excellence." "Ed has extensive experience in the consulting industry, and has already brought great value to BearingPoint as the leader of its day-to-day operations," Mr. McGeary added. "With his proven ability to tackle operational challenges, drive business results and increase client satisfaction, Ed will be instrumental in helping us make the final push on our business turnaround and execute our strategy for long-term growth." "Ed"s appointment reflects the board's determination that the best way for the company to create value for its shareholders, clients and employees is by intensifying our focus on operations -- and leveraging the full scale and scope of our global business, including continuing to own and operate our European practice as an important part of our consolidated business," Mr. McGeary continued. "Ed will pursue this strategy with a focused and disciplined approach to driving profitable growth, building the company's cash flow and strengthening the balance sheet." "I am very enthusiastic about taking on the chief executive role." Mr. Harbach stated. "I have worked in the consulting business for my entire career and I am confident that our Company can create long-term value for shareholders. BearingPoint has world-class people and a solid customer base with great potential. I look forward to working with the Board, our management team and our global employee base to operate the company efficiently and to continue to establish BearingPoint as one of the world's premier management technology and consulting firms." Prior to his role as president and chief operating officer of BearingPoint, Mr. Harbach served as a managing partner and member of the leadership team at Accenture and held key client-facing and executive positions throughout the organization. In addition to leading global client relationships with several Fortune 100 companies, Mr. Harbach served as chief information officer and managing partner, client satisfaction and quality, and also served as turnaround leader on a number of critical client and organizational assignments in multiple geographic regions. "We thank Harry for his hard work and important contributions to BearingPoint over the last three years," Mr. McGeary added. "Harry's leadership has been important, particularly in building a strong foundation to bring current the company's financial reporting, strengthen the balance sheet and resolve a significant number of serious financial, compliance, legal and other issues which existed when he arrived. On behalf of the Board and management team, we wish him well in his future endeavors." "I am delighted that we have been able to get current and I look forward to pursuing other opportunities, Mr. You stated. "It has been a privilege working with the many talented people throughout BearingPoint over the past three years." "I am proud of the progress the company has made," Mr. You continued. "It is a real testament to our franchise and to the tenacity of our people. I have known Ed for several years and am confident in his abilities to lead BearingPoint into the future." About BearingPoint Inc. Headquartered in McLean, Virginia, BearingPoint Inc. (NYSE:BE) -- http://www.BearingPoint.com/-- is a provider of management and technology consulting services to Global 2000 companies and government organizations in 60 countries. The firm has more than 17,000 employees focusing on the Public Services, Financial Services and Commercial Services industries. BearingPoint professionals have built a reputation for knowing what it takes to help clients achieve their goals, and working closely with them to get the job done. The company's service offerings are designed to help its clients generate revenue, increase cost-effectiveness, manage regulatory compliance, integrate information and transition to "next-generation" technology. * * * Moody's Investor Service placed BearingPoint Inc.'s long term corporate family rating at 'B2' in December 2006 and its probability of default rating at 'B1' in September 2006. Both ratings still hold to date. BLACKHAWK AUTOMOTIVE: Court OKs Morris-Anderson as Fin'l Advisor ---------------------------------------------------------------- Blackhawk Automotive Plastics Inc. and Tier e Automotive Group Inc. obtained permission from the Honorable Judge Kay Woods of the U.S. Bankruptcy Court for the Northern District of Ohio to employ Morris-Anderson & Associates Ltd. as their financial advisor. Morris-Anderson will: a. install Domenic Aversa, a managing director of Morris- Anderson, as the Debtors' chief restructuring officer, who will bear senior responsibility for all of the Debtors' financial matters, including: i. monitoring compliance with the terms of the Debtors' postpetition financing; ii. reporting the Debtors' current and projected financial performance to the Debtors' postpetition lenders and any official committee of unsecured creditors appointed in the case; iii. controlling all disbursements of the Debtors' cash; and iv. working with the Debtors' senior management on developing and implementing strategies for the Debtors' reorganization or sale during the course of their chapter 11 case, including via possible formulation of a plan of reorganization or sale process; b. review the business and financial condition of the Debtors and, to the extent feasible, familiarize itself with the business operations, properties, financial conditions and prospects of the Debtors; c. advise the Debtors on the financial issues and options concerning potential refinancing, recapitalizations or other restructurings; d. develop and execute a strategic plan, which may include a refinancing, recapitalization or other restructuring of the Debtors; e. make appropriate presentations regarding the Debtors and their strategic alternatives to the Bank Group and specified trade creditors; f. assist the Debtors in preparing presentations, discussions and due diligence materials and in negotiations relating to a reorganization; g. make presentations to the Debtors' senior management and their boards of directors as to the status of negotiations or discussions regarding a reorganization; and h. provide other financial advisory and investment banking services as are customary for similar transactions. The Debtor will pay Morris-Anderson at these hourly rates: Professional Rate ------------ ---- Dan Dooley, Principal $450 Domenic Aversa, Managing Director $375 Robert Wanat, Consultant $300 Dick Schulter, Consultant $275 Daniel Wiggins, Consultant $275 During the 90-days prior to bankruptcy, the Debtor paid $150,000 security retainer to Morris-Anderson. The Debtors and the firm assure the Court that Morris-Anderson represent no interest adverse to the Debtors' estates. The firm can be reached at: Morris-Anderson & Associates Ltd. Domenic Aversa, Managing Director 55 West Monroe Street, Suite 2500 Chicago, IL 60603 http://www.morris-anderson.com/ About Blackhawk Automotive Salem, Ohio-based Blackhawk Automotive Plastics Inc., formerly Warren Molded/Custom Plastics, manufactures injection molded plastic products and motor vehicle parts and accessories. BAP's customers include General Motors, Delphi, Lear, Chrysler, Honda, Navistar, and Visteon. BAP employs about 1,574 workers domestically, and generated $136 million in sales in 2006. BAP owns Canadian subsidiary, Blackhawk Automotive Plastics Ltd. which operated a manufacturing facility in Ontario until Johnson Controls Inc. bought BAP Canada's assets in May 2005. BAP Canada's remaining assets consist primarily of net operating loss carryforwards for Canadian tax purposes. The NOLs had a book value of about $8.2 million as of December 2005. BAP also owns a plant in Upper Sandusky, Ohio, which ceased operations in 2006. The company filed for chapter 11 protection on Oct. 22, 2007 (Bankr. N.D. Ohio, Case No. 07-42671). Its parent company, Tier e Automotive Group Inc., filed a separate chapter 11 petition on the same day (Bankr. N.D. Ohio, Case No. 07-42673). Tier e acquired BAP from Worthington Industries Inc. in 1999. Tier e also owns 49% stake in Nescor Holdings Inc., a holding company for Nescor Plastics Corporation, also an automotive plastics supplier. William I. Kohn, Esq., David M. Neumann, Esq., Stuart A. Laven, Jr., Esq., at Benesch, Friedlander, Coplan & Aronoff LLP represent the Debtors in their restructuring efforts. Donlin Recano & Company Inc. will provide claims, noticing, balloting and distribution services for the Debtors. The Debtors schedules disclose total assets of $58,665,229 and total liabilities of $51,244,592. As of the bankruptcy filing, BAP's aggregate debt to its senior facility lenders was about $33 million. BLACKHAWK AUTOMOTIVE: Can Hire W.Y. Campbell as Investment Banker ----------------------------------------------------------------- The Honorable Judge Kay Woods of the U.S. Bankruptcy Court for the Northern District of Ohio gave Blackhawk Automotive Plastics Inc. and Tier e Automotive Group Inc. permission to employ W. Y. Campbell & Company as investment banker. W. Y. Campbell will assist and advise the Debtors with respect to: a. the definition of objectives related to value and terms of a potential asset sale under Section 363 of the Bankruptcy Code; b. the identification and demonstration of the Debtors' propriety attributes; c. the identification and solicitation of possible appropriate acquirers or merger partners; d. the preparation and distribution of confidentiality agreements and appropriate descriptive selling materials to prospective acquirers; e. the initiation of discussions and negotiations with prospective acquirers or merger partners; f. the structuring of the asset sale or other transaction involving the Debtors' businesses or assets; and g. the various details necessary to complete a successful transaction. The Debtors agree to pay W. Y. Campbell based on these charge schedule: a. an initial retainer of $75,000, payable upon commencement of the engagement; b. a monthly retainer of $30,000, payable on the first day of each month commencing Nov. 1, 2007, and continuing through the conclusion of the engagement; c. a success fee of 2% of the aggregate proceeds payable to the Debtors of an asset sale or other transaction; and d. aggregate retainers received by the firm will be deducted from aggregate success fees received and refunded to the Debtors, provided the firm's resulting net compensation is not less than the minimum success fee. To the best of the Debtors' knowledge, the firm does not hold or represent an interest adverse to the Debtors' estate. The firm can be reached at: Ty Clutterbuck, Managing Director W. Y. Campbell & Company One Woodward Avenue, 26th Floor Detroit, MI 48226 Tel: (313) 496-9000 Fax: (313) 496-9001 http://www.wycampbell.com/ About Blackhawk Automotive Salem, Ohio-based Blackhawk Automotive Plastics Inc., formerly Warren Molded/Custom Plastics, manufactures injection molded plastic products and motor vehicle parts and accessories. BAP's customers include General Motors, Delphi, Lear, Chrysler, Honda, Navistar, and Visteon. BAP employs about 1,574 workers domestically, and generated $136 million in sales in 2006. BAP owns Canadian subsidiary, Blackhawk Automotive Plastics Ltd. which operated a manufacturing facility in Ontario until Johnson Controls Inc. bought BAP Canada's assets in May 2005. BAP Canada's remaining assets consist primarily of net operating loss carryforwards for Canadian tax purposes. The NOLs had a book value of about $8.2 million as of December 2005. BAP also owns a plant in Upper Sandusky, Ohio, which ceased operations in 2006. The company filed for chapter 11 protection on Oct. 22, 2007 (Bankr. N.D. Ohio, Case No. 07-42671). Its parent company, Tier e Automotive Group Inc., filed a separate chapter 11 petition on the same day (Bankr. N.D. Ohio, Case No. 07-42673). Tier e acquired BAP from Worthington Industries Inc. in 1999. Tier e also owns 49% stake in Nescor Holdings Inc., a holding company for Nescor Plastics Corporation, also an automotive plastics supplier. William I. Kohn, Esq., David M. Neumann, Esq., Stuart A. Laven, Jr., Esq., at Benesch, Friedlander, Coplan & Aronoff LLP represent the Debtors in their restructuring efforts. Donlin Recano & Company Inc. will provide claims, noticing, balloting and distribution services for the Debtors. The Debtors schedules disclose total assets of $58,665,229 and total liabilities of $51,244,592. As of the bankruptcy filing, BAP's aggregate debt to its senior facility lenders was about $33 million. BLACKHAWK AUTOMOTIVE: Court Approves Equipment Buy Pact w/ Stopol ----------------------------------------------------------------- The Honorable Judge Kay Woods of the U.S. Bankruptcy Court for the Northern District of Ohio gave Blackhawk Automotive Plastics Inc. and Tier e Automotive Group Inc. permission to sell their equipment to Stopol Inc. pursuant to an equipment purchase agreement. The Debtors relate that under the EPA, Stopol has proposed to purchase two of the Debtors' equipment free of liens for $220,900, and that the Debtors' lenders and the customers have consented to the sale. Also under the EPA, Stopol will have an option to purchase two additional pieces of equipment for an aggregate price of $265,000 on or before Dec. 31, 2007. All of the equipment is subject to perfected senior security interests of the lenders and the customers under a debtor-in- possession financing. Thus, upon Court's approval, the Debtors will pay the proceeds of the sale to their lenders and customers in accordance with the terms in the DIP financing. About Blackhawk Automotive Salem, Ohio-based Blackhawk Automotive Plastics Inc., formerly Warren Molded/Custom Plastics, manufactures injection molded plastic products and motor vehicle parts and accessories. BAP's customers include General Motors, Delphi, Lear, Chrysler, Honda, Navistar, and Visteon. BAP employs about 1,574 workers domestically, and generated $136 million in sales in 2006. BAP owns Canadian subsidiary, Blackhawk Automotive Plastics Ltd. which operated a manufacturing facility in Ontario until Johnson Controls Inc. bought BAP Canada's assets in May 2005. BAP Canada's remaining assets consist primarily of net operating loss carryforwards for Canadian tax purposes. The NOLs had a book value of about $8.2 million as of December 2005. BAP also owns a plant in Upper Sandusky, Ohio, which ceased operations in 2006. The company filed for chapter 11 protection on Oct. 22, 2007 (Bankr. N.D. Ohio, Case No. 07-42671). Its parent company, Tier e Automotive Group Inc., filed a separate chapter 11 petition on the same day (Bankr. N.D. Ohio, Case No. 07-42673). Tier e acquired BAP from Worthington Industries Inc. in 1999. Tier e also owns 49% stake in Nescor Holdings Inc., a holding company for Nescor Plastics Corporation, also an automotive plastics supplier. William I. Kohn, Esq., David M. Neumann, Esq., Stuart A. Laven, Jr., Esq., at Benesch, Friedlander, Coplan & Aronoff LLP represent the Debtors in their restructuring efforts. Donlin Recano & Company Inc. will provide claims, noticing, balloting and distribution services for the Debtors. The Debtors schedules disclose total assets of $58,665,229 and total liabilities of $51,244,592. As of the bankruptcy filing, BAP's aggregate debt to its senior facility lenders was about $33 million. BOYS DAY OUT: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Boys Day Out, L.P. 4601 Old Sheppard Place, Suite 100 Plano, TX 75093 Bankruptcy Case No.: 07-45402 Chapter 11 Petition Date: December 3, 2007 Court: Northern District of Texas Judge: Russell F. Nelms Debtor's Counsel: Julie C. McGrath, Esq. Forshey & Prostok, L.L.P. 777 Main Street, Suite 1290 Fort Worth, TX 76102 Tel: (817) 877-8855 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its largest unsecured creditors. C-BASS MORTGAGE: Moody's Cuts Rating on Cl. M-4 Certificates to B1 ------------------------------------------------------------------ Moody's Investors Service has downgraded 8 certificates and placed on review for possible downgrade four certificates from a transaction issued by C-Bass Mortgage Loan Asset-Backed Certificates. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, the delinquency pipeline has remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipeline will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2006-SL1 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-2, Downgraded to Baa3 from A1 -- Cl. M-3, Downgraded to Ba1 from A2 -- Cl. M-4, Downgraded to B1 from Baa1 -- Cl. M-5, Downgraded to B3 from Baa2 -- Cl. M-6, Downgraded to Caa1 from Baa3 -- Cl. B-1, Downgraded to Caa3 from Ba2 -- Cl. B-2, Downgraded to Ca from B2 -- Cl. B-3, Downgraded to C from Caa1 CALPINE CORP: Various Parties Object to Plan Confirmation --------------------------------------------------------- More than 40 parties-in-interest delivered to the U.S. Bankruptcy Court for the Southern District of New York their objections to the confirmation of Calpine Corporation's Fourth Amended Joint Plan of Reorganization, in time for the Nov. 30, 2007 confirmation objection deadline. The Plan will be presented for confirmation on December 17. Among the major Objecting Parties are: * the Official Committee of Equity Security Holders; * the Unofficial Committee of Second Lien Debtholders; * Wilmington Trust Company, solely in its capacity as collateral agent under the Collateral Trust and Intercreditor Agreement entered with Debtors Calpine Generating Company, LLC, and CalGen Finance Corp.; * a group of holders of the 7.75% Convertible Notes due 2015, composed of Davidson Kempner Capital Management, LLC, Highland Capital Management, LP, Jana Partners, LLC, and Longacre Fund Management, LLC; * Rosetta Resources Inc; * Portland Natural Gas Transmission System, Gas Transmission Northwest Corporation, TransCanada PipeLines Limited, and NOVA Gas Transmission Ltd.; * The Hawaii Structural Ironworkers Pension Trust Fund; * The Dow Chemical Company and its subsidiaries and affiliates; and * certain trade creditors. Other parties that filed Plan Confirmation Objections are: * ACE Group of Companies, * Ad Hoc Committee of CCFC Equity Holders, * Auburndale Holdings, LLC, and Pomifer Power Funding, LLC, * Block 59 Limited Partner, * California Energy Commission, * Cos-Mar Company, * Credit Suisse Cayman Islands Branch, * Duke Energy Trading and Marketing L.L.C., * County of Eastland, Texas, * Eastman Chemical Company, * Edinburg CISD, et al., * Enbridge Pipelines (Bamagas Intrastate), L.L.C., * Energy Transfer Fuel, LP, * James Phelps, * Louisiana Department of Revenue, * Merrill Lynch Commodities, Inc., * Nevada Power Company, * South Point Joint Venture, * Spectra Energy Corp., * The Bethpage Lenders, * U.S. Bank National Association, * UNBC Leasing, Inc., * Verizon Capital Corp., * Wisconsin Power and Light Company, and * Yellow Brick Road, LLC. (1) Equity Committee The Equity Committee tells Judge Lifland that the Plan has numerous deficiencies that makes it unconfirmable. Specifically, the Equity Committee points out that stakeholders have no way of determining before the Voting Deadline whether the Plan violates the "absolute priority rule" under Section 1129(b)(2) of the Bankruptcy Code and the "best interests test" under Section 1129(a)(7) because the valuation of reorganized Calpine is still undetermined. The Equity Committee asserts that the Plan violates the "absolute priority rule" by providing more than 100% recoveries to creditors as a result of various settlements of alleged makewhole and other claims. The panel adds that the Plan unfairly discriminates against equity holders by permitting holders of Section 510(b) subordinated securities claims, whose claims are pari-passu with the common stock holders, to receive a "double recovery." Furthermore, the Equity Committee notes that the Plan includes unlawful, non-consensual third-party releases that automatically bind parties who either vote for the Plan or fail to vote on the Plan. Gary L. Kaplan, Esq., at Fried, Frank, Harris, Shriver & Jacobson, LLP, in New York, says the Plan impermissibly entrenches Calpine's board of directors, chosen by the Debtors and the Official Committee of Unsecured Creditors without input or oversight by the Equity Committee, even though equity holders will likely receive a substantial portion of the New Calpine Common Stock. Mr. Kaplan states that the proposed Management and Director Equity Incentive Plan seeks to circumvent Section 503(c)'s prohibition of Key Employee Retention Plans by providing impermissible bonuses to senior executives through the Plan. The Plan also fails to properly account for the value of the Debtors' retained causes of action, hence, that value will inure to the benefit of unsecured creditors, awarding them well in excess of 100 cents on account of their claims, Mr. Kaplan further says. The Equity Committee maintains that the Plan cannot be confirmed because it was not filed in good faith. While the Debtors continue to state that they are neutral with respect to how the value of their estates is allocated among stakeholders, their conduct in prosecuting the valuation of their Plan shows that they are determined to try to provide creditors with a windfall and to wipe out billions of dollars of shareholder value, Mr. Kaplan says. (2) Second Lien Committee The Plan classifies the Second Lien Debt Claim as "unimpaired," which, the Second Lien Committee points out, means that the Second Lien Debtholders are deemed to accept the Plan on the premise that it provides the Debtholders with every right and every dollar to which they are legally, equitably and contractually entitled. Against this backdrop, the Second Lien Committee objects to the confirmation of the Plan because it fails to satisfy the Second Lien Debt Claim in full while simultaneously stripping the Second Lien Debtholders of the protections granted to them in the Second Lien Loan Agreements. The Second Lien Committee also objects to the Plan confirmation because it fails to provide for payment of all postpetition default and compounded interest and fees owed to the Second Lien Debtholders. Alan W. Kornberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, LLP, relates that at least two courts have held, and no case to the contrary has been found, that if a secured creditor is entitled to default and compound interest under its loan documents, Section 1124(1) requires payment of that interest for the secured creditors to be deemed unimpaired. Mr. Kornberg adds that the Second Lien Documents provide for payment to the Indenture Trustee, Administrative Agent and their advisors of the fees incurred in connection with the Debtors' default. The Plan must similarly provide for payments of those amounts if it is to treat the Second Lien Debt Claim as unimpaired. Mr. Kornberg also points out that, to the extent equity is a consideration, the Debtors have provided other classes of similarly situated secured creditors with all, or at least the overwhelming majority of, the postpetition default and compounded interest to which they are entitled: Creditors Default Interest Compounded Interest --------- ---------------- ------------------- CalGen First Approx. 85% of Not Applicable; Lien Lenders postpetition received current pay default interest interest throughout the Debtors' Chapter 11 cases MEP Pleasant Interest at - Hill Lenders default rate Aries Lenders Interest at Compound Interest default rate Furthermore, Mr. Kornberg notes that the Debtors may very well be solvent. The Debtors' valuation provides that equity holders may receive up to $195,000,000 worth of New Calpine Common Stock. The Equity Committee has asserted that there should be at least $3,800,000,000 of value distributable to equity holders. Bank of New York, in its capacity as successor administrative agent for the Second Lien Debtholders, also asserts that it is entitled to the payment of all costs, fees, charges and out-of- pocket expenses, including without limitation, the fees and costs incurred by its attorneys and advisors. Wilmington, as indenture trustee for the Second Lien Debtholders, supports the Second Lien Committee's contentions. (3) CalGen Loan Agents Wilmington Trust wants the Plan confirmation denied because it purports to release all liens that the Collateral Agent has on the CalGen Collateral. The Plan also purports to release all of the Guarantors and Obligors under the CalGen Loan Documents of any obligations arising under any guarantees. The release of those liens, according to Wilmington Trust, is in contravention of a Court Order and the CalGen Loan Documents, which explicitly call for those liens and guarantees to remain in place until after the claims of the CalGen Lenders are paid in full. Wilmington also opposes the confirmation because it improperly discharges the Debtors' continuing indemnification obligations to the Collateral Agent for all of its fees, costs, and expenses incurred in connection with its duties under the Collateral Trust Agreement. In a separate filing, Manufacturers & Traders Trust Company, as successor indenture trustee under the CalGen Loan Agreements, objects to the Plan's exculpation provision, which, if approved, would foreclose any opportunity the bank may otherwise have to seek recoveries against the exculpated non-debtor third parties for claims disallowed against the Debtors. M&T Bank asserts that the Court lacks judicial power to exculpate or release non-debtor third parties where, as with the Plan, exculpation is not necessary to confirm it. The exculpation of non-debtor third parties under circumstances that do not meet the test set forth by the U.S. Court of Appeals for the Second Circuit in In re Metromedia Fiber Network, would constitute an invalid exercise of judicial authority, the Bank further asserts. (4) Noteholders The 7.75% Convertible Note Holders object to the Plan to the extent that: * it does not clearly provide for payment in full on the Distribution Date to holders of Allowed Senior Note Claims of principal and interest accrued as of the Petition Date; * it does not clearly provide for the establishment of an escrow account for shares otherwise distributable to holders of Allowed Subordinated Note Claims sufficient to satisfy the amounts subject to the Subordination Dispute; and * may inadvertently impair any rights and claims of holders of Allowed Senior Note Claims with respect to the subordination provisions in the 7.75% Indenture. Another group of 7.75% Convertible Notes led by Harbinger Capital Partners Master Fund I, Ltd., assert, in a separate Court filing, that, pursuant to the terms of the 7.75% Indenture and the terms of the Plan, their Claims should include a claim for postpetition interest at the accrued default rate, as well as a claim for overdue interest, in accordance with applicable New York law. Certain beneficial owners or managers of entities of the 6% Convertible Notes due 2014, in another Court filing, object to the Plan confirmation because it classifies their claims under the same class as claims under notes that are not contractually subordinated to any other debt and are not entitled to the right to convert into a combination of cash and stock. That classification violates the requirement of Section 1122(a) that claims must be "substantially similar" to be placed in the same class, the 6% Noteholders' counsel, Dennis F. Dune, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, in New York, asserts. Mr. Dune adds that the treatment of the 6% Noteholders' claims violates the "same treatment within a class" requirement of Section 1123(a)(4) because: (i) the Plan's failure to provide adequate reserves for certain of their claims would result in lesser distributions being made on those claims if they are allowed following an appeal than will be made on claims in the same class, which are allowed by Court order; and (ii) the Plan requires the 6% Noteholders to give up greater rights than other creditors in the same class to receive the same distributions. Certain Plan provisions relating to disputed claims reserves, exculpation, injunctions against acts against non-Debtors and the effectiveness and binding nature of the Plan, violate the requirements of Section 1129(a)(3), Mr. Dune further asserts. HSBC Bank USA, N.A., as successor indenture trustee on behalf of the holders of the 7.625% Senior Notes due 2006, the 8.75% Senior Notes due 2007, the 7.75% Senior Notes due 2009, and the 6% Contingent Convertible Notes due 2014, among others, also oppose the Plan confirmation because it purports to disallow its allowed claims for reimbursement of its expenses and fees as indenture trustee in connection with the litigation of Disputed Claims. HSBC supports the 6% Noteholders' Plan confirmation objections. (5) Rosetta Resources Pursuant to the Plan, the Debtors will release the officers, directors, and certain outside professionals that they allege advised and assisted Calpine's board of directors and management in consummating the sale transaction to Rosetta Resources. Among other things, the effect of the proposed releases would be to release any claim they may have against the Released Parties in connection with the conception, structuring, review, approval, and implementation of the Rosetta Transaction, as well as the misguided decision to misuse the proceeds of the sale that caused Calpine to file for bankruptcy protection, John H. Bae, Esq., at Cadwalader, Wickersham & Taft, LLP, in New York, contends. If the Debtors believe their allegations to be well-founded, they are required to provide some business justification for their decision to provide a blanket release of the D&Os, Mr. Bae asserts. The Plan, however, provides no justification or explanation for the releases, he says. Thus, Rosetta objects to the Debtor Releases contained in the Plan and asks Judge Lifland to deny its confirmation unless and until the Debtors address Rosetta's objections. Rosetta also asks Judge Lifland to direct the Debtors to promptly produce responsive documents and a witness in accordance with the Rule 30(b)(6) notice Rosetta filed in the Adversary Proceeding. (6) Trade Creditors Certain trade creditors oppose the Plan confirmation to the extent that the contemplated governance profile for reorganized Calpine restrict their ability to freely transfer their shares. The Trade Creditors are: * LS Power Equity Advisors, LLC, and Liminus Management, LLC; * Harbinger Capital Partners Master Fund I, Ltd., and Harbinger Capital Partners Special Situations Fund L.P.; * ASM Capital, Hain Capital Group, LLC, and Sierra Liquidity Fund, LLC; * Liquidity Solutions, Inc.; and * Revenue Management. LS Power Equity and Harbinger point out that, depending on the Debtors' total enterprise value and the ultimate size of the pool of allowed claims, they may each own more than 10% of New Calpine Common Stock. Harbinger says it holds approximately $1,600,000,000, in claims against the Debtors, and under the Plan, expects to receive at least 18% of the stock of reorganized Calpine and will be the company's largest shareholder after the effective date of the Plan. The Trade Creditors note that the Plan fails to provide for registration rights for the shares they may receive, restricting their ability to freely trade the shares and thus depressing their value. Harbinger specifically contends that the Plan fails to establish a reserve to pay the additional claims asserted by the holders of Calpine's convertible notes, which will result in further illegal discrimination if those claims are deemed allowed following appeal. The Trade Creditors further believe that the Plan contains several additional corporate governance provisions that are detrimental to the future shareholders of reorganized Calpine. (7) Pipelines The Pipelines wants the Plan modified to protect their rights and insure their equitable treatment as creditors. Specifically, the Pipelines seek that: * the Debtors should be required to obtain the prior approval of the Federal Energy Regulatory Commission for their proposed rejection of the Pipelines' contracts; * the retained causes of action or claims by the Debtors against the Pipelines should be disallowed; * a judicial determination should be required before the Debtors can offset against any allowed claim; and * a reserve should be created so that sufficient stock may pay all of the Pipelines' claims in full, including those claims that are disputed. The Pipelines further asserts that the Debtors' Updated Valuation Analysis should be rejected in favor of the Creditors Committee's valuation analysis. (8) Hawaii Structural Fund The Hawaii Structural Ironworkers Pension Trust Fund wants the Plan confirmation denied to the extent that the Plan Injunction provisions permanently enjoin the litigation commenced by the Fund against the Debtors in the Superior Court in the state of California, county of Santa Clara. (9) Dow Chemical The Dow Chemical Company and its subsidiaries and affiliates, including Union Carbide Corporation, Dow Pipeline Company, Dow Hydrocarbons and Resources, LLC, and Dow Engineering Company, and the Debtors are parties to various purchase agreements for the sale of steam and electricity for the Debtors' facilities in Pittsburg, California; and Freeport, Texas. Dow Chemical objects to the Plan confirmation because it finds that certain of its provisions may somehow modify, alter, change or otherwise affect the restructured relationship it has with the Debtors. Dow Chemical is also concerned that its current and future relationships with the Debtors and their non-Debtor affiliates would be irreparably harmed if contracts and leases are deemed rejected without providing Dow with the requisite notice as what contracts and leases are being rejected. Dow Chemical seeks that if there are any inconsistencies between the agreements executed and approved by Court Order in connection with the Restructured Relationships and the Plan, the Plan Supplement, the Confirmation Order and the transactions contemplated by the Plan, the agreements and Orders relating to the Restructured Relationships must control. Dow Chemical also asks that it be provided with the requisite notice of the contracts or leases that the Debtors are rejecting under the Plan. James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, says that Dow Chemical's current and future relationships with the Calpine Parties could be irreparably harmed if the Dow contracts and leases are rejected prior notification. Mr. Bromley notes that the Plan requires the Debtors to perform under postpetition guarantees or guarantees identified in the Plan Supplement. As part of the restructuring of the Pittsburg and Freeport Relationships, Calpine re-executed certain guarantees in favor of Dow that are not listed in the Plan Supplement. Dow Chemical wants the Court to rule that Calpine is not released from any of its obligations under the re-executed guaranties and, in particular, Calpine's obligations as to any prepetition or postpetition claims that Dow Chemical may have against Freeport Energy Center, LP, a non-debtor subsidiary of Calpine. Dow Chemical further contends that the Plan violates Section 1129 because it does not comply with multiple provisions of the Bankruptcy Code including, but not limited to Sections 365, 524(e), 553, 1123(a)(4), 1123(b)(3)(B) and 1129(b). About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of that Plan begins Dec. 17, 2007. (Calpine Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Wants to Liquidate $144.25 Million ULC1 Notes ----------------------------------------------------------- Calpine Corporation and its debtor-affiliates currently hold, among other things, assets that are 8-1/2% Senior Notes due May 1, 2008, whose principal amount totals $144,250,000, issued by one of Calpine's Canadian affiliates reorganizing under the Canadian Companies' Creditors Arrangement Act, Calpine Canada Energy Finance ULC. The ULC1 Notes are currently held by Calpine Corp. and its Debtor affiliate Quintana Canada Holdings, LLC. Between 2003 and 2005, Calpine purchased certain of the 8-1/2% Senior Notes issued by ULC I. As of the date of its bankruptcy filing: -- approximately $134,250,000 principal amount of the ULC1 Notes were held by Calpine; -- approximately $10,000,000 principal amount of the ULC1 Notes were held by Quintana; and -- approximately $360,000,000 principal amount of the ULC1 Notes were held by another Canadian Debtor Calpine Canada Resources Company. The ULC1 Notes held by CCRC were recently marketed and sold in the CCAA Proceedings, with Lehman Brothers, Inc., acting as the initial purchaser and assisting in all aspects of the sale, David R. Seligman, Esq., at Kirkland & Ellis, LLP, in New York, relates. The sale of the CCRC ULC1 Notes resulted in a profit above par value, he adds. The U.S. Debtors believe that liquidating their ULC1 Note holdings is for their in their best interests since the market for distressed debt securities like the ULC1 Notes is currently advantageous. Also, Mr. Seligman says the Debtors may face adverse negative tax consequences if they do not liquidate their ULC1 Note holdings. The U.S. Debtors further believe that if Lehman Brothers acts as initial purchaser and assists in the sale and marketing of the remaining ULC1 Notes, they will have the opportunity to obtain a maximum sale price, given that Lehman Brothers is a global leader in the sale of distressed debt securities and is already familiar with the ULC1 Note market because of its involvement in the sale of the CCRC ULC1 Notes. Accordingly, the U.S. Debtors ask permission from the U.S. Bankruptcy Court for the Southern District of New York (i) to sell their ULC1 Notes to Lehman Brothers, as initial purchaser, and (ii) for Lehman Brothers to resell those Notes to the highest bidders to be selected pursuant to sale procedures. Sale Process The U.S. Debtors ask the Court to approve a sale structure for the ULC1 Notes. Pursuant to the Sale Structure, Lehman Brothers will act as the exclusive initial purchaser of the ULC1 Notes and will then immediately resell those Notes to eligible purchasers in a "Rule 144A" sale to "qualified institutional buyers," as those terms are defined in the U.S. Securities Act of 1933, and identified by Lehman Brothers in the context of a "book-building" process. To sell the Notes, Lehman Brothers intends to engage in a marketing process that will include a sales force "teach-in," a broad marketing process coordinated with the sales force and research departments and a book-building process to resell the Notes at the highest price. During the book-building process, investors place their order with a salesperson that provides the order to the manager. The manager then includes the bids in the "book" by price. Participants may submit multiple bids at increasing prices to maximize the probability of a successful bid. Mr. Seligman says a book-building process is customary for secondary sales of this type, and it is the preferred way of achieving the maximum price for the Notes. Other methods, like "bought deal," "back-stop," or "open auction" process, are not suitable under the circumstances, he adds. The U.S. Debtors believe that, given the amount of financial and operational information already available in the market, the marketing process is likely to take approximately three to five business days. To ensure that the price of the Notes reflects the maximum available price from third party purchasers, Lehman Brothers has agreed that neither it or its affiliates will purchase any Notes in the initial resale to eligible purchasers. The U.S. Debtors and the Official Committees and the Unofficial Committee of Second Lien Debtholders will have access, on a confidential basis, to the marketing process and the manner in which the book is built. No party having access to the confidential pricing information will be allowed to participate in the purchase of the Notes. After the marketing period is complete, the Debtors will determine whether the book of offers proposed for the sale of the Notes is acceptable. Lehman Brothers will determine the maximum price in the order book for the sale of all of the Notes and will determine the maximum price that will clear a sale of all of the Notes. The U.S. Debtors will have the opportunity to review the final book of offers to ensure that it is fully satisfied with all aspects of the final sale offer, and will consult with the Committees regarding the offers. As additional protection for the Debtors, a proposed "Sale Authorization Threshold" has been established based on Lehman Brothers' advice. The Sale Authorization Threshold is a price at a discount or premium to the market price of the Notes above which the U.S. Debtors are authorized to sell the Notes. The Sale Authorization Threshold and the discounts and premiums Lehman Brothers believes are applicable to the Notes are summarized in an affidavit, which was filed under seal pursuant to a Court Order. Fee Letter The U.S. Debtors also ask the Court to approve a Fee Letter, dated November 21, 2007, with Lehman Brothers for payment of fees and reimbursement of expenses incurred by Lehman Brothers in connection with the sale of the Notes. Pursuant to the Fee Letter, the U.S. Debtors will pay to Lehman Brothers, at the closing of the sale, a fee equal to 1% of the aggregate gross proceeds of the sale. The fee will be payable as a discount to the initial purchase price of the Notes. The Debtors believe the fee is reasonable given Lehman Brothers' qualifications and falls within the market rate typically charged for its services. Also under the Fee Letter, whether or not the sale of the Notes is consummated, the Debtors will reimburse Lehman Brothers for all reasonable and actual out-of-pocket expenses, in an amount not to exceed $100,000, including travel expenses, professional and legal fees and disbursements incurred in connection with its due diligence investigation of the Debtors. Injunction The U.S. Debtors also ask the Court to bar and permanently enjoin, on the filing of a notice confirming the sale of the Notes, all persons and entities from commencing or continuing any action or other proceeding with respect to any claim or cause of action against the Debtors or Lehman Brothers in relation to or arising from the transfer of the ULC1 Notes pursuant to the Fee Letter and related transactions. About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of that Plan begins Dec. 17, 2007. (Calpine Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CALUMET LUBRICANTS: Moody's Rates $385 Million Term Loan at B1 -------------------------------------------------------------- Moody's Investors Service is assigning a B1 (LGD2, 29%) rating to Calumet Lubricants Co., L.P.'s new $385 million senior secured term loan and the $50 million pre-funded senior secured Letter of Credit Facility. Moody's is also affirming Calumet's B2 corporate family rating and the B3 probability of default rating. The outlook is stable. Calumet is a wholly-owned subsidiary of Calumet Specialty Products Partners, L.P. Proceeds from the new term loan will partially fund the company's pending approximately $270 million (including working capital) acquisition of Penreco, a producer and marketer of specialty products, jointly owned by M.E. Zuckerman Specialty Oil Corporation and ConocoPhillips Company. Calumet's parent company has already issued approximately $100 million of new common units to partially fund the Penreco acquisition and will use the term loan to fund the balance of the acquisition, refinance the existing $30 million term loan and the remaining capital expenditures on the current Shreveport facility expansion plus fees. Moody's will withdraw the rating on the existing term loan at close of the new term loan. Under Moody's Loss Given Default methodology, the new senior secured credit facilities are rated one notch above the B2 CFR given that these get sufficient support from the company's senior unsecured obligations and the company's 65% family recovery (resulting in a B3 PDR), thus causing a ratings uplift. Structurally, the term-loan and L/C facilities will have a first lien position on the PP&E of Calumet, and the proposed $375 million ABL facility (not rated by Moody's) will have a first lien on the working capital assets of the company and each lender group will have a second lien each other's collateral pool. The stable outlook assumes that Calumet will be able to integrate the Penreco acquisition, particularly as it simultaneously pursues the potential second acquisition of a specialty products producer and also completes the expansion project at Shreveport in the face of a weaker margin environment since during the second half of 2007 demonstrating that the specialty products business is not immune to the volatility that is inherent in the fuels business. While the second acquisition will add further scale and diversification to the company, it does carry higher integration risk as the company would possibly be integrating two acquisitions simultaneously and if completed as originally planned, would give the company entrance into markets that are not currently core markets. In addition, the company is towards the end of the Shreveport expansion which began in 2006, but this project has already had delays and cost overruns and still has significant capital requirements to complete. A positive outlook and/or upgrade will be considered if the company funds the second acquisition with sufficient equity so as to keep leverage at currently levels, and demonstrates that it has fully integrated the two acquisitions smoothly while achieving the results it projects. It also would require that the company is successful in passing along price increases on the specialty products side of its business especially at a time when it is significantly increasing its debt and margins are likely to continued to be pressured into 2008. While Moody's acknowledges the parent company's track record of opportunistically issuing common L.P. units for the Shreveport expansion and Penreco, the company is adding a historically high level of debt to fund the acquisition, while still having to meet its partnership distributions in spite of weaker margins. The B2 reflects the increased scale and diversification that the Penreco acquisition brings to Calumet's existing business and solidifies its position as a leading independent niche provider of specialty lubricants, solvents and waxes. The company also benefits from the diversification of the fuels business at the Shreveport facility, which now generates approximately half of the company's total production and has been hedged to reduce some of the volatility inherent in that business. In addition, the Shreveport expansion, when completed, should enhance the company's earnings and cash flows as it will not only increase throughput capacity by 15,000 b/d of crude oil, but it will also enable it to run more cost advantaged sour crude which should help overall margins. The B2 also considers the parent company's capital-depleting Master Limited Partnership business model which Moody's believes is not very compatible with an inherently volatile refining/specialty products business that has yet to be tested in an extended period of weaker margins. The B2 can accommodate a continued near-term period of margin compression despite higher debt levels as the company has shown some ability to increase pricing on its specialty products business. However, if macro economic conditions impact demand for Calumet's products and thus puts pressure on the company's ability to raise prices, it may cause Calumet's ability to internally cover its interest and distributions to be pressured and thus could result in the ratings outlook pressure. Since the IPO of Calumet's parent company in 2006, Moody's notes that the parent company's distribution coverage ratio has stayed above management's target of 1.3x. However, it should also be noted that this has been in a period of historically strong margins and does not include coverage of growth capex , which when factored in, brings the distribution coverage ratio to below 1.0x and is expected to remain that way into 2008. Calumet's liquidity position remains adequate primarily due to the new larger revolving credit facility that will be in place. Moody's does not expect the company to be cash flow positive as a result of the increased interest expense from the new debt, the quarterly partnership distributions for 2008 and capex, and working capital needs. However, the new revolver is estimated to have a significantly larger borrowing base, of which only a portion allocated to L/C usage is expected, plus some modest amount of borrowings that may be needed for the second acquisition. Notably, the term loan credit agreement has an accordion feature that could serve a source of additional liquidity to support he second acquisition, which helps preserve liquidity. Calumet Lubricants Co., L.P. is headquartered in Indianapolis, Indiana. CAMPBELL RESOURCES: MSV Resources Completes Obligations to Lenders ------------------------------------------------------------------ Campbell Resources Inc. said that Raymond Chabot Inc., the Court appointed Monitor of MSV Resources Inc., has certified that MSV has now fulfilled all of its obligations with respect to its Plan of Arrangement made pursuant to the Companies Creditors Arrangement Act. In addition, a Certificate of Execution has been filed as of Nov. 27, 2007. Both Campbell and GeoNova Explorations Inc. exited CCAA earlier this year. Furthermore, The Quebec Superior Court has granted Meston Resources Inc.'s request for an additional extension to May 31, 2008, of the initial order granted June 30, 2005 under the CCAA to allow Meston to fulfil its obligations under its Plan of arrangement. About Campbell Resources Headquartered in Montreal, Quebec, Campbell Resources Inc. -- http://www.ressourcescampbell.com/-- is a mining company focusing mainly in the Chibougamau region of Quebec, holding interests in gold and gold-copper exploration and mining properties. The Superior Court of Quebec (Commercial District) granted the company protection under the CCAA on June 30, 2005. The main assets of the company are the Joe Mann Mine, an underground gold mine owned by Meston Resources Inc., a wholly owned subsidiary of the company, the Copper Rand Mine, an underground gold and copper mine owned by MSV Resources Inc., a wholly owned subsidiary of the company, and the Corner Bay Property, located near the Chibougamau Lake in the townships of Lemoine and Obalski, a total of 16 claims, which are held by MSV. The company's properties include Pitt Gold, Berthiaume Syndicate, Chevrier, Gwillim, Joe Mann Mine, Cedar Bay, Copper Rand Mine, Corner Bay, Eastmain and Lac Harbour. The activities of GeoNova Explorations Inc. consist mainly in the acquisition, exploration and development of mining properties. It focuses on exploration in the Province of Quebec and more specifically, in the Abitibi region. CATHOLIC CHURCH: Davenport Inks $37 Mil. Settlement with Victims ---------------------------------------------------------------- The Diocese of Davenport in Iowa reached a settlement with its Official Committee of Unsecured Creditors to pay $37,000,000 to sexual abuse victims. The parties reached the deal at 1:00 a.m., on Nov. 29, 2007, after four days of mediation in Chicago, Illinois. Retired Judge Nudelman assisted in the mediation process. Most Rev. Martin J. Amos, Bishop of Davenport, personally participated in the negotiations. According to the Diocese, details of the $37,000,000 settlement will be included in the Joint Consensual Plan of Reorganization anticipated to be filed by the Diocese and the Creditors' Committee in the near future. The Plan must be approved by Judge Jackwig of the U.S. Bankruptcy Court for the Southern District of Iowa, to be effective. The parties anticipate that the Plan will be approved around April 1, 2008. "The settlement provides the best opportunity for healing and for the just and fair compensation of those who have suffered sexual abuse by priests in our Diocese," said Bishop Amos. "The settlement also provides the best way to continue the Church's mission in the Diocese of Davenport. While this settlement will not end the suffering by some victims of abuse, I pray that the healing process for them might begin." The New York Times says the money will be divided among 156 people who suffered sexual abuse by priests and lower-level employees dating from the late 1930s. The Future Claims Representative, in conjunction with the Creditors' Committee, will determine the amount of money to be set aside for any future claims. Victims will have their confidentiality maintained. Distributions should begin around July 1, 2008, after the Plan has been confirmed and the claims procedures have commenced. In addition to the monetary settlement, the Diocese will implement several non-monetary undertakings in order to help bring healing and closure to the victims of sexual abuse. The Diocese will continue to offer counseling for survivors of clergy abuse. Bishop Amos will visit parishes were abuses occurred. The Diocese will also allow the publication of the names of the abusers. Victims will be allowed to speak about their experiences at parishes and through articles in the diocesan newspaper, reports say. David Clohessy, national director of Survivors Network of Those Abused by Priests, said the wide range of noneconomic proposals for the Davenport victims was unusual. In most settlements, he said, church officials fight tooth and nail to oppose any reforms. Moreover, in an effort to have a complete resolution, Bishop Amos negotiated a global settlement that includes all Catholic entities in the Diocese of Davenport. Bishop Amos said, "In the beginning, the Diocese of Davenport alone entered bankruptcy, but we were able to include all other Catholic entities in the Diocese so that they all will be protected from future claims." While each entity is independently incorporated, all parishes, schools and Catholic entities are now included in the global settlement. As a result, when the Plan is approved, all the Catholic entities will be released from liability for past cases of abuse that occurred before October 10, 2006. Contributions by some of the entities toward the settlement have yet to be determined by their boards. Part of the Diocesan portion of the settlement will come from the sale of the St. Vincent Center in Davenport by the Creditors' Committee. The Diocese will deed the St. Vincent property to the Settlement Trustee as the Diocese does not have the funds necessary to purchase the property. The chancery staff and resident priests may move to other office space and apartments. All other property owned by the Diocese has already been sold including the bishop's residence and a farm in Davenport. Investments held by the Diocese, other entities and insurance companies will fund the balance of the settlement. All of the assets owned by the Diocese are included in the settlement except gifts donated to the Diocese for specific purposes and donations to the Annual Diocesan Appeal that fund the ongoing operation of the chancery. The Diocese says further details will be provided when the Reorganization Plan is filed and following the approval of the Plan by Judge Jackwig. "I apologize for the pain caused by the actions of some priests in the past 50 years," Bishop Amos said. "The priests who abused children betrayed the people who trusted them and they betrayed the Church. This has been a sad and difficult time for all of us as we attempt to offer healing to all victims of abuse. We are committed to ensuring that the Diocesan safe environment program will prevent this type of abuse from happening again." The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Iowa 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. The Debtor was unable to file a Chapter 11 Plan of Reorganization when its exclusive plan-filing period expired on Nov. 16, 2007. (Catholic Church Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CENTERSTAGING CORP: Sept. 30 Balance Sheet Upside-Down by $15.8 MM ------------------------------------------------------------------ CenterStaging Corp.'s consolidated balance sheet at Sept. 30, 2007, showed $6.90 million in total assets, $22.00 million in total liabilities, and $695,219 in interest of consolidated variable interest entity, resulting in a $15.80 million total shareholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $1.76 million in total current assets available to pay $15.71 million in total current liabilities. The company reported a net loss of $4.47 million on revenues of $1.68 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $4.06 million on revenues of $1.70 million in the same period last year. The increase in the net loss was due primarily to the fact that salaries and wages increased $653,000, due primarily to a non-cash charge of $1,238,000 related to stock options and common shares issued to employees, an increase in interest expense by $162,000, and a reduction in selling, general, and administrative of $438,000, due primarily to a $517,000 reduction in consultant costs. 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?25fb Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 23, 2007, Stonefield Josephson Inc. expressed substantial doubt about CenterStaging Corp.'s ability to continue as a going concern after auditing the the company's financial statements for the fiscal year ended June 30, 2007. The auditing firm pointed to the company's substantial net losses, substantial monetary liabilities in excess of monetary assets as of June 30, 2007, and stockholders' deficit. The auditing firm also pointed to the company's significant amounts of debt coming due in the next 12- month period. About CenterStaging Based in Burbank, Calif., CenterStaging Corp. (OTC BB: CNSC.OB) -- http://www.centerstaging.com/-- is engaged primarily in: (i) providing production and support services for live musical performances at major televised award shows such as the Academy Awards and the GRAMMY Awards, and other televised shows and events, such as the Super Bowl halftime show and presidential inaugurations; (ii) renting its studio facilities to musicians for rehearsal, production and recording; and (iii) renting musical instruments and related equipment for use at its studios and other venues. In 2004, the company formed a digital media division, which is called "rehearsals.com," to produce and distribute original high definition audio/video content of musicians and recording artists at its studios as they rehearse, give clinics and record. CHINA HEALTH: Posts $141,918 Net Loss in Third Quarter ------------------------------------------------------ China Health Resource Inc. reported a net loss of $141,918 on sales of $8,908 for the third quarter ended Sept. 30, 2007, compared with a net loss of $86,343 on sales of $393,514 in the same period in 2006. The significant decrease in revenue during the third quarter of 2007 was primarily due to the unusual weather in this period. The sales revenues were due primarily to sales of DAR, which is seasonal, and significantly affected by the weather. The increase in net loss during the three months ended Sept. 30, 2007, was due primarily to the decrease in revenue. At Sept. 30, 2007, the company's consolidated balance sheet showed $3.6 million in total assets, $852,526 in total liabilities, and $2.7 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?25ff Going Concern Doubt As reported in the Troubled Company Reporter on April 20, 2007, Lake & Associates CPA's LLC, in Boca Raton, Fla., expressed substantial doubt about Voice Diary Inc. nka. China Health Resource Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company has suffered recurring losses and has yet to generate an internal cash flow. About China Health Headquartered in Si Chuan Province, P.R. China, China Health Resource Inc. fka. Voice Diary Inc. (OTC BB: CHRI) -- was incorporated in the State of Delaware on Feb. 26, 2002. Through its wholly owned subsidary, Yin Fa, the company operates as a pharmaceutical company focused on developing and commercializing the Dahurian Angelica Root, one of the more popular traditional Chinese medicines. Dahurian Angelica Root is a popular herb employed extensively as an ingredient in food, medicine and cosmetics. CHRYSLER LLC: Downsizing Plan Effectuates, Salaried Workers Leave ----------------------------------------------------------------- Chrysler LLC's first batch of salaried workers, who opted for the company's buyout proposals, left Friday. Another batch will be leaving at the end of the year, various reports stated. As reported in the Troubled Company Reporter on Nov. 5, 2007, Chrysler disclosed that it would make volume-related reductions at several of its North American assembly and powertrain plants. Shifts will be eliminated at five North American assembly plants which, combined with other volume-related manufacturing actions, will lead to a reduction of 8,500-10,000 additional hourly jobs through 2008. Additional actions include reductions of salaried employment by 1,000 and supplemental (contract) employment by 37%. The company also plans to eliminate hourly and salaried overtime and reduce purchased services due to reduction in volume. The volume-related actions are in addition to 13,000 jobs eliminated by the three-year Recovery and Transformation Plan announced in February. The objectives of the RTP remain the same. Sources say, citing Chrysler spokesman David Elshoff, that the first buyout program called the "special incentive program" was offered to workers who were 62 years old or older with 10 years (or more) of service. The buyout program presented these white- collared workers three months' salary and either a vehicle voucher worth $20,000 after taxes or a $20,000 tax-free contribution to a retirement health care account, in addition to full pension and retiree health benefits. Workers ages 53 to 61 with at least 10 years of service who make less than $100,000 annually, as well as select workers ages 55 to 61 with 10 years of service who make $100,000 or more in salary will be offered Chrysler's second buyout program, which provides full pension and retiree health care benefits," Eric Morath of The Detroit News relates. The program is otherwise known as "the special early retirement program." About Chrysler Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. The outlook is negative. CITGO PETROLEUM: Moody's Rates Revenue Bonds at Ba1 --------------------------------------------------- Moody's Investors Service has upgraded the rating assigned to Industrial Development Board of the Parish of Calcasieu, Inc. Environmental Revenue Refunding Bonds (CITGO Petroleum Corporation Project) Series 1995 to Aaa/VMIG1 from Aa1/VMIG1 in conjunction with the substitution of the current letter of credit provided by BNP Paribas with a new letter of credit to be provided by Sumitomo Mitsui Banking Corporation. Upon the letter of credit substitution, scheduled for December 3, 2007, the long term rating will reflect Moody's approach to rating jointly supported transactions and will be based upon the letter of credit provided by Sumitomo Mitsui Banking Corporation, the rating of CITGO, the structure of the transaction which ensures that timely debt service and purchase price payments are made to investors, and Moody's evaluation of the creditworthiness of the institution issuing the letter of credit. Moody's currently rates by Sumitomo Mitsui Banking Corporation Aa2 for long-term obligations and P-1 for short-term obligations. Moody's currently rates CITGO Ba1. Since a loss to investors will occur only if both by Sumitomo Mitsui Banking Corporation and CITGO default in payment, Moody's has assigned a long term rating based upon the joint probability of default by both parties. In determining the joint probability of default, Moody's considers the level of correlation between the letter of credit bank and the company. Moody's has determined that there is a low level of correlation between the bank and the company. Given this correlation, Moody's believe the joint probability of default of by Sumitomo Mitsui Banking Corporation and CITGO, rated Aa2 and Ba1, respectively, results in credit risk consistent with an Aaa rating. Letter of Credit The letter of credit will cover full principal plus 35 days of interest, while in the daily or weekly modes, or 275 days, while in the commercial paper rate mode, at a rate of 12%, the maximum interest rate on the Bonds. The letter of credit will be available to make payments of principal and interest, as well as purchase price, to the extent remarketing proceeds received by the Trustee are insufficient. The letter of credit provides sufficient coverage for the Bonds while they bear interest in the daily, weekly, and commercial paper (1-270 days) rate modes. Substitution of the letter of credit is permitted at any time. The trust indenture requires that the institution issuing the substitute letter of credit be such as to maintain a rating on the Bonds equal to or higher than the then current rating on the Bonds, as rated by Moody's. The indenture does not include a provision for mandatory tender upon substitution of the letter of credit, but the Bonds will be mandatorily purchased on Dec. 3, 2007, the date of substitution. Conforming draws for the timely payment of principal and interest received by the Bank by 11:00 a.m., New York City Time, on a business day, will be honored by 1:00 p.m., New York City Time, on the same business day. Conforming draws for the timely payment of purchase price received by the Bank by 1:00 p.m., New York City Time, on a business day, will be honored by 3:00 p.m., New York City Time, on the same business day. Reimbursement Agreement Defaults The Bank may deliver written notice to the trustee stating that an event of default has occurred and is continuing under the Reimbursement Agreement and directing the trustee to immediately declare the Bonds due and payable. Upon receipt of such notice, the Trustee shall immediately declare the Bonds due and payable and draw on the letter of credit on the day of acceleration. Interest ceases to accrue on the payment date. Reinstatement of Interest Draws made under the letter of credit for interest shall be automatically reinstated on the day on which such draw is honored. Expiration/Termination of the Letter of Credit The letter of credit expires upon the earliest to occur of (1) Dec. 3, 2010, the stated expiration date of the letter of credit, (2) the Bank's receipt of notice from the trustee that (a) no Bonds remain outstanding, (b) an alternate credit facility has been accepted, or (c) the Bonds have been converted to the term rate mode, (3) ten days following the trustee's receipt of notice from the Bank that an event of default has occurred under the Reimbursement Agreement, with instruction to immediately declare the Bonds due and payable. Mandatory Tenders The Bonds are subject to mandatory tender upon the following: (i) while in the commercial paper rate mode, on each interest payment date, (ii) upon conversion from one rate mode to a different rate mode, and (iii) on the interest payment date preceding the expiration date of the letter of credit. Optional Tenders Bondholders may optionally tender their bonds, while in the daily mode, on any business day, with notice sent to the paying agent no later than 11 a.m. on the purchase date. Bondholders may also optionally tender their bonds, while in the weekly mode, on any business day with at least seven days prior notice to the paying agent. CLEAR CHANNEL: Gets FCC Approval for $1.3 Bil. Sale to Newport TV ----------------------------------------------------------------- Clear Channel Communication Inc. received approval from the Federal Communications Commission to sell 35 television stations to Newport Television LLC, a private equity firm controlled by Providence Equity Partners Inc., for $1.3 billion, various sources report. In its order, the FCC denied a petition filed by Buckley Broadcasting of Monterey, seeking reconsideration of the 2002 Commission decision granting applications to transfer control of the Ackerley Group Inc. to Clear Channel. However, the FCC approval comes with certain conditions that must be met by Newport in six months, including divesting TV stations in nine markets where it is in violation with FCC ownership rules. Companies must comply with the numerical ownership limits of the FCC local television ownership rule. The nine market areas are Bakersfield, San Francisco, Santa Barbara, Fresno and Monterey in California; Salt Lake City; Albany, New York; Jacksonville, Florida, and San Antonio, Texas. Cross-ownership Rule Violation Providence has defiled an FCC newspaper-broadcast station cross- ownership rule in five markets because it owns interests in Spanish language network Univision Communications Inc. and Freedom Communications Holdings Inc. On Oct. 31, 2007, Providence filed a request for more time, in which it states that it "had intended to comply by way of redemption of its attributable interest in Freedom," but that "due to extraordinarily volatile conditions in the credit market and newspaper industry in general," it has not been able to obtain the necessary financing. Instead, it proposes to convert its interest in Freedom into one that is not attributable under the FCC's rules and, by doing so, come into compliance with the rule. About Clear Channel Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on Sept. 27, 2007, Fitch Ratings said it expects to downgrade Clear Channel Communications Inc.'s Issuer Default Rating to 'B' from 'BB-'. The rating outlook is expected to be stable. Existing ratings remain on rating watch negative pending the closing of the merger transaction and review of final documentation. CLEAR CHANNEL: Provides Update on Bain Capital/THLP Merger ---------------------------------------------------------- Clear Channel Communications, Inc. provided an update on the status of its merger with an affiliate of a private equity group co-led by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. Both parties continue to actively pursue the satisfaction of the conditions to closing of the merger. The remaining material condition to be satisfied is obtaining the expiration or termination of the waiting period under the Hart Scott Rodino Act. As reported in the Troubled Company Reporter on May 21, 2007, Clear Channel entered into a second amendment to its merger agreement with a private equity group co-led by Thomas H. Lee Partners, L.P. and Bain Capital Partners, LLC. Under the terms of the merger agreement, as amended, Clear Channel shareholders will receive $39.20 in cash for each share they own plus additional per share consideration, if any, if the closing of the merger occurs after December 31, 2007. This is an increase from the previous cash consideration of $39.00 per share. As an alternative to receiving the $39.20 per share cash consideration, Clear Channel's unaffiliated shareholders were offered the opportunity on a purely voluntary basis to exchange some or all of their shares of Clear Channel common stock on a one-for-one basis for shares of Class A common stock in the new corporation formed by the private equity group to acquire Clear Channel (subject to aggregate and individual caps), plus the additional per share consideration, if any. Clear Channel is confident that the necessary regulatory condition will ultimately be satisfied. However, it is not expected that these conditions can be satisfied in time to allow for a closing of the merger prior to the end of 2007. Clear Channel intends to exercise its right to extend the Termination Date on Dec. 12, 2007 in accordance with the provisions of the Merger Agreement. Once extended, the new Termination Date will be June 12, 2008. Subject to the receipt of the requisite regulatory approval and customary closing conditions, Clear Channel expects the closing of the merger will occur during the first quarter 2008. Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on Sept. 27, 2007, Fitch Ratings said it expects to downgrade Clear Channel Communications Inc.'s Issuer Default Rating to 'B' from 'BB-'. The rating outlook is expected to be stable. Existing ratings remain on rating watch negative pending the closing of the merger transaction and review of final documentation. CLEAR CHANNEL: Paying $0.1875 Quarterly Dividend January 15 ----------------------------------------------------------- Clear Channel Communications, Inc.Board of Directors declared a quarterly cash dividend of $0.1875 per share on its Common Stock. The dividend is payable on or before January 15, 2008 to shareholders of record at the close of business on December 31, 2007. Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on Sept. 27, 2007, Fitch Ratings said it expects to downgrade Clear Channel Communications Inc.'s Issuer Default Rating to 'B' from 'BB-'. The rating outlook is expected to be stable. Existing ratings remain on rating watch negative pending the closing of the merger transaction and review of final documentation. COINSTAR INC: Moody's Withdraws Ba2 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service withdrew the Ba2 Corporate Family Rating of Coinstar, Inc. following the refinancing of the company's existing $310 million senior secured credit facility with a new facility, which provides for a $400 million revolving line of credit (not rated by Moody's). The refinancing took place on Nov. 20, 2007. Moody's withdrew these ratings: -- The Ba2 Corporate Family Rating; -- The Ba3 Probability of Default Rating; -- The Ba2 (LGD3, 31%) on the $60 million senior secured revolver due 2011; -- The Ba2 (LGD3, 31%) rating on the (original) $250 million senior secured term loan B due 2011; -- The SGL-1 Speculative Grade Liquidity rating. Coinstar, Inc., based in Bellevue, Washington, owns and operates a multinational, fully automated network of coin processing kiosks, as well as electronic payment, entertainment services, and self- service DVD rentals. Revenue for fiscal 2006 was about $534 million. COLUMBIA AIRCRAFT: Completes Asset Sale to Textron's Cessna ----------------------------------------------------------- Cessna Aircraft Company, a Textron Inc. company, finalized its purchase of select assets of Columbia Aircraft Manufacturing Company. As reported in the Troubled Company Reporter on Nov. 29, 2007, Cessna's auction bid of $26.4 million for the Bend, Oregon-based producer of high-performance, single-engine aircraft was accepted by court order on Nov. 28, 2007 by the United States Bankruptcy Court for the District of Oregon. Company officials spent the past week finalizing the acquisition. With the deal now closed, the Bend factory will carry the Cessna name and the Columbia products will be branded as the Cessna 350 and the Cessna 400. These two low-wing, turbocharged aircraft will complement Cessna's existing line of eight piston models. Cessna also manufactures turboprops and the world's best-selling line of business jets, the Cessna Citation. Cessna Parts Distribution and the Cessna network of authorized dealers and service centers have already begun plans to integrate sales and support of the new Cessna 350 and Cessna 400 aircraft. About Cessna Aircraft Company Headquartered in Wichita, Kansas, Cessna Aircraft Company -- http://www.cessna.com/-- is one of the most famous names in small planes. A subsidiary of Textron, the company manufactures business jets, utility turboprops, and small single-engine planes. Cessna is also a maker of business jets; it makes nine variations of its popular Citation jet. Its utility turboprop plane, the Caravan, has freight, bush, amphibious, and commercial (small connecting flights) applications. Cessna's single-engine planes are typically used for personal and small-business purposes. Cessna also offers fractional ownership programs for its business jets. About Columbia Aircraft Manufacturing Headquartered in Bend, Oregon, Columbia Aircraft Manufacturing Corporation -- http://www.flycolumbia.com/-- manufactures a variety of all-composite aircraft, including the Columbia 400 and employs approximately 440 people. The company filed for Chapter 11 protection on Sept. 24, 2007 (Bankr. D. Ore. Case No. 07-33850). Leon Simson, Esq., Albert N. Kennedy, Esq., and Timothy J. Conway, Esq., at Tonkon Torp LLP represent the Debtor in its restructuring efforts. James Ray Streinz, Esq., and Johnston A. Mitchell, Esq., at McEwen Gisvold LLP serve as counsel to the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and liabilities of $1 million to $100 million. The Debtor's list of its 20 largest unsecured creditors showed total aggregate claims of more than $50 million. COUNTRYWIDE FINANCIAL: CEO Mozilo Says Bankruptcy Not Likely ------------------------------------------------------------ Countrywide Financial Corp.'s Chief Executive Officer Angelo Mozilo disclosed that although bankruptcy will always be an issue, a bankruptcy filing was unlikely for the company, Reuters reports citing CNBC. Reuters relates that in the CNBC interview, Mr. Mozilo added that the company wasn't in talks with Bank of America Corp. for another cash infusion. As previously reported in the Troubled Company Reporter, the company received a $2 billion strategic equity investment from Bank of America. The transaction was completed and funded Aug. 22, 2007. EOUST Subpoena The Executive Office of the U.S. Trustee meanwhile has issued a subpoena in order to determine if Countrywide committed abuse in the two foreclosures in southern Florida, Gretchen Morgenson of the New York Times reported last week. According to the report, in the Chapter 13 case of Manuel Del Castillo and Maria E. Pena in Miami, the company filed a claim in the amount of $279,000 which includes, among others, an $11,924 advance and insufficient-funds fee of around $683. The Del Castillos objected to the claim contending that the company didn't provide an itemized list of the charges, Ms. Morgenson further reports. In Boca Ranton, the company filed a $101,000 claim, which included $2,400 in overdue mortgage payments, in the Chapter 13 case of William and Joyce Chadwick, the report relates. The Chadwicks however also objected to the claim saying that they were current in their payments. The judges in the respective cases ruled that the fees removed from the claims after Countrywide didn't appear at the hearings. Ms. Morgenson discloses that this "no-show" prompted the U.S. Trustee to look closer into the matter. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. CSFB ADJUSTABLE: Moody's Downgrades Ratings on 14 Tranches ---------------------------------------------------------- Moody's Investors Service has downgraded ratings of fourteen tranches and has placed on review for downgrade ratings of seven tranches issued by CSFB Adjustable Rate Mortgage Trust in 2004 and 2005. The underlying collateral of the affected tranches consists of Alt-A, first-lien, fixed and adjustable rate mortgage loans. Moody's has also downgraded ratings of six tranches issued by CSFB Home Equity Pass-Through Certificates, Series 2005-1. The underlying collateral of this deal consists of subprime, first- lien, fixed and adjustable rate mortgage loans. The actions are based on the analysis of the current credit enhancement levels provided by excess spread, overcollateralization, and subordinate classes relative to expected losss. Complete rating actions are: Issuer: CSFB Adjustable Rate Mortgage Trust 2004-1 -- Cl. 9-M-2, downgraded from A2 to Baa2 -- Cl. 9-M-3, downgraded from Baa1 to Baa3 -- Cl. 9-M-4, downgraded from Baa2 to Ba1 Issuer: CSFB Adjustable Rate Mortgage Trust 2004-2 -- Cl. 7-M-3, downgraded from Baa1 to Baa3 -- Cl. 7-M-4, downgraded from Baa2 to B1 Issuer: CSFB Adjustable Rate Mortgage Trust 2004-4 -- Cl. 5-M-2, currently A2; on review for possible downgrade -- Cl. 5-M-3, currently Baa1; on review for possible downgrade -- Cl. 5-M-4, currently Baa3; on review for possible downgrade Issuer: CSFB Adjustable Rate Mortgage Trust 2004-5 -- Cl. 7-M-1, currently Aa2; on review for possible downgrade -- Cl. 7-M-2, currently A2; on review for possible downgrade -- Cl. 7-M-3, currently Baa1; on review for possible downgrade -- Cl. 7-M-4, currently Baa3; on review for possible downgrade Issuer: CSFB Adjustable Rate Mortgage Trust 2005-1 -- Cl. 5-M-2, downgraded from A2 to Baa2 -- Cl. 5-M-3, downgraded from Baa1 to Ba3 -- Cl. 5-M-4, downgraded from Baa3 to B3 Issuer: CSFB Adjustable Rate Mortgage Trust 2005-2 -- Cl. 6-M-3, downgraded from A2 to Baa1 -- Cl. 6-M-4, downgraded from Baa1 to Ba1 -- Cl. 6-M-5, downgraded from Baa2 to B3 Issuer: CSFB Adjustable Rate Mortgage Trust 2005-3 -- Cl. 8-M-2, downgraded from A2 to Baa2 -- Cl. 8-M-3, downgraded from Baa1 to Ba3 -- Cl. 8-M-4, downgraded from Baa2 to B3 Issuer: CSFB Home Equity Pass-Through Certificates, Series 2005-1 -- Cl. M-4, downgraded from A1 to A3 -- Cl. M-5, downgraded from A2 to Baa1 -- Cl. M-6, downgraded from A3 to Baa3 -- Cl. M-7, downgraded from Baa1 to Ba2 -- Cl. B-1, downgraded from Baa2 to B1 -- Cl. B-2, downgraded from Baa3 to B3 CWABS: Moody's Cuts Ratings on Two Cert. Classes to Ba1 from A3 --------------------------------------------------------------- Moody's Investors Service has downgraded 16 certificates from two transactions issued by CWABS Asset-Backed Certificates Trust. Both transactions are backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination, were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipelines will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: CWABS Asset-Backed Certificates Trust 2006-SPS1 -- Cl. A, Downgraded to Baa1 from A2 -- Cl. M-1, Downgraded to Ba1 from A3 -- Cl. M-2, Downgraded to B2 from Baa1 -- Cl. M-3, Downgraded to Ca from Ba1 -- Cl. M-4, Downgraded to C from Ba3 -- Cl. M-5, Downgraded to C from B1 -- Cl. M-6, Downgraded to C from Caa1 -- Cl. M-7, Downgraded to C from Ca Issuer: CWABS Asset-Backed Certificates Trust 2006-SPS2 -- Cl. M-1, Downgraded to Baa2 from A2 -- Cl. M-2, Downgraded to Ba1 from A3 -- Cl. M-3, Downgraded to B1 from Baa1 -- Cl. M-4, Downgraded to B2 from Baa2 -- Cl. M-5, Downgraded to Caa2 from Baa3 -- Cl. M-6, Downgraded to Ca from Ba1 -- Cl. M-7, Downgraded to C from Ba2 -- Cl. M-8, Downgraded to C from Caa1 EXCELLENCY INVESTMENT: Has Equity Deficit of $7.9 Mil. at Sept. 30 ------------------------------------------------------------------ Excellency Investment Realty Trust Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $5.2 million in total assets and $13.1 million in total liabilities, resulting in a $7.9 million total stockholders' deficit. The company reported a net loss of $723,015 for the third quarter ended Sept. 30, 2007, compared with a net loss of $1.0 million for the third quarter of 2006. Rental revenues increased $16,063, or approximately 4.2%, to $397,195 in the three-month period ended Sept. 30, 2007, as compared to rental revenues of $381,132 during the three-month period ended Sept. 30, 2006. The increase was primarily related to higher rents and occupancy rates at the company's properties. The primary reasons for the decrease in net loss from the same period in the prior year were reductions in general and administrative expenses, a gain from the sale of trading securities of $2,962 as compared to a realized loss from sale of trading securities of $305,915 in the same period in the prior year, and the fact that, unlike in the prior year, the company did not incur an unrealized loss on trading securities, partially offset by an $510,000 increase in loss on derivative liability. 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?2606 Going Concern Doubt Weinberg & Company, P.A., in Boca Raton, Fla., expressed substantial doubt about Excellency Investment Realty Trust Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company had a net loss of $2.4 million, used net cash in operations of $608,913 and has a net stockholders' deficit of $5.9 million. About Excellency Investment Headquartered in Hartford, Conn., Excellency Investment Realty Trust, Inc. (OTC BB: EIVR.OB) -- http://excellencyreit.com/-- is a real estate investment firm with offices at 245 Park Avenue, New York. The strategy of the company is to purchase distressed properties that are in good locations but are underperforming due to cosmetic obsolescence, poor management or lack of capital. Excellency will then acquire these properties at a discount, make the necessary changes and transform them into high performing investments. The company currently owns 8 properties in Hartford, Conn. and is seeking to acquire additional properties nationwide. FAIRFAX FINANCIAL: Fitch Lifts Issuer Default Rating to BB+ ----------------------------------------------------------- Fitch Ratings has upgraded the ratings of Fairfax Financial Holdings Limited as: -- Issuer Default Rating to 'BB+' from 'BB-'; -- Senior debt to 'BB' from 'B+'. Fitch has also upgraded the ratings of Fairfax's wholly and partially owned subsidiaries as: Odyssey Re Holdings Corp. -- IDR to 'BBB' from 'BBB-'; -- Senior debt to 'BBB-' from 'BB+'. Odyssey America Reinsurance Corporation -- Insurer financial strength to 'A-' from 'BBB+'. Crum & Forster Holdings Corp. -- IDR to 'BB+' from 'BB-'; -- Senior debt to 'BB' from 'B+'. Crum & Forster Insurance Group -- IFS to 'BBB' from 'BBB-'. Northbridge Financial Insurance Group -- IFS to 'BBB+' from 'BBB'. A full rating list is shown below. The Rating Outlook is Stable. Fitch has also affirmed and simultaneously withdrawn the holding company ratings of TIG Holdings, Inc. and the insurance company ratings of TIG Insurance Group that are in runoff. Fitch's two-notch upgrade of Fairfax's IDR and debt ratings reflect the holding company's considerably improved overall financial profile, with reductions in financial leverage, increased interest coverage, improved operating performance and continued favorable financial flexibility. The upgrade of Fairfax's operating company IDR, debt and IFS ratings reflect more standalone financial profiles, as the ratings were previously held down one full notch due to parent company issues. The two-notch upgrade of Crum & Forster Holdings Corp.'s IDR and senior debt rating also reflects standard notching as upstream dividends from Crum & Forster Insurance Group have been restored. Fairfax's debt-to-total capital ratio is down notably to about 30% at Sept. 30, 2007, compared to 36% at Dec. 31, 2006 and 42% at year-end 2005, due to reductions in holding company debt and strong growth in shareholders' equity. Fitch also looks at the ratio of debt to earnings before interest and taxes (debt/EBIT) as a financial leverage measure for companies with below-investment- grade IDRs where cash flow and earnings are a potential issue. Fairfax has demonstrated significant improvement with debt/EBIT of 2.2 times at year-end 2006 (7.3x excluding realized gains) compared to 5.3x at year-end 2004. Through the first nine months of 2007, annualized debt/EBIT was 1.3x (2.8x excluding realized gains). Fairfax has also significantly improved its operating earnings interest coverage to 3.6x through Sept. 30, 2007 (annualized), from 1.5x in 2006 and negative coverage in 2005. Including realized gains, coverage improved to 7.8x through Sept. 30, 2007 (annualized) from 5.2x in 2006 and negative coverage in 2005. This increase in coverage is due to better earnings that have restored upstream dividend capacity at the insurance subsidiaries. Profitability improved appreciably in 2006 to pre-tax income of $876 million, compared to a loss of $470 million in 2005 as underwriting results improved with a benign catastrophe season. Results continued to improve through the first nine months of 2007 with pre-tax income of $1.1 billion compared to $617 million for the first nine months of 2006 as runoff results improved and ongoing operations continued to produce strong results. Fitch anticipates that profitability will continue to be favorable in the near term, although underwriting results are expected to deteriorate somewhat during the softening market environment and into a potential soft market. Fitch notes that Fairfax has improved its underwriting discipline and expects the company to maintain this focus throughout the underwriting cycle. Nevertheless, there still remains the risk that the company has not fully learned its lesson from the last harsh soft market of the late 1990s that together with ill-fated acquisitions led to a material decline in Fairfax's credit quality, with significant underwriting losses and reserve charges. Although 2006 results were dampened by a $413 million charge for the commutation of the $1 billion Swiss Re corporate cover, Fitch views this and other recent commutations of finite reinsurance contracts favorably, as they free up cash, reduce reinsurance credit risk, lower interest expense on funds withheld, improve liquidity and provide for greater transparency of results. Fitch estimates that Fairfax's remaining finite reinsurance contracts (primarily for C&F and Odyssey Re) have resulted in a cumulative after-tax Canadian GAAP capital/earnings enhancement to Fairfax of approximately $100 million at year-end 2006 (about 3% of equity), much less than Fitch's estimated $750 million benefit at year-end 2004 (about 25% of equity), prior to the commutations in 2005 and 2006. Fairfax continued to demonstrate the company's favorable financial flexibility in generating almost $2 billion of cash in 2006 and 2007 from the partial sale of Odyssey Re, finite reinsurance commutations, and disposition of strategic investments in Zenith National and Hub International. Fairfax also maintains a sizable amount of holding company cash ($837 million at Sept. 30, 2007) that provides a cushion in meeting subsidiary cash flow shortages and liquidity to service its debt. Fitch upgrades these ratings with a Stable Rating Outlook: Fairfax Financial Holdings Limited -- IDR to 'BB+' from 'BB-'; -- $62 million unsecured due April 15, 2008 to 'BB' from 'B+'; -- $182 million unsecured due April 15, 2012 to 'BB' from 'B+'; -- $91 million unsecured due Oct. 1, 2015 to 'BB' from 'B+'; -- $283 million unsecured due June 15, 2017 to 'BB' from 'B+'; -- $144 million unsecured due April 15, 2018 to 'BB' from 'B+'; -- $92 million unsecured due April 15, 2026 to 'BB' from 'B+'; -- $91 million unsecured due July 15, 2037 to 'BB' from 'B+'; -- $135 million convertible due July 15, 2023 to 'BB' from 'B+'. Fairfax, Inc. -- IDR to 'BB+' from 'BB-'. Odyssey Re Holdings Corp. -- IDR to 'BBB' from 'BBB-'; -- $50 million series A unsecured due March 15, 2021 to 'BBB-' from 'BB+'; -- $50 million series B unsecured due March 15, 2016 to 'BBB-' from 'BB+'; -- $40 million series C unsecured due Dec. 15, 2021 to 'BBB-' from 'BB+'; -- $225 million unsecured due Nov. 1, 2013 to 'BBB-' from 'BB+'; -- $125 million unsecured due May 1, 2015 to 'BBB-' from 'BB+'; -- $50 million series A preferred shares to 'BB+' from 'BB'; -- $50 million series B preferred shares to 'BB+' from 'BB'. Odyssey America Reinsurance Corporation -- IFS to 'A-' from 'BBB+'. Crum & Forster Holdings Corp. -- IDR to 'BB+' from 'BB-'; -- $330 million unsecured due May 1, 2017 to 'BB' from 'B+'. Crum & Forster Insurance Group: Crum and Forster Insurance Company Crum & Forster Indemnity Company The North River Insurance Company United States Fire Insurance Company -- IFS to 'BBB' from 'BBB-'. Northbridge Financial Insurance Group: Commonwealth Insurance Company Commonwealth Insurance Company of America Federated Insurance Company of Canada Lombard General Insurance Company of Canada Lombard Insurance Company Markel Insurance Company of Canada Zenith Insurance Company (Canada) -- IFS to 'BBB+' from 'BBB'. These ratings are affirmed and withdrawn by Fitch: TIG Holdings, Inc. -- IDR at 'BB-'. TIG Capital Trust I -- $18 million trust preferred stock due 2027 at 'B'. TIG Insurance Group: TIG Indemnity Company TIG Insurance Company TIG Specialty Insurance Company -- IFS at 'BB+'. This rating is withdrawn by Fitch: Clearwater Insurance Company -- IFS at 'BBB+'. FEDDERS CORPORATION: Wants March 4, 2008 Set as Claims Bar Date --------------------------------------------------------------- Fedders Corp. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to establish March 4, 2008, at 4:00 p.m., as the period in which creditors must file their proofs of claim. The Debtors remind each entity who asserts a claim against the Debtors to file an original, written proof of claim which substantially conforms with the official proof of claim form. Proofs of claim are to be sent to: Fedders North America Inc. c/o Logan & Company Inc. 546 Valley Road Upper Montclair, NJ 07043 Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The U.S. Trustee for region 3 has appointed an Official Committee of Unsecured Creditors on this case. When the Debtors filed for protection from its creditors, it listed total assets of US$186,300,000 and total debts of US$322,000,000. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. FIRST MAGNUS: Wants Court to Vacate Order Rejecting Trinity Deals ----------------------------------------------------------------- First Magnus Financial Corporation asks the U.S. Bankruptcy Court for the District of Arizona to vacate its previous order authorizing the Debtor to reject the Master Services Agreement and related contracts with Trinity Partners Incorporated. The rejection of the agreements was requested by WNS North America Inc., the successor by merger to Trinity, which was formerly a Debtor's subsidiary. Trinity was acquired by WNS' parent company through a stock purchase agreement in 2005. The Debtor meanwhile responded to WNS by requesting the Court's permission to reject the MSA, the amended MSA and two Service Orders. On Nov. 14, 2007, WNS lodged a proposed order with respect to its request for the contracts' rejection. The proposed order, however, drew contention from the Debtor and from the Official Committee of Unsecured Creditors because it mentioned of other Service Orders and agreements, which the Debtor is unaware of. On Nov. 15, the Debtor asked the Court to approve its own proposed order, which provided for the rejection of agreements only known to it. The Debtor contended that it is "not proper to reject any agreements which it did not have opportunity to review and were not the subject of a request for authorization to reject." Within the day the Debtor's objection and proposed order were lodged and scheduled for hearing, the Court, however, also signed WNS' proposed order. Representing the Debtor, James P.S. Leshaw, Esq., at Greenberg Traurig PA, says they ask the Court to vacate the issuance of the WNS's proposed order so that it may consider the merits of the Debtor's arguments. "Given that the WNS' proposed order was signed by the Court on the same day as the filing of the Debtor's objection, and the scheduling of a hearing on the competing orders, we presume that the Court inadvertently entered the order without realizing that the Debtor did not consent with it and had filed an objection to the form of proposed order," Mr. Leshaw says. The Creditors Committee supports the Debtor's arguments and requests the Court to approve the Debtor's proposed order. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expires on Dec. 19, 2007. (First Magnus Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST MAGNUS: Countrywide, et al., Balk at Disclosure Statement --------------------------------------------------------------- Countrywide Warehouse Lending and Countrywide Home Loans Inc., and other creditors, ask the U.S. Bankruptcy Court for the District of Arizona to deny approval of the disclosure statement explaining First Magnus Financial Corporation's Plan of Liquidation, both amended on Oct. 30, 2007. The creditors contend that the disclosure statement does not disclose adequate information regarding the proposed treatment of their claims and the collateral securing those claims. Countrywide's Objections CWL and CHLI hold secured and unsecured claims against the Debtor, and assert interests in certain of the Debtor' assets pursuant to a two agreements. Under a warehouse agreement, the Debtor granted CWL a security interest in mortgage loans, which currently total about $6,009,536, and all products and proceeds of the collateral in exchange for extending a line of credit to the Debtor under a revolving credit and security agreement dated June 8, 2007. CHLI's liens arose from a loan purchase agreement dated Aug. 27, 1996, where CHLI agreed to buy mortgage loans from the Debtor and an early purchase program addendum to the loan purchase agreement dated June 23, 2004. First Magnus acknowledged that it received pre-bankruptcy payments under the purchased loans or EPP loans but has not remitted the payments, which, CHLI believes, aggregate $486,181. Robert J. Miller, Esq., at Bryan Cave LLP, counsel to Countrywide, points out that the disclosure statement fails to disclose adequate information regarding First Magnus' intended disposition of the warehouse collateral. In addition, Mr. Millers says that the disclosure statement does not disclose adequate information regarding the disposition of the purchased loan payments, payoff proceeds and any other cash funds of CHLI held by First Magnus on the bankruptcy filing. The amended disclosure statement fails to disclose any information regarding the approximately $3,800,000 in cash funds held by First Magnus on the bankruptcy filing. Mr. Miller also notes that the disclosure statement fails to disclose whether any unsecured claims of Countrywide arising under pre-bankruptcy agreements with First Magnus would constitute Class 3 Unsecured Claims or Class Unsecured Claims. Moreover, Mr. Miller asserts that the Disclosure Statement cannot be approved because the Plan contains provisions that renders it non-confirmable. Among other things, Mr. Miller points out that the Plan prohibits the payment of post-bankruptcy interest on "oversecured" Allowed Secured Claims, in contravention of Section 506(b) of the Bankruptcy Code. WC Partners' Objections Unsecured creditor WC Partners, by its managing partner, The Colton Company, seeks clarification that no assets will remain with the Debtor until unsecured creditors are paid in full. Steven M. Cox, Esq., at Waterfall, Economidis, Caldwell, Hanshaw & Villamana PC, in Tucson, Arizona, notes that the liquidation analysis attached to the disclosure statement purports to demonstrate that unsecured claims will have a recovery of 26% to 53%. The disclosure statement also provides that rejection damage claims are placed in Class 4, and claims totaling as much as $89,400,000 (Classes 3 and 4) will be paid from the dividend fund of $16,000,000 to $32,000,000, which is the source for any payment, if any, to both Class 3 and Class 4 claims under the Plan. The provisions in the disclosure statement, Mr. Cox, asserts that the Debtor has a negative tangible net worth, and unsecured creditors will not be paid in full. However, Mr. Cox points out, quite inconsistent with these disclosures, the attorney for Mr. Thomas Sullivan, Jr., a principal and part owner of the Debtor, in a letter to WNS' counsel stated: "First Magnus' tangible net worth is substantially more than $2,500,000." "The obvious question is, where is this "tangible net worth" of much more than $2,500,000, who is getting it, and why aren't the unsecured creditors of Classes 3 and 4 of the Plan being paid this as part of the Dividend Fund?" Mr. Cox asks. WNS North America's Objection WNS North America Inc., asks the Court to direct the Debtor to revise the disclosure statement and plan to correct certain errors and admissions. Nancy J. March, Esq., at DeConcini McDonald Yetwin & Lacy PC, says in the disclosure statement, the Debtor asserted that shareholders of its parent company made about $13,000,000 in cash available to the Debtor. According to Ms. March, WNS does not have sufficient knowledge to verify the accuracy of the Debtor's assertion. "WNS would very much like to believe that a substantial recovery for general unsecured creditors has been ensured," Ms. March states. She adds that neither the disclosure is accurate nor justified until there is a full resolution of the litigation with the warehouse lenders. Ms. March argues that the disclosures can only be considered adequate and not misleading if put in their proper context. "The proper context is the $11,000,000 that they had just received, and the enormous bonuses some of those same managers had been paid in just the most recent 12-month period," Ms. March points out. WNS also disagrees with the Debtor's characterization of its claim based on damages from rejection of its unquestionably valid prepetition services contracts with the Debtor but recognizes that it is up to the plan proponent to make the initial determination as to materiality of matters to be disclosed. Ms. March meanwhile points out that the plan contains material legal errors and omissions that will prevent its confirmation unless no party objects. "There is no valid legal basis for separating the general unsecured claims into Classes 3 and 4," Ms. March states. UBS Real Estate's Objection UBS Real Estate Securities Inc. asks the Court to reject the disclosure statement unless the Debtors revise them to supplement and correct certain misstatements or omissions. Kasey C. Nye, Esq., at Quarles & Brady LLP, says the Debtor failed to disclose that UBS Real owns mortgage loans it purchased from the Debtor. In the Disclosure Statement, the Repurchase Agreement was referred as part of a Warehouse Lending Arrangement between the Debtor and UBS Real, with UBS Real described as Warehouse Lender. "The disclosure statement's failure to state correctly the legal relationships between UBS Real and the Debtor is misleading, and foreshadows the improper treatment of UBS Real's claims under the proposed Plan," Mr. Nye states. Meanwhile, Mr. Nye points out that the Debtor's plan cannot be confirmed as a matter of law because it contains several flaws. "The Plan places UBS Real in Class 6 with other entities labeled as warehouse lenders and repo participants, yet, the Debtor has not made disclosures sufficient to show that all of these entities hold substantially similar claims," Ms. Nye notes. Other flaws of the Plan likewise stem from the Debtor's failure to recognize UBS Real's status as owner of the mortgage loans and to take account of UBS Real's rights under the agreements and applicable law. Pima County's Objections Pima County asks the Court to disapprove the disclosure statement and confirmation of the plan until they are amended to remedy certain deficiencies and provide for the payment of the County's claims in full. German Yusufov, Deputy County Attorney for Pima County, says that neither the plan nor the disclosure statement specifies the treatment of Pima County's claims. "The Plan contains Class 2 for allowed secured claims, however to the extent Pima County's secured claims are intended to be classified as Class 2, the treatment violates both bankruptcy and applicable state law," Mr. Yusufov points out. Mr. Yusufov says that the Debtor is attempting to strip Pima County's postpetition interest, with its definition of the "allowed claim" in the plan. DocuSafe's Objections DocuSafe of Phoenix Inc asks the Court to deny the Debtor's request to approve the disclosure statement unless it provides adequate information as to how DocuSafe's claims are to be treated under the plan and how the Debtor would retain and dispose its financial records, especially those currently held by DocuSafe and other third parties. "DocuSafe cannot determine from the disclosure statement if its prepetition secured claims for retention or storage services of the documents, or its post-petition administrative claims for the services are provided for under the plan, including the treatment of other similarly situated creditors of its class," states Franklin D. Dodge, Esq., at Ryan Rapp & Underwood PLC. Maricopa County's Objections Maricopa County Treasurer asks the Court to deny the Disclosure Statement unless the Debtor further amends the document to specifically provide that its claims along with the interest rate will be paid. The Debtor owes $12,962 in prepetition real property taxes, and $6,201 in personal property taxes for 2006 and 2007, plus the accrual of interest thereon at a statutory rate of 16% per annum. The taxes are secured liens that are "prior and superior to all other liens and encumbrances on the property," according to Madeleine C. Wanslee, Esq., at Gust Rosenfeld P.L.C., in Tucson, Arizona. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expires on Dec. 19, 2007. (First Magnus Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FREEDOM COMMS: Weak Performance Cues Moody's to Cut Rating to Ba3 ----------------------------------------------------------------- Moody's Investors Service has downgraded Freedom Communications, Inc.'s Corporate Family rating to Ba3 from Ba2 as a result of weakened operating performance. Details of the rating action are: Ratings lowered: -- $300 million senior secured revolving credit facility due 2011 -- to Ba3, LGD3, 31% from Ba2, LGD2, 29% -- $350 million senior secured term loan A due 2011 -- to Ba3, LGD3, 31% from Ba2, LGD2, 29% -- $300 million senior secured term loan A-1 due 2012 -- to Ba3, LGD3, 31% from Ba2, LGD2, 29% -- Corporate Family rating -- to Ba3 from Ba2 -- Probability of Default rating -- to B1 from Ba3 The rating outlook is stable. Moody's subscribers can find further details in the Freedom Communications, Inc. Credit Opinion published on Moodys.com. The downgrade of the CFR to Ba3 results from a weakening of Freedom's top line and EBITDA , which has led to a deterioration of the company's leverage and coverage metrics beyond levels previously expected by Moody's. The Ba3 CFR reflects Freedom's high financial leverage, the vulnerability of its business to print advertising spending, the competition which it faces in a number of markets, and the secular pressure faced by the newspaper publishing sector as a whole. The rating is supported by the reputation of Freedom's leading newspapers (including The Orange County Register), the geographic diversification of its operations, the company's attractive free cash flow generation and its good liquidity profile. The stable ratings outlook incorporates Moody's view that, notwithstanding a likely continuation of soft market conditions for the newspaper publishing sector, Freedom's free cash flow will improve over the intermediate term (partly as a result of decreased capital spending) enabling a further reduction in debt and leverage. Moody's notes that, according to the terms of a capital contribution agreement, Freedom's financial sponsors may exercise a common stock put right (with an estimated value of approximately $740 million as of December 31, 2006) as early as mid-2009, with a two year settlement window. Freedom Communications is a newspaper and television broadcasting operator based in Irvine, California. For the LTM period ended Sept. 30, 2007, the company recorded total revenues of $864 million. FREMONT HOME: Moody's Cuts Rating on Class SL-A Certs. to B3 ------------------------------------------------------------ Moody's Investors Service has downgraded four certificates from a transaction issued by Fremont Home Loan Trust. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, the delinquency pipeline has remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipeline will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: Fremont Home Loan Trust 2006-B -- Cl. SL-A, Downgraded to B3 from Baa2 -- Cl. SL-M1, Downgraded to Ca from Ba1 -- Cl. SL-M2, Downgraded to C from B1 -- Cl. SL-M3, Downgraded to C from Ca GDSP SHIVA: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: G.D.S.P. Shiva, Inc. 6550 Boca Raton Boulevard Fort Worth, TX 76112 Bankruptcy Case No.: 07-45389 Chapter 11 Petition Date: December 3, 2007 Court: Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: R. Lee Barrett, Esq. Forshey & Prostok, L.L.P. 777 Main Street, Suite 1290 Fort Worth, TX 76102 Tel: (817) 877-8855 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million The Debtor did not file a list of its largest unsecured creditors. GIGABEAM CORP: Posts $4,120,967 Net Loss in Third Quarter --------------------------------------------------------- Gigabeam Corp. reported a net loss of $4,120,967 for the third quarter ended Sept. 30, 2007, compared with a net loss of $4,118,489 in the corresponding period a year ago. Net sales were $445,863 for the three months ended Sept. 30, 2007, compared to $2,045,941 for the three months ended Sept. 30, 2006, a decrease of $1.6 million or 78%. Unit sales of WiFiber G links were 84% lower while average selling prices decreased 20%. Also, the company sold $178,000 of installation and training to certain customers. Total operating expenses were $4,037,354, a decrease from the $4,555,979 incurred during the three months ended Sept. 30, 2006, primarily due to decreases in research and development, general and administrative, and service, install and link operations expenses, partly offset by an increase in general and administrative expenses. Selling and marketing expenses were $663,227 for the three months ended Sept. 30, 2007, compared to $1,289,368 for the three months ended Sept. 30, 2006, a decrease of $626,141 or 49%. The decrease is primarily related to a significant reduction in staff levels and outbound marketing activities. General and administrative expenses were $2,100,386 for the three months ended Sept. 30, 2007, compared to $1,209,308 for the three months ended Sept. 30, 2006, an increase of $891,078, or 74%. The increase was due to an increase in stock-based compensation expense as required by SFAS 123R of $606,901 and an increase in non-cash expenses of $482,819 for consultant and professional fees in 2007 compared to 2006. At Sept. 30, 2007, the company's consolidated balance sheet showed $9,412,212 in total assets, $7,021,849 in total liabilities, and $2,390,363 in total stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $5,585,195 in total current assets available to pay $6,997,102 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?2603 Going Concern Doubt BDO Seidman LLP, in Bethesda, Md., expressed substantial doubt about GigaBeam Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company has suffered losses from operations and remains dependent on outside sources of capital for continuance of their operations. About GigaBeam Corp. Headquartered in Durham, N.C., GigaBeam Corp. (Nasdaq: GGBM) -- http://www.gigabeam.com/-- designs, develops, manufactures and sells advanced point-to-point wireless communications links capable of transmission speeds at or in excess of one gigabit-per- second. Target customers are telecom operators, carriers and network operators, communications and IT service providers, including WiLECs, system integrators and value added resellers, government agencies and other enterprises including financial services organizations seeking cost-effective millimeter wave wireless solutions. GOODYEAR TIRE: James A. Firestone Elected to Goodyear Board ----------------------------------------------------------- James A. Firestone, president, Xerox North America, has been elected to the Board of Directors of The Goodyear Tire & Rubber Company. "Jim has a wealth of managerial experience with a diverse group of respected companies, including Xerox, IBM and American Express," said Goodyear Chairman and Chief Executive Officer Robert J. Keegan. "We are confident that he will contribute significantly to Goodyear's continued growth." Mr. Firestone, 53, is an executive vice president of Xerox Corporation and has led the company's North American operations since 2004. He has also served as head of Xerox's channels group and was the company's chief strategy officer. Before joining Xerox in 1998, Mr. Firestone worked for the IBM Corporation as general manager of the Consumer Division and for the Ameritech Corporation as president of Consumer Services. He began his business career in 1978 with American Express, where during his 15-year tenure he ultimately rose to President, Travelers Cheques. Mr. Firestone holds a Bachelor of Science Degree in international economics from Georgetown University School of Foreign Service and a Master of public and private management from the Yale University School of Management. The election of Mr. Firestone brings the size of Goodyear's board to 13 members. About Goodyear Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear's operations are located in Argentina, Austria, Chile, Colombia, France, Italy, Guatemala, Jamaica, Peru, Russia, among others. Goodyear employs more than 80,000 people worldwide. * * * In June 2007, Standard & Poor's Ratings Services raised its ratings on Goodyear Tire & Rubber Co., including its corporate credit rating to 'BB-' from 'B+'. These ratings still apply as of Dec. 4, 2007. GREEN TREE: Fitch Holds Junk Ratings as Part of Surveillance ------------------------------------------------------------ Fitch has affirmed four Green Tree Recreational, Equipment & Consumer Trusts as part of its on going surveillance process, as: Series 1996-B -- Certificates affirmed at 'CCC/DR2'. Series 1996-C -- Certificates affirmed at 'CCC/DR2'. Series 1996-D -- Certificates affirmed at 'CCC/DR2'. Series 1997-A -- Certificates remains at 'CC/DR3'. Series 1997-D -- Certificates affirmed at 'CCC/DR2'. Series 1998-B -- B-2 Certificates remains at 'C/DR5'. Series 1998-C -- B-2 Certificates remains at 'C/DR6'. The securities are backed by a pool of secured loans consisting primarily of marine and recreational vehicles made by Conseco Finance Corp. (originally Green Tree Financial Corporation). The loans are now serviced by Green Tree Servicing (GTS) LLC, a byproduct of Conseco Inc.'s 2003 restructuring. GTS is currently rated 'RPS3' as a residential mortgage servicer by Fitch. GROWERS DIRECT: Posts $2,464,180 Net Loss in Third Quarter ---------------------------------------------------------- Growers Direct Coffee Company Inc. reported a net loss of $2,464,180 on revenue of $754,568 for the third quarter ended Sept. 30, 2007, compared with a net loss of $3,140,049 on revenue of $349,901 in the same period last year. Loss from operations was $2,260,651 during the third quarter ended Sept. 30, 2007, compared to loss from operations of $3,140,049 during the third quarter of last year. The decrease in operating loss was mainly attributable to the increase in revenue and lower general and administrative expenses. At Sept. 30, 2007, the company's consolidated financial statements showed $2,277,961 in total assets, $1,688,113 in total liabilities, and $589,848 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2602 Going Concern Doubt Williams & Webster, P.S., in Spokane, Wash., expressed substantial doubt about Coffee Pacific Inc. nka. Growers Direct Coffee Company 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 siginificant operating losses. About Growers Direct Coffee Headquartered in Berkeley, Calif., Growers Direct Coffee Company Inc. (OTC BB: GWDC) -- http://www.growersdirectcoffee.com/-- is a world-wide distributor and a marketer of the green bean coffee grown in Papua New Guinea, "Penlyne Castle" brand "Jamaican Blue Mountain" coffee grown by Blue Mountain Coffee Co-Operative Society Ltd of Jamaica. Coffee in Papua New Guinea are grown by the company's shareholder-farmers in the Highland region's rich volcanic soils between the altitudes of 4,000 and 6,000 feet above sea level. GUAM ECONOMIC: Fitch Will Rate $439,680 Series 2007C Bonds at BB ---------------------------------------------------------------- Fitch expects to rate Guam Economic Development and Commerce Authority, Tobacco Settlement Asset-Backed Bonds, Series 2007 bonds as: -- $17,075,000 series 2007A current interest turbo term bonds 'BBB+'; -- $15,875,000 series 2007A current interest turbo term bonds 'BBB+'; -- $3,149,020 series 2007B capital appreciation turbo term bonds 'BBB-'; -- $439,680 series 2007C capital appreciation turbo term bonds 'BB'. HANCOCK FABRICS: Wants Until May 30 to File Chapter 11 Plan ----------------------------------------------------------- Hancock Fabrics Inc. and debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive periods to propose and file a plan through and including May 30, 2008, and solicit acceptances of that plan through and including July 30. The Court held that the Debtors' current Exclusive Filing Period with respect to all parties and individuals except the Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders is through Feb. 28, 2007. In addition, the Debtors' current Exclusive Solicitation Period with respect to all parties and individuals except the Committees is through April 30, 2008. Judge Brendan Linehan Shannon said that if the Debtors receive written consent from the Creditors Committee on or by Nov. 15, 2007, to extend the Exclusive Filing Period beyond Nov. 30, 2007, to a date up through and including Feb. 28, 2008, and the Exclusive Filing Period beyond Jan. 31, 2008, up through and including April 30, 2008, then solely with respect to the Creditors Committee, the Exclusive Periods will be extended through the dates agreed upon by the Debtors and the Creditors Committee without further Court order. If, on the other hand, the Debtors do not receive written consent from the Creditors Committee by the November 15 Deadline, then the Exclusive Filing Period will expire on November 30, 2007, and the Exclusive Solicitation Period on January 31, 2008, solely with respect to the Creditors Committee. Judge Shannon noted that termination of the Exclusive Periods with respect to the Creditors Committee will also be applicable to the Equity Committee. According to Robert Dehney, Esq., at Morris, Nichols, Arsht & Tunnel, LLP, in Wilmington, Delaware, as of November 15, 2007, the Debtors have not received written consent from the Creditors Committee to extend the Exclusive Filing Period and Exclusive Solicitation Period. Absent a motion by the Debtors and ultimate relief from the Court and solely with respect to the Committees, the Exclusive Filing Period will terminate after November 30, 2007, and the Exclusive Solicitation Period will terminate after January 31, 2008. Mr. Dehney points out that the Debtors' business operations and cases are large and complex, involving hundreds of retail locations and leases and thousands of employees. He relates that the Debtors have spent the initial exclusive periods managing the transition of their enterprise "into these proceedings"; implementing several key initiatives intended to bring their retail operations in line with current best practices in modern retailing; and preparing a long range business plan intended to bring maximum value to their constituents, among others. With their historic peak sales season upon them and continuing through December, the Debtors' continued efforts are even more critical and will consume the bulk of their time in the near term, Mr. Dehney points out. He says that extending the Exclusive Periods will minimize distractions for the Debtors' management and allow them to focus properly on maximizing value from their retail operations for the benefit of creditors and other stakeholders. Furthermore, Mr. Dehney says that the Debtors still have a number of critical tasks to complete before they will be in a position to propose a plan of reorganization. These tasks include resolving state tax claims, continuing the ongoing effort to attract and obtain appropriate exit financing, continuing the claims resolution process, and completing the necessary audit support to allow the filing of certain SEC financial reports. The Debtors also need additional time to formulate, with consideration of input from the Committees, a plan of reorganization that maximizes returns to all constituents. "The Committees and other parties-in-interest will not be prejudiced by an extension of the Exclusive Periods," Mr. Dehney says. "The requested extension will not preclude these constituents from seeking a reduction or termination of the Exclusive Periods for cause." The Equity Committee also supports the extension, Mr. Dehney tells Judge Shannon. About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and six of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. As of Sept. 1, 2007, Hancock Fabrics disclosed total assets of $159,673,000 and total liabilities of 122,316,000. The Court extended the Debtors' exclusive period to file a Chapter 11 Plan to Feb. 28, 2008. (Hancock Fabric Bankruptcy News, Issue No. 21, Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Court Okays Claims Resolution Procedures --------------------------------------------------------- The Hon. Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware approved the alternative dispute resolution procedures proposed by Hancock Fabrics Inc. and debtor- affiliates to assist in the expeditious and cost-effective resolution of certain claims filed against the estate, based on prepetition occurrence. According to Judge Shannon, all pending or future requests to lift the automatic stay under Section 362 of the Bankruptcy Code for liquidating purposes or otherwise litigating an ADR Claim prior to the expiration of the ADR Injunction will be deemed denied without further action by the parties or the Court. Judge Shannon extended the deadline for the Debtors to file notices of removal of civil actions and proceedings under Rule 9027 of the Federal Rules of Bankruptcy Procedure with respect to the ADR Claims to 90 days from the expiration of the ADR Injunction. Debtors' Request Owing to the nature and extent of certain claims asserted against them -- principally, those asserting claims for personal injury -- the Debtors believe that an ADR process will greatly expedite the resolution of claims and facilitate their successful reorganization, Robert Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, LLP, in Wilmington, Delaware, related. The ADR Claims are comprised of all claims that the Debtors, in their sole discretion, believe should be liquidated pursuant to the ADR Procedures. A claim would be classified as an ADR claim, and therefore, subject to the ADR Procedures, upon the service of an ADR Notice on a claimant by the Debtors. A claim for which the automatic stay was modified by prior Court order to allow the litigation underlying the claim to proceed could not become an ADR claim unless the holder of a Non-Stayed Claim returns an "Opt-In Notice." Currently, the automatic stay has shielded the Debtors from the expense of litigating claims that are based on underlying state and federal court lawsuits. The Debtors realize, however, that a process for liquidating the claims is a necessary component of their reorganization. The Debtors believe that the resolution of these claims through litigation would be a time consuming and inefficient process and would represent a substantial drain on the Debtors' resources. Therefore, the Debtors propose to submit the ADR claims to the ADR Procedures. The salient terms of the proposed ADR Procedures are: (a) Offer Exchange Procedures The first stage of the procedures is the offer exchange procedures, providing the parties with an opportunity to exchange settlement offers and, if possible, resolve an ADR Claim on a consensual basis without any further actions by the parties. The Offer Exchange Procedures include: (i) the designation of claims as ADR Claims where the Debtors will designate certain claims for resolution; (ii) objection to inclusion in the ADR Procedures where a holder of an ADR Claim will have 20 days to object to the ADR Procedures; (iii) a settlement offer, the proposed amount of which is presumed to be a general, unsecured, nonpriority, prepetition claim; and (iv) the Debtors' written response to the settlement offer which must be filed within 30 days from the date of the Debtors' receipt of the offer. (b) Arbitration After the completion of the Offer Exchange Procedures, any ADR Claims that remain unresolved will be submitted to arbitration on these terms: (i) The ADR Claims will be divided into two classes: claims less than $75,000 and claims greater than $75,000. (ii) The arbitration of all ADR Claims will be governed by the Commercial Arbitration Rules of the AAA. (iii) For Class A Claims, if a claimant has consented to binding arbitration, the Debtors will shoulder the fees and administrative costs. For Class B Claims, if a claimant has consented to binding arbitration, the fees and administrative costs will be split evenly between the Debtors and the claimant. (iv) Absent further order of the Bankruptcy Court or the written agreement of the Debtors, an arbitration award for any ADR Claim will constitute a general, nonpriority, unsecured prepetition claim and the classification or priority of any ADR Claim is expressly reserved for determination by the Bankruptcy Court. (c) Injunction The ADR Claimants will be enjoined from, among other things, commencing any action or proceeding in any manner to collect or otherwise enforce a claim against the Debtors or their property other than through the ADR Procedures. The ADR Injunction will expire when the ADR Procedures have been completed. Removal Period for ADR Claims Should be Extended The Debtors ask the Court to extend the deadline to file notices of removal of civil actions and proceedings under Rule 9027 of the Federal Rules of Bankruptcy Procedure with respect to the ADR claims. The Debtors ask that the deadline be extended 90 days from the expiration of the ADR Injunction to facilitate the implementation of the procedures. Pending the expiration of the ADR Injunction and the exhaustion of the ADR procedures with respect to the ADR claims, the Debtors submit that it would be premature, and actually counter productive, to remove any ADR Claims pursuant to Section 1452 of the Judiciary Procedures Code. According to Ms. Bifferato, the implementation of the ADR Procedures will not otherwise modify the obligations of the Debtors or their insurance companies or the Debtors' general liability insurance policies and related agreements. About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and six of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. As of Sept. 1, 2007, Hancock Fabrics disclosed total assets of $159,673,000 and total liabilities of 122,316,000. The Court extended the Debtors' exclusive period to file a Chapter 11 Plan to Feb. 28, 2008. (Hancock Fabric Bankruptcy News, Issue No. 21, Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). HOVNANIAN ENT: Ends $20 Million Redevelopment Project at Wildwood ----------------------------------------------------------------- Hovnanian Enterprises Inc. had notified Wildwood City in New Jersey of its intention to end a partnership with the City as redeveloper, Lauren Suit of Cape May County Herald reports. Hovnanian also ended plans of redeveloping a former landfill spanning at the avenues of Susquehanna, Baker and Lincoln into a residential village with about 300 homes, the report relates. The company, which had shelled out more than $20 million for the redevelopment project, was forced to withdraw from the investment due to "significant environmental and engineering issues" that made the project impossible to finish, the report says, citing Lewis Kurland, Esq., company counsel. According to Mr. Kurland, the slump in the housing industry throughout the country hindered the company from moving forward with the project, the report adds. About Hovnanian Enterprises Headquartered in Red Bank, New Jersey, Hovnanian Enterprises Inc. (NYSE: HOV) -- http://www.khov.com/-- is a homebuilder with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Windward Homes, Cambridge Homes, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. Hovnanian is a member of the Public Home Builders Council of America, --- http://www.phbca.org/-- a nonprofit group devoted to improving understanding of the business practices of America's largest publicly-traded home building companies, the competitive advantages they bring to the home building market, and their commitment to creating value for their home buyers and stockholders. The PHBCA's 14 member companies build one out of every five homes in the United States. The City of Wildwood, New Jersey had named the company as a redevelopment partner in 2003. * * * As reported in the Troubled Company Reporter on Aug. 30, 2007, Fitch Ratings downgraded Hovnanian Enterprises Inc.'s ratings including the company's Issuer Default Rating to BB- from BB+. The Rating Outlook remains Negative. INTERACTIVE TV: Sept. 30 Balance Sheet Upside-Down by $14 Million ----------------------------------------------------------------- Interactive Television Networks Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $1.3 million in total assets and $15.3 million in total liabilities, resulting in a $14.0 million total shareholders' deficit. At Sept. 30, 2007, the company's consolidated balance sheet showed strained liquidity with $693,474 in total current assets available to pay $15.3 million in total current liabilities. The company reported a net loss of $1.7 million on total revenues of $321,565 for the third quarter ended Sept. 30, 2007, compared with net income of $7.6 million on total revenues of $217,312 in the same period of 2006. Loss from operations decreased to $1.2 million during the third quarter of 2007, from $2.1 million during the third quarter of 2006. Results for the third quarter ended Sept. 30, 2007, included a non-cash gain of $11.8 million as a result of change in fair value of derivative instruments, versus a $295,112 gain from the change in fair value of derivative instruments in the third quarter ended Sept. 30, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?25fc Going Concern Doubt LBB & Associates Ltd. LLP, in Houston, expressed substantial doubt about Interactive Television Networks 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 the need to raise additional financing in order to satisfy its vendors and other creditors and execute its business plan. About Interactive Television Networks Headquartered in Woodland Hills, Calif., Interactive Television Networks Inc. (OTC BB: ITTV.OB) -- http://www.itvt.com/-- is a provider of services and hardware for Internet Protocol Television. The company's subscription-based ITVN service supplements the television and movie industries by providing consumers with an easy and less expensive way to watch and control television and movies. INTERNATIONAL NORCENT: Wants February 19 Set as Claims Bar Date --------------------------------------------------------------- International Norcent Technology and its debtor-affiliate, Norcent Holdings Inc., ask the United States Bankruptcy Court for the Central District of California to set Feb. 19, 2008, as deadline for all persons and entities to file their proofs of claims. According to the Debtors, the request proposes to allow the Debtors to move towards forming a Chapter 11 plan, at the same time, permits creditors ample time to asserts their claims. All proofs of claims must be filed with the Clerk of Bankruptcy Court at this address: Edward R. Roybal Building and Courthouse 255 East Temple Street Los Angeles, California 90012 A hearing has been set on Dec. 12, 2007, at 10:30 a.m., to consider the Debtors' request. Based in San Dimas, California, International Norcent Technology -- http://www.norcent.net/-- sell electronic parts, appliances & equipment and computers & computer peripherals in wholesale. is a distributor of consumer electronics that includes LCD and plasma television, digital cameras, and other consumer electronic products that are manufactured under the Norcent brand by manufacturers principally located in China. The company's customers include Wal-Mart, Target, Best buy, Circuit City and Office Depot. The company and its affiliate, Norcent Holdings Inc., filed for Chapter 11 protection on Oct. 11, 2007 (Bankr. C.D. Calif. Case Nos. 07-19169 and 07-19171). David B. Shemano, Esq., and Mette H. Kurth, Esq., Sheppard Mullin Richter & Hampton, represent the Debtors. No Official Committee of Unsecured Creditors has been appointed in this case to date. The Debtors' schedules showed total assets of $13,227,619 and total debts of $65,058,663. INTERNATIONAL NORCENT: Taps Connoly as Special Litigation Counsel ----------------------------------------------------------------- International Norcent Technology and its debtor-affiliate, Norcent Holdings Inc., ask the United States Bankruptcy Court for the Central District of California for authority to employ Connolly Bove Lodge & Hutz LLP, as their special litigation counsel. Connolly Bove will represent the Debtors with respect to: a) Philips patent litigation, including any possible appeals of the judgement entered in that litigation; b) antitrust litigation as necessary, including a possible appeal should the District Court enter an order dismissing the antitrust litigation; and c) intellectual property counseling, including prosecution and portfolio maintenance. The Debtors tell the Court that they paid the firm $439,480 for its legal services since their bankruptcy filing The firm's attorneys charge between $310 and $475 per hour for this engagement, while its nonattorney staff bills at $160 per hour. To the best of the Debtors' knowledge, the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Based in San Dimas, California, International Norcent Technology -- http://www.norcent.net/-- sell electronic parts, appliances & equipment and computers & computer peripherals in wholesale. is a distributor of consumer electronics that includes LCD and plasma television, digital cameras, and other consumer electronic products that are manufactured under the Norcent brand by manufacturers principally located in China. The company's customers include Wal-Mart, Target, Best buy, Circuit City and Office Depot. The company and its affiliate, Norcent Holdings, Inc., filed for Chapter 11 protection on Oct. 11, 2007 (Bankr. C.D. Calif. Case Nos. 07-19169 and 07-19171). David B. Shemano, Esq., and Mette H. Kurth, Esq., Sheppard Mullin Richter & Hampton, represent the Debtors. As reported in the Troubled Company Reporter on Nov. 21, 2007, the Debtors submitted to the Court their schedules of assets at $13,227,619 and debts at $65,058,663. INTERSTATE BAKERIES: Plea for Details of Teamster Pact Denied ------------------------------------------------------------- Interstate Bakeries Corporation and eight of its subsidiaries and affiliates filed their Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court for the Western District of Missouri on Nov. 5, 2007. The U.S. Bankruptcy Court for the Western District of Missouri - Kansas City Division denied the requests of Interstate Bakeries Corporation and the Official Committee of Unsecured Creditors for entry of an order, pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, directing the production of documents by Yucaipa Companies, LLC; BBU, Inc.; New Bakery, Inc.; and Bimbo Bakeries USA Inc. The Order is without prejudice for the reasons stated on the Nov. 29, 2007 hearing record. Judge Jerry Venters issued the Order following Court arguments from IBC and the Creditors Committee that they needed to know the terms of an exclusive agreement among the International Brotherhood of Teamsters, which represents 9,500 of the 25,000 IBC workers, and Grupo Bimbo and Yucaipa, which are jointly considering a bid for the wholesale baker. In its November 2, 2007 objection to the Debtors' plan funding request, Yucaipa stated that "the Teamsters have determined to partner exclusively with Yucaipa with respect to a plan of reorganization," adding that "[t]he Teamsters have agreed to work exclusively with Yucaipa and provide meaningful concessions to a Reorganized IBC as part of a plan sponsored by Yucaipa and Bimbo." Bimbo appeared at the November 7 hearing on the Plan Funding Motion and has confirmed its partnership with Yucaipa in the acquisition of the Debtors. At the November 7 hearing, the Debtors asked that Yucaipa and Bimbo voluntarily share the terms of their so-called "exclusive dealing arrangement" with the Teamsters. Yucaipa and Bimbo refused. Similarly, in response to inquiries from the Committee prior to the hearing, Yucaipa and Bimbo refused to disclose the terms of any arrangement. On November 14, the Debtors and the Committee served joint Rule 2004 subpoenas on Yucaipa and Bimbo, directing that they produce, through documentation and deposition testimony, the terms of their so-called exclusive dealing arrangement with the Teamsters. Yucaipa and Bimbo once again refused. On November 20, in an effort to avoid Court intervention on the subject, which was then scheduled for a conference call on November 21, the Debtors and the Committee asked yet again that Yucaipa and Bimbo disclose the terms of their so-called exclusive dealing arrangement with the Teamsters. Yucaipa and Bimbo again refused. To date, the Teamsters has not disclosed the terms of any agreement it has with Yucaipa and Bimbo. To ensure that the competitive bidding process is free from collusion and otherwise fair, the Debtors and the Court are entitled to understand the nature and terms of exclusive arrangement among Yucaipa, Bimbo and the Teamsters, Paul Hoffman, Esq., at Stinson Morrison Hecker, in Kansas City, Missouri, said in a Court filing, on the Debtors' behalf. Mr. Hoffman argued that the Debtors are concerned that potential competing investors and bidders may be dissuaded from participating in the ongoing auction process as a result of Yucaipa's exclusive agreement with the Teamsters. Thus, he said, the Debtors determined to seek further information whether there really is an agreement, and decide what should be done about it. Without knowledge about the facts of the arrangement, the Debtors are impeded in exercising their business judgment and fulfilling their fiduciary duties to maximize the estate value in the auction process, Mr. Hoffman justified. The Committee agreed with Yucaipa's counsel that the scope of discovery concerning Yucaipa's and Bimbo's attempt to acquire IBC will, in all likelihood, expand greatly after December 13, if a firm bid is made. "The open auction process approved through the Plan Funding Motion may be severely prejudiced by the secretive arrangement Yucaipa and Bimbo have touted," yet, "neither Yucaipa nor Bimbo can point to any prejudice they would suffer by having to disclose the terms of their deal with the Teamsters," Paul D. Sinclair, Esq., at Shughart Thomson & Kilroy, P.C., in Kansas City, Missouri, told the Court, on the Committee's behalf. "In fact," he added, "the only imaginable prejudice to Yucaipa and Bimbo is that open disclosure of their Teamsters' deal will increase competitive bidding for IBC, the precise goal of the process." Based on statements made during the November 21st conference with the Court, it appears that Yucaipa's and Bimbo's arrangement with the Teamsters may be memorialized in a term sheet, Mr. Sinclair noted. If that is the case, Mr. Sinclair said, the Committee's present discovery request amounts to the production of a few pieces of paper. In the alternative, the Committee's request can be satisfied through a brief written statement by Yucaipa and Bimbo identifying the deal terms and a very short deposition. "The potential prejudice to the auction process as a result of Yucaipa's and Bimbo's selective disclosure, announcing that a Teamsters deal exists but refusing to identify its terms, far outweighs any infinitesimal burden to Yucaipa and Bimbo associated with disclosure," Mr. Sinclair further stated in a Court filing. "The fact is, no one can even attempt to match or beat the terms of a union deal they do not know," Mr. Sinclair told Judge Venters. "Not only are the Debtors, the Committee, and putative bidders, left in the dark during this crucial period, no one other than Yucaipa, Bimbo and the Teamsters know just how 'exclusive' the arrangement really is -- or if it is truly exclusive." The Committee insisted that it is, under Rule 2004, entitled to investigate the terms of that arrangement, which will result in a minimal intrusion upon the affairs of Yucaipa and Bimbo. However, in a separate Court filing, Yucaipa and the Bimbo Entities asked Judge Venters to deny the requests of the Debtors and the Committee as they are (i) significantly beyond the intended scope of Rule 2004, (ii) are unduly burdensome, and (iii) seek confidential commercial information protected under Rule 45 of the Federal Rules of Civil Procedure. On Yucaipa's behalf, Steven N. Cousins, Esq., at Armstrong Teasdale, LLP, in St. Louis, Missouri, argued that the discovery requests are "a last-ditch effort to ward off parties that may be better situated than the Debtors to maximize the estates' value and provide meaningful recovery for their creditors." Mr. Cousins further asserted that what brings the bidding process to futility is the Debtors' fundamental inability over the years to come to terms with the Teamsters, as well as their financial losses, cost structure and pension liability. Moreover, Mr. Cousins pointed out that the Debtors and other potential bidders would have the advantage of considering the confidential commercial information as they structure their own bids, which are currently due in mid January, while Yucaipa and the Bimbo Entities will have not the same benefit. Pursuant to the Order, Judge Venters found that there was no basis to force the disclosure now. He also noted that if Yucaipa and the Bimbo Entities make an offer by a December 13 deadline, many of the details IBC seeks will be disclosed at that time, the Kansas City Star reported. IBC has filed its own plan of Reorganization and has been promised $400,000,000 in financing if it can get additional concessions from the Teamsters. IBC has already gained concessions from the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents about 10,000 IBC employees. Other parties who wanted to make an offer for IBC were given until November 28 to make their intent known to the company. All other bidders besides Yucaipa and the Bimbo Entities have until January 15 to submit proposals. If there are multiple bids, an auction will take place on January 22. Judge Venters will give its blessing to the prevailing bid on January 29. About IBC Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and seven of its debtor-affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04- 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. The Debtors have been been actively seeking higher and better offers to the proposed financing and plan support agreements and received interest from multiple parties regarding the opportunity to invest in the company. The deadline for investors to submit initial bids was on November 28 and deadline to submit final bids is on Jan. 15, 2008. (Interstate Bakeries Bankruptcy News, Issue No. 78; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). INTERSTATE BAKERIES: Wants DIP Financing Maturity Extended ---------------------------------------------------------- Interstate Bakeries Corporation and eight of its subsidiaries and affiliates seek the United States Bankruptcy Court for the Western District of Missouri for authority to: (a) obtain an extension of the maturity date of the September 23, 2004 Revolving Credit Agreement, as amended, from February 9, 2008, until June 2, 2008; (b) continue the existing grant to the lenders under the Amended DIP Credit Agreement of the same priority in payment and security under the October 2004 Final DIP Order and continued in the August 2006 First Supplemental DIP Order and the February 2007 Amended DIP Order, subject to certain exceptions to secure the Debtors' obligations under the Amended DIP Credit Agreement; and (c) continue the use of cash collateral, pursuant to Sections 361, 362, and 363 of the Bankruptcy Code, and to continue the provision of adequate protection to the Prepetition Secured Lenders under the Existing Agreements, with respect to any diminution in the value of their interests in the Prepetition Collateral resulting from the priming liens and security interests originally granted, continued by the Supplemental DIP Order and the Amended DIP Order, and sought to be continued hereby. The Amended DIP Credit Agreement provides the Debtors with financing of up to $200,000,000 principal amount and grants security interests and super-priority claims to the Postpetition Lenders. The Final DIP Order, on the other hand, provided for adequate protection to the Prepetition Secured Lenders, including the payment of interest and fees accruing under the Prepetition Credit Agreement while the First Supplemental DIP Order provided for additional adequate protection in the form of certain restricted cash being paid to the Prepetition Secured Lenders. The Amended DIP Order modified the DIP Credit Agreement to, among other things, extend the maturity date of the DIP Credit Agreement from June 2, 2007, to February 9, 2008, reset certain covenants set forth in the DIP Credit Agreement and add covenant levels for additional periods in light of the extension of the maturity date. According to Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in Chicago, Illinois, over the course of their Chapter 11 cases, the Debtors have produced hundreds of millions of dollars by, among other things, closing 13 bakeries, closing nearly 600 depots and over 400 retail outlets, eliminating over 2,000 routes through consolidation and terminating roughly 22% of their workforce. "Despite these efforts, the Debtors continue to encounter several obstacles," Mr. Ivester tells the Court. "In addition to inflationary pressures caused by rising ingredient, fuel and labor costs, the impediments to profitability that have plagued IBC for the last several years -- decentralized operations, lack of innovation (in marketing, products and delivery structure) and increased competition -- have continued to affect IBC's profitability, resulting in EBITDA of $48.5 million for fiscal 2005 (ending May 28, 2005) and of approximately $4.0 million for fiscal 2006 (ending June 3, 2006)." Moreover, Mr. Ivester continues, "it is now apparent that the decades-old delivery and sales system that was preserved in the long-term extension agreements with the unions simply does not allow the Debtors to compete profitably." Mr. Ivester says the Debtors have felt the pressure of two primary obstacles to overcome for their value-maximizing strategy to be realized: additional concessions from the Debtors' unionized workforce, and a funding commitment to provide junior debt or equity financing. Mr. Ivester notes that the Debtors have recently reached an agreement on contract modifications with one of its two principal unions, the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union. Unfortunately, he says, the Debtors' discussions with the International Brotherhood of Teamsters have not been successful to date. After an extensive process soliciting, negotiating and evaluating potential funding commitments, Mr. Ivester recounts, the Debtors obtained the Court's approval to enter into a $400,000,000 exit facility commitment with Silver Point Finance, LLC, and its affiliated investment funds, as well as approval of bidding procedures for alternative investment proposals. Furthermore, Mr. Ivester states, the foundation of the Debtors' plan of reorganization, dated Nov. 5, 2007, rests upon the Silver Point Commitment and plan funding agreements by holders of over 95% of the lenders under the Debtors' prepetition senior secured credit facility. Under the current order extending the Debtors' exclusive periods to file and solicit acceptances of a Plan, the Debtors' exclusive solicitation period expires January 7, 2008. "Now that the Debtors have fulfilled the mandate to develop a strategic plan to restructure the Debtors business and financial operations and devise a path to emerge from chapter 11, they are exploring alternatives other than the Business Plan and the related Plan," Mr. Ivester states. In addition to working with numerous parties through certain alternative proposal procedures approved by the Court in the Plan Funding Order, the Debtors have executed confidentiality agreements with interested parties, including Yucaipa Companies Ltd. and Bimbo Bakeries USA, Inc., permitting access to large quantities of the Debtors' confidential information. To continue operating the Debtors' business as the final chapter plays out, the Debtors are seeking agreement from the Postpetition Lenders to extend the maturity date of the Amended DIP Credit Agreement. Mr. Ivester says the Debtors and the Postpetition Lenders have negotiated the Third Amendment to the Amended DIP Credit Agreement, which the parties intend to finalize and execute by December 10, 2007, subject to Court approval. The principal provisions of the Third Amendment to the Amended DIP Credit Agreement are: (a) JPMorgan Chase Bank will serve as Administrative Agent for a syndicate of financial institutions to be arranged by JP Morgan. IBC and Armour & Main Redevelopment Corporation; Baker's Inn Quality Baked Goods, LLC; IBC Sales Corporation; IBC Services, LLC; IBC Trucking LLC; Interstate Brands Corporation; and New England Bakery Distributors, LLC, are the Subsidiary Borrowers. (b) JPMorgan will also serve as Collateral Agent under the Amended DIP Credit Agreement for the Lenders. (c) The Subsidiary Borrowers will obtain a total revolving credit commitment of up to $200,000,000, with a sublimit of $150,000,000 for letters of credit to be issued for purposes that are satisfactory to the Administrative Agent. (d) Borrowings will be repaid in full, and the Commitment will terminate at the earliest of (i) June 2, 2008, (ii) the substantial consummation of a plan of reorganization that is confirmed pursuant to a court order, and (iii) the acceleration of the Loans and the termination of the Commitment in accordance with the Amended DIP Credit Agreement. (e) All direct borrowings and reimbursement obligations under Letters of Credit and in respect of overdrafts will continue at all times to receive the priority in payment and be secured as set forth in the Final DIP order and as continued by the Supplemental DIP Order and the Amended DIP Order. (f) If there are outstanding Loans and the fair market value of cash and cash equivalents of the Borrowers held in securities accounts and deposit accounts exceeds $60,000,000, then repayments of Loans will be required in the amount of the excess. (g) An interest of JPMorgan's Alternate Base Rate plus 1.75% or at the Borrowers' option, LIBOR plus 2.75% for interest periods of one, three or six months will be payable monthly in arrears, at the end of any interest period and on the Termination Date. The proposed Third Amendment to the Amended DIP Credit Agreement also contains fee provisions. Other fee provisions are contained in a Fee Letter dated November 15, 2007, the terms of which JPMorgan has requested to be kept confidential. The Fee Letter will be provided to the Committees and the U.S. Trustee and will be made available to the Court for review. The grant of adequate protection contained in the DIP Orders will continue unaffected, Mr. Ivester says. The Debtors believe that entry of an order approving the Third Amendment to the Amended DIP Credit Amendment is necessary and appropriate to enable the Debtors to reorganize successfully. About IBC Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and seven of its debtor-affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04- 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. The Debtors have been been actively seeking higher and better offers to the proposed financing and plan support agreements and received interest from multiple parties regarding the opportunity to invest in the company. The deadline for investors to submit initial bids was on November 28 and deadline to submit final bids is on Jan. 15, 2008. (Interstate Bakeries Bankruptcy News, Issue No. 78; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). INTERSTATE HOTELS: Completes $118 Million Buyout of Three Hotels ---------------------------------------------------------------- Interstate Hotels & Resorts has completed the transaction to acquire three hotels from affiliates of The Blackstone Group L.P. for an aggregate price of $118 million. Two of the hotels, the 321-room Hilton Seelbach Louisville in Kentucky and the 226-room Crowne Plaza Madison in Wisconsin, were acquired through a joint venture partnership with Investcorp International's U.S.-based Real Estate Group. Interstate invested approximately $4.7 million for a 15% equity interest in these properties, which will continue to be operated by Interstate under new management agreements. As part of the overall transaction, Interstate closed on the acquisition of a 100% interest in the third hotel, the Sheraton Columbia, for $46.5 million. The company will immediately begin a $12 million comprehensive renovation of the property, including upgrades to all guest rooms and public spaces. The renovation is expected to be completed by the end of 2008. Interstate funded the acquisitions with available cash and capacity under its senior revolving credit facility. "This transaction, which includes our seventh wholly owned property and two additional joint venture properties, illustrates our continued ability to execute on our growth strategy," Thomas F. Hewitt, Interstate's chief executive officer, said. "We know these properties well and are confident that we can create substantial value for our partners and our shareholders." Sheraton Columbia Maryland The 288-room Sheraton Columbia Hotel is located in Columbia, Maryland, a 14,000-acre planned community approximately 40 miles north of Washington, D.C., and 15 miles from Baltimore. Situated in Howard County features more than 2,500 businesses, over 60,000 jobs, 21 million square feet of commercial and residential space and an array of social, cultural, educational, entertainment and recreational programs and facilities. Hilton Seelbach Louisville Kentucky Since its opening in 1905, Seelbach Hilton Louisville, a 321-room property offers the atmosphere of a bygone era including internet access in all guest rooms and meeting rooms. It also is home to Kentucky's Oak Room restaurant. The hotel is situated downtown, close to Louisville's attractions. Crowne Plaza Madison Wisconsin Located off I-90/94, three miles from the Madison airport, the 226-room Crowne Plaza is situated near Madison's shopping mall, theater and restaurants, and proximate to the city's convention center, the University of Wisconsin and the state capitol. Renovated in 2005, the hotel features an indoor pool, restaurant and lounge, a business center and more than 6,800 square feet of meeting space. About Investcorp Real Estate Group The Investcorp Real Estate Group (LSE: IVC, BSE: INVCORP) -- http://www.investcorp.com/-- is a return-oriented real estate investor. Investcorp's real estate team, is experienced in the acquisition, development, financing, leasing, management, and disposition of a wide variety of property types including office, retail, hotel, residential, mixed-use, luxury resort and others. The Investcorp Real Estate Group is part of Investcorp, a provider and manager of alternative investment products. Investcorp has offices in New York, London and Bahrain. Founded in 1982, the firm has five lines of business: private equity, real estate, hedge funds, venture capital and Gulf growth capital. About Interstate Hotels & Resorts Inc. Headquartered in Arlington, Virginia, Interstate Hotels & Resorts Inc. (NYSE: IHR)-- http://www.ihrco.com/-- operated 189 hospitality properties with more than 43,000 rooms in 36 states, the District of Columbia, Belgium, Canada, Ireland, Mexico and Russia, including six wholly-owned properties and 20 properties with a minority ownership interest through 13 separate joint ventures, as of Aug. 31, 2007. In addition, Interstate Hotels & Resorts has contracts to manage 16 hospitality properties with nearly 4,600 rooms under development. * * * Moody's Investor Services placed Interstate Hotels & Resorts Inc.'s long term corporate family rating at B1 in January 2007. The outlook is negative. In August 2004, Standard & Poor's placed the company's long term foreign and local issuer credit ratings at B. Both ratings still hold to date. ISLE OF CAPRI: Posts $24.6 Million Net Loss in 2008 Second Quarter ------------------------------------------------------------------ Isle of Capri Casinos Inc. reported financial results for the second fiscal quarter ended Oct. 28, 2007. The company reported net loss of $24.6 million in quarter ended Oct. 28, 2007, compared to net income of $9.6 million for the same period in the previous year. For six months ended Oct. 28, 2007, the company reported net loss of $31.8 million, compared to net income of $18.9 million. "In the second quarter, the company recorded a pre-tax charge of $6.5 million related to costs capitalized in connection with a proposed project in west Harrison County, Mississippi, and proposed expansions in Davenport, Iowa and Kansas City, Missouri, which negatively impacted our results," Bernard Goldstein, chairman of the board and chief executive officer commented. "We have also begun conducting a strategic review of our existing portfolio and growth opportunities." "In addition, our second quarter results were impacted by significant non-recurring charges, including charges resulting from the retirement of our 9% Senior Subordinated Notes as part of the refinancing completed in July 2007. The refinancing improved the flexibility of our balance sheet and is consistent with our strategy to effectively lower our weighted average interest rate." "Our company goal continues to be increased EBITDA(1) through margin improvement, and we have identified opportunities to reduce spending at both the corporate and site levels as a result of our focus on expense reduction and cost containment measures," Virginia McDowell, president and chief operating officer, said. "Although we continue to see improvements in operating results at nearly all of our legacy properties, the isle casino at Coventry continues to under perform. We are currently streamlining our cost structures at Coventry and developing new marketing programs, but we have also been negatively impacted by recent legislative changes, including an increase in taxes and the implementation of a smoking ban. As a result, we are currently evaluating the returns on and realization of our United Kingdom investments as a part of our strategic review process. The process in the United Kingdom will be led by Donn Mitchell, who was named senior vice president of UK operations." The company reported a loss from continuing operations for the quarter of $24.6 million during the second quarter of fiscal 2008 compared to a loss from continuing operations of $4.2 million for the second quarter of fiscal 2007. The results from operations for the second quarter of fiscal 2008 include $6.5 million of charges related to costs capitalized in connection with a proposed project in west Harrison County, Mississippi and the write-off of construction projects in Davenport, Iowa and Kansas City, Missouri. Additionally, in the second quarter of fiscal 2008, the company recognized an $11.5 million loss from early extinguishment of debt related to the retirement of the company's 9% Senior Subordinated Notes on Aug. 29, 2007. Combined, these items resulted in a $10.8 million after-tax impact on the quarterly results. The results from continuing operations for the second quarter of fiscal 2007 include $1.0 million of office relocation costs and $3.7 million of increased new development costs compared to the second quarter of fiscal 2008. Combined, these items resulted in $2.8 million of after-tax impact on the prior year quarterly results. For the six months ended Oct. 28, 2007, the company reported a loss from continuing operations of $31.8 million compared to income from continuing operations of $1.1 million for the same period in fiscal 2007. At Oct. 28, 2007, the company's balance sheet showed total assets of $2.12 billion, total liabilities of $1.86 billion, resulting to a total stockholders' equity $0.26 billion. About Isle of Capri Casinos Based in Biloxi, Mississippi and founded in 1992, Isle of Capri Casinos Inc. (Nasdaq: ISLE) -- http://www.islecorp.com/-- owns and operates casinos in Biloxi, Lula and Natchez, Mississippi; Lake Charles, Louisiana; Bettendorf, Davenport, Marquette and Waterloo, Iowa; Boonville, Caruthersville and Kansas City, Missouri and a casino and harness track in Pompano Beach, Florida. The company also operates and has a 57% ownership interest in two casinos in Black Hawk, Colorado. Isle of Capri Casinos' international gaming interests include a casino that it operates in Freeport, Grand Bahama, a casino in Coventry, England, and a two-thirds ownership interest in casinos in Dudley and Wolverhampton, England. * * * Moody's Investor Services placed Isle of Capri Casinos Inc.'s probability of default and long term corporate family ratings at 'B1' in June 2007. The ratings still hold to date with a stable outlook. J CREW OPERATING: Strong Performance Cues Moody's to Lift Rating ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of J. Crew Operating Corp., including its corporate family rating to Ba2 from Ba3. The upgrade reflects the company's continued strong operating performance and cash flow generation which, when combined with its voluntary debt payments, have led to solid improvements in its debt protection measures. The outlook is stable. The Ba2 corporate family rating reflects the company's solid merchandising skills as reflected by three years of very strong sales growth, its credible market position in the highly fragmented specialty apparel retail sector, industry leading EBITA margins, and healthy debt protection measures. The rating is also supported by the company's moderate seasonality with nearly 47% of its cash flow from operations being generated during the fourth quarter. In addition, the rating reflects the company's very good liquidity and conservative capital structure. The positive impact on the rating of these strengths is constrained by the company's relatively small scale and its high business risk as a specialty apparel retailer which exposes the company to potential performance volatility as a result of fashion risk. Following the successful completion of its initial public offering in July 2006, the company has been steadily repaying its outstanding debt with its internally generated cash. To date, the company has reduced its outstanding term loan balance to $125 million from the originally $285 million. J. Crew's cash balances, steady cash generation, and a $200 million credit facility with no outstanding balances provide comfortable liquidity. These ratings were upgraded: -- Corporate family rating to Ba2 from Ba3; -- Probability of default rating to Ba2 from Ba3; -- Senior secured term loan due 2012 (originally $285 million) to Ba2 (LGD 3, 47%) from Ba3 (LGD 4, 58%). J. Crew Operating Corp., headquartered in New York, New York, is a multi-channel apparel retailer that operates 185 retail stores, 53 factory outlet stores, a catalogue, and website under the name J. Crew. Revenues for the LTM period ended August 4, 2007 were approximately $1.2 billion. JP MORGAN: Fitch Affirms 'B-' Rating on $5.2MM Class N Certs. ------------------------------------------------------------- Fitch Ratings has affirmed J.P. Morgan Chase Commercial Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2001-C1, as: -- $67.7 million class A-2 at 'AAA'; -- $603.7 million class A-3 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $47.7 million class B at 'AAA'; -- $21.9 million class C at 'AAA'; -- $21.9 million class D at 'AAA'; -- $12.9 million class E at 'AAA'; -- $25.8 million class F at 'AA+'; -- $12.9 million class G at 'AA-'; -- $21.9 million class H at 'BBB+'; -- $9 million class J at 'BBB'; -- $6.4 million class K at 'BBB-'; -- $10.3 million class L at 'BB-'; -- $5.2 million class M at 'B'; -- $5.2 million class N at 'B-'; -- $32.7 million class NC-1 at 'A'; -- $6.7 million class NC-2 at 'A-'. Class A-1 has paid in full. The class NC-1 and NC-2 certificates represent subordinate interests in the Newport Centre loan. Fitch does not rate the $13.8 million class NR certificates. The rating affirmations are due to stable performance since the last Fitch rating action. As of the November 2007 distribution date, the pool has paid down 14.3% to $917.8 million from $1.07 billion at issuance. In addition, 34 loans (24.6%) have defeased. There are currently 34 assets considered Fitch Loans of Concern (24.6%) including five (2.7%) that are in special servicing. Two of the specially serviced loans (0.4%) are current and will be returned to the master servicer. The other three specially serviced assets are two real estate owned properties (1.5%) and one that is 30+ days delinquent (0.7%). The largest REO (1.3%) is a multifamily property in Austin, Texas. The property became REO in May 2004 and is listed for sale. The other REO (.2%) is a multifamily property in Fort Worth, Texas and was sold in November 2007. Fitch currently expects losses based on recent appraised values or the actual sales price. Such losses, however, are expected to be fully absorbed by the non- rated class NR. Fitch also reviewed the performance of the deal's shadow rated loan and its underlying collateral, the Newport Centre. The Newport Centre (16.7%), the largest loan in the pool, is secured by 386,000 square feet of a 920,000 square foot regional mall located in Jersey City, New Jersey. The loan consists of a $113.2 million senior component and a $39.4 million subordinate component, which represents the non-pooled class NC certificates. In-line occupancy at the mall declined to 89% as of June 2007 from 97.7% at issuance due to a large 2004 lease rollover. Despite the increased vacancy, Servicer reported net operating income has improved since issuance and the loan maintains an investment grade shadow rating. KIMBALL HILL: Moody's Lowers All Ratings with Negative Outlook -------------------------------------------------------------- Moody's Investors Service lowered all the ratings of Kimball Hill, Inc., including the company's corporate family rating to Caa2 from B2 and senior subordinated notes ratings to Ca from Caa1. The ratings outlook is negative. The downgrades and negative outlook reflect the following: 1) Moody's expectation that weak industry conditions will remain in effect until well into 2009, with any sector recovery likely to be sluggish for some time after that; 2) concern that Kimball Hill's inventory levels in 2008 will show little real reduction, if any, thus impeding sustainable cash flow generation; iii) adjusted debt leverage, 65.7% at June 30, 2007, will remain elevated as cash flow generation will be largely insufficient to repay any significant amount of debt, while equity may continue to be eroded by impairment and option abandonment charges; iv) Moody's projects that the company will have difficulty in complying with both of its debt leverage covenants (total debt to tangible net worth and total liabilities to tangible net worth) by the end of 2008, if not earlier; and v) Kimball Hill's multiple off-balance sheet obligations may be a further drain on cash. Going forward, the ratings could be reduced again if the company is unable to obtain additional, and more than stopgap, covenant relief and adjusted debt leverage increased to 85%. The ratings outlook could stabilize if the company were to obtain substantial and long-term covenant relief and were to reverse the current weakness in inventory performance and cash flow generation. These ratings for Kimball Hill were lowered: -- Corporate family rating, lowered to Caa2 from B2; -- Probability of Default rating lowered to Caa2 from B2; -- Senior Subordinated Notes, lowered to Ca (LGD-6, 90%) from Caa1 (LGD-6, 90%). Founded in Chicago in 1969, Kimball Hill, Inc. is one of the largest private homebuilders in the U.S. Revenues and net income for the trailing twelve months ended June 30, 2007 were approximately $1.04 billion and ($72) million, respectively. LE-NATURE'S: Files Second Amended Disclosure Statement and Plan --------------------------------------------------------------- Le-Nature's Inc. and its debtor-affiliates submitted to the U.S. Bankruptcy Court for the Western District of Pennsylvania their second amended disclosure statement and chapter 11 plan of liquidation. Treatment of Claims Under the Plan, the Debtors intend to pay in full administrative and unclassified fee claims. Priority tax claims will either be paid in full or in equal annual installments, plus 6% interest per annum. Class 1 claims, or lenders secured claims, will be paid in full in exchange for: (a) tier one trust beneficial interests in a percentage ratable to other holders in class 1; (b) additional tier one trust beneficial interests in a percentage ratable to other holders in class 1 as a result of the disallowance of any disputed claim; and (c) all proceeds distributed under the plan and the liquidation trust agreement. Class 2, or other secured claims, will be paid in full in exchange for, at the option of the liquidation trust, one or a combination of: (a) payment in cash from proceeds of sale of collateral securing allowed class 2 claims; (b) surrender of the collateral securing the allowed class 2 claims; or (c) other distributions that satisfy requirements of Bankruptcy Code Section 1129. Class 3, or priority non-tax claims, will be paid in full in cash at the later of: (a) the effective date of the Plan; (b) the date the claim becomes an allowed claim or otherwise becomes payable under the plan; or (c) as soon as reasonably practicable. Class 4A, or lenders unsecured claims, will receive: (a) tier two trust beneficial interests in percentage ratable to other holders of allowed claims in class4A, class 4B, and class4C; (b) additional tier two trust beneficial interests in percentage ratable to other holders of allowed claims in class 4A, B, and C as a result of disallowance of disputed claim in class 4A, B and C; (c) additional tier two trust beneficial interests in percentage ratable to other holders of allowed claims in class4A, B, and C as a result of turnover enforcement of class 4C distributions; (d) proceeds of the foregoing distributed pursuant to the terms of the plan and the liquidation trust agreement; and (e) a percentage of the proceeds of the Tea Systems International LLC/Holdings Property to other holders of claims in class 4A and 4C, subject to: (i) use of proceeds to fund the initial trust funding or liquidation trust reserve; and (ii) reallocation of proceeds to holders of allowed claims in class 4A, B and C. Class 4B, or general unsecured claims, will receive: (a) tier two trust beneficial interests in a percentage ratable to other holders of allowed claims in class 4A, B and C; (b) additional tier two trust beneficial interests in a percentage ratable to other holders of allowed claims in class 4A, B and C, as a result of the disallowance of disputed claim in class 4A, B and C; (c) distributed pursuant to terms of the plan and the liquidation trust agreement; and (d) a percentage of the proceeds of the TSI/Holdings Property ratable to other holders of allowed claims in class 4A, B and C, but only to the extent that: (i) the proceeds are not used to fund the initial trust funding or the liquidation trust reserve; and (ii) the proceeds are reallocated to holders of allowed claims in class 4A, B and C. Class 4C, or unsecured senior subordinated notes claims, will receive: (a) tier two trust beneficial interests in a percentage ratable to other holders of allowed claims in class 4A, B and C; (b) additional tier two trust beneficial interests in a percentage ratable to other holders of allowed claims in class 4A, B and C, as a result of the disallowance of disputed claim in class 4A, B and C; (c) distributed pursuant to terms of the plan and the liquidation trust agreement; and (d) a percentage of the proceeds of the TSI/Holdings Property ratable to other holders of allowed claims in class 4A, B and C, subject to: (i) use of proceeds to fund the initial trust funding or liquidation trust reserve; and (ii) reallocation of proceeds to holders of allowed claims in class 4A, B and C, provided however, that certain distributions will be deemed reallocated and distributed on account claims in class 4A, as a settlement of potential claims by lenders for enforcement of contractual subordination provisions in the senior subordinated notes indenture, in accordance with a turnover enforcement. Class 5, or subordinated litigation claims, will receive: (a) tier three trust beneficial interest in a percentage ratable to other allowed claims in class 5; (b) additional tier three trust beneficial interest as a result of the disallowance of disputed claim in class 5; and (c) proceeds distributed to the terms of the plan and the liquidation trust agreement. Class 6, or interest, will receive: (a) tier four trust beneficial interests in a percentage ratable to other allowed interests in class 6; (b) additional tier four trust beneficial interests as a result of the disallowance of disputed claims in class 6; and (c) proceeds distributed pursuant to the terms of the plan and the liquidation trust agreement. Other than class 3, or priority non-tax claims, all classes of claims and interests are entitled to vote for the rejection or acceptance of the Debtors' second amended plan of liquidation. About Le-Nature's Inc. Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. -- http://www.le-natures.com/-- makes bottled waters, teas, juices and nutritional drinks. Its brands include Kettle Brewed Ice Teas, Dazzler fruit juice drinks and lemonade, and AquaAde vitamin-enriched water. Four unsecured creditors of Le-Nature's filed an involuntary chapter 7 petition against the company on Nov. 1, 2006 (Bankr. W.D. Pa. Case No. 06-25454). On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's Holdings Inc., and Tea Systems International Inc., filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. Judge McCullough converted Le Nature's Inc.'s case to a chapter 11 proceeding. The Debtors' cases are jointly administered. The Debtors' schedules filed with the Court showed $40 million in total assets and $450 million in total liabilities. Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represents the Debtors in their restructuring efforts. The Court appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq., and Thomas A. Pitta, Esq. at Lowenstein Sandler PC, represent the Official Committee of Unsecured Creditors. Edward S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion McDonough & Lucas represent the Ad Hoc Committee of Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc Committee of Senior Subordinated Noteholders. On June 12, 2007, Wachovia Bank, National Association filed a motion to convert the Debtors' case to chapter 7. The motion is to be heard by the Court on Dec. 10, 2007. LE-NATURE'S: Hearing on 2nd Amended Disclosure Statement is Jan. 3 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Pennsylvania has set a hearing on Jan. 3, 2008, to consider approval of the Disclosure Statement explaining Le-Nature's Inc. and its debtor- affiliates' Second Amended Chapter 11 Plan of Liquidation. Headquartered in Latrobe, Pennsylvania, Le-Nature's Inc. -- http://www.le-natures.com/-- makes bottled waters, teas, juices and nutritional drinks. Its brands include Kettle Brewed Ice Teas, Dazzler fruit juice drinks and lemonade, and AquaAde vitamin-enriched water. Four unsecured creditors of Le-Nature's filed an involuntary chapter 7 petition against the company on Nov. 1, 2006 (Bankr. W.D. Pa. Case No. 06-25454). On Nov. 6, 2006, two of Le-Nature's subsidiaries, Le-Nature's Holdings Inc., and Tea Systems International Inc., filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. Judge McCullough converted Le Nature's Inc.'s case to a chapter 11 proceeding. The Debtors' cases are jointly administered. The Debtors' schedules filed with the Court showed $40 million in total assets and $450 million in total liabilities. Douglas Anthony Campbell, Esq., Ronald B. Roteman, Esq., and Stanley Edward Levine, Esq., at Campbell & Levine, LLC, represents the Debtors in their restructuring efforts. The Court appointed R. Todd Neilson as Chapter 11 Trustee. Dean Z. Ziehl, Esq., Richard M. Pachulski, Esq., Stan Goldich, Esq., Ilan D. Scharf, Esq., and Debra Grassgreen, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Chapter 11 Trustee. David K. Rudov, Esq., at Rudov & Stein, and S. Jason Teele, Esq., and Thomas A. Pitta, Esq. at Lowenstein Sandler PC, represent the Official Committee of Unsecured Creditors. Edward S. Weisfelner, Esq., Robert J. Stark, Esq., and Andrew Dash, Esq., at Brown Rudnick Berlack Israels LLP, and James G. McLean, Esq., at Manion McDonough & Lucas represent the Ad Hoc Committee of Secured Lenders. Thomas Moers Mayer, Esq., and Matthew J. Williams, Esq. at Kramer Levin Naftalis & Frankel LLP, represent the Ad Hoc Committee of Senior Subordinated Noteholders. On June 12, 2007, Wachovia Bank, National Association filed a motion to convert the Debtors' case to chapter 7. The motion is to be heard by the Court on Dec. 10, 2007. LONG BEACH: Moody's Cuts Rating on Cl. A-1 Certs. to Ba1 from A3 ---------------------------------------------------------------- Moody's Investors Service has downgraded 6 certificates from Long Beach Mortgage Loan Trust 2006-A. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination, were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, the delinquency pipeline has remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipeline will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: Long Beach Mortgage Loan Trust 2006-A Downgrade: -- Class A-1, Downgraded to Ba1 from A3; -- Class A-2, Downgraded to Ba1 from A3; -- Class A-3, Downgraded to Ba1 from A3; -- Class M-1, Downgraded to Ca from Ba2; -- Class M-2, Downgraded to C from B3; -- Class M-3, Downgraded to C from Ca. LYNN KASEL: Case Summary & 11 Largest Unsecured Creditors --------------------------------------------------------- Debtors: Lynn Frank Kasel Brenda Joyce Kasel 11925 North East 39th Street Bellevue, WA 98005 Bankruptcy Case No.: 07-15801 Chapter 11 Petition Date: December 3, 2007 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtors' Counsel: Douglas W Harris, Esq. Attorney at Law 11120 North East 2nd Street Suite 220 Bellevue, WA 98004 Tel: (425) 456-1832 Total Assets: $1,634,730 Total Debts: $1,404,496 Debtors' list of its 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Taxes - 1040 for $925,000 Jackson federal Building 2000, 2001, 2002, 915 2nd Avenue M/S W244 2003, 2004, and Seattle, WA 98174 2005 Estate of Betty Kasel $20,000 No Address Chase Visa $11,616 P.O. Box 15298 Wilmington, DE 19850-5298 Alliant Credit Union Visa $10,354 Target Visa $6,916 Eskanos & Adler PC HFC $6,119 Collection & Bankruptcy Dept. Sears Mastercard $4,308 Chase Auto Finance Past due 4 payments $2,150 Nordstrom Visa $2,110 Nordstrom $948 Macys $842 MASTR SECOND: Low Credit Enhancement Cues Moody's to Cut Ratings ---------------------------------------------------------------- Moody's Investors Service has downgraded three certificates from MASTR Second Lien Trust 2006-1. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination, were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, the delinquency pipeline has remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipeline will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: MASTR Second Lien Trust 2006-1 Downgrade: -- Class M-1, Downgraded to Baa3 from A2; -- Class M-2, Downgraded to Caa2 from Ba1; -- Class M-3, Downgraded to Ca from B2. MCMILLIN COS: Moody's Junks Ratings with Negative Outlook --------------------------------------------------------- Moody's Investors Service lowered all the ratings of McMillin Companies, LLC, including the company's corporate family rating to Caa2 from B2 and senior notes ratings to Caa3 from B3. The ratings outlook is negative. The downgrades and negative outlook reflect the following: i) Moody's does not see a sector recovery beginning before well into 2009 at the earliest, with any recovery likely to be very measured at first, thus prolonging the company's underperformance on key financial metrics vs. prior expectations; ii) actual inventory performance (adjusted for impairments and option abandonments) over the past four quarters has been disappointing. Moody's remains concerned that McMillin's inventory levels for the coming quarters will show little real reduction, if any, thus impeding sustainable cash flow generation; iii) the company has violated the interest coverage incurrence test (not maintenance test) in its bond indenture. As a result, liquidity, although in satisfactory shape currently from a large pre-emptive draw on the revolver, may tighten substantially by year-end 2008 unless the covenant is successfully renegotiated; iv) McMillin's adjusted debt leverage, 61.2% at June 30, 2007, will remain elevated as cash flow generation will be insufficient to repay any significant amount of debt, while equity continues to be eroded by impairment and option abandonment charges; v) the company's relatively small size and scale and limited geographic, product, and price point diversity worsen the effects of the California housing downturn Going forward, the ratings could be reduced again if the company is unable to obtain additional, and more than stopgap, covenant relief. The ratings outlook could stabilize if the company were to obtain substantial and long-term covenant relief and were to reverse the current weakness in inventory performance and cash flow generation. These ratings for McMillin were lowered: -- Corporate family rating, lowered to Caa2 from B2; -- Probability of Default rating lowered to Caa2 from B2; -- Senior Notes, lowered to Caa3 (LGD-4, 69%) from B3 (LGD-5, 73%). Headquartered in San Diego, California, McMillin Companies, LLC designs, constructs, markets and sells single family detached homes to entry level and move-up buyers. The company also makes limited capital investments in and manages the development of residential land and other real estate ventures. Homebuilding revenues for the trailing twelve month period ended June 30, 2007 were $514 million. MERRILL LYNCH: Moody's Downgrades Ratings on 43 Tranches -------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 43 tranches and has placed under review for possible downgrade the ratings of 12 tranches from 8 transactions issued by Merrill Lynch in 2007. Additionally, 2 downgraded tranches remain on review for possible further downgrade. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, subprime mortgage loans. In its analysis, Moody's has applied its published methodology updates as of July 13, 2007 to the non delinquent portion of the transactions. Collateral backing these transactions is also experiencing higher than anticipated rates of delinquency, foreclosure, and REO relative to credit enhancement levels. Complete list of Rating Actions: Issuer: Merrill Lynch First Franklin Mortgage Loan Trust, Series 2007-1 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa2, previously A1, -- Cl. M-5, Downgraded to Ba1, previously A2, -- Cl. M-6, Downgraded to Ba3, previously A3, -- Cl. B-1, Downgraded to B3, previously Baa1, -- Cl. B-2, Downgraded to Caa2, previously Baa2, -- Cl. B-3, Downgraded to Ca, previously Baa3. Issuer: Merrill Lynch First Franklin Mortgage Loan Trust, Series 2007-2 -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Baa3, previously Baa1, -- Cl. B-2, Downgraded to Ba1, previously Baa1, -- Cl. B-3, Downgraded to B1, previously Baa2. Issuer: Merrill Lynch First Franklin Mortgage Loan Trust, Series 2007-3 -- Cl. M-6, 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 B1, previously Baa3. Issuer: Merrill Lynch First Franklin Mortgage Loan Trust, Series 2007-4 -- Cl. M6, Downgraded to Baa1, previously A3, -- Cl. B1, Downgraded to Baa2, previously Baa1, -- Cl. B2, Downgraded to Baa3, previously Baa1, -- Cl. B3, Downgraded to Ba2, previously Baa3. Issuer: Merrill Lynch Mortgage Investors Trust 2007-MLN1 -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A3, previously A1, -- Cl. M-5, Downgraded to Baa1, previously A2, -- Cl. M-6, Downgraded to Ba2, previously A3, -- Cl. B-1, Downgraded to Ba3, previously Baa1, -- Cl. B-2, Downgraded to B2, previously Baa2, -- Cl. B-3, Downgraded to Caa3, previously Baa3. Issuer: Merrill Lynch Mortgage Investors Trust Series 2007-HE2 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A3, previously A1, -- Cl. M-5, Downgraded to Baa3, previously A2, -- Cl. M-6, Downgraded to Ba3, previously A3, -- Cl. B-1, Downgraded to B3 on review for possible further downgrade, previously Baa1, -- Cl. B-2, Downgraded to Ca, previously Baa2, -- Cl. B-3, Downgraded to C, previously Baa3. Issuer: Merrill Lynch Mortgage Investors Trust Series 2007-HE3 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to Baa2, previously A2, -- Cl. M-6, Downgraded to Ba1, previously A3, -- Cl. B-1, Downgraded to B2, previously Baa1, -- Cl. B-2, Downgraded to Ca, previously Baa2, -- Cl. B-3, Downgraded to C, previously Baa3. Issuer: Merrill Lynch Mortgage Investors Trust, Series 2007-HE1 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa2, previously A1, -- Cl. M-5, Downgraded to Ba3, previously A2, -- Cl. M-6, Downgraded to B3 on review for possible further downgrade, previously A3, -- Cl. B-1, Downgraded to Ca, previously Baa1, -- Cl. B-2, Downgraded to C, previously Baa2, -- Cl. B-3, Downgraded to C, previously Baa3. MIDTOWN MANOR: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Midtown Manor on Piedmont, L.L.C. 811 Piedmont Avenue Atlanta, GA 30308 Bankruptcy Case No.: 07-80395 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Midtown Manor Town Homes, L.L.C. 07-80405 Chapter 11 Petition Date: December 3, 2007 Court: Northern District of Georgia (Atlanta) Debtors' Counsel: J. Carole Thompson Hord, Esq. Schreeder, Wheeler & Flint, L.L.P. 1100 Peachtree Street Northeast, Suite 800 Atlanta, GA 30309-4516 Tel: (404) 954-9858 Estimated Assets Estimated Debts ---------------- --------------- Midtown Manor on Piedmont, $1 Million to $1 Million to L.L.C. $10 Million $10 Million Midtown Manor Town Homes, $1 Million to $1 Million to L.L.C. $10 Million $10 Million A. Midtown Manor on Piedmont, LLC's Four Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Don Sepulveda $90,000 123 Tribble Gap Road Cumming, GA 30040 Kronberg Wall Architects $2,000 1359 Lafrance Street Atlanta, GA 30307 Brunning & Stang $1,000 3091 Maple Drive, Suite 220 Atlanta, GA 30305 Georgia Land Surveying $1,000 B. Midtown Manor Town Homes, LLC's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ O'Brien Property Management $61,970 2779 Woodwin Road Doraville, GA 30360 Herbert Construction Co. $54,258 P.O. Box 996 Marietta, GA 30061-0996 Brunning & Stang $29,837 3091 Maple Drive, Suite 220 Atlanta, GA 30305 Eberly & Associates $19,272 Kronberg Wall Architects $18,445 Robles Masonry $10,375 Estes Shields $10,095 Precision Layout $3,900 Hertz Rental $3,305 Aqua Seal Lutions $2,829 Art Craft Concrete, Inc. $1,338 Miranda Construction $875 MetzgerMoore, Inc. $872 Arborguard $465 Brand Vaughan Lumber $235 Happy Can, Inc. $100 Georgia Power $69 MITCHELL DEUTSCH: Voluntary Chapter 11 Case Summary --------------------------------------------------- Lead Debtor: Mitchell F. Deutsch 883 Fischer Boulevard Toms River, NJ 08753-3879 Bankruptcy Case No.: 07-23483 Debtor-affiliates filing separate Chapter 11 petitions on December 3, 2007: Entity Case No. ------ -------- Double N, Inc. 07-27806 Debtor-affiliates filing separate Chapter 11 petitions on September 20, 2007: Entity Case No. ------ -------- 412 Somerset Street of N.J., L.L.C. 07-23520 Nanco, Inc. 07-23485 Debtor-affiliate filing a separate Chapter 11 petition on September 13, 2007: Entity Case No. ------ -------- The M. Deutsch Group, Inc. 07-23113 Type of business: The Debtors provide car washing services. Mitchell Deutsch and The M Deutsch Group, Inc.'s cases were converted from Chapter 7 liquidation to Chapter 11 on September 27, 2007. Chapter 11 Petition Date: September 13, 2007 Court: District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtors' Counsel: Timothy P. Neumann, Esq. Broege, Neumann, Fischer & Shaver, L.L.C. 25 Abe Voorhees Drive Manasquan, NJ 08736 Tel: (732) 223-8484 Financial condition of debtors filing separate Chapter 11 petitions on September 13, 2007: Estimated Assets Estimated Debts ---------------- --------------- Mitchell F. Deutsch Unknown Unknown The M. Deutsch Group, Inc. Unknown Unknown Financial condition of debtor-affiliates filing separate Chapter 11 petitions on September 20, 2007: Estimated Assets Estimated Debts ---------------- --------------- Kleen Rite Enterprises Inc. $1 Million to $1 Million to $100 Million $100 Million 412 Somerset Street of Less than Less than N.J., L.L.C. $10,000 $50,000 Nanco, Inc. $1 Million to $1 Million to $100 Million $100 Million Financial condition of debtor-affiliate filing a separate Chapter 11 petition on December 3, 2007: Estimated Assets Estimated Debts ---------------- --------------- Double N, Inc. $1 Million to $1 Million to $10 Million $10 Million The Debtors did not file a list of their 20 largest unsecured creditors. MONEY CENTERS: Sept. 30 Balance Sheet Upside-Down by $6.8 Million ----------------------------------------------------------------- Money Centers of America Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $6.7 million in total assets and $13.5 million in total liabilities, resulting in a $6.8 million total stockholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $3.7 million in total current assets available to pay $5.4 million in total current liabilities. The company reported a net loss of $719,348 on revenues of $2.2 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $442,863 on revenues of $2.6 million in the same period in 2006. Net loss increased by approximately $277,000 during the three months ended Sept. 30, 2007, primarily due to an increase in non cash compensation and amortization expense resulting from amortization of deferred financing costs in connection with the refinance of the company's vault cash, offset by decreases in interest expense and selling, general and administrative expenses. Revenues as a whole decreased by approximately 15.5% during the three months ended Sept. 30, 2007, as compared to the three months ended Sept. 30, 2006. The Money Centers portfolio, consisting primarily of full-service casino contracts, decreased 8% or $167,990. The company also lost approximately $215,000 in revenues from the loss of the Campo contract in the 4th quarter 2006. The company had the addition of $50,000 in revenues from new contracts, while the remaining Money Centers casinos same store sales remained relatively unchanged from same quarter last year. The Available Money portfolio, consisting of ATM contracts, decreased 42% or $235,398 due to termination of contracts. 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?25f7 Going Concern Doubt Sherb & Co LLP, in Boca Raton, Florida, expressed substantial doubt about Money Centers of America Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of Dec. 31, 2006. The auditing firm reported that the company has suffered recurring losses from operations, has net cash used in operations, a net working capital deficit, a stockholders' deficit and an accumulated deficit. About Money Centers Headquartered in King of Prussia, Pennsylvania, Money Centers of America Inc. (OTC BB: MCAM.OB) -- http://www.moneycenters.com/-- provides cash access services to the gaming industry. The company delivers ATM, credit card advance, POS debit card advance, check cashing services and CreditPlus marker services on an outsourcing basis to casinos. The company also licenses its OnSwitch(TM) transaction management system to casinos so they can operate and maintain their own cash access services, including the addition of merchant card processing. MORGAN STANLEY: Fitch Holds 'B' Rating on $7.9MM Class K Certs. --------------------------------------------------------------- Fitch Ratings has affirmed Morgan Stanley Capital I Inc., commercial mortgage pass-through certificates, series 1999-FNV1, as: -- $307.7 million class A-2 at 'AAA'; -- Interest only class X at 'AAA'; -- $33.2 million class B at 'AAA'; -- $26.9 million class C at 'AAA'; -- $12.6 million class D at 'AAA'; -- $30.0 million class E at 'AAA'; -- $14.2 million class F at 'AAA'; -- $20.5 million class G at 'A-'; -- $7.9 million class H at 'BBB'; -- $9.5 million class J at 'BB-'; -- $7.9 million class K at 'B'. The ratings of these classes remain unchanged: -- $6.3 million class L at 'CCC/DR3'; -- $1.9 million class M at 'C/DR6'. Class N remains at 'C/DR6' and has been depleted by realized losses. Although there has been 3.8% additional paydown and 18% additional defeasance since Fitch's last rating action, the transaction is experiencing adverse selection, losses have already eroded two classes and are expected to erode a third. In addition, there is refinance risk with 29.4% of non-defeased loans maturing in 2008. As of the November 2007 distribution date, the pool's aggregate collateral balance has been reduced 24.3%, to $478.7 million from $632.1 million at issuance. Seventy-one loans (44.9%) have defeased to date. Currently, one asset (1.7%) is in special servicing with significant losses expected. The asset is a real estate owned retail center located in Sevierville, Tennessee. Occupancy, as of June 2007, is 84% and the special servicer is stabilizing and marketing the property for sale. Fitch expects losses upon liquidation of the asset to deplete class M and partially erode class L. MORGAN STANLEY: Fitch Holds 'BB-' Rating on $9.5MM Class H Certs ---------------------------------------------------------------- Fitch Ratings has affirmed Morgan Stanley Capital I Inc., commercial mortgage pass-through certificates, series 2000-FNV1, as: -- $307.7 million class A-2 at 'AAA'; -- Interest only class X at 'AAA'; -- $33.2 million class B at 'AAA'; -- $26.9 million class C at 'AAA'; -- $12.6 million class D at 'AAA'; -- $30.0 million class E at 'AAA'; -- $14.2 million class F at 'AAA'; -- $20.5 million class G at 'A-'; -- $7.9 million class H at 'BBB'; -- $9.5 million class J at 'BB-'; -- $7.9 million class K at 'B'. The ratings of the following classes remain unchanged: -- $6.3 million class L at 'CCC/DR3'; -- $1.9 million class M at 'C/DR6'. Class N remains at 'C/DR6' and has been depleted by realized losses. Although there has been 3.8% additional paydown and 18% additional defeasance since Fitch's last rating action, the transaction is experiencing adverse selection, losses have already eroded two classes and are expected to erode a third. In addition, there is refinance risk with 29.4% of non-defeased loans maturing in 2008. As of the November 2007 distribution date, the pool's aggregate collateral balance has been reduced 24.3%, to $478.7 million from $632.1 million at issuance. Seventy-one loans (44.9%) have defeased to date. Currently, one asset (1.7%) is in special servicing with significant losses expected. The asset is a real estate owned retail center located in Sevierville, Tennessee. Occupancy, as of June 2007, is 84% and the special servicer is stabilizing and marketing the property for sale. Fitch expects losses upon liquidation of the asset to deplete class M and partially erode class L. MORGAN STANLEY: Moody's Cuts Rating on Cl. B4 Certs. to C from Ca ----------------------------------------------------------------- Moody's Investors Service has downgraded 17 certificates and placed on review for possible downgrade 2 certificates from three transactions issued by Morgan Stanley Mortgage Loan Trust. All transactions are backed by second lien loans. The certificates were downgraded or placed on review for possible downgrade because the bonds' credit enhancement levels, including excess spread and subordination, were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses of over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipelines will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: Morgan Stanley Mortgage Loan Trust Downgrade: -- Series 2006-10SL, Class M-2, Downgraded to Baa3 from Baa1; -- Series 2006-10SL, Class M-3, Downgraded to Ba2 from Baa2; -- Series 2006-10SL, Class B-1, Downgraded to B3 from Baa3; -- Series 2006-10SL, Class B-2, Downgraded to Caa2 from Ba2; -- Series 2006-10SL, Class B-3, Downgraded to Ca from Ba3; -- Series 2006-10SL, Class B-4, Downgraded to C from B3; -- Series 2006-14SL, Class M-4, Downgraded to Ba1 from Baa2; -- Series 2006-14SL, Class B-1, Downgraded to B1 from Baa3; -- Series 2006-14SL, Class B-2, Downgraded to Caa1 from Ba1; -- Series 2006-14SL, Class B-3, Downgraded to Ca from Ba3; -- Series 2006-14SL, Class B-4, Downgraded to C from B1; -- Series 2006-4SL, Class M-2, Downgraded to Ba1 from Baa1; -- Series 2006-4SL, Class M-3, Downgraded to B2 from Baa2; -- Series 2006-4SL, Class B-1, Downgraded to Caa2 from Baa3; -- Series 2006-4SL, Class B-2, Downgraded to Ca from Ba1; -- Series 2006-4SL, Class B-3, Downgraded to C from B1; -- Series 2006-4SL, Class B-4, Downgraded to C from Ca. Review for Possible Downgrade: -- Series 2006-10SL, Class M-1, current rating Aa3, on review for possible downgrade; -- Series 2006-4SL, Class M-1, current rating Aa2, on review for possible downgrade. MORTGAGE LENDERS: Has Until February 4 to Remove Actions -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has granted the request of Mortgage Lenders Network USA, Inc., to: (a) extend the period, within which it may remove actions initiated prior to Feb. 5, 2007 through and including February 4, 2008; (b) extend the period, within which the Debtor may remove actions initiated after Feb. 5, 2007 to the later of: -- February 4, 2008; and -- the time period specified in Rules 9027(a)(3)(A) and (B), which provides for the shorter of: * 30 days after receipt of a copy of the initial pleading setting forth the claim or cause of action to be removed; or * 30 days after receipt of the summons, if the initial pleading has been filed with the Court but not served with the summons; and (c) grant an order without prejudice to the Debtor's right to seek further extensions of the applicable deadline. As reported in the Troubled Company Reporter on Nov. 16, 2007, Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, related that since filing for bankruptcy, the Debtor has directed substantially all of its efforts and its professionals' towards the liquidation of hard assets and remaining servicing operations. She noted that the Debtor has also engaged in numerous contested matters and adversary proceedings to protect its rights as debtor-in-possession or to maximize the value of its bankruptcy estate for the benefit of its creditors. Hence, the Debtor, she said, has not had an opportunity to thoroughly review Actions to determine whether there are any that may need to be removed. Ms. Jones contended that the sought extension will afford the Debtor the opportunity necessary to make fully-informed decisions concerning removal of any Action and will assure that the Debtor does not forfeit valuable rights under Section 1452. Additionally, the rights of the Debtor's adversaries will not be prejudiced by the extension because any party to an Action that is removed may seek to have it remanded to the state court pursuant to Section 1452(b). The Debtor submits that its request to extend the deadline for removing the Actions is reasonable and practical in light of the present posture of its bankruptcy case. About Mortgage Lenders Middletown, Conn.-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- is a privately held company offering a full range of Alt-A/Non-Conforming and Conforming loan products through its retail and wholesale channels. The company filed for chapter 11 protection on Feb. 5, 2007 (Bankr. D. Del. Case No. 07-10146). Pachulski Stang Ziehl & Jones LLP represents the Debtor. Blank Rome LLP represents the Official Committee of Unsecured Creditors. In the Debtor's schedules of assets and liabilities filed with the Court, it disclosed total assets of $464,847,213 and total debts of $556,459,464. The Debtor's exclusive period to file a chapter 11 plan of reorganization is set to expire on Jan. 2, 2008. (Mortgage Lenders Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945- 7000). NATCO INT'L: Sept. 30 Balance Sheet Upside-Down by $1,056,256 ------------------------------------------------------------- Natco International Inc.'s interim balance sheet at Sept. 30, 2007, showed $1,353,272 in total assets and $2,409,528 in total liabilities, resulting in a $1,056,256 total stockholders deficit. The company's interim balance sheet at Sept. 30, 2007, also showed strained liquidity with $9,171 in total current assets available to pay $2,409,528 in total current liabilities. The company reported a net loss of $41,200 on $-0- of revenues for the six months ended Setp. 30, 2007, compared with a net loss of $155,141 on $-0- of revenues in the same period of 2006. Consequently, the company discontinued all manufacturing activities and is in the process of doing a reverse merger with Photo Violation Technologies Corp of Vancouver, British Columbia, Canada. Full-text copies of the company's interim financial statements for the quarter ended Sept. 30, 2007, are available for free at: http://researcharchives.com/t/s?25f9 Going Concern Doubt Moore & Associates Chartered, in Las Vegas, expressed substantial doubt about Natco International Inc.'s ability to continue as a going concern after auditing the company'sconsolidated financial statements for the years ended March 31, 2007, and 2006. The auditing firm pointed to the company's significant operating losses over the past three years, substantial stockholders' deficiency, and working capital deficiency. About Natco International Headquartered in Surrey, BC, Canada, Natco International Inc. (OTC BB: NCII.OB) was previously engaged in the production of jewellery cleaners and tire sealants. During the last fiscal year, the company discontinued its production of both lines. The company has signed a binding letter of agreement with Photo violation Technologies Corp., which will lead PVT to take over the company in a reverse merger. PVT is a private company with subsidiaries in Europe and Asia that has developed a patented, technologically innovative parking meter system -- the PhotoViolationMeter(TM). NEW CENTURY: Moody's Lowers Rating on Cl. A-2b Certs. to Ba1 ------------------------------------------------------------ Moody's Investors Service has downgraded 6 certificates from New Century Home Equity Loan Trust, Series 2006-S1. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination, were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, the delinquency pipeline has remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipeline will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: New Century Home Equity Loan Trust, Series 2006-S1 Downgrade: -- Class A-1, Downgraded to Ba1 from Baa2; -- Class A-2a, Downgraded to Baa3 from A3; -- Class A-2b, Downgraded to Ba1 from Baa2; -- Class M-1, Downgraded to Ca from Ba3; -- Class M-2, Downgraded to C from B3; -- Class M-3, Downgraded to C from Ca. NOMURA ASSET: Moody's Junks Ratings on 19 Certificate Classes ------------------------------------------------------------- Moody's Investors Service has downgraded 35 certificates from five transactions issued by Nomura Asset Acceptance Corporation, Alternative Loan Trust. All transactions are backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination, were too low compared to the current projected loss numbers at the previous rating levels. Substantial pool losses over the last few months have continued to erode credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. The actions reflect Moody's expectation that the significant delinquency pipelines will have a further negative impact on the credit support for the senior and mezzanine certificates. Complete rating actions are: Issuer: Nomura Asset Acceptance Corporation, Alternative Loan Trust Downgrade: -- Series 2006-S1, Class M-4, Downgraded to Baa2 from A2; -- Series 2006-S1, Class M-5, Downgraded to Ba1 from Baa2; -- Series 2006-S1, Class M-6, Downgraded to B2 from Baa3; -- Series 2006-S1, Class B-1, Downgraded to Caa2 from Ba1; -- Series 2006-S1, Class B-2, Downgraded to Ca from B1; -- Series 2006-S1, Class B-3, Downgraded to C from Caa3; -- Series 2006-S2, Class M-1, Downgraded to A3 from Aa3; -- Series 2006-S2, Class M-2, Downgraded to Ba1 from Baa1; -- Series 2006-S2, Class M-3, Downgraded to B2 from Baa2; -- Series 2006-S2, Class M-4, Downgraded to Caa2 from Ba1; -- Series 2006-S2, Class M-5, Downgraded to Ca from Ba2; -- Series 2006-S2, Class M-6, Downgraded to C from B3; -- Series 2006-S2, Class B-1, Downgraded to C from Ca; -- Series 2006-S3, Class M-2, Downgraded to Baa3 from Baa1; -- Series 2006-S3, Class M-3, Downgraded to Ba2 from Baa2; -- Series 2006-S3, Class M-4, Downgraded to B1 from Ba1; -- Series 2006-S3, Class M-5, Downgraded to Caa2 from Ba2; -- Series 2006-S3, Class M-6, Downgraded to Ca from B1; -- Series 2006-S3, Class B-1, Downgraded to C from B3; -- Series 2006-S3, Class B-2, Downgraded to C from Ca; -- Series 2006-S4, Class M-1, Downgraded to A3 from A1; -- Series 2006-S4, Class M-2, Downgraded to Baa3 from A3; -- Series 2006-S4, Class M-3, Downgraded to Ba2 from Baa1; -- Series 2006-S4, Class M-4, Downgraded to B1 from Baa3; -- Series 2006-S4, Class M-5, Downgraded to Caa2 from Ba1; -- Series 2006-S4, Class M-6, Downgraded to Ca from Ba3; -- Series 2006-S4, Class B-1, Downgraded to C from B3; -- Series 2006-S4, Class B-2, Downgraded to C from Ca; -- Series 2006-S5, Class A, Downgraded to A3 from A1; -- Series 2006-S5, Class M-1, Downgraded to Baa3 from A3; -- Series 2006-S5, Class M-2, Downgraded to B1 from Baa1; -- Series 2006-S5, Class M-3, Downgraded to Ca from Baa3; -- Series 2006-S5, Class M-4, Downgraded to C from Ba1; -- Series 2006-S5, Class M-5, Downgraded to C from B2; -- Series 2006-S5, Class M-6, Downgraded to C from Ca. NOVASTAR MORTGAGE: Moody's Downgrades Ratings on Nine Classes ------------------------------------------------------------- Moody's Investors Service has downgraded nine classes of certificates from five deals issued by NovaStar Mortgage Funding Trust in 2003 and 2004. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization, excess spread and mortgage insurance relative to the expected loss. These deals have already stepped down except for NovaStar Mortgage Funding Trust, Series 2004-4, which will step down in December if it passes the triggers. Losses have already begun to erode the overcollateralization while losing credit enhancement provided by subordination due to stepdown, leaving the rated bonds less protected. As of November 2007, OC in these deals was below target. The deals are backed by subprime, fixed and adjustable- rate mortgage loans. Complete rating actions are: Issuer: NovaStar Mortgage Funding Trust, Series 2003-3 -- Class B-2, downgraded from Baa2 to Ba2; Issuer: NovaStar Mortgage Funding Trust, Series 2003-4 -- Class B-2, downgraded from Baa2 to Ba2; -- Class B-3, downgraded from Baa3 to B1; Issuer: NovaStar Mortgage Funding Trust, Series 2004-1 -- Class B-2, downgraded from Baa2 to Ba3; -- Class B-3, downgraded from Baa3 to B3; Issuer: NovaStar Mortgage Funding Trust, Series 2004-2 -- Class B-1, downgraded from Baa1 to Baa3; -- Class B-2, downgraded from Baa2 to Ba2; -- Class B-3, downgraded from Baa3 to B3; Issuer: NovaStar Mortgage Funding Trust, Series 2004-4 -- Class B-3, downgraded from Baa3 to Ba1. OPTIGENEX INC: Sept. 30 Balance Sheet Upside-Down by $5,958,008 --------------------------------------------------------------- Optigenex Inc.'s condensed balance sheet at Sept. 30, 2007, showed $2,398,213 in total assets and $8,356,221 in total liabilities, resulting in a $5,958,008 total stockholders' deficit. The company's condensed balance sheet at Sept. 30, 2007, also showed strained liquidity with $939,989 in total current assets available to pay $2,092,320 in total current liabilities. The company reported net income of $497,918 on net sales of $150,538 for the third quarter ended Sept. 30, 2007, compared with a net loss of $4,464,659 on net sales of $77,603 in the the same period last year. Loss from operations was $231,156 compared to loss from operations of $566,926 in the three months ended Sept. 30, 2006. Interest expense for the three months ended Sept. 30, 2007, was $491,974 compared to interest expense of $8,483,380 in the comparable period in 2006. Of the total in 2007, $399,452 was non-cash interest expense resulting from the accounting treatment of the company's convertible notes. The remaining $92,522 was interest due under the convertible notes. As of Sept. 30, 2007, the company has not paid $492,326 of interest due under its convertible notes and accordingly this amount is included in accrued expenses at Sept. 30, 2007. During the three months ended Sept. 30, 2007, the company recorded non-cash other income of $1,221,048 related to the decrease in the fair value of the warrants and embedded derivative liability. This compares with non-cash other income of $4,582,942 during the three months ended Sept. 30, 2006, due to the change in fair value of the warrants and derivative liability. Full-text copies of the company's condensed financial statements for the quarter ended Sept. 30, 2007, are available for free at: http://researcharchives.com/t/s?25f8 Going Concern Doubt Goldstein Golub Kessler LLP, in New York, expressed substantial doubt about Optigenex 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 stockholders deficiency. About Optigenex Inc. Headquartered in Lyndhurst, N.J., Optigenex Inc. (OTC BB: OPGX.OB) supplies bulk material and finished products featuring its patented and wholly natural compound AC-11(R) as a core ingredient to wholesale distributors, skin care and nutraceutical marketing companies. In addition, the company licenses its technology and trademark to third party marketers and manufacturers of skin care and nutraceutical products. OWENS CORNING: Court Approves Settlement Pact with Ohio ------------------------------------------------------- Th Hon. Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved, in its entirety, the Settlement Agreement between Reorganized Owens Corning and its affiliates and the state of Ohio, by and through its attorney general on behalf of the Ohio Environmental Protection Agency. The Ohio Claims Settlement resolves current and potential environmental liabilities of the Reorganized Debtors in certain contaminated sites located in Ohio, including the Granville Solvents Site. The Settlement also addresses the claims asserted by Ohio against the Reorganized Debtors. Among others, the Settlement provides for: (1) the settlement of claims related to certain air emission fees; and (2) the compromise of alleged priority environmental claims totaling about $345,000 as allowed unsecured claims aggregating approximately $50,000. The Settlement also reaffirms the Reorganized Debtors' continuing obligations with respect to site they own on and after the effective date of their Chapter 11 plan. Ohio's Claim As industrial manufacturers in the United States, the Reorganized Debtors continue to have substantial environmental obligations and potential liability with respect to their operations under several federal and state environmental statues and regulations, including those of the State of Ohio. Under those environmental laws, certain Debtors had actual and potential liabilities. The State of Ohio, by and through its attorney general on behalf of the Ohio Environmental Protection Agency, filed three unsecured priority claims against the Debtors after their bankruptcy filing: Claim No. Claim Amount Basis --------- ------------ ----- 7280 $150 Asserted against Soltech, Inc., for permit and emissions fees owed to Ohio. 7323 345,768 Asserted against Owens Corning for postpetition past response costs and anticipated future response costs. 7333 450 Asserted against Owens Corning for permit and emissions fees owed to Ohio. To resolve their dispute, the Debtors and the state of Ohio, by and through its attorney general on behalf of the Ohio Environmental Protection Agency, entered into a settlement agreement. The parties' Settlement addresses each of the Claims asserted by Ohio. The Settlement also acknowledges that some liability may not yet be known or quantifiable and that some sites have yet to be discovered or linked to applicable Debtors. Among other things, the Settlement provides that: (1) The Reorganized Debtors and Ohio have reached complete resolution of any and all Claims for one Liquidated Site. The Liquidated Site was a site owned and operated by third parties to which certain Debtors sent hazardous substances for disposal. Ohio had filed allegedly unsecured priority Claims related to the Liquidated Site for approximately $308,0005. The Settlement compromises those Claims as an Allowed Unsecured Claim against Debtor Owens Corning for $13,065. The Reorganized Debtors may eventually recover insurance proceeds with respect to the Liquidated Site. (2) The Reorganized Debtors have also settled and compromised certain Claims filed by Ohio addressing certain Debtor- Owned Sites. These refer to those sites in the State of Ohio that the Debtors owned on or after the date of confirmation of the Debtors' Chapter 11 Plan. The Settlement provides Allowed Unsecured Claims against Owens Corning for Past Response Costs for those sites aggregating $37,424. (3) Additional Sites encompass all sites other than those sites designated as Debtor-Owned Sites and the Liquidated Site, where a prepetition release or threatened release of a hazardous substance has occurred. All liabilities of the applicable Debtors to Ohio with respect to Additional Sites have been discharged under Section 1141 of the Bankruptcy Code pursuant to the terms of the Plan. Ohio will receive no distributions under the Plan on account of those liabilities. In exchange for the discharge, the Settlement provides that Ohio may seek a determination of liability against the applicable Reorganized Debtors for amounts incurred if Ohio undertakes or oversees Response activities in the ordinary course with respect to any Additional Site. (4) The Settlement allows Claim Nos. 7280 and 7333 for $57 each. A full-text copy of the Ohio Claims Settlement is available for free at http://www.bankrupt.com/misc/OWENS_ohiopact.pdf About Owens Corning Headquartered in Toledo, Ohio, Owens Corning fka Owens Corning (Reorganized) Inc. (NYSE: OC) -- http://www.owenscorning.com/-- is a producer of residential and commercial building materials and glass fiber reinforcements, and other similar materials for composite systems. The company has operations in 26 countries. The company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represented the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Official Committee of Asbestos Creditors. James J. McMonagle served as the Legal Representative for Future Claimants and wass represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. On Sept. 28, 2006, the Honorable John P. Fullam, Sr., of the U.S. District Court for the Eastern District of Pennsylvania affirmed the order of Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware confirming Owens Corning's Sixth Amended Plan of Reorganization. The Plan took effect on Oct. 31, 2006, marking the company's emergence from Chapter 11. (Owens Corning Bankruptcy News, Issue No. 165; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). PAMPELONNE CDO: Moody's Junks Rating on Four Note Classes --------------------------------------------------------- Moody's Investors Service downgraded ratings of eight classes of notes issued by Pampelonne CDO II, Ltd., with five of these ratings left on review for further possible downgrade. The notes affected by these rating action are: (1) Up to $1,600,000,000 aggregate principal balance of Class S Senior Floating Rate Notes due 2052; * Prior Rating: Aaa on review for possible downgrade * Current rating: Aa3 on review for possible downgrade (2) $100,000,000 Class A-1 Senior Floating Rate Notes Due 2052; * Prior Rating: Aaa on review for possible downgrade * Current rating: Baa2 on review for possible downgrade (3) $70,000,000 Class A-2 Senior Floating Rate Notes Due 2052; * Prior Rating: A3 on review for possible downgrade * Current rating: Ba1 on review for possible downgrade (4) $80,000,000 Class A-3 Senior Floating Rate notes Due 2052; * Prior Rating: Baa3 on review for possible downgrade * Current Rating: B1 on review for possible downgrade (5)$70,000,000 Class B Floating Rate Notes Due 2052; * Prior Rating: Ba2 on review for possible downgrade * Current rating: Caa1 on review for possible downgrade (6) $35,000,000 Class C Floating Rate Deferrable Notes Due 2052; * Prior Rating: Caa1 on review for possible downgrade * Current rating: Ca (7) $23,000,000 Class D Floating Rate Deferrable Notes Due 2052; * Prior Rating: Caa3 on review for possible downgrade * Current rating: Ca (8) $7,500,000 Class E Floating Rate Deferrable Notes Due 2052; * Prior Rating: Caa3 on review for possible downgrade * Current rating: Ca The rating actions reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee, on Nov. 8, 2007 of an event of default caused by a failure of the Class A EOD Ratio to be greater than or equal to the required level pursuant to Section 5.1(e) of the Indenture, dated Mar. 6, 2007. Pampelonne CDO II, Ltd. is a hybrid collateralized debt obligation backed primarily by a portfolio of RMBS securities, CDO securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Class A EOD Ratio fell below the required level of 100.0%. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral and the Notes. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by the certain noteholders. Because of this uncertainty, the Class S, Class A-1, Class A-2, Class A-3 and Class B Notes remain on review for possible downgrade pending the receipt of definitive information. PERFORMANCE TRANS: Taps FTI Consulting as Financial Advisor ----------------------------------------------------------- Performance Transportation Services Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Western District of New York to employ FTI Consulting Inc. as their financial advisors. President and chief executive officer Jeffrey L. Cornish of Performance Logistics Group Inc., says that FTI possesses a longstanding relationship with the Debtors in that the firm rendered financial advisory services to the Debtors when the Debtors filed for bankruptcy in 2006. The Debtors and FTI entered into a new engagement letter on Oct. 17, 2007, pursuant to which FTI will: a. assist the Debtors with information and analyses required pursuant to the Debtors' debtor-in-possession financing; b. assist with the identification and implementation of cash management procedures; c. assist with the review and development of a long-range business plan and supporting analyses; d. assist with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of those contracts or leases; e. assist in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts and analysis of proposed transactions for which Court approval is sought; f. attend meetings and assist in discussions with potential investors, banks and other secured lenders, any official committee appointed in the Chapter 11 cases, the United States Trustee, other parties-in-interest and professionals hired by these parties, as requested; g. assist in the preparation of information and analyses necessary for the confirmation of a plan of reorganization in the Chapter 11 cases, including information contained in the disclosure statement; h. assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; i. provide accounting and tax support; j. testify on case-related issues as required by the Debtors; and k. render other financial advisory services as the Debtors' management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in the Debtors' bankruptcy cases. The Debtors will pay FTI based on its professionals' hourly rates: Professional Rate ------------ ---- Senior Managing Directors $595 - $695 Directors/Managing Directors $435 - $590 Associates/Consultants $215 - $405 Administration/Paraprofessionals $95 - $175 The Debtors will also reimburse FTI for reasonable and necessary expenses incurred in connection with their Chapter 11 cases, including, but are not limited to, airfare, meals, hotel accommodations, telephone, industry research, duplicating and printing. David J. Beckman, a senior managing director with FTI Consulting Inc., relates that according to his firm's books and records, during the 90-day period before to the Debtors' Petition Date, FTI received $128,145.78 from the Debtors for professional services performed and expenses incurred. "FTI's current estimate is that it has received unapplied advance payments from the Debtors in excess of prepetition billings in the amount of $100,000," Mr. Beckman said. "The Debtors and FTI have agreed that the retainer will not be segregated by FTI in a separate account but will be held until the end of the Debtors' chapter 11 cases and applied to FTI's final approved fees." Mr. Cornish tells the Court that Mr. Beckman and the FTI employees will not be entitled to any salary from the Debtors. The FTI employees will draw their salary and receive health and other benefits from FTI. Mr. Beckman adds that, to the best of his knowledge, FTI is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code. Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The Court confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their retructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. (Performance Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PERFORMANCE TRANS: Taps Sitrick as Communications Consultants ------------------------------------------------------------- Performance Transportation Services Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Western District of New York to employ Sitrick and Company Inc., as their corporate communications consultants. Jeffrey L. Cornish, president and chief executive officer of Performance Logistics Group, Inc., relates that Sitrick served as corporate communications consultants when the Debtors filed for bankruptcy in 2006. Before the Debtors' bankruptcy filing, Mr. Cornish says, Sitrick assisted in the development of a comprehensive communications strategy designed to facilitate the smooth transition of the Debtors' operations into Chapter 11. Among other things, Sitrick prepared public announcements of the commencement of the Debtors' Chapter 11 cases and prepared other communications to all relevant constituencies. Pursuant to an engagement letter dated Nov. 17, 2007, Sitrick will: a. develop and implement communications programs and related strategies and initiatives for communications with the Debtors' key constituencies, including customers, employees, vendors, shareholders, bondholders and the media, regarding the Debtors' operations and financial performance and the Debtors' progress through the Chapter 11 process; b. develop public relations initiatives for the Debtors to maintain public confidence and internal morale during the Chapter 11 cases; c. prepare press releases and other public statements for the Debtors, including statements relating to major Chapter 11 events; d. prepare other forms of communication to the Debtors' key constituencies and the media, potentially including materials to be posted on the Debtors' Web sites; and e. perform other communications consulting services as may be requested by the Debtors. Before bankruptcy filing, the Debtors provided Sitrick with a $25,000 retainer and a refundable expense advance of $10,000 for all reasonable and necessary out-of-pocket expenses incurred, including, but not limited to, transportation, lodging, food, production costs and copying services. As of the Petition Date, Mr. Cornish says, the Debtors did not owe Sitrick any amounts for prepetition services rendered. The Debtors tell the Court that Sitrick intends to charge for its professional services on an hourly basis -- its ordinary and customary hourly rates range from $165 to $850. The firm also intends to seek reimbursement of actual and necessary out-of- pocket expenses. Anita-Marie Laurie, an employee of Sitrick and Company Inc., assures the Court that Sitrick is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The Court confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their retructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. (Performance Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PERFORMANCE TRANS: Wants Imperial Capital as Investment Banker -------------------------------------------------------------- Performance Transportation Services Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Western District of New York to employ Imperial Capital LLC as their investment bankers. Jeffrey L. Cornish, Performance Logistics Group Inc. president and chief executive officer, says the Debtors selected Imperial Capital because of Imperial Capital's substantial experience in the restructuring field and understanding of the issues involved in Chapter 11 cases. Imperial Capital specializes in the sales and trading of high- yield and distressed debt securities, bank debt, convertible bonds, preferreds, and equities. Mr. Cornish relates that Imperial Capital adds significant value to its institutional accounts through its Capital Structure Arbitrage, Bankruptcy/Reorganization, and Investment Banking Groups. Imperial Capital will assist the Debtors in connection with a potential change of control transaction. Specifically, Imperial Capital will: (a) advise the Debtors on a proposed purchase price and form of consideration for the Transaction; (b) assist the Debtors in developing, evaluating, structuring and negotiating the terms and conditions of a potential Transaction; (c) assist the Debtors in the preparation of solicitation materials with respect to the Transaction and the Debtors; (d) identify and contact selected qualified buyers for the Transaction and furnish them, on behalf of the Debtors, with copies of Offering Materials; (e) assist the Debtors in arranging for potential Buyers to conduct due diligence investigations; (f) if applicable, assist the Debtor in obtaining court approval for the Transaction; (g) assist in the consummation of the Transaction; (h) if requested in writing by the Debtors, provide an opinion as to the fairness, from a financial point of view, to the Debtors of the consideration to be received in the Transaction; and (i) provide other investment banking services with respect to the Debtors as may from time to time be agreed upon between the Debtors and Imperial Capital. The Debtors propose to pay Imperial Capital: -- a $75,000 initiation fee, payable in cash; -- a fee equal to 1% of the consideration to be received by the Debtors or their security holders pursuant to the Transaction; and -- a $175,000 fee upon delivery of a fairness opinion, if the opinion is requested in writing by the Debtors. Imperial Capital will also be reimbursed for reasonable out-of- pocket expenses. Marc A. Bilbao, managing director of Imperial Capital, LLC, assures the Court that Imperial Capital is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The Court confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their retructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. (Performance Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PILGRIM'S PRIDE: Paying Quarterly Dividend on December 14 --------------------------------------------------------- The Board of Directors of Pilgrim's Pride Corporation has declared a quarterly dividend of 2-1/4 cents per share. The quarterly dividend is payable on Dec. 28, 2007, to shareholders of record at the close of business on Dec. 14, 2007. Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * Pilgrim's Pride Corp. holds Moody's Investors Service's B1 senior unsecured credit rating, B2 senior subordinated notes, and Ba3 corporate family ratings. PPC's planned new $250 million senior unsecured notes also bears Moody's B1 rating and its new $200 million senior subordinated notes bears Moody's B2 rating. The outlook on all ratings is stable. All ratings still hold to date. Standard & Poor's Ratings Services gave Pilgrim's Pride Corp. a 'BB-' corporate credit rating. This rating still holds to date. POPE & TALBOT: Asks B.C. Court for Authority to Sell Surplus Lands ------------------------------------------------------------------ Pope & Talbot Inc. and its debtor-affiliates ask the British Columbia Supreme Court to approve four transactions covering the sale of their surplus lands: (a) An agreement between Pope & Talbot Ltd. and Kelowna Family Golf Centre Ltd., dated Oct. 19, 2007, for land and premises located in Beaverdell, British Columbia, for CDN$550,000. (b) An agreement between P&T Ltd. and Dan Norn, James Norn and Byron Norn dated Oct. 26, 2007, for land and premises located in Lower Arrow Lake, for CDN$751,000. (c) An agreement between P&T Ltd. and Paterson Pole Ltd. dated Oct. 26, 2007, for land and premises located in Lower Arrow Lake, for CDN$1,350,000. (d) An agreement between P&T Ltd. and RJR Investments Ltd. dated Nov. 16, 2007, for a portfolio of 10 properties. ' The subject properties are Blanket Creek, Beaton Complex, Beaton Schedule A, Galena Bay Thumb, Arrowhead (Henry's Creek), Galena Bay, Taite Creek, Tuzo Junction, Kettle River Park North, and Kettle River Park South. The Canadian Debtors told the British Columbia Supreme Court that with the assistance of Colliers International, they have determined that certain properties are redundant and surplus to their ongoing and future operations. Kathy L. Mah, Esq., at Stikeman Elliott LLP, in Toronto, Canada, relates that the Canadian Debtors and Colliers have engaged in a valuation and marketing process to sell certain properties. In April 2007, Ms. Mah relates, Colliers' valuation team physically inspected the assets within the portfolio, including the nature of the market, individual property characteristics and their corresponding values. Subsequently, strategic marketing efforts by Colliers led to a significant market response which allowed Colliers to negotiate purchase agreements that significantly exceeded the asking price on all properties, Ms. Mah states. About Pope & Talbot 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' CCAA Stay expires on Jan. 16, 2008. 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. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPE & TALBOT: Wants to Implement Cross-Border Insolvency Protocol ------------------------------------------------------------------ Pope & Talbot Inc. and its debtor affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to implement a proposed cross-border insolvency protocol to govern the administration of the Debtors' dual proceedings between the Bankruptcy Court and the Canadian Court. "It would be prudent for the Bankruptcy Court and the Canadian Court to implement a cross-border protocol to address certain administrative issues anticipated to arise in coordinating the Debtors' Chapter 11 cases and CCAA proceedings," Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Delaware, the Debtors' proposed bankruptcy counsel, states. Specifically, Ms. Jones says, a cross-border protocol is needed to ensure that: -- the Debtors' Chapter 11 cases and the CCAA insolvency proceedings are coordinated to avoid inconsistent, conflicting or duplicative activities; -- all parties are informed adequately of key issues in the Chapter 11 cases and the CCAA proceedings; -- the substantive rights of all parties are protected; and -- the jurisdictional integrity of the Bankruptcy Court and the Canadian Court is preserved. Accordingly, the Debtors propose a cross-border insolvency protocol to govern the administration of the Debtors' dual proceedings between the Bankruptcy Court and the Canadian Court. (a) To harmonize and coordinate the administration of the insolvency proceedings, each Court may coordinate activities and consider whether it is appropriate to defer to the judgment of the other Court. * The Court may communicate with each other, with or without counsel present, with respect to any matter relation to the insolvency proceedings. * On the question of proper jurisdiction or Court to determine a certain issue raised in either of the insolvency proceedings, the Court before which the matter was raised will contact the other Court to determine an appropriate process by which the issue of jurisdiction will be determined. That process will be subject to submissions by the Debtors, the U.S. Trustee, the Canadian Monitor, the Committee, and any interested party. * The Courts may coordinate activities in the insolvency proceedings. * The Courts may conduct joint hearings with respect to any matter relating to the conduct administration, determination or disposition of any aspect of the insolvency proceedings. (b) Any transactions outside the ordinary course of business concerning the sale, lease or use of the Canadian Debtors' assets located solely in Canada will be subject to the sole approval of the Canadian Court; and the sale, lease or use of the Debtors' assets located solely in the United States will be subject to the sole approval of the Bankruptcy Court. (c) Any transactions outside the ordinary course of business concerning the sale or lease or use of the Debtors' assets located both in Canada and the United States, including but not limited to a sale or sales of all or substantially all of the assets of the collective Debtors or of one or both of their business divisions, will be subject to the joint jurisdiction and approval of both Courts. (d) All creditors or equity security holders of the Debtors other than the Canadian Debtors must file their claims against the U.S. Debtors with the Bankruptcy Court, pursuant to claims procedures established by the Court. The Bankruptcy Court will have exclusive jurisdiction over all claims against the U.S. Debtors. (e) Any creditor or equity security holder of the Canadian Debtors may file a proof of claim or interest in either the Bankruptcy Court or the Monitor in the CCAA proceeding. (f) If a creditor files a claim both in the Bankruptcy Court and with the Canadian Monitor in the CCAA proceeding, the last timely filed claim will govern. (g) The Debtors and the Monitor will endeavor to coordinate notice procedures and establish the same deadline for the filing of claims against the Debtors in both the Bankruptcy Court and the Canadian proceeding, and all other matters regarding the filing, reviewing and objecting to claims. (h) The adjudicating forum will decide the amount, value, allowability, priority, classification and treatment of claims filed in any plan of reorganization or plan of arrangement or compromise, and a creditor's rights to collateral and set-off using a choice of law analysis based upon the choice of law principles applicable in that forum. The protocol also contains other provisions with respect to (i) the development of plan or plans of reorganization or plan or plans of arrangement or compromise, (ii) the retention and compensation of professionals, (iii) recognition of stays of proceedings, (iv) rights to appear and be heard, (v) resolutions of disputes under the protocol, (vi) avoidance actions, (vii) executory contracts, (viii) notice, and (ix) preservation of rights. The protocol will become effective only upon approval of both the Bankruptcy Court and the Canadian Court. The approval and implementation of the protocol will not divest or diminish either of the Courts' independent jurisdiction over the subject matter of the Chapter 11 cases and the CCAA proceedings. 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' CCAA Stay expires on Jan. 16, 2008. 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. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPE & TALBOT: Selects KPMG LLP as Independent Auditor ------------------------------------------------------ Pope & Talbot Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for permission to employ KPMG LLP as their independent auditor, effective as of Nov. 19, 2007. The Debtors believe that KPMG's diverse experience and extensive knowledge in the field of accounting will be of much help to their restructuring plans, Harold N. Stanton, president and chief executive officer of Pope & Talbot Inc., tells the Court. The Debtors have employed KPMG as their independent auditor for a period of more than five years. By virtue of its prior engagement, the firm is familiar with the books, records, financial information and other data maintained by the Debtors, and is well qualified to continue to provide auditing services to the Debtors, Mr. Stanton says. As the Debtors' financial advisors, KPMG will: -- audit the Debtors' consolidated financial statements and internal control over financial reporting; -- review the Debtors' condensed consolidated balance sheets and related condensed consolidated statements of operations and cash flows as well as selected quarterly financial data; -- perform procedures required by the standards of the Public Company Accounting Oversight Board (United States), including reading information incorporated by reference in the Debtors' previously filed registration statements and performing subsequent event procedures; -- audit the Debtors' Pension Plan and Tax Deferred Savings Plan; and -- perform additional audit services that may be requested by the Debtors from time to time during the pendency of their Chapter 11 cases. The Debtors will pay for KPMG's general auditing services according to the firm's customary hourly rates: Professional Hourly Rate ------------ ----------- Partners $360 Managers $270 Senior Associates $200 Staff $120 Assistant $100 KPMG will be paid these amounts with respect to auditing services related to the Debtors' pension and tax deferred savings plans: Professional Hourly Rate ------------ ----------- Partners $300 Managers $200 Senior Associates $150 Staff/Assistant $110 The Debtors will also reimburse KPMG for any direct expenses it incurred or will incur in connection with the performance of the contemplated auditing services. During the 90-day period prior to the bankruptcy filing, the Debtors paid KPMG $685,513 for professional services performed and expenses incurred, according to Mr. Stanton. As of Nov. 19, 2007, KPMG was holding a $10,535 retainer from the Debtors. KPMG intends to apply the retainers to fees for services rendered and expenses incurred after the bankruptcy filing. Timothy McCann, a certified public accountant at KPMG, assures the Court that his firm is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. 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' CCAA Stay expires on Jan. 16, 2008. 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. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). PROJECT FUNDING: Moody's Lowers Rating on $537.08MM Notes to Ba2 ---------------------------------------------------------------- Moody's Investors Service downgraded three classes of notes issued by Project Funding Corporation I. Moody's noted that this transaction is secured by a static portfolio of project finance loans and closed in February of 1998. According to Moody's, the largest of the loans in the portfolio suffered a default in the payment of principal due at the end of March 2006. The rating action reflects continuing uncertainty about the amount and timing of the recovery on that loan. Issuer: Project Funding Corporation I Action: Downgrade Description: $537,083,000 Class I Senior Notes due 2012 -- Previous Rating: A3 (under review for possible downgrade) -- Current Rating: Ba2 Description: $17,285,000 Class II Senior Notes due 2012 -- Previous Rating: B1 (under review for possible downgrade) -- Current Rating: Ca Description: $17,902,000 Class III Mezzanine Notes due 2012 -- Previous Rating: B3 (under review for possible downgrade) -- Current Rating: Ca QWEST COMMS: Fitch Affirms 'BB' Issuer Default Rating ----------------------------------------------------- Fitch Ratings has affirmed Qwest Communications International, Inc.'s Issuer Default Rating at 'BB'. Additionally, Fitch has affirmed the IDRs of Qwest's wholly owned subsidiaries including Qwest Corporation as well as the specific issue ratings as highlighted below. The Rating Outlook for Qwest and its subsidiaries is Stable. Approximately $14.5 billion of debt outstanding as of Sept. 30, 2007 is affected by Fitch's action. Supported by the operating margin improvement derived from ongoing cost reductions and productivity enhancements coupled with the debt reduction achieved by the company to date, Fitch believes that Qwest's credit profile is strong within the current ratings category. Qwest's credit profile has also benefited from the rationalization of the company's network and less profitable products and the emergence and growth potential of IP based data products. Overall the ratings assigned to Qwest and its subsidiaries incorporate the scope, scale and relatively consistent cash flow generated by Qwest Corporation's local exchange business, and the relative stability of Qwest's enterprise segment. Fitch's ratings also reflect Qwest's improved financial flexibility, solid liquidity position and Fitch's expectation of modest credit metric improvement and generation of material free cash flow. Key rating issues center on a potential shift of Qwest's financial policies following the strategic review initiated by Qwest's new chief executive officer, competitive pressure from facilities based telecommunications providers and limited revenue growth and cost reduction opportunities. Fitch believes that the strategic review will encompass an evaluation of the company's financial policies including capital structure, share repurchases, dividends, and the level of reinvestment in its businesses, which presents an element of event risk to Qwest's credit profile. Currently, given Fitch's expectation that Qwest will continue to generate meaningful levels of free cash flow, Fitch believes that there is sufficient flexibility within the current ratings to support the existing amount of cash returned to Qwest's shareholders. From Fitch's perspective, an increase in the level of cash returned to shareholders would need to maintain the balance with continued debt reduction, and maintaining a strong level of financial flexibility and liquidity position given the business, operational, and regulatory risks within Qwest's credit profile. Qwest faces intense competition from facilities based telecommunications providers across its entire product portfolio. The competitive threats increase the likelihood of product and technology substitution and manifest themselves primarily through access line erosion and anemic revenue growth. In Fitch's opinion, Qwest lacks the revenue diversity, which can offset competitive pressures that the larger incumbent local exchange providers enjoy. Qwest's ability to grow its revenue base will, in Fitch's opinion, be predicated on the company's ability to drive further bundled service penetration, grow the ARPU of growth products and continue to migrate its enterprise customer base to more advanced data services. On a consolidated basis, the company ended the third quarter of 2007 with approximately $14.506 billion of debt. During the first nine months of 2007, Qwest reduced its total debt outstanding by approximately $386 million. In total, Qwest and its subsidiaries redeemed or paid upon maturity approximately $884 million of debt, including $320 at Qwest Corporation, $314 million at Qwest Communications Corporation, and $250 million at Qwest Communications International, Inc. The debt repayments were funded in part with cash on hand and $500 million of new senior notes issued by Qwest Corporation. The debt reduction accomplished during 2007, coupled with Qwest's improving operating profile, have contributed to the continued strengthening of Qwest's credit protection metrics. Qwest's leverage metric as of the latest twelve month period ended September 30, 2007 was 3.2 times, reflecting steady improvement from 3.4x as of year-end 2006 and 3.8x as of year-end 2005. Qwest announced that it redeemed $250 million aggregate principal amount from Qwest's Floating Rate senior notes due 2009. As of Sept. 30, 2007, the outstanding principal amount of the notes was $500.0 million. Taking into consideration the early redemption, Fitch expects that Qwest's leverage as of year end 2007 will be approximately 3.1x. Looking into 2008, Fitch expects that nominal margin expansion, coupled with further debt reduction, will modestly strengthen Qwest's credit profile. Fitch believes that Qwest's leverage will approach 3.0x by year-end 2008. Fitch assumes that during 2008, Qwest will retire approximately $560 million of scheduled maturities with available cash. In Fitch's opinion, Qwest's liquidity position is strong and is supported by existing cash and short-term investments totaling approximately $1.1 billion as of the end of the third quarter of 2007, the $850 million senior secured revolver, as well as Fitch's expectation that the company will continue to generate stable levels of free cash flow. Qwest repurchased approximately 107 million shares of its common stock, spending about $1.152 billion during the first nine months of 2007. As of Sept. 30, 2007, approximately $848 million of capacity remained under the board- authorized $2.0 billion stock repurchase program. Scheduled maturities of debt during 2008 and 2009 total approximately $1.4 billion, which Fitch expects that Qwest will retire with cash. The Stable Rating Outlook reflects Fitch's expectation for continued stabilization of the company's revenue base driven by further strengthening of Qwest's service bundling strategy and investment in growth products such as high speed internet and advanced data products. Fitch Ratings has affirmed these ratings of Qwest and its subsidiaries below: Qwest Communications International, Inc. -- Issuer Default Rating at 'BB'; -- Senior Secured Credit Facility at 'BBB-'; -- Senior Unsecured Notes (guaranteed by QSC) at 'BB+'; -- Senior Unsecured Notes at 'BB'; -- Senior Convertible Senior Notes at 'BB'. Qwest Corporation -- IDR at 'BB'; -- Senior Term Loan at 'BBB-'; -- Senior unsecured notes at 'BBB-'. Qwest Services Corporation -- IDR at 'BB'. Qwest Capital Funding -- IDR at 'BB'; -- Senior unsecured notes at 'BB'. Fitch has affirmed and withdrawn this rating: Qwest Communications Corporation -- IDR at 'BB'. RAFAELLA APPAREL: Moody's Holds B1 CFR and Revises Outlook ---------------------------------------------------------- Moody's Investors Service affirmed Rafaella Apparel Group, Inc.'s Corporate Family and Probability of Default Ratings at B1, its senior secured note rating at B2 and revised the company's outlook to negative from stable. "The revision in Rafaella's rating outlook to negative reflects Moody's concerns regarding execution risk relating to strengthening the Rafaella brand, including increased investments related to branding initiatives, during a time where the macroeconomic environment remains challenging," said Scott Tuhy, Moody's Vice President and Senior Analyst. As a result of the May/Federated merger, Rafaella lost higher margin business with the previous May companies, and has replaced it primarily with lower margin private label business. The affirmation of the B1 corporate family rating reflects the overall financial position of the company, including good free cash flow generation and liquidity position, replenishment nature of a large part of the Rafaella business, resulting in low seasonality and moderate free cash flow and leverage. The rating is pressured by the company's limited scale, with revenues of $182 million for the LTM period ended September 30, 2007 and single owned fashion brand, decreasing sales and profitability, high customer concentration and limited segment and channel diversity. These ratings were affirmed and assessments revised: -- Corporate Family Rating, at B1 -- Probability of Default Rating, at B1 -- $138.5 million senior secured notes due June 2011, at B2 (to LGD4 62%, from LGD4 60%) The ratings outlook was changed to negative from stable. Rafaella Apparel Group, Inc. based in New York, New York, is a designer, sourcer, and marketer of a full line of women's career and casual sportswear separates under the Rafaella brand. For the LTM period ended September 30, 2007, the company reported net sales of approximately $182 million. RENT-A-CENTER: To Close 280 Stores as Part of Consolidation Plan ---------------------------------------------------------------- Rent-A-Center, Inc. disclosed plans to close approximately 280 stores across the U.S. "We continually analyze every aspect of our business in an effort to improve operating and financial performance," Mark E. Speese, the Chairman and Chief Executive Officer of Rent-A-Center, Inc., commented. "Accordingly, we evaluated every market in which we operate based on operating results, competitive positioning, and growth potential. As a result, we identified approximately 280 stores that we intend to close and merge with existing Rent-A- Center stores within the next 90 days." The Company expects to incur pre-tax restructuring charges related to the store consolidation plan and other restructuring items in the range of $36.0 million to $43.0 million, substantially all of which will be recorded in the fourth quarter of our fiscal year ending Dec. 31, 2007. The estimated cost with respect to this restructuring relates primarily to lease terminations, fixed asset disposals and other miscellaneous items. The Company expects the cash outlay associated with this restructuring will be in the range of $26.0 million to $30.5 million over the next 12 to 18 months. The 280 stores identified generated revenues of approximately $140.0 million year-to-date through Oct. 31, 2007. These stores will transfer their customer rental purchase agreements to existing Rent-A-Center stores and the Company expects to retain the majority of these rental purchase agreements. At the conclusion of the restructuring, the Company expects a pre-tax monthly operating income benefit in the range of $2.0 million to $2.5 million. Based in Plano, Texas, Rent-A-Center, Inc. (Nasdaq:RCII) -- http://www.rentacenter.com/-- operates approximately 3,355 company-owned stores nationwide and in Canada and Puerto Rico. The stores generally offer high-quality, durable goods such as major consumer electronics, appliances, computers and furniture and accessories under flexible rental purchase agreements that generally allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period. ColorTyme, Inc., a wholly owned subsidiary of the Company, is a national franchiser of approximately 210 rent-to-own stores operating under the trade name of "ColorTyme." * * * Standard & Poor's Ratings Services assigned BB long-term foreign and local issuer credit ratings to Rent-A-Center Inc. on October 2006. The ratings still hold to date. Moody's Investors Service assigned low-b ratings to Rent-A-Center Inc., including Ba3 long-term corporate family rating, Ba2 bank loan debt, B2 senior subordinate rating and Ba3 probability of default rating. All ratings still hold to date. RENT-A-CENTER: Earns $25 Million in Quarter Ended September 30 -------------------------------------------------------------- Rent-A-Center, Inc. reported revenues and earnings for the quarter ended Sept. 30, 2007. Reported net earnings for the quarter ended Sept. 30, 2007 were $25.3 million, an increase of $0.1 million or 0.4% from the reported net earnings of $25.2 million for the same period in the prior year. The company reported total revenues for the quarter ended Sept. 30, 2007 of $709.7 million, an increase of $122.5 million from the reported total revenues of $587.2 million for the same period in the prior year. This 20.9% increase in revenues was primarily driven by the Rent-Way acquisition that closed on Nov. 15, 2006. Same store revenues for the quarter ended Sept. 30, 2007 decreased 1.8%. For the quarter ended Sept. 30, 2007, the company generated cash flow from operations of approximately $127.2 million, while ending the quarter with $100.3 million of cash on hand. During the quarter ended Sept. 30, 2007, the company repurchased 2,307,400 shares of its common stock for $45.1 million in cash under its common stock repurchase program. To date, the company has repurchased a total of 18,235,950 shares and has utilized approximately $441.0 million of the $500.0 million authorized by its Board of Directors since the inception of the plan. In addition, during the quarter ended Sept. 30, 2007, the company reduced its outstanding indebtedness by $31.2 million. "Our third quarter financial results for total revenue and earnings per diluted share were within our guidance range; however, the business environment was very challenging throughout the quarter," Mark E. Speese, the Company's Chairman and Chief Executive Officer, commented. "Although we believe that our customer continues to face financial challenges, we have been encouraged by the positive results from our operational initiatives, as well as an increase in demand in October. As we prepare to enter 2008, we intend to focus on enhancing store level operations, improving operational efficiencies, and further investing in our financial services business, while maintaining a solid balance sheet. Reported net earnings for the nine months ended Sept. 30, 2007 were $81.6 million, a decrease of $23.8 million from the reported net earnings of $105.4 million for the same period in the prior year. This decrease is primarily a result of the $51.3 million litigation expense recorded in the first quarter of 2007 in connection with a lawsuit settlement. Total reported revenues for the nine months ended Sept. 30, 2007 were $2.189 billion, an increase of $0.411 billion, or 23.1% from the reported total revenues of $1.778 billion for the same period in the prior year. Same store revenues for the nine month period ending Sept. 30, 2007 increased 1.4%. Through the nine month period ended Sept. 30, 2007, the company generated cash flow from operations of $270.3 million. During the nine month period ended Sept. 30, 2007, the company repurchased 3,607,150 shares of its common stock for $80.1 million in cash under its common stock repurchase program. In addition, during the nine month period ended Sept. 30, 2007, the company reduced its outstanding indebtedness by approximately $91.5 million. At Sept. 30, 2007, the company's balance sheet showed total assets of $2.6 billion and total liabilities of $1.7 billion, resulting in a stockholders' equity of $954.2 million. Equity at Sept. 30, 2006, was $947.5 million. Based in Plano, Texas, Rent-A-Center, Inc. (Nasdaq:RCII) -- http://www.rentacenter.com/-- operates approximately 3,355 company-owned stores nationwide and in Canada and Puerto Rico. The stores generally offer high-quality, durable goods such as major consumer electronics, appliances, computers and furniture and accessories under flexible rental purchase agreements that generally allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period. ColorTyme, Inc., a wholly owned subsidiary of the Company, is a national franchiser of approximately 210 rent-to-own stores operating under the trade name of "ColorTyme." * * * Standard & Poor's Ratings Services assigned BB long-term foreign and local issuer credit ratings to Rent-A-Center Inc. on October 2006. The ratings still hold to date. Moody's Investors Service assigned low-b ratings to Rent-A-Center Inc., including Ba3 long-term corporate family rating, Ba2 bank loan debt, B2 senior subordinate rating and Ba3 probability of default rating. All ratings still hold to date. REUNION INDUSTRIES: Inks $15 Million DIP Pact with Wachovia ----------------------------------------------------------- Reunion Industries Inc. has obtained a debtor-in-possession financing from Wachovia Bank N.A., Bill Rochelle of Bloomberg News reports. According to Bloomberg, Wachovia, the Debtor's existing secured lender, offered a $15 million financing. The financing is still subject to Court approval. Headquartered in Pittsburgh, Pennsylvania, Reunion Industries Inc. owns and operates industrial manufacturing operations that design and manufacture engineered, high quality products for specific customer requirements. These products include large diameter seamless pressure vessels, manufactured by its CP Industries division, and hydraulic and pneumatic cylinders, manufactured by its Hanna Cylinders division. In addition, the Debtor has a 65% interest in Shanghai Klemp Metal Products Co., Ltd., a Chinese company located in Shanghai, China. Shanghai Klemp manufactures metal bar grating. Reunion Industries filed for Chapter 11 protection on November 26, 2007 (Bankr. D. Conn. Case No.: 07-50727). Two Reunion Industries stockholders, Charles E. Bradley, Sr. Family, L.P., and John Grier Poole Family, L.P., filed separate Chapter 11 petitions on the same day (Bankr. D. Conn. Case Nos. 07-50725 and 07-50726). Carol A. Felicetta, Esq. at Reid and Riege, P.C. represents the Debtors in their restructuring efforts. Reunion Industries listed $0 assets and $1,513,143 debts in its petition, while its shareholders both reported $0 assets and $0 debts. RHODES COMPANIES: Moody's Puts Ca Rating on Sr. Secured Loan ------------------------------------------------------------ Moody's Investors Service lowered all the ratings of The Rhodes Companies, LLC, including the company's corporate family rating to Caa2 from B2, the rating on the senior secured first-lien term loan to Caa1 from B2, and the rating on the senior secured second- lien term loan to Ca from Caa1. The ratings outlook is negative. The downgrades and negative outlook reflect the following: i) Moody's does not expect a housing sector recovery to begin before well into 2009 at the earliest, with any recovery likely be very restrained at the outset, thus prolonging the company's underperformance on key financial metrics vs. prior expectations; ii) the company's compliance with its recently revised covenants may become problematic as early as the current quarter; iii) any meaningful reduction in the company's debt to net value metric will not occur before the end of 2009, at the earliest, which is well beyond the company's original projections; iv) Moody's projects both profitability and cash flow generation to remain negative in 2008; v) liquidity will be tight as Rhodes' current cash balances, which it uses in lieu of a revolver to finance seasonal and other requirements, are greatly reduced since the time that its financing was arranged, and the company may burn through a substantial amount of this cash before its cash flow can make a material contribution to liquidity; and vi) the company's relatively small size and scale, geographic concentration, and limited product and price point diversity exacerbate the effects of the Las Vegas housing downturn. Going forward, the ratings could be reduced again if the company is unable to obtain additional covenant relief. The ratings outlook could stabilize if the company were to obtain substantial and long-term covenant relief and were to reverse the current weakness in inventory performance and cash flow generation. These ratings for Rhodes were lowered: -- Corporate family rating, lowered to Caa2 from B2; -- Probability of Default rating, lowered to Caa2 from B2; -- Senior Secured First Lien Term Loan, lowered to Caa1 (LGD- 3, 40%) from B2 (LGD-3, 43%); -- Senior Secured Second Lien Term Loan, lowered to Ca (LGD- 5, 89%) from Caa1 (LGD-6, 92%). Headquartered in Las Vegas, Nevada, The Rhodes Companies, LLC and its co-borrowers (Heritage Land Company, LLC and Rhodes Ranch General Partnership) comprise the largest private community developer and homebuilder in Las Vegas. Revenues and net income (essentially pretax income, since the company pays no income taxes) for the trailing twelve months ended September 30, 2007 were $178 million and ($6) million, respectively. ROUGE INDUSTRIES: Has Until January 18 to File Liquidating Plan --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware further extended Rouge Industries Inc. and its debtor-affiliates' exclusive periods to: a) file a Chapter 11 plan until Jan. 18, 2008; and b) solicit acceptances of that plan until March 21, 2008. The Debtors tell the Court that they need more time to finalize and file a liquidating Chapter 11 plan. The Debtors say that they have succefully sold substantially all of their operating assets for approximately $100 million more than the initial bid. The Debtors' exclusive period to file a Chapter 11 plan expired on Nov. 19, 2007. Based in Dearborn, Michigan, Rouge Industries Inc., an integrated producer of flat-rolled steel, filed for chapter 11 protection on October 23, 2003 (Bankr. D. Del. Case No. 03-13272). Adam G. Landis, Esq., at Landis Rath & Cobb LLP and Alicia Beth Davis, Esq., at Morris Nichols Arsht & Tunnell represent the Debtors. Kurt F. Gwynne, Esq., and Richard Allen Keuler, Jr., Esq., at Reed Smith LLP serve as counsel to the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $558,131,000 in total assets and $558,131,000 in total debts. On Dec. 19, 2003, the Court approved the sale of substantially all of the Debtors' assets to SeverStal N.A. for $285.5 million. The asset sale closed on Jan. 30, 2005. SALANDER-O'REILLY: Sotheby's Wants to Auction 29 Art Pieces ----------------------------------------------------------- Sotheby's Inc. seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to sell 29 artworks in which Salander-O'Reilly Galleries LLC has an interest for approximately $2,240,000, Bill Rochelle of Bloomberg News reports. According to Bloomberg, Sotheby's anticipates an auction for the artworks on Jan. 28, 2008. A hearing to consider Sotheby's request has been set for Dec. 6, 2007. 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, an independent turnaround firm. SECURITIZED ASSET: Moody's Lowers Ratings on 41 Tranches -------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 41 tranches and has placed under review for possible downgrade the ratings of 15 tranches from 8 transactions issued by Securitized Asset Backed Receivables LLC Trust in 2007. Additionally, one downgraded tranche remains on review for possible further downgrade. The collateral backing these classes consists of primarily first lien, fixed and adjustable-rate, subprime mortgage loans. In its analysis, Moody's has applied its published methodology updates as of July 13th, 2007 to the non delinquent portion of the transactions. Collateral backing these transactions is also experiencing higher than anticipated rates of delinquency, foreclosure, and REO relative to credit enhancement levels. Complete list of Rating Actions: Issuer: Securitized Asset Backed Receivables LLC Trust 2007-BR1 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Baa1, previously A1, -- Cl. M-5, Downgraded to Ba1, previously A2, -- Cl. M-6, Downgraded to B1, previously A3, -- Cl. B-1, Downgraded to Caa2, previously Baa1, -- Cl. B-2, Downgraded to C, previously Baa2. Issuer: Securitized Asset Backed Receivables LLC Trust 2007-BR2 -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A3, previously A1, -- Cl. M-5, Downgraded to Baa2, previously A2, -- Cl. M-6, Downgraded to Ba2, previously A3, -- Cl. B-1, Downgraded to B2, previously Baa1, -- Cl. B-2, Downgraded to Caa2, previously Baa2, -- Cl. B-3, Downgraded to C, previously Baa3. Issuer: Securitized Asset Backed Receivables LLC Trust 2007-BR3 -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A2, previously A1, -- Cl. M-5, Downgraded to Baa1, previously A2, -- Cl. M-6, Downgraded to Baa3, previously A3, -- Cl. B-1, Downgraded to Ba2, previously Baa1, -- Cl. B-2, Downgraded to B1, previously Baa2, -- Cl. B-3, Downgraded to Caa2, previously Baa3. Issuer: Securitized Asset Backed Receivables LLC Trust 2007-BR4 -- Cl. M-5, Downgraded to A3, previously A2, -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Ba1, previously Baa1, -- Cl. B-2, Downgraded to Ba3, previously Baa2. -- Cl. B-3, Downgraded to B3 on review for possible further downgrade, previously Baa3. Issuer: Securitized Asset Backed Receivables LLC Trust 2007-BR5 -- Cl. B-1, Downgraded to Baa2, previously Baa1, -- Cl. B-2, Downgraded to Ba1, previously Baa2, -- Cl. B-3, Downgraded to B1, previously Baa3. Issuer: Securitized Asset Backed Receivables LLC Trust 2007-HE1 -- Cl. A-1 Currently Aaa on review for possible downgrade, -- Cl. M-1 Currently Aa1 on review for possible downgrade, -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to Caa1, previously A1, -- Cl. M-5, Downgraded to Caa3, previously A2, -- Cl. M-6, Downgraded to Ca, previously A3, -- Cl. B-1, Downgraded to C, previously Baa1, -- Cl. B-2, Downgraded to C, previously Baa2, -- Cl. B-3, Downgraded to C, previously Baa3, -- Cl. A-2C Currently Aaa on review for possible downgrade, -- Cl. A-2D Currently Aaa on review for possible downgrade. Issuer: Securitized Asset Backed Receivables LLC Trust 2007-NC1 -- Cl. M-2 Currently Aa2 on review for possible downgrade, -- Cl. M-3 Currently Aa3 on review for possible downgrade, -- Cl. M-4, Downgraded to A3, previously A1, -- Cl. M-5, Downgraded to Baa2, previously A2, -- Cl. M-6, Downgraded to Ba2, previously A3, -- Cl. B-1, Downgraded to B2, previously Baa1, -- Cl. B-2, Downgraded to Caa2, previously Baa2, -- Cl. B-3, Downgraded to C, previously Baa3. Issuer: Securitized Asset Backed Receivables LLC Trust 2007-NC2 -- Cl. M-6, Downgraded to Baa1, previously A3, -- Cl. B-1, Downgraded to Ba1, previously Baa1, -- Cl. B-2, Downgraded to Ba2, previously Baa2, -- Cl. B-3, Downgraded to B1, previously Baa3. SOLAR STAMPING: Court Converts Reorganization Case to Chapter 7 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan has converted Solar Stamping & Manufacturing LLC's chapter 11 reorganization case into one under a chapter 7 liquidation, Bill Rochelle of Bloomberg News reports. According to Bloomberg, the Debtor sought for the conversion after its only customer, General Motors Corp., switched to other suppliers. Bloomberg relates that the conversion terminates the $2.3 million postpetition financing previously offered by GM to the Debtor. Headquartered in Detroit, Michigan, Solar Stamping and Manufacturing LLC filed for chapter 11 protection on Aug. 29, 2007 (Bankr. E.D. Mich. Case No. 07-57127). Jeffrey S. Grasl, Esq. and Stephen M. Gross, Esq. at McDonald Hopkins, P.L.C. serve as the Debtor's counsel. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million to $100 million. SOLUTIA INC: Noteholders to Appeal Ruling on Claim -------------------------------------------------- The Bank of New York, as Indenture Trustee for the 11.25% Senior Secured Notes due 2009 issued by Solutia Inc. and its predecessor, takes an appeal to the United States District Court for the Southern District of New York under 28 U.S.C. Section 158(a) from each and every part of: (a) the order of the U.S. Bankruptcy Court for the Southern District of New York denying BNY's request for relief from the automatic stay, entered Nov. 26, 2007; (b) Judge Beatty's November 9 memorandum decision on joint motion for partial summary judgment with respect to Claim No. 6210, and the November 26 final order granting partial summary judgment in favor of the Debtors and the Official Committee of Unsecured Creditors regarding the Debtors' objection to BNY's Claim No. 6210; and (c) Judge Beatty's ruling on BNY's emergency motion for reconsideration of the Memorandum Decision on Joint Motion for Partial Summary Judgment, issued on November 26. Bankruptcy Court's Ruling The Debtors's Consensual Plan provides, among other things, that the holders of the Debtors' 11.25% senior secured notes will be paid the allowed amount of their claim in full, in cash on the effective date. On Nov. 9, 2007, the Court issued its memorandum decision on the Debtors', the Official Committee of Unsecured Creditors', and the 2009 Noteholders' motions for partial summary judgment with respect to Claim No. 6210, where it concluded, among other things, that the Claim has a principal balance of $187,400,000. Bank of New York, as indenture trustee for the 11.25% senior secured notes due 2009 issued by Solutia Inc., or its predecessor, filed a motion for reconsideration of the Court's Memorandum Decision, which was denied. The Court entered its final order granting partial summary judgment in favor of the Debtors and Creditors Committee regarding the Debtors' objection to Claim No. 6210 on November 26, 2007. In the final order, the Court allowed Claim No. 6210, (i) the original issued amount of the 2009 Notes of $181,711,550, and (ii) the accrued prepetition original issue discount of $5,666,797. Pursuant to Section 506(b) of the Bankruptcy Code these interest on Claim No. 6210 will be allowed: -- $21,611,958, the accrued original issue discount from the Petition Date through November 9, 2007; and -- an amount equal to the number of days from November 9, 2007 to the effective date of Solutia's Plan multiplied by $20,158, the daily accrued original issue discount from the Peittion Date from November 9, 2007, through January 15, 2008; provided that the effective date or the Plan has not occurred on or before January 15, until the efective date of Solutia Inc's plan will be multiplied by $21,735. The Court also denied Bank of New York's motion to lift stay. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on November 29, the Court confirmed the Debtors' Consensual Plan. (Solutia Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Solutia carries Moody's Investors Service's B1 Corporate Family Rating and Probability of Default Rating. SPRINGWOOD CLIFFS: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Springwood Cliffs, L.L.C. P.O. Box 728 Otto, NC 28763 Bankruptcy Case No.: 07-20128 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- River Valley Ranch, L.L.C. 07-20129 Titan Building Contractors, Inc. 07-20130 Shane C. Stikeleather 07-20131 Type of Business: The Debtors builds homes and develops real estate. Chapter 11 Petition Date: December 3, 2007 Court: Western District of North Carolina (Bryson City) Judge: George R. Hodges Debtor's Counsel: David R. Hillier, Esq. Gum, Hillier & McCroskey, P.A. 47 North Market Street, P.O. Box 3235 Asheville, NC 28802 Tel: (828) 258-3368 Fax: (828) 252-6721 Assets Debts ------ ----- Springwood Cliffs, L.L.C. $1,140,000 $426,239 River Valley Ranch, L.L.C. $10,035,000 $1,279,119 Titan Building Contractors, $1 Million to $1 Million to Inc. $100 Million $100 Million Shane C. Stikeleather $1 Million to $1 Million to $100 Million $100 Million A. Springwood Cliffs, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Macon County Tax Collector 2007 property taxes $3,898 5 West Main Street Parcel 07-45554 Franklin, NC 28734 B. River Valley Ranch, LLC's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Macon County Tax Collector 2007 property taxes $3,898 5 West Main Street Parcel 07-45554 Franklin, NC 28734 C. Titan Building Contractors, Inc's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Supply Mart $109,734 P.O. Box 1417 Clayton, GA 30525 Nantahala Lumber Co. $55,741 P.O. Box 1149 Franklin, NC 28734 Rabuns Sand $24,797 P.O. Box 592 Clayton, GA 30525 Rabun County Bank $48,797 R.B.C. Bankcard $19,000 H.D. Supply $18,773 Interior Construction $18,657 Specialist Northeast Georgia Heating $16,177 & Air A.C./D.C. Electric $15,734 The Home Depot $14,325 Smith Kesler & Co. $13,190 T.I.A.A.-C.R.E.F. $12,560 Gale Insulation $11,368 Innovative Building Concepts $10,604 Zickgraf Hardwood Co. $9,004 Alvin Johnson $8,689 Seays Farm & Garden $8,683 United Community Bank Yellow Jacket $8,000 Strawblower- Repossessed Ferikes & Bleynat $7,449 D. Shane C. Stikeleather's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Supply Mart $109,734 P.O. Box 1417 Clayton, GA 30525 Nantahala Lumber Co. $55,741 P.O. Box 1149 Franklin, NC 28734 Rabuns Sand $24,797 P.O. Box 592 Clayton, GA 30525 Rabun County Bank $48,797 R.B.C. Bankcard $19,000 H.D. Supply $18,773 Interior Construction $18,657 Specialist Northeast Georgia Heating $16,177 & Air A.C./D.C. Electric $15,734 The Home Depot $14,325 Smith Kesler & Co. $13,190 T.I.A.A.-C.R.E.F. $12,560 Gale Insulation $11,368 Innovative Building Concepts $10,604 Zickgraf Hardwood Co. $9,004 Alvin Johnson $8,689 Seays Farm & Garden $8,683 United Community Bank Yellow Jacket $8,000 Strawblower- Repossessed Ferikes & Bleynat $7,449 STANLEY-MARTIN: Moody's Junks Corporate Family Rating ----------------------------------------------------- Moody's Investors Service lowered the ratings of Stanley-Martin Communities, LLC, including its corporate family rating to Caa1 from B2 and the senior sub notes rating to Caa2 from B3. The ratings outlook is negative. The downgrade and negative outlook reflect Moody's expectation that: (i) a housing sector recovery does not begin before well into 2009 at the earliest, with any recovery likely be very restrained at the outset, thus prolonging the company's underperformance on key financial metrics vs. prior expectations; (ii) the company's cash flow from operations in 2007 will be negative, and it will be challenging for the company to move into positive cash flow territory in 2008; (iii) adjusted debt to capitalization could increase to above 80% in 2008; (iv) even though the company currently has modest headroom under its covenants, the cushion could erode very rapidly given the current industry conditions; and (v) the company's relatively small size and scale and limited geographic, product and price point diversity exacerbate the effects of the Washington, DC housing downturn. The rating also takes into consideration the company's constrained liquidity position. Stanley-Martin's revolver was recently reduced to $127.5 million from $150 million and at September 30, 2007 only $44.5 million was available. Moody's projects the company to utilize its revolving credit facility throughout 2008. Going forward, the outlook and/or ratings would be pressured if the company were unable to turn cash flow positive on a trailing 12-month basis by mid-year 2008, if covenant compliance were to become problematic, or if the company's adjusted debt to capitalization were to reach 85% in 2008. The outlook and ratings could benefit by a strengthening of the company's cash flow generation and a permanent reduction in its adjusted debt leverage metric to well below 70%. These ratings were changed: -- Corporate Family Rating lowered to Caa1 from B2; -- Probability of Default Rating lowered to Caa1 from B2; -- $150 million of senior subordinated notes, due 2015, lowered to Caa2 (LGD-5, 79%) from B3 (LGD-5, 77%). Speculative Grade Liquidity Rating lowered to SGL-4 from SGL-3 Headquartered in Reston, Virginia Stanley-Martin is one of the largest private homebuilders in the Washington, D.C. metropolitan area. The company designs and builds single-family homes and town homes geared to the entry level and first- and second-time move up buyers. Homebuilding revenues for the trailing twelve month period ended September 30, 2007 were approximately $178 million. SVI MEDIA: Sept. 30 Balance Sheet Upside-Down by $18.6 Million -------------------------------------------------------------- SVI Media Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $10.8 million in total assets, $6.0 million in total liabilities, and $23.4 million in preferred stock, resulting in a $18.6 million total shareholders' deficit. At Sept. 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $2.6 million in total current assets available to pay $4.0 million in total current liabilities. The company reported a net loss of $6.3 million on revenue of $3.2 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $7.2 million on revenue of $3.7 million in the same period 12 months ago. The decrease in revenue resulted primarily from lower VOD content revenue. Selling, general and administrative expenses for the third quarter of 2007 were $3.9 million compared to $4.9 million for the comparable period of 2006. The decrease is the result of lower stock-based compensation and the implementation of restructuring and cost control initiatives, primarily in the areas of payroll, consulting and professional services. As of the end of the third quarter of 2007, the company performed a goodwill impairment test relating to SVI which resulted in an impairment to the goodwill of $2.7 million. For the third quarter of 2007, interest expense was $621,613 compared to $3.3 million for the comparable period in 2006. Interest expense for third quarter of 2007 includes $103,859 and $214,445, respectively, of cash-based interest on the company's outstanding senior secured debt and non-cash interest expense relating to the accretion of the underlying debt discount. For the comparable period in 2006, the company incurred $2.6 million in loan extension fees and liquidated damages of $341,667. During the third quarter of 2007, in connection with the Exchange Transaction, the company recognized a loss on the extinguishment of debt, preferred stock and creditor settlements of $981,015. Included in this amount is a loss on extinguishment of debt of $6.4 million, a gain on the extinguishment of Series A & B preferred stock of $5.2 million, and gains of $340,152 for the reduction of certain trade payables. The company recognized a gain on the extinguishment of its derivative liabilities of $290,487 during the third quarter of 2007 which resulted from the Exchange Transaction and the cancellation of the securities underlying the derivative liabilities. This compares to income of $15,251 from the change in the fair value of the derivative liabilities primarily resulting from decrease in stock price during the third quarter of 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?2605 Bankruptcy Warning Management anticipates its current cash reserves including the funds received from the Senior Secured Notes will be sufficient to fund its anticipated operations into December 2007. The company said it is currently experiencing issues with paying its vendors and if additional capital is not obtained by December 2007, the company may be required to seek bankruptcy relief which can lead to a liquidation of the company's assets. Going Concern Doubt McKennon Wilson & Morgan LLP, in Irvine, Calif., expressed substantial doubt about Oxford Media Inc. nka. SVI Media Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company has incurred losses, has used cash in operating activities and has significant working capital and stockholders' deficit. As of Sept. 30, 2007, the company had a working capital deficiency of $1.4 million and $4.2 million of Senior Secured Notes outstanding. In addition, during the three months ended Sept. 30, 2007, the company recorded an impairment on its goodwill associated with the acquisition of SVI of $2.7 million. About SVI Media Headquartered in Peoria, Ill., SVI Media Inc. (OTC: SVIA) formerly Oxford Media Inc., incorporated on Oct. 13, 2003, operated its businesses through its two subsidiaries, OxfordSVI Inc., and Creative Business Concepts Inc. during the year ended Dec. 31, 2006. The company's primary business through OxfordSVI is providing technology, content and support services for in-room entertainment and high-speed Internet access to small and medium- sized hospitality properties. As part of its operations, the company has developed a system comprising hardware and software technology primarily for the delivery of video-on-demand, on a pay-per-view basis. On March 8, 2007, the company sold its Creative Business Concepts Inc. operations. TABS 2006-5: Moody's Cuts Rating on $950MM Notes to Ba2 from A3 --------------------------------------------------------------- Moody's Investors Service downgraded three classes of notes issued by TABS 2006-5, Ltd. and left two of these on review for possible downgrade. The notes affected by these rating action are: (1) $950,000,000 Class A1S Variable Funding Senior Secured Floating Rate Notes due 2046 * Prior Rating: A3 on review for possible downgrade * Current rating: Ba2 on review for possible downgrade (2) $175,000,000 Class A1J Senior Secured Floating Rate Notes due 2046 * Prior Rating: Baa3 on review for possible downgrade * Current rating: Caa2 on review for possible downgrade (3) $140,000,000 Class A2L Senior Secured Floating Rate Notes due 2046 * Prior Rating: Ba2 on review for possible downgrade * Current rating: Ca The rating actions reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence on October 16, 2007 of an event of default caused by a failure of the Senior Credit Test to meet the required level, pursuant to Section 5.1(h) of the Indenture dated October 5, 2006. TABS 2006-5, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to effect the calculation of overcollateralization. Thus, the Senior Credit Ratio of Net Outstanding Portfolio Collateral Balance divided by the sum of Outstanding Class A1S Funded Amount plus the Remaining Unfunded Facility Commitment plus the Aggregate Outstanding Amount of the Class A1J Notes failed to meet the required level. Upon an event of default in this transaction, a majority of the controlling class is entitled to exercise certain remedies under the indenture. Liquidation of the underlying portfolio is one possible remedy; however, it is not clear at this time whether the controlling class will choose to exercise this option. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The expected losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by the controlling class. Because of this uncertainty, the ratings of the Class A1S Notes and Class A1J Notes remain on review for possible downgrade pending the receipt of definitive information. TENNECO INC: Completes Partial Offering of 10-1/4% Senior Notes --------------------------------------------------------------- Tenneco Inc. has completed its partial tender offer and consent solicitation for its 10-1/4% Senior Secured Notes due 2013 (CUSIP 880349AD7). As of midnight, New York City time, on Nov. 30, 2007, the expiration date, holders of Notes had tendered approximately $474 million principal amount of Notes and Tenneco purchased $230 million principal amount of such Notes, which was the maximum amount of the offer, or 48.5% of the principal amount of Notes tendered in the offer. The total purchase price of the Notes was $250 million, including $20 million in premiums. Holders whose Notes were accepted for purchase were also paid accrued and unpaid interest on their purchased Notes up to, but not including the payment date. Banc of America Securities LLC and Citigroup Global Markets, Inc. served as dealer managers and solicitation agents in connection with the tender offer and consent solicitation. About Tenneco Inc. Based in Lake Forest, Illinois, Tenneco Inc., (NYSE: TEN) -- http://www.tenneco.com/-- manufactures automotive ride and emissions control products and systems for both the original equipment market and aftermarket. Brands include Monroe(R), Rancho(R), and Fric Rot ride control products and Walker(R) and Gillet emission control products. The company has operations in Argentina, Japan, and Germany, with its European operations headquartered in Brussels, Belgium. The company has approximately 19,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Sept. 26, 2007, Fitch Ratings has placed Tenneco Inc.'s Issuer Default Ratings and securities ratings on Rating Watch Negative. Fitch confirmed these ratings: (i) IDR 'BB-'; (ii) Senior secured bank facility 'BB+'; (iii) Senior secured notes 'BB'; and (iv) Subordinated 'B'. THOMAS EDWARDS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Thomas A. Edwards aka Edward A. Thomas 3 Kings Way Provincetown, MA 02657 Bankruptcy Case No.: 07-17721 Chapter 11 Petition Date: December 3, 2007 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Nina M. Parker, Esq. Parker & Associates 10 Converse Place Winchester, MA 01890 Tel: (781) 729-0005 Fax: (781)729-0187 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. THORPE INSULATION: Futures Representative Wants Fergus as Counsel ----------------------------------------------------------------- Honorable Charles B. Renfrew, proposed futures representative of Pacific Insulation Company, debtor-affiliate of Thorpe Insulation Company, asks the U.S. Bankruptcy Court for the Central District of California for authority to retain Fergus, A Law Firm, as his counsel. Fergus currently represents Mr. Renfrew in connection with In re Western Asbestos Cases jointly administered and pending in the U.S. Bankruptcy Court for the Northern District of California, Judge Tchaikovsky presiding. Fergus also represents Mr. Renfrew in connection with a J.T. Thorpe Settlement Trust established in In re J.T. Thorpe, Inc. et al. Mr. Renfrew relates that he may, from time to time, request that Fergus undertake specific matters beyond the limited scope of the responsibilities of his proposed counsel. Hence, Mr. Renfrew seeks authority to include the matters within the scope of Fergus' employment. Fergus' customary hourly rate are $655 per hour for Gary Fergus, Esq., and range from $200 to $400 for associates and $50 to $165 for paraprofessionals. Mr. Renfrew assures the Court that Fergus does not hold or represent an interest adverse to the estate. The Court will hear the matter on Dec. 12, 2007, at 10:00 a.m. The firm can be reached at: Gary S. Fergus, Esq. Fergus, A Law Firm 595 Market Street, Suite 2430 San Francisco, CA 94105 Tel: (415) 537-9030 Fax: (415) 537-9038 http://www.ferguslegal.com/ As reported in the Troubled Company Reporter on Dec. 4, 2007, Pacific had asked the Court for permission to appoint Mr. Renfrew as its futures representative. Mr. Renfrew will represent future asbestos claimants. Mr. Renfew may retain attorneys and other professionals subject to Court approval. Compensation of Mr. Renfrew and his retained professionals will be payable subject to Court approval. About Thorpe Insulation Long Beach, California-based Thorpe Insulation Company, formerly Plant Insulation Company, was incorporated in April 10, 1948. It supplied and distributed asbestos thermal insulation in Southern California before about 1972. The company's products included pipe and boiler insulation, asbestos cloth and insulating mud. After 1972, some of Thorpe's operations also involved asbestos and lead abatement, including repairing insulation that contained asbestos at commercial and industrial sites. On or about Dec. 17, 2004, Thorpe's lender, Pacific Funding Group LLC, sold its collateral at a foreclosure sale to Farwest Insulation Consulting owned by Eric and David Fults. Following the foreclosure, Thorpe ceased operation of its business. To date, Thorpe has been subjected to about 12,000 claims and lawsuits related to asbestos. Thorpe filed for chapter 11 protection on Oct. 15, 2007 (Bankr. C.D. Calif. Case No. 07-19271). Jeremy V. Richards, Esq., and Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl & Jones, LLP, represent the Debtor. When the Debtor filed for protection from its creditors, it disclosed estimated assets and debts of more than $100 million. Los Angeles-based Pacific Insulation Company was incorporated in California by Thorpe on May 23, 2000, to be its wholly owned subsidiary. On Oct. 1, 2000, Pacific transferred 100% of its shares to Thorpe in exchange for Thorpe's materials division assets. Thorpe's sole shareholders and board members, Robert W. Fults and Linda Fults, own 50.1% and 49.9% of Pacific, respectively. Pacific is a southwest commercial and industrial insulation distributor and fabricator with locations in Southern and Northern California, Arizona, and Nevada. It provides pipe, air handling, fire barrier, board and blanket insulation as well as adhesives, mastics and sealants. Pacific has never installed or sold any materials containing asbestos. It currently has 55 full-time employees. Pacific filed for chapter 11 petition on Oct. 31, 2007 (Bankr. C.D. Calif. Case No. 07-20016) due to its alleged asbestos liability and the failure of Thorpe's insurers to pay asbestos claims asserted against Thorpe. John A. Lapinski, Esq., Leslie R. Horowitz, Esq., and Stephen R. Hyam, Esq., at Clark & Trevithick represent Pacific in its restructuring efforts. On Nov. 6, 2007, Pacific's case was jointly administered under Thorpe Insulation's bankruptcy proceeding. Caplin & Drysdale, Chartered and Heller Ehrman LLP are co-counsels to the Official Committee of Unsecured Creditors. THORPE INSULATION: Futures Rep Wants Hamilton as Consultant ----------------------------------------------------------- Honorable Charles B. Renfrew, proposed futures representative of Pacific Insulation Company, debtor-affiliate of Thorpe Insulation Company, asks the U.S. Bankruptcy Court for the Central District of California for authority to retain Hamilton, Rabinovitz & Associates as his expert consultants. Mr. Renfew relates that he requires the services of an expert who can provide an opinion with respect to the number and severity of anticipated future claims based upon the unique history of the company, its prior claiming history and peer reviewed epidemiological studies. Without this advice, it is not possible for the futures representative to evaluate whether any proposed plan of reorganization will provide "reasonable assurances that the trust will value, and be in a financial position to pay, present claims and future demands that involve similar claims in substantially the same manner." Specifically, Hamilton Rabinovitz will: a. provided consultation with respect to estimation of the number and value in total and by disease of present and future asbestos related claims; b. develop financial models of the assets of, administration of and payments by a claims resolution trust; c. analyze and respond to issues relating to notice procedures concerning asbestos related claimants and assisting in the development of such notice procedures; d. assess proposals made by other parties, including proposals from the Debtors and the Committees regarding, inter alia, the estimation of claims and or the formulation and cost of a claims resolution trust pursuant to Section 524(g) of the Bankruptcy Code; e. assist the futures representative in negotiations with the Debtors and other parties in interest regarding the foregoing; f. render expert testimony as required by the futures representative; g. assist the futures representative in the preparation of testimony or reports he wishes or is required to make and in the evaluation of reports and testimony by other experts and consultants; h. obtain all previously filed public data regarding estimations against other defendants in asbestos related proceedings; i. analyze and evaluate other ongoing asbestos related litigation, including, if necessary, tobacco related litigation; and j. render other advisory services as may be requested by the futures representative from time to time. Hamilton Rabinovitz will charge at these rates: Designation Rate ----------- ---- Senior Partners $625 Managing Directors $550 Principals $400 Directors $350 Managers $325 Senior Analysts $250 Analysts $200 Research Associates $100 Hamilton Rabinovitz bills mediations, arbitrations, depositions, Securities and Exchange expert testimony, and trial testimony at one hour and a half. The professionals who will primarily render services for the futures representative are Dr. Francine Rabinovitz whose current hourly rate is $625, Robert Sims who bills at an hourly rate of $550, and Paul Honig at $325 per hour. The futures representative assures the Court that Hamilton Rabinovit is a disinterested person and does not hold or represent an interest adverse to the Debtors, their estate, their creditors, and other parties-in-interest. The firm can be reached at: Francine F. Rabinovitz Hamilton, Rabinovitz & Associates 26384 Carmel Rancho Lane, Suite 202 Carmel, California 93923 Tel: (831) 626-1350 Fax: (831) 622-1351 http://www.hra-inc.com/ The Court will hear the matter on Dec. 12, 2007, at 10:00 a.m. As reported in the Troubled Company Reporter on Dec. 4, 2007, Pacific had asked the Court for permission to appoint Mr. Renfrew as its futures representative. Mr. Renfrew will represent future asbestos claimants. Mr. Renfew may retain attorneys and other professionals subject to Court approval. Compensation of Mr. Renfrew and his retained professionals will be payable subject to Court approval. About Thorpe Insulation Long Beach, California-based Thorpe Insulation Company, formerly Plant Insulation Company, was incorporated in April 10, 1948. It supplied and distributed asbestos thermal insulation in Southern California before about 1972. The company's products included pipe and boiler insulation, asbestos cloth and insulating mud. After 1972, some of Thorpe's operations also involved asbestos and lead abatement, including repairing insulation that contained asbestos at commercial and industrial sites. On or about Dec. 17, 2004, Thorpe's lender, Pacific Funding Group LLC, sold its collateral at a foreclosure sale to Farwest Insulation Consulting owned by Eric and David Fults. Following the foreclosure, Thorpe ceased operation of its business. To date, Thorpe has been subjected to about 12,000 claims and lawsuits related to asbestos. Thorpe filed for chapter 11 protection on Oct. 15, 2007 (Bankr. C.D. Calif. Case No. 07-19271). Jeremy V. Richards, Esq., and Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl & Jones, LLP, represent the Debtor. When the Debtor filed for protection from its creditors, it disclosed estimated assets and debts of more than $100 million. Los Angeles-based Pacific Insulation Company was incorporated in California by Thorpe on May 23, 2000, to be its wholly owned subsidiary. On Oct. 1, 2000, Pacific transferred 100% of its shares to Thorpe in exchange for Thorpe's materials division assets. Thorpe's sole shareholders and board members, Robert W. Fults and Linda Fults, own 50.1% and 49.9% of Pacific, respectively. Pacific is a southwest commercial and industrial insulation distributor and fabricator with locations in Southern and Northern California, Arizona, and Nevada. It provides pipe, air handling, fire barrier, board and blanket insulation as well as adhesives, mastics and sealants. Pacific has never installed or sold any materials containing asbestos. It currently has 55 full-time employees. Pacific filed for chapter 11 petition on Oct. 31, 2007 (Bankr. C.D. Calif. Case No. 07-20016) due to its alleged asbestos liability and the failure of Thorpe's insurers to pay asbestos claims asserted against Thorpe. John A. Lapinski, Esq., Leslie R. Horowitz, Esq., and Stephen R. Hyam, Esq., at Clark & Trevithick represent Pacific in its restructuring efforts. On Nov. 6, 2007, Pacific's case was jointly administered under Thorpe Insulation's bankruptcy proceeding. Caplin & Drysdale, Chartered and Heller Ehrman LLP are co-counsels to the Official Committee of Unsecured Creditors. TRUMP ENTERTAINMENT: Earns $6.6 Million in Quarter Ended Sept. 30 ----------------------------------------------------------------- Trump Entertainment Resorts, Inc. reported its results for the quarter ended Sept. 30, 2007. The company reported net income of $6.6 million on $365.9 million revenues for the quarter ended Sept. 30, 2007, compared to net income of $5.8 million on $378.2 million revenues for the same quarter last year. "We are pleased that we were able to achieve stable financial results during the quarter compared to last year despite the challenges the Atlantic City gaming market is currently facing, which led to a 6.2% marketplace decline in gross gaming revenue during the quarter," Mark Juliano, Chief Executive Officer of the Company, said. "We are working diligently to further improve our business in this changing marketplace, and we are pleased with the positive results from the Taj Mahal and Plaza resulting from efforts under our strategic operating plan. The Marina has been disproportionately impacted by the increased competition and, as a result, we are currently taking aggressive steps by dedicating additional resources to improve the Marina's performance." The company reported, as of Sept. 30, 2007, it had cash and cash equivalents of $89.1 million, excluding $85.5 million of cash which is restricted to fund the new tower under construction at the Taj Mahal. Total debt increased by $160.0 million since Dec. 31, 2006 to $1.5 billion at Sept. 30, 2007, principally due to borrowings under the company's delayed draw term loan, which is being used to fund construction of the Taj Mahal tower. At Sept. 30, 2007, the company's balance sheet showed total assets of $2.4 billion and total liabilities of $2.0 billion, resulting in a stockholders' equity of $399.8 million. Equity at Dec. 31, 2006, was $412.7 million. Based in Atlantic City, New Jersey, Trump Hotels & Casino Resorts Inc. now known as Trump Entertainment Resorts Inc. (Nasdaq: TRMP) -- http://www.trumpcasinos.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The company and its debtor-affiliates filed for Chapter 11 bankruptcy protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005. The Plan took effect on May 20, 2005. * * * Trump Entertainment Resorts Inc.'s 8.5% Senior Secured Notes due 2015 hold Standard & Poor's Rating Services' B rating and Moody's Investors Service's Caa1 rating. TRUMP ENTERTAINMENT: CFO & EVP Dale Black To Resign on Dec. 14 -------------------------------------------------------------- Trump Entertainment Resorts Inc. disclosed on Dec. 3, 2007, that Dale R. Black, Executive Vice President and Chief Financial Officer of the company had resigned from his position with the company to accept a similar position with another gaming and entertainment company. Mr. Black's resignation will become effective on or about Dec. 14, 2007. The company will identify potential succession candidates for the position of Chief Financial Officer. Based in Atlantic City, New Jersey, Trump Hotels & Casino Resorts Inc. now known as Trump Entertainment Resorts Inc. (Nasdaq: TRMP) -- http://www.trumpcasinos.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The company and its debtor-affiliates filed for Chapter 11 bankruptcy protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005. The Plan took effect on May 20, 2005. * * * Trump Entertainment Resorts Inc.'s 8.5% Senior Secured Notes due 2015 hold Standard & Poor's Rating Services' B rating and Moody's Investors Service's Caa1 rating. UAP HOLDING: Selling Stake to Agrium Inc. Through Tender Offer -------------------------------------------------------------- UAP Holding Corp. and Agrium Inc. have entered into a definitive agreement for Agrium to acquire UAP. Under the terms of the agreement, a subsidiary of Agrium will commence a tender offer to purchase all of the outstanding common stock of UAP for $39 per share in cash for an aggregate transaction value of approximately $2.65-billion, including an estimated $487-million of assumed debt. The all cash purchase price represents a 27% premium over the volume weighted-average trading price for UAP shares on the NASDAQ for the 20 trading days ended Nov. 30, 2007, and a premium of 30% over the closing price of $29.91 per share on that date. The boards of directors of both companies have unanimously approved the agreement, and the UAP board of directors has unanimously recommended that the UAP shareholders accept the tender offer. "The addition of UAP's business to our own Retail operations is an excellent strategic fit for Agrium and a significant step in our strategy of continuing to grow and transform the company," Mike Wilson, president and CEO of Agrium, said. "The acquisition will significantly expand our geographic base and our product diversity, and will offer an opportunity to leverage strengths of both companies." "We believe the transaction will enable Agrium to capitalize on the strong outlook for agriculture markets and will allow us to deliver value to both our shareholders and our customers," Mr. Wilson added. "It increases the scale and size of our business, further enhances stability of our earnings profile and strengthens Agrium's ability to serve and grow its customer base. A key factor to our success will be drawing from the extensive experience of employees from both organizations." "We anticipate we will be able to generate annual synergies of approximately $115-million by 2010, with a majority of this captured in 2009," Mr. Wilson continued. "We expect that these synergies will be achieved primarily by improved margins on all three crop input product groupings, largely through enhanced purchasing efficiencies. This acquisition is expected to be slightly accretive on an earnings per share basis in the first year and significantly accretive thereafter. Agrium has committed bridge and term loan financing in place to fund the acquisition and our plan is to arrange financing of $1.25-billion in equity, with the balance in public and bank term debt to replace the bridge loan." "This transaction represents an extraordinary opportunity for our shareholders, customers, and employees," Kenny Cordell, CEO and president of UAP, said. "Agrium is well respected in the industry and we believe that the combination of the two organizations will allow for an improved product offering and new services and technologies to be delivered to a broader range of customers." Agrium noted these key benefits of the transaction: -- creates a retailer of crop inputs and services, with broader geographic coverage as a result of combining the complementary footprints of Agrium and UAP; -- expected annual synergies of approximately $115-million, with approximately $20-million in 2008, approximately $80-million in 2009 and approximately $115-million in 2010 and beyond; -- combined retail earnings before interest, income taxes, depreciation and amortization or EBITDA of $417-million for the last twelve months excluding synergies, and approximately $532-million in Retail EBITDA on a combined basis for the last twelve months including the approximately $115-million in expected annual synergies; -- supports Agrium's strategy of investing through the value chain, diversifying geographically and expanding Agrium's stable earnings base profile; -- expands Agrium's Retail business model to incorporate a mid-tier service, higher-volume business; -- combined total Retail sales of over $5.2-billion and combined sales of almost $8-billion on a company wide basis on a last twelve month basis; -- provides Agrium's Retail business with 265 proprietary and private label brands and more than doubles Agrium's seed business. Seed sales have grown by over 16% per year for both Agrium and UAP over the past three years; -- provides a platform to support Agrium's future growth. The tender offer is expected to commence no later than Dec. 10, 2007, and completion of the tender offer is subject to customary conditions, including that shares representing at least a majority of the UAP common stock on a fully diluted basis are validly tendered into the offer, and that customary regulatory approvals are obtained. After completion of the tender offer, UAP will engage in a second- step merger with the subsidiary of Agrium, pursuant to which each share of outstanding UAP common stock not tendered in the tender offer will be converted into the right to receive $39 in cash. Upon completion of the merger, UAP will become a wholly-owned subsidiary of Agrium. The parties expect to complete the transaction in early 2008. Agrium has engaged RBC Capital Markets as financial advisor and Blake, Cassels & Graydon LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP in connection with the transaction. UAP has engaged J.P. Morgan Securities Inc. as financial advisor which provided a fairness opinion on the transaction, and Wachtell, Lipton, Rosen & Katz as legal counsel in connection with the transaction. About Agrium Inc. Headquartered in Calgary, Alberta, Agrium Inc. (TSX: AGU) (NYSE: AGU) -- http://www.agrium.com/-- is a retail supplier of agricultural products and services in both North and South America and a producer and marketer of agricultural nutrients and industrial products. Agrium produces and markets three primary groups of nutrients: nitrogen, phosphate and potash well as controlled release fertilizers and micronutrients. Agrium's strategy is to grow through incremental expansion of its existing operations and acquisitions as well as the development, commercialization and marketing of new products and international opportunities. About UAP Holding Corp. Headquartered in Greeley, Colorado, UAP Holdings Corp. (NASDAQ:UAPH) -- http://www.uap.com/-- is the holding company of United Agri Products Inc., an independent distributor of agricultural and non-crop products in the United States and Canada. United Agri Products Inc. markets products, including chemicals, fertilizer, and seed to farmers, commercial growers, and regional dealers. United Agri Products also provides an array of value-added services, including crop management, biotechnology advisory services, custom fertilizer blending, seed treatment, inventory management, and custom applications of crop inputs. United Agri Products maintains a network of approximately 370 distribution and storage facilities and three formulation plants, located in crop-producing areas throughout the United States and Canada. * * * As reported in the Troubled Company Reporter on Sept. 10, 2007, Standard & Poor's Ratings Services raised its corporate credit rating UAP Holding Corp. to 'BB-' from 'B+'. The outlook is stable. UAP HOLDING: $2.65 Bil. Agrium Deal Cues Moody's Ratings Review --------------------------------------------------------------- Moody's Investors Service placed the ratings (Ba3 CFR) of UAP Holdings Corp.'s subsidiary, UAP Agri Products Inc., under review for possible upgrade. At the same time, Moody's placed Agrium Inc.'s Baa2 senior unsecured rating under review for possible downgrade. The reviews were prompted by the recent announcement that the two companies have entered into a definitive agreement, whereby a wholly-owned subsidiary of Agrium will acquire all of the outstanding shares of UAP at a price of $39 per share for an aggregate acquisition cost of $2.65 billion, including $487 million of debt at UAP. The acquisition will be funded by a committed bridge financing on an interim basis and a plan to arrange financing of $1.25 billion in equity, with the balance in public and bank term debt. The transaction remains subject to a number of approvals, including regulatory and shareholder. Moody's believes the conclusion of Agrium's review is likely to result in an affirmation of its Baa2 ratings should the transaction close on the terms announced. UAP's review for possible upgrade reflects the potential benefit that is expected to accrue at UAP as a result of the acquisition. Moody's believes UAP's debt may be repaid in full, resulting in a potential ratings withdrawal upon acquisition close in the first quarter of 2008. The following factors were considered by Moody's in reaching its preliminary judgment that the current rating will remain unchanged if the transaction concludes as expected. The transaction will improve Agrium's business profile by adding scale, broader diversification, purchasing power, and stability to earnings. Despite the initial rise in debt to fund the acquisition, Moody's expects management will maintain its historically conservative financial policies and investment discipline. Specifically, Moody's expects the company to reduce leverage and that its Adjusted Debt-to-Capital ratio will be below 40% within the next 12 to 18 months. Moody's notes the increased reliance on retail sales that results from the acquisition of UAP will likely weaken EBITDA margin to the low-to-mid teens. Additional nitrogen fertilizer supply and volatile natural gas costs could also pressure margins in Agrium's wholesale business. Moody's, however, still favorably views the company's selling price advantage in the Pacific Northwest relative to the vast majority of North American ammonia producers. In addition, the transaction is consistent with Agrium's operating strategy and will create the largest North American agricultural distributor while enhancing margin stability. Conversely, the transaction involves substantial execution risk and a reduction in financial flexibility when other recent acquisitions are considered on a combined basis. Specifically, Moody's believes the company will be challenged with blending different retail business philosophies together. Agrium operates a value added services business model whereas UAP manages a low service, high volume model. Furthermore, Moody's expects weak cash flow generation over the next two years due to equity capital contributions for the joint venture nitrogen facility (EAgrium) in Egypt. The company will not achieve returns on the non-recourse financing project until after the completion of the facility in 2010. With respect to UAP, management has experienced successive quarters of deteriorating working capital performance. The agricultural market has undergone product mix changes as farmers take advantage of ethanol demand by devoting additional acreage to corn at the expense of other crops, such as cotton, which require more agricultural chemicals. Moody's will continue to monitor UAP's working capital trends during the integration efforts. The review will focus on the final financing arrangements for the acquisition, the strategic fit of the two companies, regulatory approvals, and the level of cash flow that can be generated to meaningfully reduce debt in a reasonable fashion given the cyclicality and price volatility of the company's agricultural products. The timing of the transaction will be executed in an environment where industry fundamentals are very favorable. Recent low levels of grain stock have led to an increase in grain prices. High demand levels due to higher protein consumption (primarily in Asia), expectations of increased corn acreage and crop input use, and ethanol demand represent key drivers for a favorable outlook for both Agrium's wholesale and retail businesses. Currently, crop yields, planted acreage, and farm income are at record levels as strong supply/demand dynamics within Agrium's product lines will help generate robust credit metrics over the intermediate term. The company has indicated that it anticipates generating roughly $115 million in synergies by 2010. The likelihood of and time frame in which these synergies can be achieved will also be considered under the review. On review for possible downgrade: Issuer: Agrium, Inc. -- Senior unsecured notes and debentures at Baa2; On review for possible upgrade: Issuer: United Agri Products, Inc. Ba3 -- PDR: Ba3 -- Gtd Sr Sec Revolving Credit Facility due 2011, Ba1 (LGD2, 17%) -- Gtd Sr Sec Term Loan due 2012, Ba3 (LGD3, 45%) Agrium Inc., headquartered in Calgary, Alberta, Canada, is a leading global producer and marketer of agricultural nutrients and industrial products and a major retail supplier of agricultural products and services in both North and South America. Agrium produces and markets three primary groups of nutrients: nitrogen, phosphate and potash as well as controlled release fertilizers and micro-nutrients. UAP serves over 100,000 customers in major crop producing areas of North America and is the largest independent distributor of agricultural inputs in the U.S. and Canada. UNIVERSAL ENERGY: Posts $4,319,107 Net Loss in Third Quarter ------------------------------------------------------------ Universal Energy Corp. reported a net loss of $4,319,107 on $-0- of revenues for the third quarter ended Sept. 30, 2007, compared with a net loss of $38,269 on $-0- of revenues in the same period last year. Results for the third quarter ended Sept. 30, 2007, includes, in addition to total operating expenses of $746,236, a non-operating expense of $3.6 million. At Sept. 30, 2007, the company's consolidated balance sheet showed $4,785,526 in total assets, $2,647,834 in total liabilities, and $2,137,692 in total stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $327,545 in total current assets available to pay $1,583,678 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?2601 Going Concern Doubt Tedder, James, Worden & Associates P.A., in Orlando, Fla., expressed substantial doubt about Universal Energy Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing frim reported that the company has incurred net losses and negative cash flows from operations since inception. Since inception, the company has funded its operations primarily from private placements of its common stock and debt issuances. As of Sept. 30, 2007, although the company has completed the drilling and is currently completing production of certain well, it is still considered to have no proved reserves. From inception to Sept. 30, 2007, the company has accumulated losses of approximately $8.4 million and expects to incur further losses in the development of its business. About Universal Energy Headquartered in Lake Mary, Fla., Universal Energy Corp. (OTC BB: UVSE) is an independent energy company engaged in the acquisition and development of crude oil and natural gas leases in the United States and Canada. The company's minority working interests in drilling prospects currently consist of land in Alberta, Canada, Louisiana and Texas. VERIFONE HOLDINGS: To Restate Financial Statements in Prior Qtrs. ----------------------------------------------------------------- VeriFone Holdings Inc. disclosed Monday that following a review by and on the recommendation of management, it has concluded that its unaudited interim consolidated financial statements for the three months ended Jan. 31, 2007, the three and six months ended April 30, 2007, and the three and nine months ended July 31, 2007, should no longer be relied upon, principally due to errors in accounting related to the valuation of in-transit inventory and allocation of manufacturing and distribution overhead to inventory, each of which affects VeriFone's reported costs of net revenues. The restatements are anticipated to correct errors that overstated previously reported inventories in material amounts as of Jan. 31, 2007, April 30, 2007, and July 31, 2007, and understated cost of net revenues in material amounts for the three month periods ended Jan. 31, 2007, April 30, 2007, and July 31, 2007. Accordingly, the company cautioned investors not to rely on its historical financial statements and earnings press releases and similar communications for the periods ended Jan. 31, 2007, April 30, 2007, and July 31, 2007. Based on its review to date, management currently anticipates that the restatement will result in reductions to previously reported inventories of approximately $7.7 million, $16.5 million and $30.2 million as of Jan. 31, 2007, April 30, 2007, and July 31, 2007, respectively, and reductions to previously reported pre tax income of approximately $8.9 million, $7.0 million and $13.8 million for the three month periods ended Jan. 31, 2007, April 30, 2007 and July 31, 2007, respectively. VeriFone is currently evaluating the anticipated effect of the restatement on after-tax income for those periods. The company said that these estimates include corrections of other unrelated errors detected in the course of VeriFone's review to date, are based on currently available information and are subject to change during the course of the company's restatement process. While VeriFone is not currently aware of other accounting errors requiring adjustment to any prior period financial statements, there can be no assurances that VeriFone or its independent registered public accounting firm will not find additional accounting errors requiring further adjustments in those or earlier periods. VeriFone today also announced that it expects to report total revenues for the three and twelve months ended Oct. 31, 2007, of approximately $238 million and $904 million, respectively. VeriFone's management and the Audit Committee of its Board of Directors have determined to delay the release of full fourth quarter 2007 financial results that were scheduled to be released on Dec. 6, 2007, pending completion of the assessment of these errors and the restatements. "I am very disappointed to have to bring you this news and am committed to ensuring that we promptly and thoroughly remedy this situation and move forward with the business of delivering value to our shareholders. I am committed to regaining your confidence in VeriFone," said Douglas G. Bergeron, chairman and chief executive officer. VeriFone concluded that a restatement of its interim unaudited financial statements is required as a result of an internal review of in-transit inventory balances conducted in preparation for VeriFone's fiscal 2007 audit. In reaching the conclusion to restate its financial results, VeriFone's management and the Audit Committee discussed the matters described in this press release with VeriFone's independent registered public accounting firm. Upon completion of its assessment of these errors, VeriFone intends to file amended Quarterly Reports on Form 10-Q for the periods described above that will restate the previously issued financial statements included therein. VeriFone currently estimates that it will file these amended quarterly reports, together with its Annual Report on Form 10 K for the fiscal year ended Oct. 31, 2007, in January 2008. However, VeriFone cannot be certain how much time will ultimately be required for it to complete the restatement process. About VeriFone Holdings Inc. Headquartered in San Jose, Calif., VeriFone Holdings Inc. (NYSE: PAY) -- http://www.verifone.com/-- provides secure electronic payment solutions. VeriFone provides expertise, solutions and services that add value to the point of sale with merchant- operated, consumer-facing and self-service payment systems for the financial, retail, hospitality, petroleum, government and healthcare vertical markets. * * * Verifone Holdings Inc. still carries Moody's Moody's Investors Service 'B1' long term corporate family rating. Rating Outlook is Stable. VESCOR DEVELOPMENT: U.S. Trustee Can Appoint Chapter 11 Trustee --------------------------------------------------------------- The Honorable Mike K. Nakagawa of the United States Bankruptcy Court for the District of Nevada agreed to the appointment of a Chapter 11 trustee in Vescor Development LLC and its debtor- affiliates' bankruptcy cases. Judge Nakagawa has yet to name a Chapter 11 trustee for the Debtors' cases. On Oct. 10, 2007, Sara L. Kistler, the United States Trustee for Region 17, asked the Court to appoint a Chapter 11 Trustee to serve in the Debtors' jointly administered bankruptcy cases instead of converting the Debtors bankruptcy case into a Chapter 7 liquidation proceeding. The U.S. Trustee told the Court that Val E. Southwick, the managing member of the Debtors, refused to answer certain questions in regard to the Debtors' management operations, financial affairs and transaction with related entities. In addition, Mr. Southwick, the U.S. Trustee said, invoked his right to avoid self-incrimination under the fifth amendement to the U.S. Constitution. As a result, the U.S. Trustee and other parties in interest are unable to evaluate the status of the Debtors' financial condition to date. About Vescor Development Henderson, Nevada-based Vescor Development LLC develops real estate. The company and its affiliates share common management and ownership. Apex MM serves as the Debtors' manager. The company and three of its affiliates, ADL 1 LLC, IDL 9 LLC and JDL 10 LLC, filed for chapter 11 bankruptcy protection on Aug. 20, 2007 (Bankr. D. Nev. Case Nos. 07-15210 through 07-15213). Laurel E. Davis, Esq. at Fennemore Craig, P.C. represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed total assets of $151,954,690 and total debts of $85,590,847. The company's affiliates, Vescor Development 3 LLC, BDL 2 LLC and EDL 5 LLC had filed for chapter 11 protection on Aug. 26, 2006 (Bankr. D. Nev. Lead Case No. 06-12094). Laurel E. Davis, Esq., at Lionel Sawyer & Collins serves as the Debtors' counsel. When Vescor filed for protection from its creditors, it listed total assets of $109,570,385 and total debts of $63,290,195. Vescor Development 3 and its debtor-affiliates delivered its reorganization plan and disclosure statement in January 2007, whereby they planned to pay its general unsecured creditors in full. The Court confirmed that plan on March 20, 2007, with a condition to retain a qualified chief restructuring officer. WATERFORD EQUITIES: Wants to Hire Moses & Singer as Counsel ----------------------------------------------------------- Waterford Equities LLC and its debtor-affiliates ask the United States Bankruptcy Court for the District of Connecticut for permission to employ Moses & Singer LLP as their counsel. Moses & Singer will: a) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and management of their properties; b) assist the Debtors in maximizing the value of their assets for the benefit of all creditors and other parties in interest; c) pursuing confirmation of a plan or plans of reorganization of the Debtors and approval of any associated disclosure statement; d) commencing and prosecuting any and all necessary and appropriate actions or proceeding on behalf of the Debtors and their estates; e) prepare on the Debtors' behalf all necessary and desirable applications, motions, answers, orders, reports and other legal papers; f) appear in Court to protect the interests of the Debtors and their estates; g) assist and advising the Debtors with respect to general corporate, securities and bankruptcy issues relating to these Chapter 11 cases; h) peform all other legal services for the Debtors which may be necessary and proper in these Chapter 11 cases and in the Debtors general business operations and financial affairs. The firm's professionals and their compensation rates are: Professional Designation Hourly Rate ------------ ----------- ----------- Alan Kolod, Esq. Partner $750 Alan Gamza, Esq. Partner $585 Mark Parry, Esq. Partner $625 Philippe Zimmerman, Esq. Partner $450 Andrew P. Lederman, Esq. Counsel $450 Declan M. Butvick, Esq. Associate $415 Christopher R. Gresh, Esq. Associate $235 Don Kick Paralegal $200 Nova Constantino Paralegal $200 Alan Kolod, Esq., a partner of the firm, assures the Court that the firm is a "disinterseted person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Kolod can be reached at: Alan Kolod, Esq. Moses and Singer LLP The Chrysler Building 405 Lexington Avenue New Yor, NY 10174 Tel: (212) 775-7800 Headquartered in Middletown, Connecticut, Waterford Equities L.L.C. -- http://www.havenhealthcare.com/-- provide nursing care to the elderly in New England, Connecticut. The company operates health centers and assisted living facilities. In addition, the company specializes in short-term rehabilitative care and long- term care. The company and 44 of its affiliates filed for Chapter 11 protection on November 22, 2007 (Bankr. D. Conn. Lead Case No. 07-32719). When the Debtors filed for protection against their creditors, it listed assets and debt between $1 Million to $100 Million. The Debtors'consolidated list of their 50 largest unsecured creditors showed total claims of more than $20 million. WATERFORD EQUITIES: Taps Wiggin and Dana as Special Counsel ----------------------------------------------------------- Waterford Equities LLC and its debtor-affiliates ask the United States Bankruptcy Court for the District of Connecticut for permission to employ Wiggin and Dana LLP as their special counsel. Wiggin and Dana will represent the Debtors in connection with their operations, including, corporate, bankruptcy court and regulatory matters, as well as health care insolvency and receivership proceedings. The firm's current professionals designated to represent the Debtors and their hourly rates are: Professionals Hourly Rates ------------- ------------ James I. Glasser, Esq. $450 Joseph Martini, Esq. $450 P. Maureen Weaver, Esq. $395 Sharyn B. Zuch, Esq. $395 Bethany L. Appleby, Esq. $350 Alyssa B. Cunningham, Esq. $260 Joseph Gillis $195 Gisele Roemer $165 Ryan W. Lamanna $145 Sharyn B. Zuch, Esq., an attorney of the firm, assures the Court that the firm does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Ms. Zuch can be reached at: Sharon B. Zuch, Esq. Wiggin and Dana LLP One City Place 185 Asylum Street Hartford, CT 06103 Tel: (860) 297-3715 Headquartered in Middletown, Connecticut, Waterford Equities L.L.C. -- http://www.havenhealthcare.com/-- provide nursing care to the elderly in New England, Connecticut. The company operates health centers and assisted living facilities. In addition, the company specializes in short-term rehabilitative care and long- term care. The company and 44 of its affiliates filed for Chapter 11 protection on November 22, 2007 (Bankr. D. Conn. Lead Case No. 07-32719). When the Debtors filed for protection against their creditors, it listed assets and debt between $1 Million to $100 Million. The Debtors'consolidated list of their 50 largest unsecured creditors showed total claims of more than $20 million. WILLIAM LYON: Negative Cash Flow Cues Moody's Ratings Downgrades ---------------------------------------------------------------- Moody's Investors Service lowered all of the ratings of William Lyon Homes, including the company's corporate family rating to Caa1 from B2 and senior notes ratings to Caa2 from Caa1. The ratings outlook is negative. The downgrade and negative outlook reflect Moody's expectation that: (i) homebuilding does not begin to recover before well into 2009 at the earliest, with any recovery likely be very restrained at the outset, thus prolonging the company's underperformance on key financial metrics vs. prior expectations; (ii) William Lyon's cash flow from operations will be sharply negative in 2007, with a reversal into positive cash flow territory in 2008 difficult to achieve because of its inability to date to reduce actual inventories (after adjustment for impairments and option abandonments), iii) the company will be unprofitable for all of 2008, even before charges; (iv) the company will need to rely on its $560 million credit facilities all through 2008; (v) the company's adjusted debt leverage is projected to remain above 65% throughout 2008; and (vi) the company may need to seek additional covenant relief as it has only modest cushion of approximately $58 million under its tangible net worth covenant. Going forward, the outlook and/or ratings would be pressured if the company were not able to turn cash flow positive on a trailing 12-month basis by mid-year 2008, if covenant compliance became problematic, or if the company's adjusted debt to capitalization reached 85% in 2008. The outlook and ratings could benefit if Moody's were to project that William Lyon will generate substantial positive cash flow from operations in 2008 and use the cash flow to pay down a meaningful amount of debt. These ratings were changed: -- Corporate Family Rating lowered to Caa1 from B2; -- Probability of Default Rating lowered to Caa1 from B2; -- Senior Subordinated Notes, lowered to Caa2 (LGD-5, 82%) from Caa1 (LGD-5, 80%). Begun in 1956 and headquartered in Newport Beach, California, William Lyon Homes designs, builds, and sells single family detached and attached homes in California, Arizona and Nevada. Consolidated homebuilding revenues for the last twelve months ended September 30, 2007 were $1.1 billion. WILLIAM WORTHY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: William Madison Worthy, II aka William Madison Worthy P.O. Box 462 Isle of Palms, SC 29451 Bankruptcy Case No.: 07-06712 Chapter 11 Petition Date: December 3, 2007 Court: District of South Carolina (Charleston) Judge: John E. Waites Debtor's Counsel: D. Nathan Davis, Esq. Davis Law Firm 1124 Sam Rittenberg Boulevard Suite 8 Charleston, SC 29407 Tel: (843) 571-4042 Fax: (843) 763-5619 Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. XEROX CORP: Names New Senior Leadership in North America -------------------------------------------------------- Xerox Corporation disclosed the appointment of two seasoned executives to its North American senior management team. Doug Lord has been named president of Xerox's U.S. Solutions Group, and Kevin Warren will now lead Xerox Canada, Ltd. Mr. Lord, previously head of Xerox Canada, moves to the U.S. to lead Xerox's direct sales force that markets and sells Xerox's systems and services across the country. He replaces Michael Brannigan, who is retiring from Xerox after a 35-year career with the company. Mr. Lord brings a strong sales orientation to the role with more than 30 years of Xerox experience not only in sales management but also in marketing, human resources, supply chain and customer service. A 23-year veteran of Xerox, Kevin Warren assumes the role of president, chairman and CEO of Xerox Canada, leading a team of 4,200 employees who deliver annual revenue of more than $1.2 billion. Warren previously led the team responsible for the transition of Xerox's acquisition of Global Imaging Systems. He has a strong background in direct sales and sales management, previously serving as head of Xerox's U.S. Eastern Sales Operations. Xerox also announced the retirement of Emerson Fullwood, chief marketing officer, Xerox North America. Mr. Fullwood began his Xerox career in 1972 and has held a number of marketing and sales leadership positions throughout the company. "A company's success is often defined by its leaders who are on the front line, serving as champions for their people and their customers," said Jim Firestone, executive vice president and president, Xerox North America. "During their more than three decades with Xerox, Mike and Emerson exemplified values-based, results-driven leadership. We will always appreciate their contributions to our company. They have paved the way for the next generation of Xerox leadership, including Kevin and Doug, to accelerate Xerox's growth and continue building value for our stakeholders." The appointments are effective January 1. Both Messrs. Lord and Warren report to Mr. Firestone. Headquartered in Stamford, Connecticut, Xerox Corp. -- http://www.xerox.com/-- develops, manufactures, markets, services and finances a range of document equipment, software, solutions and services. Xerox operates in over 160 countries worldwide and distributes products in the Western Hemisphere through divisions, wholly owned subsidiaries and third-party distributors. The company maintains operations in France, Japan, Italy, Nicaragua, among others. * * * Xerox Corp. holds Fitch Ratings' BB preferred stock rating to date. YOUR BLACK MUSLIM: NCK LLC Wins Auction With $1,052,000 Offer ------------------------------------------------------------- NCK LLC won a bid Wednesday to buy Your Black Muslim Bakery's building and now awaits approval of a sale deal from the Honorable Edward Jellen of the U.S. Bankruptcy Court of Oakland, California, Josh Richman writes for Inside Bay Area. NCK, operator of an institution for HIV/AIDS victims, placed a bid of $1,052,000, which won over Paulette Arbuckle, a bakery operator who bid at $1,051,000, Inside Bay Area relates. Both bidders, NCK and Ms. Arbuckle will be considered by Judge Jellen at a sale hearing, Inside Bay Area adds. About NCK LLC Oakland-based NCK LLC began in 1987 as a Catholic agency providing pastoral care, meals and massages to HIV/AIDS patients. It is currently a nondenominational organization providing a wide range of services \u2014 from food to counseling to acupuncture \u2014 to those living with HIV/AIDS and other maladies. Kurt Zimmerman represented NCK at a bid to buy Your Black Muslim Bakery's building. NCK plans to use the auctioned building for its Vital Life Services, formerly the Center for AIDS Services, which currently rents a space 5720 Shattuck Ave. in Oakland. About Your Black Muslim Bakery Your Black Muslim Bakery -- http://www.ybmb.com/-- is located at 5832 San Pablo Avenue in Oakland, California. Your Black Muslim Bakery was founded by Yusuf Bey. His business ventures over time also included a security company, dry-cleaning stores and other entities. In 1994, Yusuf Bey's 21-year-old son was gunned down. Yusuf Bey died in 2003 while charged with 27 counts in the alleged rapes of four girls under age 14. His successor, Waajid Aljawaad Bey, was found in a shallow grave in the Oakland Hills in 2004. Then the next CEO, Antar Bey, was gunned down in a 2005 carjacking attempt. Yusuf Bey IV assumed the business before being arrested for vandalizing. Yusuf Bey IV filed for Chapter 11 protection on Oct. 24, 2006 (Bankr. N.D. Calif. Case No. 06-41991) after his family lost control over the business due to violence and civil cases filed against them. Fayedine Coulter, Esq., represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $1,850,000 and total debts of $900,000. Judge Edward Jellen in August 2007 ordered the business liquidated to satisfy its creditors after Bey IV missed to file reports and pay fees. Eric Nyberg, Esq., represents bankruptcy trustee, Tevis Thompson. * Euler Hermes Says Credit Index Shows Economic Contraction ----------------------------------------------------------- Amid fears that the nation's economy is headed for recession, a major credit index showed economic contraction in the manufacturing and service sectors for the first time in five years. According to analysis from leading trade credit insurer Euler Hermes ACI, a potent combination of negative economic factors could lead the Federal Reserve to once again lower interest rates in an attempt to revive the sharply slowing economy. In his monthly commentary regarding a national survey of credit managers in the manufacturing and service sectors, Euler Hermes ACI Chief Economist Daniel C. North said the survey data showed a decline for the third straight month in the manufacturing and service sectors. "Although the drop was relatively small, six of the 10 index components fell, leaving five components below the 50 level - this indicates economic contraction," said North. "This is the first time that there have ever been more than four components indicating contraction since the inception of the index in 2002, and it could well be a harbinger of things to come." To explain the reason for the continually deteriorating business conditions, North continued to point to a number of negative headwinds facing the U.S. economy. "Gasoline prices are high, housing prices are low, the dollar is crumbling, consumer confidence is plummeting, holiday sales have been mixed at best, credit is drying up, bankruptcies and foreclosures are on the rise, the employment situation is decaying, and conditions in the housing industry are getting worse," he said. "It is a potent combination which could lead the economy into a recession in the first half of next year." However, he conceded that both the economy and the nation's business environment have remained resilient so far, but "cracks are starting to show, and the Fed will almost certainly cut the Fed Funds rate again at its December 11th meeting in an effort to forestall a recession." And, in all likelihood, North believes the Fed will have to continue to cut the Fed Funds rate well into 2008, perhaps as low as 3.5%. North said the manufacturing sector manufacturing sector fell slightly in November, with bankruptcies plummeting 7.9% - the second largest drop on record. "The bright spot of the manufacturing report was that the sales component erased all of last months 5.2% fall," he said. As has been the case for months now, comments from the survey participants were mostly about the terrible conditions in the housing market, but this month North commented that "there are some unhappy comments from other industries as well, indicating more widespread weakness." For example, one manufacturer of nuts, bolts, screws, etc. said manufacturing "is cutting back to a four-day week." A petroleum refiner said, "We are seeing stress across industries due to rising energy and raw material costs." And a manufacturer of cookies and crackers noted how the housing crisis is now directly affecting even the food industry: "We're affected by the trauma of home builders, mortgage banks and title companies." Meanwhile, North said the service sector decline was widespread as seven of the 10 components fell. As with the manufacturing sector, bankruptcies led the way down, falling 6.0%. Also similar to the manufacturing sector, most survey comments were negative regarding the housing industry, but downbeat comments from other industries are now ringing in. One participant from the photocopying industry said, "Even our best customers are paying beyond 100 days past due." Another from the plastics industry, referring to the impact of higher oil prices, said, "Prices are increasing ... We have had several customers close their doors as a result of the higher price." Finally, another from the tire industry described the state of the economy perfectly: "There appears to be no question that the economy is turning negative. With the housing industry in a slump and the price of gas more than $3.00 a gallon, individuals simply do not have the money they once had to make retail purchases." About Euler Hermes Headquartered in Owings Mills, Maryland, Euler Hermes ACI -- http://www.eulerhermes.com/usa-- is the U.S. subsidiary of the Euler Hermes Group. In addition Euler Hermes ACI is North America's oldest and largest provider of trade credit insurance and accounts receivable management solutions. Euler Hermes ACI provides receivables management services that includes commercial third party collections, receivables management outsourcing, and international collections. With 5,800 employees in 49 countries, Euler Hermes offers services for the management of B-to-B trade receivables and posted a consolidated turnover of EUR2.01 billion in 2006. Euler Hermes, subsidiary of AGF and a member of the Allianz group, is listed on Euronext Paris. The group and its principal credit insurance subsidiaries are rated AA- by Standard & Poor's. * Mintz Levin Forms Group to Address Subprime Market Crisis ----------------------------------------------------------- Mintz Levin Cohn Ferris Glovsky and Popeo P.C. has formed a Subprime Practice Group in response to an increasing demand from clients seeking guidance on the legal complexities associated with the collapse of the subprime lending market. The group taps into the expertise of more than two dozen attorneys across multiple offices and practice areas including litigation, securities, bankruptcy and restructuring, structured finance, governmental investigations, insurance coverage, white collar crime, and real estate. "Fallout from the collapse of the subprime market is becoming increasingly widespread and the reverberations will continue to be felt for some time," Richard Moche, manager of the firm's Public Finance Section, said. "Already, the firm has seen a growing demand from businesses and individuals seeking advice related to a range of complex issues stemming from the situation -- from investigations by government authorities to claims against directors and officers to bankruptcy," he added. "By forming a dedicated subprime practice group, we are bringing to bear the vast expertise of attorneys from across the firm to serve clients with a coordinated, multi- disciplinary approach." Mr. Moche pointed out that the wide range of entities potentially affected by the crisis includes: -- market participants responding to investigations by governmental authorities; -- insurers responding to claims against officers and directors under D&O policies; -- financial institutions defending claims asserting inadequate disclosures of the risks related to the subprime market in the offering of securities backed by subprime mortgages; and -- companies defending against shareholder suits alleging inadequate disclosure of the exposure to subprime credit issues. About Mintz Levin Cohn Ferris Glovsky and Popeo P.C. Mintz Levin Cohn Ferris Glovsky and Popeo P.C. -- http://www.mintz.com/-- is an AmLaw 100 law firm. Since 1933, the company's lawyers have represented entrepreneurs, emerging growth companies, Fortune 500 companies, government agencies, not- for-profit organizations and leaders in primary industries that include Life Sciences/Biotechnology; Technology & Communications; Energy & Clean Technology; Financial Services & Insurance; Healthcare; Real Estate, Hospitality & Construction; and Retail & Consumer Products. The company's knowledge combined with its industry expertise provides clients with enterprise legal advice that gives their business a competitive advantage in the marketplace. Mintz Levin maintains offices in Boston, Washington, New York, Stamford, Los Angeles, London, Palo Alto and San Diego. * Fitch Says Neg. Performance in RMBS and SF CDO Leads to EOD ------------------------------------------------------------- Unprecedented negative performance in both the U.S. subprime RMBS and SF CDO sectors will lead to an increasing likelihood of CDO event of defaults, according to Derivative Fitch in a new report. Derivative Fitch has received two EOD notices to date, with the number likely to increase. SF CDOs and CDO-squared transactions originated in 2006 and this year are the most vulnerable to EODs, according to Senior Director Beth Nugent, although EOD risk does not stop with these vintages. 'The rights and remedies of an event of default are unique to each transaction, therefore investors should properly examine and interpret the documents of their investments in order to fully understand the effects of an event of default,' said Nugent. 'Better understanding of EOD documentation is especially important at this juncture. Should U.S. subprime RMBS performance continue to deteriorate, Derivative Fitch expects to see further collateral downgrades that could put more SF CDOs at risk of triggering event of defaults.' In an EOD, the controlling class on a transaction can vote to either accelerate payments to noteholders or to liquidate assets. Both scenarios are accounted for in Derivative Fitch's CDO analysis. For transactions where an EOD has been triggered or is imminent, Derivative Fitch assumes that the controlling class will vote to accelerate note payment. Fitch will model the priority of payments that is affected upon an EOD acceleration in its cash flow analysis. This approach may yield a more favorable credit opinion of the senior notes if the priority of payments directs all interest and principal proceeds to redeem these senior notes. However, if the controlling class does not vote to accelerate or votes to liquidate the transaction, Derivative Fitch will revise its assumptions, which may result in a rating adjustment. * Fitch Says Real Estate Loan CDO Delinquencies Increased --------------------------------------------------------- U.S. commercial real estate loan CDO delinquencies increased slightly last month. Though true trends are not conclusive due to the relatively small universe of loans, increased loan extensions are expected, according to the latest U.S. CREL CDO loan delinquency index from Derivative Fitch. 'Although there were no repurchased loans this month, two new delinquent loans contributed to a 0.15% U.S. CREL CDO loan delinquency rate for November 2007 compared to last month's delinquency rate of 0.08%, excluding repurchased loans,' said Senior Director Karen Trebach. Loan delinquencies consist of loans that are 60 days or greater delinquent, including performing matured balloons. 'The overall delinquency rate for CREL CDOs remains historically low and is comparable to the U.S. CMBS loan delinquency rate of 0.28% for October 2007. When accounting for last month's repurchased loans, the November 2007 U.S. CREL CDO loan delinquency rate would be closer to 0.43%.' Five loans were delinquent as of the November 2007 index. The two new delinquent loans were both whole loans, joining two other delinquent whole loans from last month. The fifth delinquent loan is a B-note position. Whole loans on transitional assets are expected to exhibit higher volatility than B-notes or mezzanine loans on stable assets, leading to a greater probability of default. Loss severities for whole loans, however, are expected to be much lower than B-note or mezzanine loans. One of the new delinquencies is a multifamily loan in Texas, which is consistent with the trend seen in CMBS delinquencies. The other is a hotel loan in Florida that has fallen behind on its business plan. This trend is consistent with the trend highlighted in Fitch's October LDI press release in which the largest percent of delinquent loans were secured by transitional hotel properties that were unable to actualize on their business plans. All of the delinquent loans are from the 2006 vintage. Due to the short-term nature of the collateral in CREL CDOs, many loans in the 2006 vintage have already reached maturity and some are facing balloon defaults, which is not surprising given the difficulty associated with refinancing in today's market. Fitch expects the asset managers to modify and extend these loans. Fitch also reviewed loans that were 30 days delinquent. Although not included in the loan delinquency index, this category can be an early warning sign that a loan could ultimately be classified as delinquent. Four loans, representing 0.16% of the CREL CDO collateral were 30 days delinquent in November 2007. One loan, representing over 50% of the total 30-day delinquency, is a chronic late payer that is not currently anticipated to result in a loss to the CDO. Fitch considers credit impaired assets that have been removed from the pool to be part of the delinquency rate. Excluding these repurchased loans would overstate the performance of a pool. To date, most CREL CDO asset managers have opted to buy out credit impaired assets at par rather than workout the loan within the CDO. This month, however, asset managers reported that no assets were repurchased. Given the lower available liquidity in the market, Fitch expects less repurchases of troubled loans and more workouts within the trust. One advantage of a CDO is that it generally allows issuers the flexibility to modify loans even before they become delinquent. Modifications could include term extension, rate reduction, or posting of additional collateral. Fitch will also begin tracking this expected trend. In its ongoing surveillance process, Fitch will increase the probability of default to 100% for delinquent loans that are unlikely to return to current. This adjustment could increase the loan's expected loss in the cases where the probability of default was not already 100%. The weighted average expected loss on all loans is the credit metric used to monitor the performance of a CREL CDO. Issuers covenant not to exceed a certain PEL and Fitch determines the ratings of the CDO liabilities based on this covenant. Fitch analysts monitor the as-is PEL over the life of the CDO. The difference between the PEL covenant and the as-is PEL represents the transaction's cushion for reinvestment and negative credit migration. Derivative Fitch currently rates 35 CREL CDOs encompassing nearly 1,100 loans with a balance of $23.5 billion. Fitch's U.S. CREL CDO Loan Delinquency Index will be published during the first week of every month based on asset manager and servicer reports collected by Fitch's dedicated CRE CDO surveillance team. In addition to publishing the monthly Loan Delinquency Index, Derivative Fitch is committed to providing ratings that reflect current performance and anticipate future credit events. To achieve this objective, it is imperative that Fitch's CRE CDO surveillance team be provided with relevant and up-to-date loan- level information. Fitch recently published a report entitled 'CRE CDOs: Enhanced Information Provides Early Warning Signals'. In the report, Fitch describes the on-going reports Fitch requests from asset managers, in addition to the monthly loan delinquency status report, and explains the value of each report. * Fitch Says US Paper Industry Was Stymied By Housing Downturn -------------------------------------------------------------- Financial improvement in the U.S. paper and forest products industry was stymied in the third quarter of 2007 as the housing market downturn continued to persist, according to a Fitch Ratings' report. Higher seasonal activity in Q3 stabilized but did not support a rise in prices, and a seasonally slower fourth quarter has let lumber prices drift lower. Fitch expects the disparaging results experienced during Q1 of 2007 will likely be repeated at least a couple of times. Consolidation and mill and box plant closures in the corrugated markets are moving closer to a declining domestic demand, permitting cost pass-throughs and better operating margins. Higher prices compensating for cost inflation may preserve third- quarter operating margins, and the presently low U.S. dollar will encourage further containerboard exports. Traditional lower seasonal volumes in Q4, however, will produce lower absolute earnings. Paper shipments were seasonally better than in previous years, but in Q4 will be seasonally weaker than in the quarter just closed. Fiber costs are not expected to rise, due to an adequate supply and decreased paper shipments; however, energy and transport costs will be higher, but are not to be outdone by higher paper prices. On balance, operating margins are expected to hold. * Moody's Lowers Ratings on Six Rated Homebuilders Companies ------------------------------------------------------------ Moody's Investors Service lowered the ratings of the six B2 rated homebuilders -- Ashton Woods USA, LLC, Kimball Hill, Inc., McMillin Companies, LLC, The Rhodes Companies, LLC, Stanley-Martin Communities, LLC, and William Lyon Homes -- assigning each of the six companies negative outlooks and the following corporate family ratings: * Ashton Woods lowered to B3 from B2 * Stanley-Martin lowered to Caa1 from B2 * William Lyon Homes lowered to Caa1 from B2 * Kimble Hill lowered to Caa2 from B2 * McMillin Companies lowered to Caa2 from B2 * Rhodes lowered to Caa2 from B2 The downgrades of the six companies and negative ratings outlooks reflect the following: 1) Moody's does not see a sector recovery beginning before well into 2009 at the earliest, with any recovery likely to be very restrained at the outset, thus prolonging the companies' underperformance on key financial metrics vs. prior expectations. Among the numerous negative factors overhanging the housing market, the key ones are as follows: a. Elevated inventory levels of new and existing housing that are expected to last into 2009 b. Disruptions in the mortgage market, further exacerbated by the recent difficulties at Freddie Mac c. Greatly diminished consumer homebuying confidence d. Affordability, while improving somewhat, remaining a thorny issue in key markets e. Declining home prices and increased buyer incentives being offered, also expected to last into 2009 f. Lofty speculative housing levels, largely from increased cancellations but also including an appreciable number of "deliberate" specs, i.e., homes started without a contract of sale g. Rapidly declining orders and backlogs and historically high cancellation rates 2) While actual inventory levels (i.e., reported inventory levels that are adjusted to reflect land impairment and option abandonment charges) may show declines for many of the companies in their soon-to-be completed fourth quarters, that is what would typically occur even in strong years. The fourth quarter almost always shows a seasonal decline in inventory levels as company employees strive to maximize closings in order to meet bonus targets. Moody's remains concerned, however, that inventory levels for the coming quarters will show little real reduction, thus impeding sustainable cash flow generation. 3) The companies have faced increasing difficulties in complying with financial covenants throughout 2007, and as 2008 progresses, Moody's expects to see additional instances of non-compliance. This will likely restrict, or further restrict, revolver availability. 4) Debt leverage will remain elevated as cash flow generation will be largely insufficient to repay any significant amount of debt while tangible net worth positions continue being eroded by impairment and option abandonment charges. 5) Because of the rapidity of the decline in unit home deliveries and thus of revenues, the companies continue to struggle to keep pace by reducing controllable expenses. This has made, and will continue to make, it difficult for the companies to generate more than minimal earnings before charges. 6) The companies' relatively small size and scale and limited geographic, product and price point diversity exacerbate the risk of localized down cycles. Specific rating actions and rationales will be contained in individual press releases on each of the six companies. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Dec. 6, 2007 TURNAROUND MANAGEMENT ASSOCIATION Seattle Holiday Party Athletic Club, Seattle, Washington Contact: 206-223-5495; http://www.turnaround.org/ Dec. 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 10, 2007 TURNAROUND MANAGEMENT ASSOCIATION Holiday Party Guy Anthony's Restaurant, Merrick, New York Contact: 631-251-6296 or http://www.turnaround.org/ Dec. 10, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA/CFA Joint Holiday Party Maryland Club, Baltimore, Maryland Contact: 215-657-5551 or http://www.turnaround.org/ Dec. 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Joint Holiday Networking Event with TMA/CFA Loews Hotel, Philadelphia, Pennsylvania Contact: 215-657-5551 or http://www.turnaround.org/ Dec. 13, 2007 TURNAROUND MANAGEMENT ASSOCIATION Colorado Chapter Annual Brew Pub & Pool Social Wynkoop Brewing Company, Denver, Colorado Contact: 303-847-5026 or http://www.turnaround.org/ Dec. 13, 2007 TURNAROUND MANAGEMENT ASSOCIATION Holiday Extravaganza - TMA & CFA Georgia Aquarium, Atlanta, Georgia Contact: 678-795-8103 or http://www.turnaround.org/ Dec. 19, 2007 LEXISNEXIS CONFERENCES Mealey's Asbestos Bankruptcy Conference Four Seasons Hotel, Miami, Florida Contact: http://www.lexisnexis.com/ Dec. 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South Florida Contact: 561-882-1331; http://www.turnaround.org/ Jan. 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Distressed Debt Panel University Club, Jacksonville, Florida Jan. 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION NJTMA Holiday Party Iberia Tavern & Restaurant, Newwark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ Jan. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Annual Lenders Panel Westin Buckhead, Atlanta, Georgia Contact: http://www.turnaround.org/ Jan. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Current Outlook: Workouts, Lending and Turnarounds Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org/ Jan. 17-18, 2008 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Diplomat, Hollywood, Florida Contact: http://www.abiworld.org/ Jan. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION Finding Money: Int'l Asset Search and Recovery Methods for Collecting Judgments Centre Club, Tampa, Florida Contact: http://www.turnaround.org/ Feb. 7, 2008 TURNAROUND MANAGEMENT ASSOCIATION PowerPlay Philips Arena, Atlanta, Georgia Contact: 678-795-8103 or http://www.turnaround.org/ Feb. 7, 2008 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Event Carnelian Room, San Francisco, California Contact: 510-346-6000 ext 226 or http://www.turnaround.org/ Feb. 14-16, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 22, 2008 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Fairmont Miramar, Santa Monica, California Contact: http://www.abiworld.org/ Feb. 23-26, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Litigation Seminar I Park City, Utah Contact: http://www.nortoninstitutes.org/ Feb. 26, 2008 TURNAROUND MANAGEMENT ASSOCIATION Retail Panel Citrus Club, Orlando, Florida Contact: www.turnaround.org/ Feb. 27-28, 2008 EUROMONEY INSTITUTIONAL INVESTOR 6th Annual Distressed Investing Forum Union League Club, New York, New York Contact: http://www.euromoneyplc.com/ Mar. 6-8, 2008 ALI-ABA Fundamentals of Bankruptcy Law Mandalay Bay Resort, Las Vegas, Nevada Contact: http://www.ali-aba.org/ Mar. 8-10, 2008 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition St. John's University School of Law, New York Contact: http://www.abiworld.org/ Mar. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club of Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ Mar. 25, 2008 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Maggie Good Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ Mar. 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Mar. 27-30, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Litigation Seminar II Las Vegas, Nevada Contact: http://www.nortoninstitutes.org/ Apr. 3, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION Annual Spring Luncheon Renaissance Hotel, Washington, District of Columbia Contact: 703-449-1316 or www.iwirc.org Apr. 3, 2008 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - East The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ Apr. 3-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 26th Annual Spring Meeting The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ Apr. 25-27, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Spring Seminar Eldorado Hotel & Spa, Santa Fe, New Mexico Contact: http://www.nabt.com/ May 1-2, 2008 AMERICAN BANKRUPTCY INSTITUTE Debt Symposium Hilton Garden Inn, Champagne/Urbana, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ May 9, 2008 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - NYC Alexander Hamilton U.S. Custom House, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 12, 2008 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Hotel & Conference Center, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 13-16, 2008 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, Louisiana Contact: 1-703-739-0800; http://www.abiworld.org/ May 18-20, 2008 INTERNATIONAL BAR ASSOCIATION 14th Annual Global Insolvency & Restructuring Conference Stockholm, Sweden Contact: http://www.ibanet.org/ June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference J.W. Marriott Spa and Resort, Las Vegas, Nevada Contact: http://www.airacira.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: http://www.abiworld.org/ June 19-21, 2008 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Omni Hotel, San Francisco, California Contact: http://www.ali-aba.org/ June 26-29, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Seminar Jackson Hole, Wyoming Contact: http://www.nortoninstitutes.org/ July 10-13, 2008 AMERICAN BANKRUPTCY INSTITUTE 16th Annual Northeast Bankruptcy Conference Ocean Edge Resort Brewster, Massachussets Contact: http://www.abiworld.org/events July 31 - Aug. 2, 2008 AMERICAN BANKRUPTCY INSTITUTE 4th Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, Maryland Contact: http://www.abiworld.org/ Aug. 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, Florida Contact: http://www.abiworld.org/ Aug. 20-24, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Captain Cook, Anchorage, Alaska Contact: http://www.nabt.com/ Sept. 4-5, 2008 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 24-26, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 15th Annual Fall Conference Scottsdale, Arizona Contact: http://www.ncbj.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Desert Ridge Marriott, Scottsdale, Arizona Contact: http://www.iwirc.org/ Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com; http://researcharchives.com/t/s?20fa BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES China\u2019s New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency \u2013 Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers\u2014the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Today\u2019s Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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 Medel C. 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 ***