/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071217.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 17, 2007, Vol. 11, No. 298 Headlines 360 GLOBAL: Court Confirms 360 Viansa's Ch. 11 Reorganization Plan AAMES MORTGAGE: Moody's Lowers Ratings on Five Certificates ACA ABS: Poor Credit Quality Cues Moody's to Lower Ratings ACXIOM CORP: Moody's Confirms Ba2 Corporate Family Rating AEGIS ASSET: Moody's Junks Rating on Class B Certificates AMERICAN HOME: McManus Disposes of 13,000 Shares of AHM Stock AMERICAN HOME: Former Employees Amend Class Action Complaint AMERICAN HOME: Inks 2nd Stipulation with ABN on Construction Loans AMERICAN PACIFIC: Earns $3.6 Mil. in Quarter Ended September 30 ASCENDIA BRANDS: Discloses Default of Lender Covenants ASSOCIATED ESTATES: Paying $0.17/Share Dividend on February 1 BALLANTYNE RE: Fitch Downgrades Ratings and Removes Neg. Watch BANC OF AMERICA: Fitch Holds 'BB' Rating on Two Class Certs. BANC OF AMERICA: Moody's Places Seven Ratings Under Review BEAR STEARNS: BofA Withdraws Plea to Clarify Injunction Order BEAR STEARNS: Funds Want More Time to Answer Amici Brief BEAR STEARNS: Receives Subpoena from New York Attorney General BIG A DRUG: Section 341(a) Meeting Set for January 7 BKF CAPITAL: Posts $602,000 Net Loss in Third Quarter BOSTON SCIENTIFIC: Inks $425 Mil. Buyout Deal with Avista Capital BRANDYWINE REALTY: Board Declares Fourth Quarter 2007 Dividends BROADWAY GEN: Planned Asset Sale Cues Moody's Positive Outlook BRODERICK CDO: Moody's Junks Ratings on Four Note Classes CAL-BAY INTERNATIONAL: Relocates Corp. Headquarters to Nevada CAMBIUM LEARNING: Moody's Holds B3 Rating and Changes Outlook CANNERY CASINO: Crown Limited Deal Prompts Moody's Pos. Outlook CATHOLIC CHURCH: Davenport Must File Plan by January 31 CATHOLIC CHURCH: Davenport to Divide Settlement Amount in 4 Ways CATHOLIC CHURCH: "Allocation Order" Entered in San Diego's Case CATHOLIC CHURCH: Portland Wants BMC to Archive Proofs of Claim CHECK ELECT: Case Summary & 30 Largest Unsecured Creditors CHRYSLER LLC: To Idle Two Plants in Michigan & Ontario in January CITIGROUP MORTGAGE: Poor Credit Support Cues S&P to Cut Rating CLAYMONT STEEL: Selling Assets for $564.8 Million to Evraz Group CONVERSION SERVICES: Sept. 30 Balance Sheet Upside-Down by $1.7MM COUNTRYWIDE: Fitch Junks Ratings on 46 Transactions EIMSKIP HOLDINGS: S&P Holds 'B' Long-Term Corp. Credit Rating ENRON CORP: Commences Civil Action Against Hewitt Association ENRON CORP: Three Bankers Plead Guilty to Wire Fraud EURONET WORLDWIDE: Confirms Tax-Free All-Stock Offer for MoneyGram EURONET WORLDWIDE: S&P Places 'BB' Rating Under Positive Watch FAIRPOINT COMMS: Inks Deal with Maine PUC for Access Line Deal GENERAL MOTORS: Refuses to Pay Bonuses to Retirees, IUE-CWA Says GSV-2 RESORT: Files List of 20 Largest Unsecured Creditors GSV-2 RESORT: Submits Schedules of Assets and Liabilities GSV-2 RESORT: Section 341(a) Meeting Scheduled on December 20 HALCYON STRUCTURED: Moody's Rates $21.7MM Class D Notes at Ba2 HOLOGIC INC: Full Loan Repayment Cues Moody's to Hold Ba3 Rating INDYMAC RESIDENTIAL: Fitch Holds 'B' Rating on Class 2-B-5 Certs. INTERSTATE BAKERIES: Disclosure Statement Hearing Set for Jan. 29 INTERSTATE BAKERIES: Inks Second Amendment to Credit Agreement INVERNESS MEDICAL: Finalizes $36 Million Matritech Acquisition JOURNAL REGISTER: Inks Amendment to JPMorgan Credit Agreement JOURNAL REGISTER: S&P Lifts Rating on $825MM Facilities to BB- KNIGHT INC: To Sell 80% of MidCon Interests to Myria Acquisition KNIGHT INC: Midcon Sale Cues S&P to Affirm 'BB-' Credit Rating LARRY OLSON: Case Summary & 20 Largest Unsecured Creditors LIN TV: Board Completes Review of Strategic Alternatives LIN TELEVISION: Moody's Holds Debt Ratings with Stable Outlook MACTARA LTD: Court OKs Scaled-Back Production Pact with Creditors MARATHON FINANCIAL: Submits Schedules of Assets and Liabilities MATRITECH INC: Inverness Medical Finalizes $36 Million Buyout MONEYGRAM INTERNATIONAL: Euronet Confirms Tax-Free All-Stock Offer MONEYGRAM INTERNATIONAL: Provides Comments on Euronet's Offer MONITOR OIL: U.S. Trustee Appoints Five-Member Creditors Committee MORGAN STANLEY: Moody's Slashes Rating on Class M-2 Loan to Ba1 MUZAK HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $400 Mil. MUZAK HOLDINGS: S&P Affirms Ratings and Removes Positive Watch NCO GROUP: $325 Million OSI Deal Cues Moody's Ratings Review NEUMANN HOMES: Trade Creditors Want Official Committee Appointed NEUMANN HOMES: Court Approves Drinker Biddle as Special Counsel NEUMANN HOMES: Wants Court's OK to Sell Property for $1.4 Million NEW YORK UNITED: Court Says Disclosure Statement is Adequate NEW YORK UNITED: Plan Confirmation Hearing Slated on January 17 NICHOLS BROTHERS: Selects Miles Stover as Financial Advisor NICHOLS BROTHERS: Wants James Murphy as Estate Appraiser NICHOLS BROTHERS: Committee Can Retain Lasher Holzapfel as Counsel NOVASTAR: Fitch Cuts Rating on Class B-4 Certs. to B from BBB- OPTION ONE: Fitch Downgrades Ratings on Six Certificate Classes PACIFIC CROSSING: Submits Schedules of Assets and Liabilities PACIFIC CROSSING: Section 341(a) Meeting Slated for January 9 PACIFIC LUMBER: Fifth Circuit Affirms Bankruptcy Court Ruling PANTRY INC: Earns $5.6 Million in Quarter Ended September 27 PENN NATIONAL: Wins Sumner County's Endorsement for Casino Project PENN NATIONAL: 99.3% of Shareholders Vote to Approve Merger Deal PIKE NURSERY: Section 341(a) Meeting Slated for December 20 QUAKER FABRIC: Asks Court to Extend Exclusivity Period to April 14 QWEST COMMUNICATIONS: Fitch Affirms BB Issuer Default Rating REGENCY ENERGY: $655 Million CDM Deal Cues Moody's Rating Review RESIDENTIAL CAPITAL: Extends Early Tender Time to December 19 SAN DIEGO: S&P Lowers Rating on $10 Million Certificates to BB SIGNAL SECURITIZATION: Fitch Holds 'BB' Rating on Class B Certs. SINCLAIR BROADCAST: Paying $0.175/Share Dividend on January 15 SMART-TEK SOLUTIONS: Sept. 30 Balance Sheet Upside-Down by $4.2MM SOFA EXPRESS: Wants Deadline to File Schedules Extended to Jan. 17 SOFA EXPRESS: Section 341(a) Meeting Set for January 11 SONJA WILKES: Voluntary Chapter 11 Case Summary STANFIELD ARNAGE: Moody's Assigns Ba2 Rating on $20MM Notes SUNCOAST ROOFERS: U.S. Trustee Forms Seven-Member Creditors Panel SUNCOAST ROOFERS: Court Approves Stichter Riedel as Counsel THOMAS HUTCHINSON: Case Summary & 7 Largest Unsecured Creditors TROPICANA ENTERTAINMENT: New Jersey Denies Renewal of License TROPICANA ENT: Denied License Renewal Cues S&P to Junk Rating TROPICANA ENT: In Compliance with Credit Facility as of Dec. 5 US SHIPPING: Moody's Junks Corporate Family Rating WASHINGTON MUTUAL: Fitch Affirms 'BB-' Ratings on Two Classes WASTEQUIP INC: Moody's Cuts Corporate Family Rating to B3 WINSTAR COMMS: Chapter 7 Trustee Says Company Controlled by Lucent WINSTAR COMMS: Chapter 7 Trustee Wants AG Edwards as Stockbroker WYLE HOLDINGS: Moody's Assigns B2 Corporate Family Rating YRC WORLDWIDE: Reaches Tentative Pact with Teamsters YRC WORLDWIDE: Inks New Amendment to Receivables Purchase Pact YRC WORLDWIDE: Poor Performance Cues S&P to Cut Rating to BB+ * Fitch Says Housing Contraction to Extend to 2008 * Fitch Believes Gaming Issuers Can Manage Credit Profiles * ABI Study Shows Examiners Found to Drive Up Bankruptcy Costs * BOND PRICING: For the Week of Dec. 10 - Dec. 14, 2007 ********* 360 GLOBAL: Court Confirms 360 Viansa's Ch. 11 Reorganization Plan ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Nevada confirmed the Chapter 11 Plan of Reorganization proposed by 360 Viansa LLC, an affiliate of 360 Global Wine Co., Bill Rochelle of Bloomberg News reports. The Plan is to become effective by Dec. 31, 2007, Bloomberg says, citing company lawyer Martin Brill, Esq., at Levene Neale Bender Rankin & Brill. As reported in the Troubled Company Reporter on Oct. 12, 2007, the Debtors' Plan proposes to sell 100% of the equity in the reorganized Debtors to the highest bidder free and clear of all liens to fund and implement the Plan. The Debtors told the Court that if Laurus Master Fund Ltd., a secured creditor of the Debtors, is the successful bidder, Croesus Corporation's secured claim will remain in place with the reorganized Debtor. Additionally, the Debtors said the successful bidder can elect to assume or reject the agreement with General Electric Capital Corporation. If the successful bidder elects to assume the agreement, it will set aside sufficient funds to pay the cure and fair market value of the equipment subject to the leases. Treatment of Claims Under the Plan, Administrative Claims will be paid in full on the effective date. At the option of the reorganized Debtors, holders of Priority Tax Claims, totaling approximately $635,000, will be paid, either: a. cash on the effective date; or b. deferred cash payments, in equal quarterly installments with interest at the federal interest rate, estimated at 6% per annum. Any Class 2 Claims of statutory lien holders filed prior to the July 16, 2007 non-governmental creditors bar date and Oct. 15, 2007 governmental units bar date will be paid in full on the effective date. New Vine Logistics' secured claim will receive payment of $416,500 in cash, in full and complete satisfaction of its claim on the effective date. Croesus and Laurus' secured claim will be paid in full from the proceeds of the sale on the effective date. Gryphon Master Fund LP's secured claim will also be paid in full from the balance of the sale proceeds. Dell Financial Services LP, General Motors Acceptance Corporation, Key Equipment Finance, and US Bancorp's secured claims will be paid according to the terms stated in their respective prepetition agreements with the Debtors, or the release of their collateral in full, at the option of the successful bidder. Each holder of Administrative Convenience and General Unsecured Claims will receive pro rata distribution of a lump sum of $150,000 on the effective date. Holders of Equity Interests will not receive any distribution under the Plan. About 360 Global Wine Headquartered in Los Angeles, California, 360 Global Wine Company and 360 Viansi LLC -- http://www.360wines.com/-- are small, diversified marketers of wine and alcoholic beverages. The company filed for Chapter 11 protection on March 7, 2007 (Bankr. Nev. Case No. 07-50205). 360 Viansa LLC, an affiliate, filed a separate chapter 11 petition on the same day (Bankr. Nev. Case No. 07-50206). Brett A. Axelrod, Esq., at Beckley Singleton, Chartered and Bridget Robb Peck, Esq., at Lewis and Roca LLP represent the Debtors in their restructuring efforts. David A. Honig, Esq., and Todd J. Dressel, Esq., at Winston & Strawn LLP, represent the Official Committee of Unsecured Creditors. Zachary J. Wadle, Esq., at McDonald Carano Wilson LLP serves as counsel to the Ad Hoc Committee of Creditors Holding Unsecured Claims. In their petition, 360 Global Wine listed total assets of $43 million and total debts of $39 million while 360 Viansa listed total assets and debts between $1 million to $100 million. AAMES MORTGAGE: Moody's Lowers Ratings on Five Certificates ----------------------------------------------------------- Moody's Investors Service downgraded 5 certificates issued by Aames Mortgage Trust 2003-1. The transaction's current pool factor is 13.10%. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The downgrades on the certificates are driven by the complete erosion of the OC which left the Cl. B exposed to future losses and the tranches successively above it in a weaker position. Complete rating actions are: Issuer: Aames Mortgage Trust 2003-1 -- Cl. M-3, Downgraded to Baa2 from A3 -- Cl. M-4, Downgraded to Ba2 from Baa1 -- Cl. M-5, Downgraded to B2 from Baa2 -- Cl. M-6, Downgraded to Ca from B2 -- Cl. B, Downgraded to C from Caa3 ACA ABS: Poor Credit Quality Cues Moody's to Lower Ratings ---------------------------------------------------------- Moody's Investors Service placed these notes issued by ACA ABS 2003-1, Limited on review for possible downgrade: Class Description: $15,000,000 Class B Floating Rate Term Notes, due June 10, 2038 -- Prior Rating: Aa1 -- Current Rating: Aa1, on review for possible downgrade In addition Moody's also announced that it has downgraded and left on review for possible downgrade these notes: Class Description: $29,000,000 Class C Floating Rate Deferrable Interest Term Notes, due June 10, 2038 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $18,000,000 Class D Floating Rate Deferrable Interest Term Notes, due June 10, 2038 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of residential mortgage-backed securities. ACXIOM CORP: Moody's Confirms Ba2 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service has confirmed Acxiom's Ba2 corporate family rating and assigned a negative rating outlook, concluding a review for possible downgrade initiated on May 17, 2007 following the company's announcement that it had entered into a definitive agreement to be acquired by Silver Lake and ValueAct Capital for $3.0 billion. On Oct. 1, 2007, Acxiom reached a settlement agreement with Silver Lake and ValueAct Capital to terminate the previously announced acquisition pursuant to which Acxiom received $65 million in cash. The negative outlook reflects the challenges the company will have to regain organic revenue growth and profitability and the potential impact from the downturn in the financial services market, which accounts for approximately 25% of their business. The Ba2 corporate family rating confirmation reflects the company's leadership position in the database marketing services space, solid free cash flow and liquidity position and moderate financial leverage. The rating is constrained by its relatively high client (top 30 clients represented about 50% of fiscal 2007 revenues) and business line concentration, modest size, and market challenges including consumer privacy and potential regulatory concerns. The ratings could be downgraded if the company were to increase its share repurchase or acquisition activity such that there is a leveraging event that results in free cash flow to debt of less than 5%, or if operating margins decline significantly from historical results. Given the negative outlook, a rating upgrade is unlikely at the present time. The rating outlook could be stabilized were the company to demonstrate free cash flow to debt exceeding 15% on a sustained basis. Ratings confirmed: -- Corporate Family Rating - Ba2 -- Probability of Default Rating - Ba3 -- $544 million Senior Secured Term Loan due September 2012 - Ba2, LGD 3, 30% -- $200 million Senior Secured Revolving Credit Facility expiring September 2011 - Ba2, LGD 3, 30% With about $1.4 billion in revenues and $343 million of EBITDA for the twelve months ended September 2007, Acxiom Corporation, headquartered in Little Rock, Arkansas, is a customer data integration and content software and information technology outsourcing services provider. AEGIS ASSET: Moody's Junks Rating on Class B Certificates --------------------------------------------------------- Moody's Investors Service has downgraded three certificates from Aegis Asset Backed Securities Trust 2003-3. The transaction is backed by primarily first-lien, fixed and adjustable-rate subprime mortgage loans. The certificates have been downgraded based upon recent and expected pool losses and the resulting actual and expected erosion of credit support. Generally, existing credit enhancement levels were too low for the previous ratings given the current projected losses on the underlying pools. Furthermore, the deal is realizing tail-end losses with a pool factor of only 10.80%. Complete rating actions are: Downgrade Issuer: Aegis Asset Backed Securities Trust 2003-3 -- Class M2, downgraded from A2 to Baa3 -- Class M3, downgraded from A3 to Ba3 -- Class B, downgraded from Baa2 to Caa1 AMERICAN HOME: McManus Disposes of 13,000 Shares of AHM Stock ------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Michael A. McManus, Jr., director of American Home Mortgage Investment Corp., discloses that disposed of 13,000 shares of the company's common stock on December 4, 2007, priced at $0.04 per share. Following the transaction, Mr. MacManus discloses he is deemed to beneficially own 28,486 shares of AHM Investment's common stock. Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 21, 2007. (American Home Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Former Employees Amend Class Action Complaint ------------------------------------------------------------ Seven of American Home Mortgage Investment Corp. and its debtor- affiliates' former employees amend the complaint of the class action originally asserted by Ahmad Rasheed and Michael S. Surowiec on behalf of themselves and other similarly situated former employees. Kathy S. Koch, Chan Nguyen, Jarrett Perry, Gina Pulliam, Michael S. Surowiec, Patricia Williams and Kathleen Wielgus contend that the Debtors failed to pay them, and the other Former Employees, their wages, salary, commissions, bonuses, accrued holiday pay and accrued vacation for 60 calendar days after their terminations. They add that the Debtors also failed to make 401(k) contributions and to provide them with health insurance coverage and other employee benefits under the Employee Retirement Income Security Act. James E. Huggett, Esq., at Margolis Edelstein, in Wilmington, Delaware, says that the Plaintiffs sue under Rules 7023(a) and (b)(3) of the Federal Rules of Bankruptcy Procedure and Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure, on behalf of a class of Former Employees, like themselves, and other persons, who are affected employees within the meaning of Section 210l(a)(5) of the Labor Code. Mr. Huggett tells the U.S. Bankruptcy Court for the District of Delaware that common questions of law and fact are applicable to all members of the Class, and that the Class is so numerous, approximately 4,000 persons, that it would be impractical for each member to render joinders. He assures the Court that (i) the Class meets the requirements of Rule 23(a) for class certification, (ii) no Class member has an interest in individually controlling the prosecution of a separate action under the Worker Adjustment and Retraining Notification Act, and (iii) no litigation concerning the WARN Act rights of any Class member has been commenced. Concentrating all the potential WARN Act litigation of the Class members in the Court will avoid a multiplicity of suits, will conserve judicial and the parties' resources, and is the most efficient means of resolving the WARN Act issues, Mr. Huggett notes. Accordingly, the Plaintiffs and the Class members ask the Court to: -- grant an administrative priority claim, pursuant to Section 503(b)(a)(A) of the Bankruptcy Code, equal to the sum of: * unpaid wages; * salary * commissions * bonuses * accrued holiday pay * accrued vacation pay * pension and 401 (k) contributions; * other ERISA benefits for 60 days. -- alternatively, determine that the first $10,950 of the Class members' WARN Act claims is entitled to priority status, under Section 507(a)(4) of the Bankruptcy Code, and the remainder as a general unsecured claim; -- certify that the Plaintiffs and the other Class members constitute a single class; -- appoint Mr. Huggett, and Margolis Edelstein, as Class Counsel; -- appoint the Plaintiffs as the Class representatives with reasonable compensation; and -- allow as administrative priority claim the reasonable attorneys' fees, costs and disbursements. Debtors Respond The Debtors tell the Court they did not make certain payments under the WARN Act because no violation of the statute occurred. They note that they were not an employer or business enterprise under the WARN Act at the time the alleged violations occurred, as they were excused from giving notice under the unforeseeable business circumstances and faltering company exceptions of the WARN Act. The Debtors further argue that the Amended Complaint, in whole or in part, fails to state a claim upon which relief can be granted. They insist that the Plaintiffs have failed to mitigate their damages. The Debtors say that to the extent that any of the Plaintiffs, or Class members, are entitled to recover sums, then, the Debtors are entitled to set-off or recoup against those amounts previously paid to any of the Plaintiffs, including voluntary or unconditional payments not required by legal obligation, or payments made to third parties or trustees on behalf of, or attributable to, the Plaintiffs. The Debtors, therefore, ask the Court to dismiss the Amended Complaint and award them attorney's fees with interest and costs. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 21, 2007. (American Home Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Inks 2nd Stipulation with ABN on Construction Loans ----------------------------------------------------------------- American Home Mortgage Acceptance Inc., American Home Mortgage Corp., American Home Mortgage Investment Corp., American Home Mortgage Servicing Inc., and ABN AMRO Bank N.V. entered into a second stipulation regarding postpetition advances and sale of construction loan portfolio. The parties' previous sale stipulation provided that (i) if there were no qualified bidder for certain mortgage loans, which were subject of a master repurchase agreement between the Parties, or (ii) if ABN AMRO exercised its right to notify the Debtors not to accept the successful bid at the auction, then: -- ABN AMRO would pay to the Debtors $700,000, which it did on November 8, 2007; and -- within 20 business days of the bid deadline, or other date as agreed to, the Debtors would transfer, convey and turn over to ABN AMRO all of their rights in and to the Mortgage Loans. ABN AMRO has previously asked that the applicable 20-day deadline be extended to provide it additional time to find a substitute servicer and transferee with respect to the Mortgage Loans. In addition, the Debtors have agreed to use commercially reasonable efforts to keep in place the construction loan servicing group to service the Mortgage Loans through the remainder of calendar 2007 and the first quarter of calendar 2008, as long as ABN AMRO (i) continues to make additional mortgagor advances and servicing payments in accordance with the provisions of the Parties' postpetition advances stipulation, and (ii) agrees the waiver of claims provision will be effective. Among the salient terms of the Second Stipulation are: -- The funding requests to ABN AMRO to fund additional mortgagor advances with respect to the Mortgage Loans, pursuant to the Postpetition Advances Stipulation is increased from $32,000,000 to $70,000,000; -- ABN AMRO will pay its pro-rata share of the 2008 budget amounts, on the same terms as provided in the Postpetition Advances Stipulation; -- The turnover of the Debtors' rights in the Mortgage Loans to ABN AMRO will: (a) be conditioned upon ABN AMRO's performance of each of the payment obligations contained in the Postpetition Advances Stipulation and the Second Stipulation; and (b) occur on the first business day that is 15 calendar days after ABN AMRO provides written notice to the Debtors and their counsel that it has obtained an acceptable substitute servicer or transferee, and upon the transfer and substitution of servicer, ABN AMRO will no longer be obligated to make any further servicing payments; and -- On the date the Debtors turnover and deliver possession of the Mortgage Loans and Servicing Rights to ABN AMRO, it will not retain, nor assert, a claim in the Debtors' bankruptcy estates, under or with respect to the ABN MRA Agreements, the Mortgage Loans, or the Servicing Rights, provided that ABN AMRO will retain the right to pursue recovery of any of the ABN advances applied or used by any of the Debtors in any manner inconsistent with the ABN MRA Agreements, the Postpetition Advances Stipulation, the Advances Order, or the Second Stipulation. Budget for Construction and Renovation Lending The Debtors submitted a budget for the servicing of the construction loan portfolio for first quarter of calendar year 2008: Projected Expenses Jan08 Feb08 Mar08 ------------------ ----- ----- ----- Inspections $10,900 $9,400 $5,100 Appraisals 2,362 2,126 1,913 Data Processing 1,500 1,500 1,500 Overnight & Postage 1,837 1,653 1,488 Facilities 4,500 4,500 4,500 Salaries 176,301 92,968 261,467 Benefits 6,000 6,000 6,000 Misc 5,000 5,000 5,000 ------- ------- ------- Total Expenses $208,400 $123,147 $286,968 Actual Expenses $128,822 $122,970 About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Debtors' exclusive period to file a plan expires on Dec. 21, 2007. (American Home Bankruptcy News, Issue No. 19, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN PACIFIC: Earns $3.6 Mil. in Quarter Ended September 30 --------------------------------------------------------------- American Pacific Corporation reported financial results for its fiscal year ended Sept. 30, 2007. For three months ended Sept. 30, 2007, the company reported net income of $3.6 million compared to a net income of $0.8 million in the same period of the previous year. In fiscal year ended Sept. 30, 2007, the company reported a net income of $4.98 million compared to a net loss of $3.9 million, in the prior year. Capital and Liquidity As of Sept. 30, 2007, the company has cash balances of $21.4 million and no amounts drawn against its $20 million revolving credit line. In addition, the company was in compliance with the various covenants contained in its credit facilities. Cash flows from operating activities during the fiscal year 2007 improved by $14.6 million compared to the prior fiscal year. Operating activities provided cash of $24.1 million for the fiscal year 2007 compared to $9.5 million for the prior fiscal year. During fiscal year 2007, the company spent $8.4 million in cash for capital expenditures. This amount of expenditures is lower than the prior fiscal year period because during the prior fiscal year the company was actively involved in the construction of the new simulated moving bed facility at AFC. Financing cash flows for the fiscal year 2006 reflect debt issued in connection with its AFC acquisition. At Sept. 30, 2007, American Pacific Corporation's balance sheet showed total assets of $249.4 million, total liabilities of $173.7 million and total shareholders' equity of $75.7 million. About American Pacific Based in Las Vegas, Nevada, American Pacific Corporation (Nasdaq: APFC) -- http://www.apfc.com/-- is a manufacturer of specialty and fine chemicals, as well as propulsion products sold to defense, aerospace and pharmaceutical end markets. Products provide access to, and movement in, space via solid fuel and propulsion thrusters and represent the key active ingredient in drug applications such as HIV, epilepsy and cancer. The company produces specialty chemicals utilized in various applications such as fire extinguishing systems, as well as manufacture water treatment equipment. * * * Moody's Investor Service placed American Pacific Corporation's long term corporate family and probability of default at 'B1' in January 2007. The ratings still to date with a stable outlook. ASCENDIA BRANDS: Discloses Default of Lender Covenants ------------------------------------------------------ Ascendia Brands, Inc. on Friday said that it notified its senior lenders that it is in default of certain covenants contained in its first and second lien credit facilities and is unable to make certain representations and warranties deemed to be made when drawings are made under its revolving credit facility. Under its senior credit facilities, unless a waiver is provided by the lenders, Ascendia is required to make a prepayment of its senior debt if and to the extent that, at the end of any month, the amount of first lien debt then outstanding exceeds three times its adjusted pro forma trailing twelve month earnings before interest, taxes, depreciation and amortization. The company, on Nov. 30, 2007, had disclosed that it was evaluating certain adjustments to previously issued financial statements. Although these adjustments have not yet been finalized, Ascendia believes that a prepayment in the amount of approximately $26 million is currently required to be paid to its senior lenders, based upon the estimated adjusted pro forma TTM EBITDA as of Oct. 27, 2007. Ascendia's failure to make such payment constitutes an event of default under its first and second lien credit facilities and entitles its senior lenders to accelerate its first and second lien indebtedness. In addition, as a result of the company's inability to make the required prepayments, and as a consequence of its financial condition generally, certain representations and warranties that are deemed to be made whenever Ascendia makes drawings under its revolving credit facility may no longer be true and correct. These include representations and warranties that Ascendia and its subsidiaries, taken as a whole, are solvent and that there has been no material adverse change in its condition since August 26, 2006. The company says that it has notified its lenders that it cannot make such representations and warranties. As a result of its failure to make the prepayment and its inability to make the representations and warranties, Ascendia's revolving lender is entitled to cease to permit borrowings under Ascendia's revolving credit facility. On Dec. 12, 2007, the company received notice from the agent for the first lien lenders reserving such lenders' rights under the first lien facility generally, including the right to cease making advances under the revolving credit facility. The company relates that its lenders have not yet exercised, or notified it that they intend to exercise, any remedies. However, if the lenders were to declare the loans to be due and payable, or if Ascendia becomes unable to draw on its revolving credit facility, it would become unable to fund continuing operations unless alternative sources of capital were found. The company is in negotiations with its lenders and is actively seeking additional capital in order to provide the liquidity necessary to fund future operations. About Ascendia Brands Ascendia Brands, Inc. -- http://www.ascendiabrands.com/-- (AMEX: ASB) manufactures, markets and sells nationally and internationally known branded products in the health and beauty care categories. The company's portfolio includes Baby Magic(R), Binaca(R), Mr. Bubble(R), Calgon(TM), the healing garden(R), Lander(R), Lander essentials(R), Ogilvie(R), Tek(R), Dorothy Gray(R) and Tussy(R). The company, formerly known as Cenuco Inc., sells its products through a variety of channels, concentrating primarily on the mass merchandiser, drug, grocery and dollar store outlets. The company is headquartered in Hamilton, New Jersey, and operates two manufacturing facilities, in Binghamton, New York, and Toronto, Canada. ASSOCIATED ESTATES: Paying $0.17/Share Dividend on February 1 ------------------------------------------------------------- Associated Estates Realty Corporation has declared a quarterly dividend of $0.17 per share on the company's common shares, payable Feb. 1, 2008, to shareholders of record on Jan. 15, 2008. Based in Richmond Heights, Ohio, Associated Estates Realty Corporation (NYSE: AEC) -- http://www.aecrealty.com/-- is a real estate investment trust and is a member of the Russell 2000 Index. The company directly or indirectly owns, manages or is a joint venture partner in 98 properties containing a total of 19,909 units located in 10 states. * * * Moody's Investor Service placed Associated Estates Realty Corporation's senior unsecured debt rating at 'B1' in November 2006. The rating still holds to date with a positive outlook. BALLANTYNE RE: Fitch Downgrades Ratings and Removes Neg. Watch -------------------------------------------------------------- Fitch downgrades and removes from Rating Watch Negative these notes of Ballantyne Re: -- $250,000,000 class A-1 floating rate notes to 'BB' from 'A+'; -- $10,000,000 class B-1 subordinated notes to 'B' from 'BB+'; -- $40,000,000 class B-2 subordinated floating rate notes to 'B' from 'BB+'. The rating actions reflect material mark-to-market declines in the value of subprime residential asset- and mortgage-backed securities held by Ballantyne in the asset portfolios supporting its reserves. As a result, Ballantyne Re has suffered significant unrealized losses in those portfolios. These losses have further resulted in the deferral and accrual of interest on the class B-1 and B-2 notes and a substantial write-down of the accrued interest and principal of Ballantyne Re's class C notes. The 'AAA' ratings of Ballantyne Re's class A-2 and A-3 floating- rate guaranteed notes are not affected because those ratings are linked to the financial strength of the relevant financial guarantors. Ballantyne Re is a special purpose public limited company incorporated and registered in Ireland. The company was established for the limited purpose of entering into a reinsurance agreement with Scottish Re, and conducting activities related to the notes' issuance. Under the reinsurance agreement, Scottish Re ceded a block of business to Ballantyne Re. Ballantyne Re issued the notes to finance excess reserve requirements under Regulation XXX for the ceded block of business. BANC OF AMERICA: Fitch Holds 'BB' Rating on Two Class Certs. ------------------------------------------------------------ Fitch Ratings has affirmed the ratings of these Banc of America Funding Corporation, mortgage pass-through certificates: Series 2005-A Group 4: -- Class 4-A-1 affirmed at 'AAA'; -- Class 4-B-1 affirmed at 'AA'; -- Class 4-B-2 affirmed at 'A'; -- Class 4-B-3 affirmed at 'BBB'; -- Class 4-B-4 affirmed at 'BB'; -- Class 4-B-5 affirmed at 'B'. Series 2005-D: -- Classes A-1, A-2 and A-R affirmed at 'AAA'. Series 2005-1: -- Classes 1-A-1 to 1-A-10, 30-IO and 30-PO affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'. Series 2005-2: -- Classes 1-A-1 to 1-A-20, 1-A-R, 1-A-LR, 2-A-1 to 2-A-5, 30-IO and 30-PO affirmed at 'AAA'; -- Class B-2 affirmed at 'A'. Series 2005-3 Group 1: -- Classes 1-A-1 to 1-A-25, 1-A-1/2, 1-A-R, 1-A-LR, 30-IO and 30-PO affirmed at 'AAA'. The affirmations on the above transactions reflect satisfactory credit enhancement relationships to future loss expectations and affect approximately $1.4 billion in outstanding certificates, as of the November 2007 distribution date. The trusts are seasoned from a range of 29 months to 34 months and the pool factors range from approximately 62% to 78%. The 90+ delinquencies range from 0% (series 2005-A Group 4) to 0.48% (series 2005-2) of respective current collateral balances. The cumulative loss for series 2005- 1 is 0.04% of original collateral balance and the other transactions have not incurred any losses so far. BAFC, a special purpose corporation, purchased the mortgage loans from various entities and deposited the loans into the trusts. The above transactions comprise of conventional, fixed-rate and adjustable-rate mortgage loans extended to 'Prime' and 'Alternative A' borrowers that are secured by first liens on one- to four-family residential properties. The loans in the above transactions are serviced by various entities. BANC OF AMERICA: Moody's Places Seven Ratings Under Review ---------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade 7 certificates, issued by Banc of America Funding 2004-C Trust and Banc of America Funding 2005-B Trust. The collateral backing each deal placed on review consists primarily of adjustable-rate alternative A mortgage loans. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. Complete rating actions are: Issuer: Banc of America Funding 2004-C Trust -- Cl. 4-M-2, current rating A2, on review for possible downgrade; -- Cl. 4-B-1, current rating Baa2, on review for possible downgrade; -- Cl. 4-B-2, current rating Baa3, on review for possible downgrade; Issuer: Banc of America Funding 2005-B Trust -- Cl. 3-M-2, current rating A2, on review for possible downgrade; -- Cl. 3-B-1, current rating Baa2, on review for possible downgrade; -- Cl. 3-B-2, current rating Baa3, on review for possible downgrade; -- Cl. 3-B-3, current rating Ba2, on review for possible downgrade. BEAR STEARNS: BofA Withdraws Plea to Clarify Injunction Order ------------------------------------------------------------- Bank of America N.A. withdrew, without prejudice, its request for modification of Judge Lifland's August 2007 Injunction Order to permit it to exercise its voting rights under an indenture entered with Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structure Credit Strategies Enhanced Fund, Ltd. BofA and each of the Bear Stearns Funds are parties to various derivative transactions, including without limitation, interest rate, total return, credit spread, credit default and credit index swap transactions. In October 2007, BofA asked Judge Lifland permission to exercise its voting rights to consent to and vote in favor of further amending the Indenture to provide that: (1) no payment will be made to any Preference Shareholder unless and until the entire indebtedness on all of the Enhanced Fund's outstanding Secured Floating Rates Notes of various classes and seniority have been paid and discharged; and (2) all of the Enhanced Fund's discount current and future commercial paper notes outstanding, have been paid and discharged and no more CP Notes will be issued by the Enhanced Fund. In November, Judge Lifland postponed ruling on BofA's request, stating that a change in the Indenture would prevent the Bear Stearns Funds from getting any payment from the collateralized debt obligations before all of its notes, bonds, and other debt is repaid in full. Judge Lifland also said that he didn't want to rule on BofA's request because the Bear Stearns Funds' Chapter 15 petition is still pending on appeal. BofA did not provide details on the Indenture. During the November hearing, Judge Lifland said he is "too much in the dark" to grant relief without further information. He instructed BofA to "come back and explain more completely" what it was asking for. Jantra Van Roy, Esq., at Zeichner Ellman & Krause, LLP, in New York, represents BofA. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BEAR STEARNS: Funds Want More Time to Answer Amici Brief -------------------------------------------------------- Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, has asked the United States District Court for the Southern District of New York to extend until January 4, 2008, the time for Foreign Representatives of the Bear Stearns High Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., to file their reply to the amici curiae brief filed by Professor Jay Westbrook, Professor Kenneth Klee, and Daniel Glosband. The Foreign Representatives' response deadline was originally scheduled on December 12, 2007. In a letter addressed to District Judge Sweet, Mr. Hodara said that FTI Capital Advisors, LLC, has informed the Foreign Representatives that it intends to file an amicus curiae brief in opposition of the Appeal. Mr. Hodara said extension of the reply deadline will permit the Foreign Representatives to efficiently address the issues raised by the amici briefs. In another letter, Lance Gotthoffer, Esq., at Reed Smith, in New York, told Judge Sweet that his firm will submit a brief, on behalf of Bear Stearns High-Grade Structured Credit Strategies (Overseas) Ltd., in support of the Bankruptcy Court's decision denying the Cayman Islands-based Funds' Chapter 15 petition. The Overseas Fund is one of the two "feeder" funds that invested in the collapsed Cayman Islands funds. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BEAR STEARNS: Receives Subpoena from New York Attorney General -------------------------------------------------------------- New York Attorney General Andrew Cuomo sent subpoenas to Bear Stearns Cos., Merrill Lynch & Co., and Deutsche Bank AG, seeking information related to the packaging and selling of debt tied to "high-risk mortgages," the Wall Street Journal reported. The investigation is examining how investment banks adequately reviewed the quality of mortgages before packaging them into products that were then sold to investors, Reuters says. The subpoenas also asked information about how the debt was pooled into securities, including the investment firms' relationship with credit-rating firms, Reuters added. Mr. Cuomo stated in October that he had subpoenaed the investment banks in relation to his probe into the United States mortgage loan market, Reuters related. Bear Stearns Cos. is parent to Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., who are undergoing winding up proceedings in the Cayman Islands. The Cayman Island hedge funds invested in collateralized debt obligations related to U.S. subprime mortgage loans. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BIG A DRUG: Section 341(a) Meeting Set for January 7 ---------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of creditors in Big A Drug Stores Inc.'s chapter 11 cases on January 7, 2008, at 2:00 p.m. The creditors meeting will be held at 725 S. Figueroa Street, Room 2610 in Los Angeles, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in South Gate, California, Big A Drug Stores Inc. -- http://www.bigadrug.com/-- operates a chain of 21 retail drug stores, located throughout California. The company's stores offer full service pharmacies and over-the-counter drugs, cigarettes, optical products, liquor, general merchandise, groceries, beer and wine, and beverages. The company filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. C.D. Calif. Case No. 07-20699). Steven R. Fox, Esq., at The Law Offices of Steven R. Fox; and Lewis R. Landau, Esq., represent the Debtor. As of Nov. 18, 2007, the Debtor listed total assets of $18,788,648 and total debts of $54,424,646. BKF CAPITAL: Posts $602,000 Net Loss in Third Quarter ----------------------------------------------------- BKF Capital Group Inc. reported a net loss of $602,000 on revenues of $723,000 for the third quarter ended Sept. 30, 2007, compared with a net loss of $16.4 million on revenues of 2.2 million in the same period last year. The decrease in revenues is attributable to the closing of the company's business. The revenues for the three months ended Sept. 30, 2007, are a result of interest earned on treasury bills and money market funds and trailer fees from departed portfolio managers. Total expenses for the third quarter of 2007 were approximately $1.3 million, compared to operating expenses of $18.6 million in the same period in 2006. Operating loss for the third quarter of 2007 was $602,000, as compared to operating loss of $16.4 million in the same period in 2006. At Sept. 30, 2007, BKF had cash, cash equivalents and U.S. Treasury bills of $24.4 million, compared to $31.1 million at Dec. 31, 2006. This decrease in cash and cash equivalents reflects the loss of operating activities, litigation and other settlements and the Directors and Officers Liability Insurance creating the resulting funding shortfall. At Sept. 30, 2007, the company's consolidated balance sheet showed $28.1 million in total assets, $7.3 million in total liabilities, and $20.8 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?2665 Going Concern Doubt Grant Thornton LLP, in New York, expressed substantial doubt about BKF Capital Group 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 said that the company experienced a total loss of assets under management and as a result the company has had a significant decline in revenues in 2006 and no longer has an operating business. In addition, the auditing firm said that the cash projected to be generated from operations will not be sufficient to fund operations and that the company will need to use its existing working capital to fund operations. About BKF Capital BKF Capital Group Inc. (Other OTC: BKFG.PK) does not have significant operations. Previously, the company was engaged in the provision of investment advisory and asset management services in the United States. It intends to merge with, acquire, or commence a business potentially being funded by a capital raising event. BKF Capital Group was founded in 1907 and is based in New York City. BOSTON SCIENTIFIC: Inks $425 Mil. Buyout Deal with Avista Capital ----------------------------------------------------------------- Boston Scientific Corporation and Avista Capital Partners have signed a definitive agreement under which Avista will acquire from Boston Scientific its fluid management and venous access businesses for $425 million in cash. The transaction is expected to close in the first quarter of 2008, subject to regulatory approvals and customary conditions. Boston Scientific disclosed its intent to sell these businesses as part of its plan to divest non-strategic assets. Avista said that upon close of the transaction, the combined fluid management/venous access business will operate as an independent company under a new name. Ron Sparks, an Avista healthcare industry advisor, will become chairman and chief executive officer of the new company. Dave McClellan, president of Boston Scientific's Oncology business, will become president of the new company. The fluid management franchise, formerly North American Medical Instruments Corporation, produces a range of products used to manage fluid and measure pressure during angiography and angioplasty procedures. The fluid management franchise employs approximately 750 people in its Glens Falls, New York manufacturing facility. The venous access franchise, whose products are also manufactured in Glens Falls, offers a portfolio of implantable devices designed to provide access to the blood stream for patients requiring intravenous antibiotics, nutrition, chemotherapy and blood sampling. The venous access franchise is part of Boston Scientific's Oncology business, and employs approximately 150 people in locations around the United States. The projected revenue for the two businesses in 2007 is approximately $170 million. "We now have under agreement the divestitures of all five non- strategic businesses we had identified for sale," Jim Tobin, president and chief executive officer of Boston Scientific, said. "In addition, our expense and head count reduction initiative is well under way, and we continue to make progress monetizing our investment portfolio and restructuring several businesses. These measures should help us further our overall goals of restoring profitable growth, increasing shareholder value and continuing to strengthen Boston Scientific for the future." In addition to the two sales, Boston Scientific has also disclosed agreements to sell its cardiac surgery, vascular surgery and auditory businesses. "Boston Scientific's fluid management and venous access businesses maintain strong leadership positions in their respective markets and are recognized for benefiting interventional cardiologists, radiologists and oncologists, and their patients," David Burgstahler, a partner at Avista Capital Partners. "Furthermore, given his extensive experience in the medical device field, Ron Sparks is a great fit to drive growth for the combined business going forward." "We are very excited about this transaction," Larry Pickering, Avista Capital Partners' healthcare industry partner, added. "The fluid management franchise has exceptional brands and a cutting- edge manufacturing facility at Glens Falls with unique custom kitting capabilities. The venous access business has robust R&D capabilities, a knowledgeable sales force and a strong new product introduction track record, which should continue to propel organic growth." "I am eager and delighted to work with the existing fluid management and venous access teams to build on their leading franchises in oncology, radiology and interventional cardiology to create a world-class, stand-alone medical device company," Ron Sparks said. "We want to recognize the important work these teams have done in developing these franchises, well as the valuable role we expect them to play going forward." "This is an exciting time for fluid management and venous access, and we are thrilled to be joining the talented Avista team as we develop a strategy to drive long-term growth and expand our businesses," Dave McClellan said. "We greatly appreciate the contributions our Fluid management and venous access employees have made to Boston Scientific," Mr. Tobin added. "We wish them continued success in providing customers and patients with quality products and innovative therapies." Fluid management/venous access will be Avista's fifth investment in the healthcare industry. In 2007, Avista made healthcare investments in BioReliance and VWR International and in 2006 Avista disclosed investments in Nycomed and MedServe. While at DLJ Merchant Banking Partners, the Avista partners were involved in numerous healthcare transactions including Accellent, Charles River Laboratories, Focus Diagnostics, KCI, Prometheus Labs and Warner Chilcott. About Avista Capital Partners Avista Capital Partners -- http://www.avistacap.com/-- is a private equity firm with offices in New York City and Houston, Texas. Founded in 2005, Avista manages $2 billion in private equity capital. Avista's strategy is to make controlling or influential minority investments in growth-oriented media, healthcare and energy companies. Through its team of seasoned investment professionals and industry experts, Avista seeks to partner with management teams to invest in and add value to well- positioned businesses. About Boston Scientific Headquartered in Natick, Massachusetts, Boston Scientific Corporation (NYSE: BSX) -- http://www.bostonscientific.com/-- develops, manufactures and markets medical devices used in a broad range of interventional medical specialties. The company has offices in Argentina, Chile, France, Germany, and Japan, among others. * * * As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its ratings on Boston Scientific Corp., including the 'BB+' corporate credit rating, and removed them from CreditWatch, where they were placed with negative implications Aug. 3, 2007. The rating outlook is negative. BRANDYWINE REALTY: Board Declares Fourth Quarter 2007 Dividends --------------------------------------------------------------- Brandywine Realty Trust's Board of Trustees has declared a cash dividend for the fourth quarter of 2007 of $0.44 per common share, payable on Jan. 18, 2008 to holders of record on Jan. 4, 2008. The Board of Trustees also declared dividends for the fourth quarter of 2007 of $0.46875 and $0.460938 for the 7.50% Series C Cumulative Redeemable Preferred Shares and 7.375% Series D Cumulative Redeemable Preferred Shares, respectively, each payable on Jan. 15, 2008 to holders of record on Dec. 30, 2007 of the Series C and Series D Preferred Shares. Headquartered in Radnor, Pennsylvania, Brandywine Realty Trust (NYSE: BDN), http://www.brandywinerealty.com/-- is one of the full-service, integrated real estate companies in the United States and is focused primarily on the ownership, management and development of class A, suburban and urban office buildings in selected markets aggregating approximately 42 million square feet. * * * Fitch assigned a 'BB+' rating on Brandywine Realty Trust's Preferred Stock. The outlook is positive. BROADWAY GEN: Planned Asset Sale Cues Moody's Positive Outlook -------------------------------------------------------------- Moody's Investors Service has affirmed the B1 and B3 ratings assigned to Broadway Gen Funding, LLC's first and second lien credit facilities respectively. In addition, Moody's has revised the outlook on the ratings to positive from stable. The outlook revision reflects the announcement of Broadway Gen's plans to sell three of its five electric generating assets. Bosque is being sold to a consortium of Arcapita, a private equity firm, and Fulcrum, an energy services and investment company, while Zeeland is being sold to CMS and Sugar Creek to NIPSCO, both regulated utilities. As a result, the sales of both Zeeland and Sugar Creek are dependant upon receipt of approval from state utility regulators, which Moody's believes is likely. All of the after- tax proceeds from the sale of Bosque, expected to equal approximately $375 million, and 75% of the proceeds of the sales of Zeeland and Sugar Creek (roughly $310 million and $210 million respectively) must be used to prepay debt per the terms of the credit facilities. While the portfolio's performance in 2007 was well below forecast levels, with debt service coverage expected to be just 1.0x for the year, the sales of Bosque and Zeeland alone (both currently anticipated to occur prior to the end of the first quarter of 2008) are expected to generate sufficient proceeds to fully repay the first lien term loan (currently outstanding in the amount of $690 million). Following those sales, the $250 million second lien term loan will be the only funded debt still outstanding, subject to first priority liens in favour of the lenders to the revolving and letter of credit facilities and hedge counterparties in satisfaction of mark-to-market collateral posting requirements under the hedges. With the sale of Sugar Creek to NIPSCO (not expected until May), the amount of debt outstanding secured by the remaining projects -- Apex and West Georgia - could be less than $30 million depending upon the amount of operating cash flow and excess equipment sales proceeds that are swept to repay debt prior to the sale. Even if Broadway Gen is unable to close on two of the sales and just one of the assets is sold, whichever that may be, it will experience a significant improvement in its projected credit metrics, particularly for its first lien debt. The portfolio also benefits from several recent hedging arrangements providing greater certainty to its future cash flows. These include a 20-year PPA with the Municipal Electric Authority of Georgia for one of West Georgia's four units commencing in 2009, a three year energy and capacity sales agreement with CMS for Zeeland's peaking capacity, and the sale of Sugar Creek's reliable capacity into PJM's RPM market through the middle of 2010. This helps to offset the portfolio's poor financial performance in 2007, with EBITDA expected to be $30 million below forecast. The weaker than expected performance was due to an extended outage at one facility; the impact of poor merchant market conditions on a second, and an unfavourable hedge at a third. However, these are not expected to be recurring problems. Broadway Gen Funding, LLC is an independent power generation company headquartered in East Brunswick, New Jersey. It is owned by LS Power Equity Partners, a private equity fund managed by the LS Power Group. BRODERICK CDO: Moody's Junks Ratings on Four Note Classes --------------------------------------------------------- Moody's Investors Service has downgraded ratings of seven classes of notes issued by Broderick CDO III Ltd. Four of these ratings were left on review by Moody's for possible further downgrade. The notes affected by these rating actions are: Class Description: $318,750,000 Class A-3 Third Priority Senior Secured Floating Rate Delayed Draw Notes due 2050 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa1, on review for possible downgrade Class Description: $56,250,000 Class A-4 Fourth Priority Senior Secured Floating Rate Notes due 2050 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $92,000,000 Class A-5 Fifth Priority Senior Secured Floating Rate Notes due 2050 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $28,000,000 Class B Sixth Priority Senior Secured Floating Rate Notes due 2050 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $10,000,000 Class C Seventh Priority Senior Deferrable Secured Floating Rate Notes due 2050 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $10,000,000 Class D Eighth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $4,000,000 Class E Ninth Priority Mezzanine Deferrable Secured Floating Rate Notes due 2050 -- 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. 14, 2007, of an event of default caused by a failure of the Class A Sequential Pay Ratio to be satisfied, as required under Section 5.1(i) of the Indenture dated Feb. 27, 2007. Broderick CDO III 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 Class A Sequential Pay Ratio failed to meet the required level. As provided in Article 5 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 severity of 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 ratings of Class A- 3, A-4, A-5 Notes and the Class B Notes remain on review for possible downgrade. CAL-BAY INTERNATIONAL: Relocates Corp. Headquarters to Nevada ------------------------------------------------------------- Cal-Bay International Inc. has relocated its corporate headquarters to Henderson, Nevada from Carlsbad, California, John Wilson, the company's appointed PR director. The new office location and contact information are expected to be disclosed very soon. Mr. Wilson added that the company would also be disclosing in the near future the new board of directors simultaneous with the resignation of the current board. Cal-Bay has retained new legal council to review all legal aspects of company holdings and previous attempts to file suit against the company. About Cal-Bay International Cal-Bay International Inc. (OTCBB: CBAY) -- http://www.calbayinternational.com/-- is a publicly traded real estate development and investment company. Cal-bay International Inc. acquires, develops, and manages a diversified portfolio of real estate properties. Going Concern Doubt Lawrence Scharfman CPA PC expressed substantial doubt about Cal-Bay's ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditing firm pointed to the company's need to secure additional working capital for its planned activity and to service its debt. CAMBIUM LEARNING: Moody's Holds B3 Rating and Changes Outlook ------------------------------------------------------------- Moody's Investors Service has affirmed Cambium Learning, Inc.'s B3 Corporate Family rating, while changing the rating outlook to negative from stable. Details of the rating action are: Ratings Affirmed: -- $30 million senior secured first lien revolving credit facility, due 2011 -- B2, LGD3, 37% -- $128 million senior secured first lien term loan, due 2011 -- B2, LGD3, 37% -- Corporate Family rating -- B3 -- PDR -- B3 The rating outlook has been changed to negative from stable. The change in rating outlook to negative from stable reflects a deterioration in the company's YTD operating performance and a failure to acheive the financial goals set by management when ratings were first assigned in March 2007. The negative rating outlook also incorporates Moody's concern that continuing soft performance could lead to liquidity pressure and place the company at risk of breaching its financial covenants, absent an amendment. The B3 Corporate Family rating continues to reflect the risks associated with Cambium's high leverage (calculated at over 8.0 times debt to EBITDA at the end of September 2007, according to Moody's standard adjustments), its rapid growth (sales have more than doubled in the past two years), the acquisitiveness of its management team (six acquisitions since the company's incorporation in October 2003), and the relatively short track record of its operations. In addition, the ratings recognize the company's vulnerability to spending on pre-K to 12 intervention solutions products and the competitive pressure faced by its product offerings. Ratings are supported by Cambium's modest free cash flow, the diversification of its product and customer base, and the meaningful cash equity contribution recently provided by its new owners. Headquartered in Natick, Massachusetts, Cambium Learning, Inc. is a leading provider of intervention solutions designed specifically for the pre-K-12 at-risk and special education markets. The company reported sales of $98 million for the LTM period ended September 30, 2007. CANNERY CASINO: Crown Limited Deal Prompts Moody's Pos. Outlook --------------------------------------------------------------- Moody's Investors Service affirmed Cannery Casino Resorts, LLC's B2 corporate family rating, and changed the rating outlook to positive from stable. The change in rating outlook reflects the announcement that CCR signed an agreement to be acquired by Baa2 rated Crown Limited for $1,752 million plus acquisition costs. Crown operates large gaming facilities in Australia and is listed on the Australian Stock exchange. The positive outlook reflects the probability that CCR's ratings could be raised as a result of ownership by Crown, as well as Moody's expectation that CCR's two development projects currently underway will be completed on time and on budget. The transaction will not close until all necessary gaming approvals are received which is expected to take up to one year. Cannery Casino Resorts, LLC is a privately held gaming company owned by an entity managed by Oaktree Capital Management, LLC (42%) and Millennium Gaming, Inc. (58%). Through its wholly owned subsidiary, PA Meadows, LLC, CCR is constructing a temporary casino in western Pennsylvania, and also owns and operates three casinos in Las Vegas, Nevada. CCR is redeveloping its Nevada Palace casino (to be renamed East Side Cannery) located on the Boulder Strip in Las Vegas, Nevada. Crown Limited is an Australian based gaming company which owns the Crown Casino complex in Melbourne and the Burswood Casino complex in Perth. The company also has a number of strategic investments, including a joint venture constructing casinos in Macau. CATHOLIC CHURCH: Davenport Must File Plan by January 31 ------------------------------------------------------- The Hon. Lee M. Jackwig of the U.S. Bankruptcy Court for the Southern District of Iowa has ordered the Diocese of Davenport to file its plan of reorganization and disclosure statement by January 31, 2008. Objections to the Disclosure Statement are due February 22. The Court will convene a hearing on March 5, 2008, 1:30 p.m. to consider approval of the Disclosure Statement. Judge Jackwig notes that the hearing is a "no testimony hearing." Judge Jackwig further noted that if parties intend to rely on exhibits other than those that might be attached to the Disclosure Statement at the hearing, the Court advises that at least one full calendar week before the hearing date, the Parties must: -- exchange marked exhibits; -- submit those exhibits directly to the assigned judge's chambers; and -- file only their list of exhibits with the Clerk of the Court. 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. 110; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Davenport to Divide Settlement Amount in 4 Ways ---------------------------------------------------------------- The Diocese of Davenport will utilize a matrix to determine the allocation of payouts from the $37,000,000 settlement amount for the victims asserting claims against the Diocese, The Quad-City Times reports. The Report says the Settlement Amount will be divided in four ways: (1) for the group of matrix claims; (2) for the group of litigated claims; (3) for future claimants; and (4) for legal and administrative fees. Counsel for the Diocese, Richard A. Davidson, Esq., at Lane & Waterman LLP, in Davenport, Iowa, explained that the Matrix will assign a monetary value to the types and severity of the abuse suffered by the claimants. He added that those who choose not to have their claims paid based on the Matrix can take their claim to Scott County District Court. Mr. Davidson said a few of the 156 claims filed against the Diocese will likely be thrown out because of questionable credibility, while others will be categorized as "convenience claims," which will be paid a nominal sum of $10,000 or $15,000, says The Times. Mr. Davidson noted that the Diocese's plan of reorganization will detail all aspects of payment of the claims and the sources of payment for the Settlement Amount. "It's a rather complex plan," Mr. Davidson told The Times. He disclosed that the the plan is modeled after the Diocese of Spokane's plan of reorganization. Moreover, Mr. Davidson said some Catholic entities within the Diocese may pay toward the Diocesan portion of the Settlement, as will insurance companies, which had policies covering the Churches where abuse occurred. He disclosed to The Gazette that Bishop Martin Amos would decide in the coming months, which of the Diocese's 83 parishes and 23 schools would be asked to give money for the Settlement. "And there's probably only a handful," Mr. Davidson said. He explained that only few will be asked to contribute because the other parishes and the schools have no money. He assured the claimants that the situation did not affect the Settlement Amount. According to Mr. Davidson certain parishes and schools, like Regina High School, would benefit from the terms of the Settlement, if approved, because it releases all parishes and schools from liability for abuse cases that occurred before October 2006. However, the Settlement does not apply to individuals accused of abuse, like retired Sioux City Bishop and former Regina High principal, Lawrence Soens, The Gazette reports. Craig A. Levien, Esq., at Betty, Neuman & McMahon, in Davenport, Iowa, who represents many of the claimants, said the lawsuits against Mr. Soens would proceed unless he admits guilt, The Gazette says. 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. 110; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: "Allocation Order" Entered in San Diego's Case --------------------------------------------------------------- Judge Peter D. Lichtman of the Superior Court of California for the county of Los Angeles issued an "Allocation Order" on Dec. 7, 2007, dividing among the plaintiffs the $198,125,0000 global settlement reached on September 6, 2007, with the Roman Catholic Bishop of San Diego and other Catholic institutions as part of Bankruptcy mediation. The Diocese will give the first payments in January 2008, and the remaining balance in September 2008, The North County Times reports. How much any individual victim is to receive has been ordered sealed because of the sensitive nature of the claims. In his 12-page order, Judge Lichtman held that the settling plaintiffs' overriding interests in maintaining the confidentiality of their identities, individual settlement awards, and in the materials and documents considered by the Superior Court during the confidential valuation and allocation proceedings will be prejudiced if the records are not sealed. The Superior Court stated that the spreadsheet that contains the allocation awards is filed under seal, and will not be shared among the plaintiffs to maintain the confidentiality of the information. However, the Superior Court will allow the administrator of the qualified settlement fund to have access to the numbers for the sole purpose of permitting the allocation to (i) be consummated in strict accord with the Court's findings, and (ii) enable the proper monetary distribution of the Settlement Amount. Teri Figueroa of The North County Times says that the sealed portion of Judge Lichtman's order provides for the division of $173,000,000 of the Settlement Amount to 126 victims, which leaves $25,000,000 for the 18 victims, who held out from the allocation process. Allocation Process During the allocation process, Judge Lichtman met with counsel and the Plaintiffs, and reviewed briefs and questionnaires filled during the litigation of the Clergy II Cases. The Superior Court also considered its own factors developed through many years of experience in settling other clergy cases. Among the factors considered were: -- nature and type of abuse; -- extent of abuse and duration; -- consequences of abuse: * substance abuse; * sexual dysfunction; * psychological issues; and * employment standing; and -- legal factors. In allocating the amounts, Judge Lichtman pointed out that the Superior Court had to set up another set of priorities to accommodate the huge volume of high end abuse victims. He said there was "simply not enough money to compensate all of the high end victims with a high end dollar amount." The highest dollar amount awarded to certain cases was $2,100,000. However, Judge Lichtman noted that there was no sufficient money to award to all cases that "so qualified and merited" for high end amounts. Judge Lichtman also expressed the Court's feeling of helplessness and ineffectivity in trying to assuage the grief, sorrow and unbearable weight of pain expressed by the victims. "To say that the recounting process was painful would be an understatement. The suffering experienced . . . is truly life altering and psychologically debilitating," he stated. "The San Diego cases and the task requested represented the most difficult process that this Court has had to face in 14 years," Judge Lichtman said. "The range, extent and depth of abuse . . . are unlike any that this Court has previously seen. It is because of this factor that this Court's task in determining the allocation was incredibly difficult." Paul Livingston, one of the plaintiffs and the San Diego director of Survivors Network of Those Abused by Priests, said the victims had different reactions to the Settlement and the announcement of the allocation of funds, the County Times reports. "There is a range of emotions," said Mr. Livingston. "There is a complete breakdown for some, and others are thankful to have it behind them." In a statement responding to Judge Lichtman's order, Rodrigo Valdivia, the Diocese chancellor, apologized to the victims for their suffering, reports the Union Tribune. "The diocese acknowledges again that no amount of money, nor money alone, can adequately resolve the irreparable consequences of sexual abuse," Mark Sauer of the Union Tribune quoted Mr. Valdivia. "Judge Lichtman has confirmed what those of us who have been involved in these cases for the past five years as advocates for those abused by Catholic priests and other religious have been saying: the abuse and cover up in the San Diego Diocese was the worst we have seen anywhere in the country," said Irwin Zalkin, Esq., at Zalkin & Zimmer LLP, in San Diego, California, who represented many of the plaintiffs. The Diocese's campaign for donations from lay Catholics to help pay the Settlement Amount has collected more than $1,000,000, says the County Times. About the San Diego Diocese The Roman Catholic Diocese of San Diego in California -- http://www.diocese-sdiego.org/-- employs approximately 3,000 people in various areas of work. The Diocese filed for Chapter 11 protection just before commencement of the first of court proceedings for 140 sexual abuse lawsuits filed against the Diocese. Authorities of the San Diego Diocese said they were not in favor of litigating their cases. The San Diego Diocese filed for chapter 11 protection on Feb. 27, 2007 (Bankr. S.D. Calif. Case No. 07-00939). Gerald P. Kennedy, Esq., at Procopio, Cory, Hargreaves and Savitch LLP, represents the Diocese. Attorneys at Pachulski Stang Ziehl & Jones LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Diocese listed total assets of $152,510,888 and total liabilities of $72,754,092. On March 27, 2007, the Debtor filed its plan and disclosure statement. On November 1, The Court dismissed the San Diego's bankruptcy proceeding. (Catholic Church Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Portland Wants BMC to Archive Proofs of Claim -------------------------------------------------------------- The Archdiocese of Portland in Oregon seeks authority from the U.S. Bankruptcy Court for the District of Oregon to allow it and its claims agent, BMC Group, Inc., to archive all proofs of claim filed in the bankruptcy case on DVD and to destroy all paper copies. Thomas W. Stilley, Esq., at Sussman Shank LLP, in Portland, Oregon, relates that pursuant to the Court's order fixing a bar date and approving the form for filing Proofs of Claim, and to maintain the confidentiality of certain tort claimants, Judge Perris has ordered that all Proofs of Claim be filed with BMC, rather than with the Court. The Court further ordered that BMC will retain all paper copies of the Proofs of Claim until otherwise instructed by the Court. Mr. Stilley also relates that the Clerk of the Bankruptcy Court has advised the Archdiocese to maintain copies of the Proofs of Claim for 20 years. To reduce the cost and storage space necessary to maintain the copies for an extended period of time, the Archdiocese proposes that all Proofs of Claim be stored on DVDs and the paper copies destroyed. The Clerk has authorized these procedures for archiving the Proofs of Claim: -- copies must only be created and stored on high quality DVD+Rs, like "Gold" quality, as opposed to "Silver," from high quality manufacturers like Hi-Space and Imation; -- each copy must be verified to contain a fully complete, and accurate, record of all Proofs of Claim; -- two copies of each DVD+R must be stored by BMC in a safe and secure location; -- each DVD+R copy must be stored in a "jewel" type case, on edge, and in a cool, dry, dark location; -- two additional copies of each DVD+R must be delivered by BMC to the Archdiocese and its counsel, who must also comply with the procedures in storing their DVD+R copies; -- after creation, verification of accuracy, and storage as required, the original Proofs of Claim may be shredded; and -- all confidentiality and other requirements of previous orders regarding the Proofs of Claim will continue to apply to the extent that they are not modified by the order authorizing DVD storage. About Archdiocese of Portland The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. The Court approved the Debtor's disclosure statement explaining its Second Amended Joint Plan of Reorganization on Feb. 27, 2007. On April 17, 2007, the Court confirmed Portland's 3rd Amended Plan. On Sept. 28, 2007, the Court entered a final decree closing Portland's case. (Catholic Church Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CHECK ELECT: Case Summary & 30 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Check Elect, Inc. 101 Second Street San Francisco, CA 94105 Bankruptcy Case No.: 07-21768 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Indivos Corp. 07-21772 Pay By Touch Checking Resources, Inc. 07-21773 Pay By Touch Check Cashing, Inc. 07-21775 Seven Acquisition Sub, L.L.C. 07-21777 Pay By Touch Processing, Inc. 07-21778 Pay By Touch Payment Solutions, L.L.C. 07-21779 CardSystems Payment Solutions, L.L.C. 07-21780 Maverick International Services, Inc. 07-21782 A.T.M.D. Acquisition Corp. 07-21783 Debtor-affiliates filing separate Chapter 11 petitions in October 31, 2007: Entity Case No. ------ -------- John Patrick Rogers 07-20029 Type of Business: The Debtors are engaged in biometric authentication for loyalty and payments. See http://www.paybytouch.com/ Chapter 11 Petition Date: December 14, 2007 Court: Central District Of California (Los Angeles) Judge: Thomas B. Donovan Debtors' Counsel: James O. Johnston, Esq. Hennigan, Bennett & Dorman, L.L.P. 865 South Figueroa Street, Suite 2900 Los Angeles, CA 90017 Tel: (213) 694-1200 Fax: (213) 694-1234 Check Elect, Inc's Financial Condition: Estimated Assets: Less than $50,000 Estimated Debts: $100 Million to $500 Million Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ OZ Master Fund, Ltd. Unsecured noteholder $7,400,000 9 West 57th Street, 39th Floor New York, NY 10019 Accenture, L.L.P. Consulting services $7,057,698 161 North Clark Street Chicago, IL 60601 Denarius Touch, L.L.C. Unsecured noteholder $5,365,000 One Maritime Plaza, Suite 1325 San Francisco, CA 94111 Saatchi & Saatchi Marketing and public $2,930,398 Lockbox #100511 relations services Atlanta, GA 30384 Sungard Availability Services Storage services $1,590,000 PO Box 91233 Chicago, IL 60693 Kristy Sherman and Unsecured noteholder $1,307,159 Kevin Colaco 2702 Clayton Road, Suite 200 Concord, CA 94519 XperEx Hardware sold to $1,286,665 384 Oyster Point Boulevard, Debtor Suite 9 South San Francisco, CA 94080 Cogent Hardware sold to $1,245,796 P.O. Box 30309 Debtor Los Angeles, CA 90030 Swing Vote- Product placement $1,100,000 the Movie Productions, L.L.C. fee 9201 Pan American Freeway, Northeast Albuquerque, NM 87113 Arrow Electronics, Inc. Hardware sold to $875,323 P.O. Box 60000, File 21174 Debtor and staffing San Francisco, CA 94160 services P.K.V. Racing, L.L.C. Marketing $750,000 4001 Methanol Lane Indianapolis, IN 46268 Cooley, Godward, Kronish, Legal services $674,666 L.L.C. 101 California Street, 5th Floor San Francisco, CA 94111 Norhtec Hardware sold to $569,602 99/24 Software Park Boulevard Debtor 11th Floor, Unit A3 Chaengewattana Road Pakkred, Nonthaburi Thailand 11120 Plainfield Direct, L.L.C. Unsecured noteholder $555,000 55 Railroad Avenue, 3rd Floor Greenwich, CT 06830 Highbridge International, Unsecured noteholder $555,000 L.L.C. 9 West 57th Street, 27th Floor New York, NY 10019 I.B.M. eBusiness Technical services $536,256 P.O. Box 12195 Research Triangle Park, NC 27709 Mayer Brown, L.L.P. Legal services $516,304 350 South Grand Avenue, 25th Floor Los Angeles, CA 90071 McKinsey & Company, Inc.-U.S. Consulting services $509,000 P.O. Box 7247-7255 Philadelphia, PA 19170 Resource and Design, Inc. Furnishings sold to $454,811 272 Main Street Debtor San Francisco, CA 94105 J.P. Morgan Ventures Corp. Back rent $442,650 P.O. Box 714982 Columbus, OH 43271 Larry Anastasi Cash $435,713 (Capture Acquisition) payment for 806 Joshua Court acquisition Moorestown, NJ 08057 of Capture Resource, Inc. Gail Grassi Cash $434,286 (Capture Acquisition) payment for 806 Joshua Court acquisition Moorestown, NJ 08057 of Capture Resource, Inc. Gary Smith Cash $434,286 (Capture Acquisition) payment for 806 Joshua Court acquisition Moorestown, NJ 08057 of Capture Resource, Inc. Lynn, Tillotson, & Pinker, Legal services $421,528 L.L.P. 750 North St. Paul Street, Suite 1400 Dallas, TX 75201 Porter Novelli Public relations $377,210 1838 Solutions Center services Chicago, IL 60677 Sagem Morpho, Inc. Hardware sold to $342,927 1145 Broadway Plaza, Debtor Suite 200 Tacoma, WA 98402 Infonox Technical services $311,094 980 Hamlin Court Sunnyvale, CA 94089 Bingham McCutchen Legal services $292,113 Three Embarcadero Center San Francisco, CA 94111 eTouch Systems Corp. Technical $258,200 6627 Dumbarton Circle services Fremont, CA 94555 U.P.E.K., Inc. Hardware sold to $251,359 2200 Powell Street, Suite 300 Debtor Emeryville, CA 94608 CHRYSLER LLC: To Idle Two Plants in Michigan & Ontario in January ----------------------------------------------------------------- Chrysler LLC disclosed its intentions of tentatively closing two more plants in Detroit, Michigan and Windsor, Ontario, for two weeks beginning Jan. 14, 2007, to avoid an oversupply of Jeep Commanders, Grand Cherokees and Dodge & Chrysler minivans, the Associated Press reports citing an unnamed source. As reported in the Troubled Company Reporter on Dec. 7, 2007, Chrysler planned to temporarily cease car production in its plants in Warren, Michigan and Fenton, Missouri, before Christmas, postponing its opening until the whole month of January. The move is due to due to the company's expected $1 billion loss, slow pickup sales and prevention of an oversupply. The company will also shutter a truck plant in Mexico for two weeks in January. As previously reported, Chrysler dealers delivered 161,088 new vehicles to U.S. customers in November 2007, down 2% compared with a year ago. 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. CITIGROUP MORTGAGE: Poor Credit Support Cues S&P to Cut Rating -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class M-4 asset-backed pass-through certificates from Citigroup Mortgage Loan Trust Inc.'s series 2003-HE3 to 'B' from 'BBB+'. Concurrently, S&P affirmed its ratings on the remaining four classes from this transaction and the ratings on an additional 10 classes from series 2003-HE2 and 2004-HE1. The lowered rating reflects the deterioration of available credit support for this transaction. The failure of excess interest to cover monthly losses has resulted in an overcollateralization deficiency. As of the Nov. 25, 2007, distribution date, the O/C deficiency totaled approximately $675,000, which is 29% below its O/C target. During the previous six remittance periods, monthly losses have exceeded excess interest by approximately 2.0x. As of the November 2007 distribution period, this transaction was 46 months seasoned and had realized $9.3 million in cumulative losses. Total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) were 13.53% and 6.73% of the current pool balance, respectively. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the current ratings. As of the November 2007 remittance report, credit support for these classes ranged from 7.12% (series 2003-HE3) to 46.57% (series 2003-HE2) of the current pool balances. In comparison, current credit enhancement ranged from 1.40x (series 2003-HE3) to 1.95x (series 2003-HE2) of the original enhancements. As of November 2007, total delinquencies for these transactions ranged from 13.53% (series 2003-HE3) to 19.93% (series 2004-HE1) of the current pool balances, with severe delinquencies ranging from 6.73% (series 2003-HE3) to 11.94% (series 2004-HE1) of the current pool balances. Cumulative realized losses ranged from 0.44% (series 2003-HE2) to 2.01% (series 2003-HE3) of the original pool balances. A combination of subordination, excess interest, and O/C provide credit enhancement for these transactions. The collateral supporting these series consists of subprime pools of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Rating Lowered Citigroup Mortgage Loan Trust Inc. Asset-backed pass-through certificates series 2003-HE3 Rating ------ Class To From ----- -- ---- M-4 B BBB+ Ratings Affirmed Citigroup Mortgage Loan Trust Inc. Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 2003-HE3 A AAA 2003-HE3 M-1 AA- 2003-HE3 M-2 A 2003-HE3 M-3 A- 2003-HE2 M-1 AAA 2003-HE2 M-2 AA+ 2003-HE2 M-3 AA 2003-HE2 M-4 A+ 2003-HE2 M-5 A 2003-HE2 M-6 BBB+ 2003-HE2 M-7 BB+ 2004-HE1 A, M-1, M-2 AAA CLAYMONT STEEL: Selling Assets for $564.8 Million to Evraz Group ---------------------------------------------------------------- Evraz Group S.A. and Titan Acquisition Sub, Inc., a wholly owned unit of Evraz, have entered into a definitive agreement with Claymont Steel Holdings Inc. Under the agreement, Evraz will acquire Claymont Steel for $23.50 per share, for an aggregate price of approximately $564.8 million (including debt and net of cash). The offer price of $23.50 per share represents a premium of 19.1% to Claymont Steel's three month volume weighted average stock price, a premium of 38.2% to Claymont Steel's initial public offering price of $17.00 in December 2006, and a premium of 6.8% to the closing price of Claymont Steel's stock on Friday, Dec. 7, 2007, of $22.00. Under the terms of the agreement, Titan will make a cash tender offer for all shares of Claymont Steel common stock and then merge with Claymont Steel. The board of directors of Claymont Steel has unanimously recommended that the shareholders of Claymont Steel accept the offer. H.I.G. Capital LLC, Inc., which owns approximately 42.6% of Claymont Steel's issued common stock, has committed to tender its shares in the offer. The offer, which is expected to commence during the week of Dec. 17, 2007, will be subject to customary conditions, including antitrust clearance, and the acquisition by Evraz of a majority of Claymont Steel's shares. The offer will be followed by a merger at the same price. Upon completion of the transaction, Claymont Steel will become a subsidiary of Evraz. ABN AMRO Incorporated is acting as exclusive financial advisor to Evraz and will be the dealer-manager for the tender offer. Jefferies & Company, Inc. is acting as lead financial advisor to Claymont Steel in the transaction and delivered a fairness opinion to Claymont Steel's board of directors. Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Evraz, and Morgan, Lewis & Bockius LLP is acting as legal counsel to Claymont Steel. "We believe that this transaction delivers significant value to our stockholders," Jeff Bradley, Claymont Steel's Chairman and Chief Executive Officer, said. "We are excited at the opportunity to become part of a company with a significant international presence. As a plate producer, we believe Claymont Steel will be able to contribute to and complement Evraz's North American operations at Evraz Oregon Steel Mills, Inc. We believe that our customers will also support this deal." "This transaction represents yet another important step in the implementation of our long-term strategy to develop higher value downstream markets," Alexander Frolov, Evraz's Chairman and Chief Executive Officer, said. "It will expand our presence in North America, one of the most important steel markets globally. Having acquired Oregon Steel Mills at the beginning of this year, we laid the foundation of our American plate business and intend to continue to strengthen it now with Claymont Steel's steel plate production. We will also be happy to have Claymont Steel's experienced personnel joining Evraz's multinational team." About Evraz Headquartered in Luxembourg, Evraz Group S.A. (LSE:EVR) -- http://www.evraz.com/-- manufactures and distributes steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. It operates three steel mills in Russia, one mill in the Sverdlovsk region and two mills in the Kemerovo region. About Claymont Steel Headquartered in Claymont, Delaware, Claymont Steel Inc. -- http://www.claymontsteel.com/-- fka CitiSteel USA Inc., mills carbon steel plate. It services all major plate markets including service centers, bridge fabricators, railcar manufacturers, heavy construction machinery and material handling equipment, mining equipment, storage tanks, pressure vessel, and shipbuilding. It produces somewhere near 400,000 tons per year. The company sells its products to clients in Canada and the US. Previously a subsidiary of CITIC Group, Claymont Steel (as CitiSteel USA) was acquired by H.I.G. Capital, a private equity and venture capital investment firm in 2005. H.I.G. formed Claymont Steel Holdings in 2006 with the intent to take the company public. * * * As reported in the Troubled Company Reporter on Dec. 12, 2007, Moody's Investors Service placed Claymont Steel Inc.'s ratings under review for possible upgrade following the announcement that Evraz Group S.A. (Evraz, Ba2 corporate family rating), through its wholly owned subsidiary Titan Acquisition Sub, Inc., has entered into a definitive agreement under which Evraz will acquire Claymont Steel for $23.50 per share, for an aggregate purchase price of approximately $565 million, including debt. If Claymont's debt is retired as a result of the transaction, its ratings will be withdrawn. These ratings were placed under review for possible upgrade: B2 corporate family rating, B2 probability of default rating, and B3 rating of the company's $105 million of 8.875% senior unsecured notes due 2015. Standard & Poor's Ratings Services placed all of its ratings, including its 'B' corporate credit rating, on Claymont Steel Inc. on CreditWatch with positive implications. CONVERSION SERVICES: Sept. 30 Balance Sheet Upside-Down by $1.7MM ----------------------------------------------------------------- Conversion Services International Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $11.9 million in total assets, $9.6 million in total liabilities, $633,333 in Series A convertible preferred stock, and $1.7 million in total stockholders' equity. At Sept. 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $3.7 million in total current assets available to pay $7.4 million in total current liabilities. The company reported a net loss of $793,046 for the third quarter ended Sept. 30, 2007, compared with third quarter 2006's net loss of $1.9 million. Revenues of $5.5 million for the quarter compared to revenues of $6.1 million for the three months ended Sept. 30, 2006. Cost of revenue was $4.0 million, or 73.3% of revenue for the three months ended Sept. 30, 2007, as compared to $4.9 million, or 81.1% of revenue for the three months ended Sept. 30, 2006. Operating expenses in third quarter 2007 decreased to $2.0 million compared with operating expenses of $3.17 million in third quarter 2006. The operating loss shrank to $595,083 in third quarter 2007 from $2.0 million in the same period prior year - a reduction of 70.6%. Gain (loss) on financial instruments was $-0- for the three months ended Sept. 30, 2007, compared to a gain on financial instruments during the three months ended Sept. 30, 2006, of $760,791. The company restructured several debt instruments during the March 2007 quarter which eliminated the company's requirement to account for the financial instruments. Interest expense, net was $194,314 for the three months ended Sept. 30, 2007, as compared to interest expense, net of $604,249 for the three months ended Sept. 30, 2006. The decrease in interest expense, net for the three months ended Sept. 30, 2007, is primarily due to a $200,000 reduction in accretion charges relating to convertible debt instruments and to reduced interest expense related to the Laurus and Sands debt. 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?2666 Liquidity The company has experienced continued losses that exceeded expectations from 2004 through Sept. 30, 2007. The company has addressed the resulting liquidity issue by entering into various debt instruments between August 2004 and June 2007 and, as of Sept. 30, 2007, had approximately $7.0 million of debt outstanding in addition to an aggregate of $3.9 million of Series A and Series B Convertible Preferred Stock which was issued in 2006. Additionally, the company raised $4.9 million through the sale of common stock of the company during the nine months ended Sept. 30, 2007. Going Concern Doubt Friedman LLP, in East Hanover, N. J., expressed substantial doubt about Conversion Services International 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, negative cash flows from operations, net working capital deficiency and its ability to pay its outstanding debt. About Conversion Services Headquartered in East Hanover, N.J., Conversion Services International Inc. (AMEX: CVN) -- http://www.csiwhq.com/-- provides strategic consulting services focused on data warehousing, business intelligence and data management solutions. COUNTRYWIDE: Fitch Junks Ratings on 46 Transactions --------------------------------------------------- Fitch Ratings has taken rating actions on these Countrywide transactions: CWALT 2005-35CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 downgraded to 'BBB-' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B', removed from Rating Watch Negative. CWALT 2005-52CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 downgraded to 'BBB-' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'CC/DR4' from 'B', removed from Rating Watch Negative. CWALT 2005-55CB Group 2 -- Class 2-A affirmed at 'AAA'; -- Class 2-M affirmed at 'AA'; -- Class 2-B-1 affirmed at 'A'; -- Class 2-B-2 downgraded to 'BBB-' from 'BBB'; -- Class 2-B-3 downgraded to 'B' from 'BB'; -- Class 2-B-4 downgraded to 'C/DR4' from 'B'. CWALT 2005-57CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 downgraded to 'BBB-' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-2CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 downgraded to 'A-' from 'A'; -- Class B-2 downgraded to 'BB-' from 'BBB'; -- Class B-3 downgraded to 'C/DR4' from 'BB'; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-8T1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 downgraded to 'AA-' from 'AA'; -- Class B-1 downgraded to 'BBB' from 'A', and placed on Rating Watch Negative; -- Class B-2 downgraded to 'CC/DR3' from 'BBB'; -- Class B-3 downgraded to 'C/DR5' from 'BB', removed from Rating Watch Negative; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-9T1 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 downgraded to 'BBB+' from 'A'; -- Class B-2 downgraded to 'B' from 'BBB'; -- Class B-3 downgraded to 'C/DR4' from 'BB', removed from Rating Watch Negative; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-11CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 downgraded to 'BBB+' from 'A'; -- Class B-2 downgraded to 'B' from 'BBB'; -- Class B-3 downgraded to 'C/DR4' from 'BB'; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-12CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 downgraded to 'BB' from 'BBB'; -- Class B-3 downgraded to 'CC/DR3' from 'BB'; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-13T1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 downgraded to 'AA-' from 'AA'; -- Class B-1 downgraded to 'BBB+' from 'A', and placed on Rating Watch Negative; -- Class B-2 downgraded to 'B' from 'BBB'; -- Class B-3 downgraded to 'C/DR4' from 'BB', removed from Rating Watch Negative; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-15CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 downgraded to 'BB' from 'BBB'; -- Class B-3 downgraded to 'CC/DR3' from 'BB'; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-17T1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 downgraded to 'A+' from 'AA'; -- Class M-3 downgraded to 'A-' from 'A+'; -- Class M-4 downgraded to 'BBB-' from 'A', and placed on Rating Watch Negative; -- Class B-1 downgraded to 'C/DR3' from 'BBB'; -- Class B-2 downgraded to 'C/DR4' from 'BBB-'; -- Class B-3 downgraded to 'C/DR5' from 'BB', removed from Rating Watch Negative; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-19CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 downgraded to 'BBB-' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-20CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 downgraded to 'BBB+' from 'A'; -- Class B-2 downgraded to 'B' from 'BBB'; -- Class B-3 downgraded to 'C/DR4' from 'BB'; -- Class B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. CWALT 2006-21CB -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 downgraded to 'BBB-' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-26CB -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'A+'; -- Class M-4 downgraded to 'A-' from 'A'; -- Class B-1 downgraded to 'BBB' from 'BBB+'; -- Class B-2 downgraded to 'BB' from 'BBB'; -- Class B-3 downgraded to 'CC/DR3' from 'BB'; -- Class B-4 downgraded to 'C/DR5' from 'B'. CWALT 2006-29T1 -- Class A affirmed at 'AAA'; -- Class M-1 downgraded to 'AA' from 'AA+'; -- Class M-2 downgraded to 'AA-' from 'AA'; -- Class M-3 downgraded to 'A-' from 'A+'; -- Class M-4 downgraded to 'BBB-' from 'A'; -- Class M-5 downgraded to 'BB' from 'A-'; -- Class B-1 downgraded to 'C/DR3' from 'BBB'; -- Class B-2 downgraded to 'C/DR3' from 'BBB-'; -- Class B-3 downgraded to 'C/DR3' from 'BB'; -- Class B-4 downgraded to 'C/DR3' from 'B', removed from Rating Watch Negative. CWALT 2006-31CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 rated 'A', placed on Rating Watch Negative; -- Class B-2 downgraded to 'BBB-' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-32CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 rated 'A', placed on Rating Watch Negative; -- Class B-2 downgraded to 'BB+' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-33CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 rated 'A', placed on Rating Watch Negative; -- Class B-2 downgraded to 'BB+' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR5' from 'B'. CWALT 2006-34 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 downgraded to 'BBB-' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-35CB -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 rated 'A', placed on Rating Watch Negative; -- Class B-2 downgraded to 'BB+' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-39CB -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'A'; -- Class M-4 downgraded to 'A-' from 'A'; -- Class M-5 downgraded to 'BBB+' from 'A-'; -- Class M-6 downgraded to 'BBB-' from 'BBB'; -- Class M-7 downgraded to 'BB' from 'BBB'; -- Class B-1 downgraded to 'BB-' from 'BBB-'; -- Class B-2 downgraded to 'B' from 'BB+'; -- Class B-3 downgraded to 'C/DR4' from 'BB'. CWALT 2006-41CB Group 1 -- Class 1-A affirmed at 'AAA'; -- Class 1-M affirmed at 'AA'; -- Class 1-B-1 affirmed at 'A'; -- Class 1-B-2 downgraded to 'BBB-' from 'BBB'; -- Class 1-B-3 downgraded to 'B' from 'BB'; -- Class 1-B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-41CB Group 2 -- Class 2-A affirmed at 'AAA'; -- Class 2-M affirmed at 'AA'; -- Class 2-B-1 rated 'A', placed on Rating Watch Negative; -- Class 2-B-2 downgraded to 'BBB-' from 'BBB'; -- Class 2-B-3 downgraded to 'B' from 'BB'; -- Class 2-B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-42 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 rated 'A', placed on Rating Watch Negative; -- Class B-2 downgraded to 'BB+' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-43CB Groups 1 & 2 -- Class A affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 rated 'A', placed on Rating Watch Negative; -- Class B-2 downgraded to 'BBB-' from 'BBB'; -- Class B-3 downgraded to 'B' from 'BB'; -- Class B-4 downgraded to 'C/DR4' from 'B'. CWALT 2006-43CB Group 3 -- Class III-A affirmed at 'AAA'; -- Class III-M downgraded to 'A+' from 'AA', and placed on Rating Watch Negative; -- Class III-B-1 downgraded to 'BB' from 'A', and placed on Rating Watch Negative; -- Class III-B-2 downgraded to 'C/DR4' from 'BBB'; -- Class III-B-3 downgraded to 'C/DR5' from 'BB', removed from Rating Watch Negative; -- Class III-B-4 downgraded to 'C/DR5' from 'B', removed from Rating Watch Negative. The collateral of the above transactions primarily consists of 30- and 15-year fixed-rate mortgage loans extended to Alt-A borrowers and are secured by first liens, primarily on one- to four-family residential properties. As of the October 2007 distribution date, the above transactions are seasoned from 10 (series 2006-43CB Group 3) to 27 (series 2005-35CB) months. The pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from 74% (series 2005-35CB) to 93% (series 2006-43CB Groups 1&2). Countrywide Home Loans Servicing, LP (rated 'RMS2+' by Fitch) is the master servicer on all of the transactions. The affirmations, affecting approximately $13.4 billion of outstanding certificates, reflect a stable relationship between credit enhancement and future loss expectations. The downgrades, affecting approximately $337.7 million in outstanding certificates, and classes placed on Rating Watch Negative, affecting approximately $48.8 million of outstanding certificates, reflect deterioration in the relationship between CE and loss expectation. EIMSKIP HOLDINGS: S&P Holds 'B' Long-Term Corp. Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' long-term corporate credit rating on Canada-based Eimskip Holdings Inc. The outlook is stable. At the same time, Standard & Poor's assigned its issue and recovery ratings to EHI's proposed CDN$549.4 million senior secured financing. The financing consists of a CDN$383.7 million first-lien debt (a CDN$50 million senior secured revolving credit facility and a CDN$333.7 million term loan facility) and a CDN$165.6 million second-lien term loan, both due 2012. All amounts are Canadian-dollar equivalent as the facilities consist of both U.S.-dollar and Canadian-dollar tranches. Standard & Poor's rated the first-lien debt 'BB-', with a recovery rating of '1', indicating an expectation of very high (90%-100%) recovery in the event of a payment default. S&P rated the second-lien term loan 'B+', with a recovery rating of '2', indicating an expectation of substantial (70%-90%) recovery in the event of a payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. Once the revised financing package is implemented and the above ratings are confirmed upon documentation review, S&P will withdraw the ratings on the existing financing package. The proceeds from the new term loans and a sale-and-lease-back transaction on 20 of EHI's warehouse properties will be used to refinance the existing financing package. In addition to the term loans, EHI will issue up to CDN$112.5 million of mezzanine debt (not rated), with a security interest in all collateral ranking junior in priority to those of the senior credit facilities. The 'B' corporate credit rating reflects EHI's very high, post-acquisition debt-to-EBITDA leverage; low coverage ratios; an intensely competitive public refrigerated warehousing and logistics business in which EHI and Atlas combined are the global market leaders; generally short-term customer contracts of about one to two years in length; a material and increasing dependence on key global customers; and a low margin transportation business. These risks are partially offset by the company's participation in a global business that is relatively stable with a modest growth profile, a proven management team with a history of successfully executing and integrating acquisitions, a diverse customer base by tenant/business segment/geography (which reduces risk), solid real estate assets in generally good condition, and a strategy of integrating storage with transportation. "Despite the lower on-balance-sheet debt level under the new financing package, EHI's financial risk profile remains highly leveraged after Standard & Poor's adjustments of the additional operating lease obligations related to EHI's sale-and-lease-back transaction," said Standard & Poor's credit analyst Greg Pau. "We will continue to assess EHI's financial risk profile on a stand- alone basis until the company merges with Atlas. This is because EHI and its lenders will only have access to Atlas' excess cash flow under the current arrangement," Greg Pau added. The stable outlook reflects S&P's view that despite the heavy debt burden, the business should generate sufficient cash flow to repay a material level of debt. In the medium term, S&P could potentially upgrade EHI if a cash sweep of free cash flow accelerates debt repayment. Alternatively, S&P could lower the ratings if operating conditions in the next couple of years become more challenging than expected (possibly from significant loss of customers, resulting from poor operating performance, price competition, or a material increase in the supply of competitive PRW facilities), thereby pressuring EHI's liquidity position. ENRON CORP: Commences Civil Action Against Hewitt Association -------------------------------------------------------------- Enron Corp. Savings Plan and its administrative committee has commenced a civil action against Hewitt Associates, LLC, for alleged erroneous calculations that caused misallocation of $22,000,000 in Savings Plan assets and property. The complaint was filed in the United States District Court for the Southern District of Texas on November 30, 2007. Hewitt Associates, LLC, is a human resources firm specializing in consulting services, including benefits calculations, to benefit plans. It had acted as fund administrator for $89,000,000 in Plan assets that were part of a settlement fund. The Settlement Fund intended to compensate Plan participants for pension losses sustained in Enron's bankruptcy. Specifically, Hewitt was responsible or accurately calculating settlement distributions to individual participants. In return for its services, it collected $900,000, which would otherwise be distributed to the Participants. According to Tynan Buthod, Esq., at Baker Botts LLP in Houston, Texas, Hewitt had used the wrong number as the starting point for certain of its calculations, and miscalculated a large percentage of the distributions. The Plan had reasonably relied on the calculations, and as a result, lost $22,000,000, he tells the District Court. In July 2007, Hewitt had said before the District Court that it will accept full responsibility for the misallocations, and promised to correct the errors in its calculations, at no cost to the Savings Plan. Mr. Buthod states that although Hewitt's gross negligence have jeopardized the retirement assets of thousands of current and former Enron employees, Hewitt has refused to cover the shortfall it caused. He points out that Hewitt (i) had not provided the accurate, revised calculations, and (ii) admitted that its current calculations still contain errors. Mr. Buthod further states that Hewitt has flatly refused to fund any portion of the shortfall or to make the Participants whole. Accordingly, the Enron Savings Plan seeks to hold Hewitt responsible for the losses it caused, and asks the District Court for a judgment against Hewitt, for actual and punitive damages, among other reliefs. The plaintiffs demand a trial by jury on all issues. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtors. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. (Enron Bankruptcy News, Issue No. 200; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENRON CORP: Three Bankers Plead Guilty to Wire Fraud ---------------------------------------------------- David Bermingham, Gary Mulgrew, and Giles Darby, former bankers of Greenwich NatWest Ltd., have changed their pleas to guilty to a wire fraud charge, a violation of 18 U.S.C. Section 1343. The three British bankers originally pleaded not guilty to seven counts of wire fraud. Prosecutors alleged that the bankers participated with Enron Corp.'s former chief financial officer, Andrew Fastow, in a scheme that enabled them to collect $7,300,000. In January 2004, Mr. Fastow pleaded guilty to two counts of conspiracy for his role in Enron's financial collapse. The British bankers were arrested three months later. The defendants were set to go on trial in January, but each pleaded guilty to one count of wire fraud in a court hearing before Judge Ewing Werlein Jr. of the U.S. District Court for the Southern District of Texas, the Associated Press says. Dan L. Cogdell, Esq., Mr. Bermingham's lawyer, said in a District Court filing that the Bankers may face up to five years imprisonment, and will pay $7,352,626 in restitution to the Royal Bank of Scotland. The Bankers have also consented to a $6,102,626 judgment in the Courts of the United Kingdom, in favor of RBS. The British bankers were extradited to the United States in July 2006 to face the charges of deceiving NatWest about the true value of the bank's stake in an Enron off-books partnership, says Laurel Brubaker Calkins of Bloomberg News. According to Ms. Calkins, the bankers were each charged with seven counts of wire fraud, and faced up to 35 years in prison if convicted on all counts. A key factor in the bankers' decision to plead guilty is the U.S. government's commitment to support their request to serve most of their prison time in the United Kingdom, Ms. Calkins quotes Mr. Cogdell as saying. Mr. Fastow is serving a six-year sentence in a federal prison in Louisiana, while each of the bankers has been free on $1,000,000 bonds that required them to live in the U.S. pending trial, AP says. In an order for pre-sentence investigation and disclosure and sentencing dates, signed at Houston on November 28, 2007, Judge Werlein ruled that an initial pre-sentence report must be disclosed to counsel by January 14, 2008. The probation officer must submit the final pre-sentence report with an addendum addressing contested issues on February 11. Sentencing is set for February 22 at 10:00 a.m. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtors. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. On July 15, 2004, the Court confirmed the Debtors' Modified Fifth Amended Plan and that plan was declared effective on Nov. 17, 2004. (Enron Bankruptcy News, Issue No. 200; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) EURONET WORLDWIDE: Confirms Tax-Free All-Stock Offer for MoneyGram ------------------------------------------------------------------ Euronet Worldwide Inc., on Dec. 13, 2007, confirmed it delivered a letter to the Board of Directors of MoneyGram International, Inc. on December 4 in which Euronet offered to acquire MoneyGram in a tax-free, all-stock transaction based on a fixed exchange ratio of 0.6179 Euronet common shares for each share of MoneyGram. Based on the closing price of Euronet shares on December 4, the offer is valued at approximately $1.65 billion, or $20.00 per MoneyGram share, a premium of approximately 43% to the closing price of MoneyGram shares that day. Euronet's said that in the letter, it provided compelling rationale for the proposed transaction, which Euronet expects would deliver substantial immediate and long-term value for the shareholders of both companies. Specifically, Euronet believes that the proposed transaction would: * Create a powerful new global player in the money transfer business well positioned to capture share in a highly fragmented market; * Expand the geographic reach of both companies and unlock compelling opportunities by combining Euronet's and MoneyGram's complementary distribution networks, corridors and agent bases; * Enable the companies to further benefit from the rapid growth of the money transfer market in key emerging countries, such as China and India; and * Generate double-digit accretion and deliver significant synergies. About MoneyGram International MoneyGram International, Inc. -- http://www.moneygram.com/-- (NYSE: MGI) is a global payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram reported $1.16 billion in revenue in 2006 and approximately 138,000 global money transfer agent locations in 170 countries and territories. About Euronet Worlwide Euronet Worldwide Inc. -- http://www.euronetworldwide.com/-- (Nasdaq: EEFT) is in the business of processing secure electronic financial transactions. The company offers payment and transaction processing solutions to financial institutions, mobile operators and retailers which include comprehensive ATM and POS operation and management services; credit and debit card outsourcing services; card issuing and merchant acquiring services; software solutions; consumer money transfer and bill payment services; and electronic distribution of top-up services for prepaid mobile airtime and other prepaid products. Euronet operates and processes transactions from 39 countries. Euronet's global payment network includes over 10,500 ATMs and approximately 48,000 POS terminals which are under management in 16 countries; a growing portfolio of outsourced debit and credit card services and card software solutions; a prepaid processing network of 370,000 point-of-sale terminals across 189,000 retailer locations in 12 countries; and a consumer-to-consumer money transfer network of over 11,000 sending locations in 13 countries and more than 56,000 payout locations in approximately 100 countries. With corporate headquarters in Leawood, Kansas, USA, and 35 worldwide offices, Euronet serves clients in approximately 130 countries. EURONET WORLDWIDE: S&P Places 'BB' Rating Under Positive Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' long-term counterparty credit rating on Euronet Worldwide on CreditWatch Positive. At the same time, S&P placed its 'BBB' long-term counterparty rating of MoneyGram International on CreditWatch Negative. On Dec. 13, 2007, Euronet Worldwide confirmed that it had offered to acquire Moneygram in a tax-free, all-stock transaction. "The offer implies that if the deal is completed, Euronet will pay a premium for Moneygram shares. Because Euronet already has negative tangible equity, the merged company may have to support a $5.3 billion securities portfolio with significant negative tangible equity, and this will be of some concern," said Standard & Poor's credit analyst Jeffrey Zaun. S&P will review the strategic and financial implications of the acquisition to determine what adjustments need to be made to align the ratings on Euronet and Moneygram. The CreditWatch for both Euronet and Moneygram will be updated within 60 days. FAIRPOINT COMMS: Inks Deal with Maine PUC for Access Line Deal -------------------------------------------------------------- FairPoint Communications Inc. and Verizon Communications Inc. have reached an agreement with the staff of the Maine Public Utility Commission and the Maine Office of Public Advocate. The two companies have asked the Maine PUC to approve the acquisition of Verizon's access lines and related business in Maine, New Hampshire and Vermont. The agreement submitted to the commission resolves concerns raised among the parties as Maine has considered approving the proposed Verizon-FairPoint transaction. "This is an important step forward," Edward Dinan, Verizon president for Maine, said. "We have provided service to customers in Maine for many years, and we are committed to providing a sound communications network as we transition to FairPoint. This settlement resolves concerns that were raised, and assures that the new business starts on a sound footing." Under the terms of the agreement, FairPoint agrees to reduce its stock dividend by 35% and will make minimum debt repayments annually of $35 million. Verizon will make a contribution of $235.5 million to the working capital of the new company prior to the closing. This will enable FairPoint to incur less debt and to facilitate investment in infrastructure and improved service. The agreement provides a fair value to Verizon for its wireline properties in the three northern New England states. At the same time, it addresses financial concerns raised in regulatory proceedings in Maine and New Hampshire. Mr. Dinan noted that the proposed settlement will benefit Verizon's shareholders, who will own approximately 60% of the merged FairPoint company, because they will now own shares of a company in a stronger initial financial position. Mr. Dinan added that the proposed Maine settlement would be instrumental in reaching approval from the regulatory commissions in New Hampshire and Vermont. "We look forward to sharing this agreement with regulators in New Hampshire and Vermont in the hopes that they will agree that concerns raised in those two states are largely accommodated in the terms of the Maine settlement," he said. "Of course, each state must make its own decision to agree with us that this transaction is appropriate and good for consumers in each state." No dates have been set for the decision by the three states or the Federal Communications Commission. The two companies disclosed last January definitive agreements that will result in Verizon establishing a separate entity for its local exchange and related business assets in Maine, New Hampshire and Vermont, and then spinning off that new entity to Verizon's stockholders and merging it with and into FairPoint. "The many parties that took part in the discussions to reach this agreement did so in a professional manner with one purpose in mind -- to provide the best communications services for Maine residents and businesses," Mr. Dinan said. About Verizon Communications Inc. Headquartered in New York City, Verizon Communications Inc. (NYSE: VZ) - http://www.verizon.com/-- delivers broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers. Verizon Wireless operates America's reliable wireless network, serving 63.7 million customers. Verizon's Wireline operations include Verizon Business, which delivers innovative and seamless business solutions to customers around the world, and Verizon Telecom, which brings customers the benefits of converged communications, information and entertainment services over the fiber-optic network. A Dow 30 company, Verizon has a diverse workforce of nearly 238,000. About FairPoint Communications Based in Charlotte, North Carolina, FairPoint Communications Inc. (NYSE: FRP) -- http://www.fairpoint.com/-- provides communications services to rural and small urban communities across the country. Today, FairPoint owns and operates 30 local exchange companies located in 18 states offering an array of services, including local and long distance voice, data, Internet and broadband offerings. * * * FairPoint Communications Inc. carries to date Moody's Investor Services' "B1" probability of default and long term corporate family ratings, which were placed in January 2005 with a stable outlook. GENERAL MOTORS: Refuses to Pay Bonuses to Retirees, IUE-CWA Says ---------------------------------------------------------------- The International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communications Workers of America disclosed in their Website that General Motors Corp. is playing Scrooge in a big way this holiday season, at least in the eyes of their 25,000 GM/Delphi Corp. IUE-CWA retirees, by refusing to provide their "Christmas Bonus." The bonus actually is a lump sum payment provided in December and is used by many IUE-CWA retirees to buy Christmas and holiday gifts for their families. IUE-CWA has been negotiating with GM since early October for a new contract covering 2,500 workers at the Moraine, Ohio, SUV assembly plant. GM has told IUE-CWA that it will not pay the lump sum payment to retirees until an agreement has been reached. IUE-CWA President Jim Clark said GM's decision was shameful, especially coming in the weeks just before Christmas. "I am very disappointed in GM's decision to withhold the Christmas lump sum payment to thousands of retirees. These retired workers, who live on a fixed income, count every dollar, especially in today's economy with gasoline, oil and food prices skyrocketing. To deprive them of the ability to purchase Christmas and holiday gifts for their families is unconscionable and GM must answer for this shameful act. "Unfortunately, our retirees won't be receiving their regular bonus in time for Christmas this year and we want to be very clear: The union negotiators are not the Grinch Who Stole Christmas." The Moraine workers currently produce the Chevrolet Trailblazer, Trailblazer SS, Saab 9-7 X, GMC Envoy, Envoy Denali and Isuzu Ascender. As a result of the competitive improvements negotiated by IUE-CWA Local 798 in 2006, GM provided IUE-CWA with a letter of intent to allocate future product to the Moraine Assembly Plant. As of Dec. 14, 2007, no product has been identified by GM. Despite the commitment made by GM in 2006, the company's refusal to so far indicate a new product for the production plant has resulted in speculation that GM is looking to close the plant. This is a major hurdle in current negotiations and must be addressed by GM, IUE-CWA said. Job Cut Plans From January through June, GM will be displacing 340 workers at the Moraine plant, which employs 2,250, due to low market demand, the Dayton Business Journal reports citing company officials. The paper disclosed that GM and IUE-CWA denied a report by automotive magazine Wardsauto.com, insisting that the Moraine plant is shuttering due to shortage in the vehicle production. Jessica Peck, spokeswoman at the Moraine plant, suggests that workers are likely to be called back to work, according to the paper. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GSV-2 RESORT: Files List of 20 Largest Unsecured Creditors ---------------------------------------------------------- GSV-2 Resort Developers LLC submitted to the U.S. Bankruptcy Court for the Central District of California its list of 20 largest unsecured creditors disclosing: Creditor Nature of Claim Amount -------- --------------- ---------- Paul McDonnel Property Tax $946,283 Riverside County Treasurer 4080 Lemon St., 4th Fl. P.O. Box 12005 Tel: (951) 955-3900 Fax: (951) 955-3923 The Jones Agency Advertising $87,571 P.O. Box 2724 Palm Springs, CA 92263 Tel: (760) 325-1437 Fax: (760) 352-6097 Eagle Enterprises Consulting $36,000 38073 Chris Drive Services Cathedral City, CA 92263 Tel: (760) 408-8420 Fax: (760) 321-0887 Rutan & Tucker LLP Legal Services $19,044 611 Anton Blvd., Ste. 1400 P.O. Box 1950 Costa Mesa, CA 92628 Tel: (714) 641-5100 Elizabeth Moule & Architectural $17,558 Stefanos Polyzoides Services c/o Rex Uber 180 California Blvd. Pasadena, CA 91105 Tel: (626) 844-2400 Fax: (626) 844-2410 Vale Consulting Consulting $13,047 4654 Barranca Parkway Irvine, CA 92604 Tel: (949) 451-1900 Fax: (949) 451-1905 Alschuler Grossman LLP Legal Services $11,618 The Water Garden 1620 26th Street, 3rd Fl. North Tower Santa Monica, CA 90404 Tel: (310) 907-1000 Bingham McCutchen LLP Legal Services $10,534 355 South Grand Ave. Ste. 4400 Los Angeles, CA 90071 Tel: (213) 680-6400 Fax: (213) 680-6499 Wayne Nordwall Consulting $7,380 25210 N., 42nd Drive Services Glendale, AZ 85310 Greey Pickett Consulting $6,881 c/o W. Pickett Services c/o K. Koogler 7507 E. McDonald Dr. Suite B Scottsdale, AZ 85250 Tel: (480) 609-0009 Fax: (480) 609-0068 Edaw Inc. Consulting $6,515 Dept. 9269-02 Services Los Angeles, CA 90084 Tel: (949) 660-8044 George R. Farris Consulting $3,407 488 Environmental Services P.O. Box 22 Canyon, TX 79015 Tel: (806) 655-4336 Robert Charles Lesser Consulting $2,000 & Company Services 7200 Wisconsin Ave. 7th Floor Bethesda, MD 20814 Tel: (240) 644-1300 Fax: (240) 644-1311 RBF Consulting Inc. Consulting $777 74-130 Country Club Dr. Suite 201 Palm Desert, CA 92260 Tel: (760) 346-7481 Fax: (760) 346-8315 Palm Desert, California-based GSV-2 Resort Developers LLC filed for chapter 11 bankruptcy on Oct. 30, 2007 (Bankr. C.D. Calif. Case No. 07-16938). J. Rudy Freeman, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor in its restructuring efforts. GSV-2 RESORT: Submits Schedules of Assets and Liabilities --------------------------------------------------------- GSV-2 Resort Developers LLC submitted to the U.S. Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property B. Personal Property $26 C. Property Claimed as Exempt D. Creditors Holding $22,792,250 Secured Claims E. Creditors Holding 966,573 Unsecured Priority Claims F. Creditors Holding 3,387,664 Unsecured Nonpriority Claims --- ----------- TOTAL $26 $27,146,487 Palm Desert, California-based GSV-2 Resort Developers LLC filed for chapter 11 bankruptcy on Oct. 30, 2007 (Bankr. C.D. Calif. Case No. 07-16938). J. Rudy Freeman, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor in its restructuring efforts. GSV-2 RESORT: Section 341(a) Meeting Scheduled on December 20 ------------------------------------------------------------- The United States Trustee for Region 16 will convene a meeting of creditors of GSV-2 Resort Developers LLC at 2:30 p.m., on Dec. 20, 2007, at Room 100A, 3420 Twelfth Street in Riverside, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Palm Desert, California-based GSV-2 Resort Developers LLC filed for chapter 11 bankruptcy on Oct. 30, 2007 (Bankr. C.D. Calif. Case No. 07-16938). J. Rudy Freeman, Esq., at Pachulski Stang Ziehl & Jones LLP represents the Debtor in its restructuring efforts. HALCYON STRUCTURED: Moody's Rates $21.7MM Class D Notes at Ba2 -------------------------------------------------------------- Moody's Investors Service has assigned these ratings to Notes issued by Halcyon Structured Asset Management Long Secured/Short Unsecured 2007-3 Ltd.: (1) Aaa to $260,000,000 Class X Senior Interest Only Secured Notes, Due 2019; (2) Aaa to $324,000,000 Class A-1 Senior Secured Floating Rate Notes, Due 2019; (3) Aa2 to $31,500,000 Class A-2 Senior Secured Floating Rate Notes, Due 2019; (4) A2 to $21,000,000 Class B Senior Secured Deferrable Floating Rate Notes, Due 2019; (5) Baa2 to $9,100,000 Class C Secured Deferrable Floating Rate Notes, Due 2019; and (6) Ba2 to $21,700,000 Class D Secured Deferrable Floating Rate Notes, Due 2019. The Moody's ratings of the Notes (other than Class X Notes) address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The rating on the Class X Notes addresses the ultimate receipt of the Class X Payment Amount as provided by the governing documents. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of first lien senior secured loans and second lien loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Halcyon Structured Asset Management L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. HOLOGIC INC: Full Loan Repayment Cues Moody's to Hold Ba3 Rating ---------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 Corporate Family Rating of Hologic, Inc. and withdrew the Ba3 rating on the $1.25 billion senior secured Term Loan X. Moody's also changed the rating on the remaining senior secured credit facilities to Baa3 from Ba3 in accordance with Moody's Loss Given Default Methodology. The rating actions follow the company's full repayment of its Term Loan X with the proceeds from the sale of $1.725 billion of convertible senior unsecured notes (not rated by Moody's). The remaining proceeds from the notes offering were applied to the repayment of amounts outstanding under the Term Loan A and Term Loan B. The outlook for the ratings is stable. Ratings affirmed: -- Corporate Family Rating, Ba3 -- Probability of Default Rating, Ba3 -- Speculative Grade Liquidity Rating, SGL-2 Ratings upgraded: -- Senior Secured Revolving Credit Facility due 2012, to Baa3 (LGD1, 9%) from Ba3 (LGD3, 49%) to Baa3 -- Senior Secured Term Loan A due 2012, to Baa3 (LGD1, 9%) from Ba3 (LGD3, 49%) to Baa3 -- Senior Secured Term Loan B due 2013, to Baa3 (LGD1, 9%) from Ba3 (LGD3, 49%) to Baa3 Hologic is a leading developer, manufacturer and supplier of diagnostic and medical imaging systems primarily dedicated to serving the healthcare needs of women. The company is focused on mammography and breast care technologies as well as on osteoporosis assessment. In October 2007, Hologic completed the acquisition of Cytyc, a medical device company that develops, manufactures and markets diagnostic and surgical products that address a range of women's health applications including cervical cancer screening, treatment of excessive menstrual bleeding and radiation treatment of early-stage breast cancer. INDYMAC RESIDENTIAL: Fitch Holds 'B' Rating on Class 2-B-5 Certs. ----------------------------------------------------------------- Fitch Ratings has affirmed these IndyMac Residential Asset Securitization Trust transactions: Series 2004-A2 Group1 -- Class A affirmed at 'AAA'. Series 2004-A2 Group2 -- Class A affirmed at 'AAA'; -- Class 2-B-1 affirmed at 'AA'; -- Class 2-B-2 affirmed at 'A'; -- Class 2-B-3 affirmed at 'BBB'; -- Class 2-B-4 affirmed at 'BB' and removed from Rating Watch Negative; -- Class 2-B-5 affirmed at 'B' and removed from Rating Watch Negative. The affirmations, affecting approximately $90.4 million of the outstanding certificates, are taken as a result of a stable relationship between credit enhancement and expected loss. The collateral of the above series 2004-A group1 transaction primarily consists of 30-year fixed-rate mortgage loans extended to Alt-A borrowers and are secured by first liens, primarily on one- to four-family residential properties. The pool factor for the series 2004-A2 Group 1 is 39%. The Group 2 mortgage pool consists of seasoned, 15- or 30-year fixed-rate, first lien, one- to four-family residential mortgage loans. As of the November 2007 distribution date, both the transactions are 44 months seasoned. INTERSTATE BAKERIES: Disclosure Statement Hearing Set for Jan. 29 ----------------------------------------------------------------- The United States Bankruptcy Court for the Western District of Missouri has scheduled a hearing to consider approval of Interstate Bakeries Corporation's Disclosure Statement with respect to the company's Joint Plan of Reorganization on Jan. 29, 2008, at 1:30 p.m. Bankruptcy Judge Jerry W. Venters also fixed January 15 as the last date to file and serve written objections to the Disclosure Statement pursuant to Rule 3017 of the Federal Rules of Bankruptcy Procedure. Judge Venters allowed the Plan proponent to transmit within December 9, 2007, a copy of its Disclosure Statement and Plan to the debtor, trustee, each committee appointed pursuant to Section 1102 of the Bankruptcy Code, the Securities and Exchange Commission, and any party-in-interest. Requests for copies of the Disclosure Statement and Plan should be directed to Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom, in Chicago, Illinois. The Plan, filed November 5, is based on: -- the commitment by Silver Point Finance, LLC, to provide IBC with up to $400,000,000 in exit financing upon its emergence from Chapter 11; and -- IBC's plan funding agreements to support the Plan from JP Morgan Chase Bank, N.A., McDonnell Investment Management LLC, Quadrangle Master Fund Ltd., and Silver Point Capital, L.P. In addition, several additional holders of IBC's prepetition senior secured credit facility have also signed the Plan Funding Agreements as of November 2. In total, holders of approximately 95% of the company's prepetition senior secured credit facility now support the Plan Funding Agreements. 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. 79; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). INTERSTATE BAKERIES: Inks Second Amendment to Credit Agreement -------------------------------------------------------------- Interstate Bakeries Corp. and its debtor-affiliates disclosed in a regulatory filing with the Securities and Exchange Commission that they entered into a Second Amendment to the Amended and Restated Revolving Credit Agreement, dated as of Nov. 29, 2007, with JPMorgan Chase Bank, N.A., a national banking association, and each of the other commercial banks, finance companies, insurance companies or other financial institutions or funds from time to time party to the Credit Agreement. JPMorgan also acts as administrative and collateral agent for the Lenders. The February 16, 2007 Amended and Restated Revolving Credit Agreement was amended on October 1, pursuant to which the Lenders have made available to the Debtors a revolving credit and letter of credit facility in an aggregate principal amount not to exceed $200,000,000. The parties agreed to further amend and supplement the Credit Agreement to reflect certain modifications to the Credit Agreement. The Second Amended Credit Agreement provides, among other things, that, if requested in a writing delivered by the Administrative Agent after January 29, 2008, the Debtors will deliver to the Administrative Agent and the Lenders within 21 days of receipt of that written request a revised plan which details the Debtors' proposed strategy for maximizing the value of their estates, including, without limitation, through a sale of the borrowers and their assets, or in a series of transactions. The Debtors will not be required to deliver a revised plan in the event that on or before January 29, 2008: (i) the Borrowers have publicly announced an agreement in principle with both the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and the International Brotherhood of Teamsters, in each case regarding modifications to the existing collective bargaining agreements with BCTGM and the Teamsters, which provide for union alignment to a more capable and more cost-effective path-to-market, certain health and welfare concessions, and increased work rule flexibility; and (ii) Silver Point Finance, L.L.C., or, if the Borrowers are authorized to enter into an alternative commitment for exit financing, then the approved provider of that alternate exit financing, has publicly announced its support of those agreements with BCTGM and the Teamsters. Bidders have until January 15 to present offers for IBC, while the Teamsters and its partners have until December 13 to make an offer. Randall Vance, IBC's Senior Vice President, Chief Financial Officer and Treasurer, states that the effectiveness of the Second Amendment is conditioned upon: -- the Administrative Agent's receipt of executed counterparts of the Second Amendment which bear the signatures of the Borrowers and the Required Lenders; and -- the Borrowers' payment of any unpaid balance of the fees and expenses due and payable by the Borrowers pursuant to the Loan Documents. 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. 79; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). INVERNESS MEDICAL: Finalizes $36 Million Matritech Acquisition -------------------------------------------------------------- Inverness Medical Innovations Inc. has finalized its acquisition of Matritech Inc. The deal was structured as an asset purchase under which a newly formed subsidiary of Inverness acquired substantially all of the assets of Matritech for aggregate consideration of 616,713 shares of Inverness common stock, valued at approximately $36 million. In addition, Inverness has agreed to pay Matritech up to $2 million of incremental consideration, in cash and/or Inverness common stock, conditioned on the achievement of certain revenue targets for the upcoming twelve month period. About Matritech Inc. Headquartered in Newton, Massachusetts, Matritech Inc. (Amex: MZT) -- http://www.matritech.com/-- is a marketer and developer of protein-based diagnostic products for the early detection of cancer. The company uses its patented proteomics technology to develop diagnostics for the detection of a variety of cancers. The company's first two products, the NMP22(R) Test Kit and NMP22(R) BladderChek(R) Test, have been FDA cleared for the monitoring and diagnosis of bladder cancer. The company has discovered other proteins associated with cervical, breast, prostate, and colon cancer. About Inverness Medical Based in Waltham, Massachusetts, Inverness Medical Innovations Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. * * * Moody's placed Inverness Medical's subordinated debt rating at 'Caa1' as well as the company's long term corporate family and probability of default ratings at 'B2' in June 2007. The ratings still hold to date with a stable outlook. JOURNAL REGISTER: Inks Amendment to JPMorgan Credit Agreement ------------------------------------------------------------- Journal Register Company disclosed that on Dec. 6, 2007, it entered into an amendment to the Amended and Restated Credit Agreement dated as of Jan. 25, 2006 between the company, the lenders party and JPMorgan Chase Bank, N.A., as Administrative Agent. The Company's obligations are fully and unconditionally guaranteed by certain of its subsidiaries. Borrowings under the Credit Agreement are collateralized by substantially all of the company's assets and the assets of its subsidiaries. Terms of the Amendment Among other matters, the Amendment reduced the borrowing limit under the Revolving Credit Commitments from $375 million to $200 million and under Incremental Loan Commitments from $500 million to $250 million, subject to compliance with the Total Leverage Ratio requirements in effect prior to the Amendment with respect to the Incremental Loan Commitments. The Amendment also relaxed certain financial covenants by increasing the maximum Total Leverage Ratio and decreasing the minimum Interest Coverage Ratio. Certain modifications were also made to the addbacks used in calculating the Total Leverage Ratio. The Amendment requires the mandatory prepayment of the Net Proceeds from certain Dispositions and eliminates reinvestment rights of such Net Proceeds, subject to a $25 million basket and certain exceptions relating to Casualty Event proceeds. The Amendment also modifies certain of the restrictive covenants to limit the company's ability to: (i) make Restricted Payments, including paying dividends or stock repurchases, (ii) make acquisitions in excess of $50 million in the aggregate and (iii) dispose of assets in excess of $200 million, in each case subject to a number of qualifications and exceptions. The Amendment increased the Applicable Margin on borrowings: (i) with respect to Eurodollar Loans to LIBOR plus 2.50% and (ii) with respect to Base Rate Loans to the base rate plus 1.50%, with a .25% step-up in such rates if the Total Leverage Ratio exceeds 6.25 to 1.00. The commitment fee was increased to .50% per annum. In connection with the execution and delivery of the Amendment, the company paid each lender an amendment fee in an amount equal to 0.25% of the sum of such lender's Revolving Credit Commitment and Term Loans outstanding as of Dec. 7, 2007. The company also paid JPMorgan an arrangement fee in connection with the Amendment. The company paid the lenders an additional payment in respect of additional interest and commitment fees for the first quarter of 2007 pricing period. The company expects to write-off approximately $1.6 million of deferred loan costs associated with the Credit Agreement. This will be a non-cash item reflected in the company's fourth quarter 2007 financial statements. Several of the lenders under the Credit Agreement and their affiliates have various relationships with the company and its Subsidiaries involving the provision of financial services, including investment banking, commercial banking, advisory, cash management, custody and trust services for which they receive customary fees and may do so in the future. A copy of the amendment may be viewed for free at: http://ResearchArchives.com/t/s?2668 About Journal Register Based in Yardley, Pennsylvania, Journal Register Company (NYSE: JRC) -- http://www.journalregister.com/-- owns 22 daily newspapers and 346 non-daily publications. It operates 227 individual web sites that are affiliated with the company's daily newspapers, non-daily publications and its network of employment web sites that can be accessed through the company's web site. All of the company's operations are clustered in six geographic areas: Greater Philadelphia; Michigan; Connecticut; Greater Cleveland; and the Capital-Saratoga and Mid-Hudson regions of New York. The company owns JobsInTheUS, a network of 19 premier employment Web sites. JOURNAL REGISTER: S&P Lifts Rating on $825MM Facilities to BB- -------------------------------------------------------------- Standard & Poor's Ratings Services revised its issue-level and recovery ratings on Journal Register Co.'s $825 million senior secured credit facilities, following an amendment lowering the revolving credit facility capacity to $200 million from $375 million. The issue-level rating was raised to 'BB-' from 'B+'. The recovery rating on this debt was revised to '2', indicating that lenders can expect substantial (70% to 90%) recovery in the event of a payment default, from '3'. The credit facilities consist of a $200 million revolving credit facility and a $625 million term loan A, both of which mature in August 2012. The amended credit facilities have a revised provision for up to $250 million (from $500 million) in additional term loans. Given that the incremental facilities are uncommitted, S&P's recovery analysis has not factored in any additional borrowings. However, S&P would review its issue level and recovery ratings if the company requests and receives additional funds, to determine whether any changes would be warranted. The corporate credit rating on Yardley, Pennsylvania-based Journal Register is 'B+', and the rating outlook is negative. The 'B+' rating reflects the company's heavy debt levels, its moderate-size cash flow base, and a challenging newspaper advertising climate. The company is a newspaper publisher with 22 daily newspapers, about 346 non-daily publications, and related Internet operations. Operations are clustered in six regions-\-Greater Philadelphia, Michigan, Connecticut, Greater Cleveland, and the Capital-Saratoga and Mid-Hudson regions of New York. Ratings List Journal Register Co. Corporate Credit Rating B+/Negative/-- Ratings Revised Journal Register Co. To From -- ---- Secured Debt BB- B+ Recovery Rating 2 3 KNIGHT INC: To Sell 80% of MidCon Interests to Myria Acquisition ---------------------------------------------------------------- Knight Inc. disclosed that on Dec. 10, 2007, it entered into a purchase agreement with Myria Acquisition Inc. Under the agreement, Knight has agreed to sell, and Myria has agreed to purchase, 80% of the ownership interests of MidCon, a wholly owned subsidiary of Knight, at a price equivalent to a total enterprise value of approximately $6.575 billion, subject to certain adjustments. Myria is comprised of a syndicate of investors led by Babcock & Brown, an international investment and specialized fund and asset management group. MidCon's wholly owned subsidiary, Natural Gas Pipeline Company of America, owns and operates approximately 9,700 miles of interstate natural gas pipelines, storage fields, field system lines and related facilities, consisting primarily of two major interconnected natural gas transmission pipelines terminating in the Chicago, Illinois metropolitan area. In connection with the Agreement, Knight will enter into a long-term operations and reimbursement agreement with NGPL, whereby Knight will operate NGPL's pipeline system. The closing of the transaction contemplated by the Agreement is subject to the satisfaction or waiver of certain conditions, including receipt of applicable regulatory approvals. The transaction is expected to close in the first quarter of 2008. The Agreement contemplates that prior to closing, a newly formed wholly owned subsidiary of MidCon will issue approximately $3.0 billion of debt, which proceeds will be held in escrow and used to repay debt owed to Knight at the closing. Between the proceeds from the sale of MidCon and the debt financing, Knight expects to receive approximately $5.3 billion of after-tax cash proceeds. It expects to use virtually all of such cash to repay Knight debt, starting with the debt it incurred in connection with its going private transaction that closed in May 2007. Once the debt Knight incurred in connection its going private transaction is repaid, it will no longer have any material secured debt. A full-text copy of the Agreement, dated as of Dec. 10, 2007, between Knight Inc. and Myria Acquisition Inc., may be viewed for free at http://ResearchArchives.com/t/s?2669 Headquartered in Houston, Texas, Knight Inc. is an energy transportation and storage company, operating or owning an interest in approximately 38,000 miles of pipelines and approximately 155 terminals. KNIGHT INC: Midcon Sale Cues S&P to Affirm 'BB-' Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Knight Inc. The action follows Knight's announcement that it will sell an 80% equity interest in MidCon LLC (principally the Natural Gas Pipeline Co. of America (NGPL)) to Myria Acquisition Inc. The outlook on Knight is stable. Knight expects to receive about $5.3 billion in after-tax proceeds from the transaction, which is expected to close in first-quarter 2008. The sale will accelerate Knight's deleveraging plan, which is occurring earlier than expected since the management buyout and due mainly to asset sales. Debt reduction associated with the MidCon sale is likely to be significant, although a decline in NGPL's steady cash flows may only result in a slight improvement in key credit protection measures. The ratings on privately held Knight (formerly Kinder Morgan Inc.) reflect the company's weak business risk profile and highly leveraged financial position. Knight's credit quality is centered on its role as the owner of the general partner of master limited partnership Kinder Morgan Energy Partners L.P. (KMP; BBB/Stable/A- 2), a leading provider of midstream energy services, bulk product storage, and oil production. Although the ratings of Knight and KMP differ, they are linked because of the common management of the two enterprises and Knight's ability, through its general partnership interest and significant limited partnership holdings in KMP, to influence the partnership's business activities and financial policies. Completed asset sales have driven Knight's debt reduction, which is expected to continue substantially via the MidCon equity interest disposal proceeds. "A positive ratings or outlook revision will occur due to the degree of debt reduction, relative to Knight's ensuing cash flows, and as such, debt to EBITDA would need to improve markedly for a positive ratings revision," noted Standard & Poor's credit analyst William Ferara. "Any meaningful delays in debt reduction, fundamental problems in the business prospects, or a downturn in either Knight's or KMP's financial performance could imperil Knight's outlook or ratings," he continued. LARRY OLSON: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Larry Olson Kim l. Olson fdba Lockard Ranches, Inc. 5691 Old Naches Highway Naches, WA 98937 Bankruptcy Case No.: 07-04079 Chapter 11 Petition Date: December 12, 2007 Court: Eastern District of Washington (Spokane/Yakima) Judge: John A Rossmeissl Debtor's Counsel: James P. Hurley, Esq. Hurley & Lara 411 N Second Street Yakima, WA 98901 Tel: (509) 248-4282 Fax: (509) 575-5661 Estimated Assets: $100,000 to $1 million Estimated Debts: $1 million to $100 million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Monson Fruit Company $27,000 252 North Rushmore Road Selah, WA 98942 Holtzinger Fruit $18,142 P.O. Box 169 Yakima, WA 98907 Pacific Power $11,180 P.O. Box 400 Portland, OR 97207 Yakima Adjustment Service $9,924 Mutual of Enumclaw $6,657 Bonnevile Collections $3,578 YCCS $2,882 Yakima Valley Imagin $2,229 Int'l Credit Auditors $2,166 RJM Acquisitions LLC $1,715 Memorial Hospital $1,184 Alliance One $1,065 Action Rooter $1,000 Yakima Valley Farm Workers $625 Yakima Valley Radiology $509 Evergreen Financial Serv $401 Cascade Wind Machines $372 Barclaysbk $172 Yakima Regional $134 WA St. Fruit Commission $100 LIN TV: Board Completes Review of Strategic Alternatives -------------------------------------------------------- LIN TV Corp. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that its Board of Directors has concluded its review of strategic alternatives. The company does not expect to make further public comments with respect to this announcement and reserves the right to explore strategic alternatives in the future without making a public announcement. "The LIN TV Board and management team have confidence in our employees, high quality assets and operating plan. The strength of our core business and new digital initiatives position us well for future growth," said Vincent L. Sadusky, President and Chief Executive Officer of LIN TV. In May 2007, the company had disclosed that it retained J.P. Morgan Securities Inc. to explore strategic alternatives, including a possible sale of the company. At that time, no decision was made to sell the company and the company emphasized that it was unable to predict if this review of strategic alternatives will result in any transaction. About LIN TV LIN TV Corp. -- http://www.lintv.com/-- (NYSE: TVL) along with its subsidiaries, operates television station groups in the U.S. The company creates and delivers superior local news and community stories, along with entertainment programming to 9% of U.S. television homes, reaching an average of 11.5 million households per week. LIN TV has 29 owned and/or operated television stations and websites in 17 U.S. markets. LIN TELEVISION: Moody's Holds Debt Ratings with Stable Outlook -------------------------------------------------------------- Moody's Investors Service affirmed the existing debt ratings of LIN Television Corporation and changed the outlook to stable from developing following the company's announcement that it had concluded its review of strategic alternatives. These ratings are affected: Issuer: LIN Television Corporation -- Corporate Family Rating -- Ba3 -- Probability of Default Rating -- Ba3 -- Secured Revolver -- Baa3 (to LGD 1, 9% from LGD 2, 13%) -- Secured Term Loan -- Baa3 (to LGD 1, 9% from LGD 2, 13%) -- 6.5% Senior Subordinated Notes due 2013 -- B1 (to LGD 4, 66% from LGD 4, 69%) -- 6.5% Senior Subordinated Notes CL B due 2013 -- B1 (to LGD 4, 66% from LGD 4, 69%) -- 2.5% Exch. Senior Subordinated Notes due 2033 -- B1 (to LGD 4, 66% from LGD 4, 69%) -- SGL-2 speculative grade liquidity assessment The outlook is stable. LIN's Ba3 corporate family rating reflects the company's high debt to EBITDA leverage (7.1x TTM 9/30/07, incorporating Moody's standard adjustments), the inherent cyclicality of the advertising business and the increasing business risk associated with the broadcast television industry's overall declining audience and the increasing fragmentation of advertising spending over a growing number of media. LIN's rating is supported by its diverse network affiliations and geographic footprint, notable free cash flow generation and the company's continued local market focus. LIN TV Corp., headquartered in Providence, Rhode Island, owns and operates and/or programs 29 television stations, including two stations pursuant to local marketing agreements, in 17 mid-sized markets in the United States. In addition, the company owns 20% of KXAS-TV in Dallas, Texas and KNSD-TV in San Diego, California, through a joint venture with NBC. MACTARA LTD: Court OKs Scaled-Back Production Pact with Creditors ----------------------------------------------------------------- The Honorable Joseph Kennedy of the Novia Scotia Supreme Court approved an agreement between MacTara Limited and its creditors, Bill Power of The Chronicle Herald reports. Under the agreement, MacTara will lower its production at Upper Musquodoboit until March 31, 2008, while looking for potential buyers, the Chronicle says, citing MacTara counsel Thomas Boyne, Esq. MacTara will close the Upper Musquodoboit mill and lay off 160 plant workers by the end of December, the Chronicle adds. Emergency CCAA Restructuring As reported in the Troubled Company Reporter on Oct. 31, 2007, MacTara has disclosed of its 30-day emergency restructuring under the Companies Creditors Arrangement Act as it struggles to pay salaries to about 160 workers. However, the company intends to continue to operate its business as it formulates a reorganization plan. Chief executive officer Gordon Shupe stated in his affidavit filed with the Supreme Court of Nova Scotia that that without the 30-day relief, the company will be forced to immediately cease operations. Documents submitted with the Court showed MacTara owes $23 million to creditors. About MacTara MacTara Limited -- http://www.mactara.com/-- is located in Upper Musquodoboit in Nova Scotia, Canada and currently focuses on the production of dimension lumber, industrial bio-fuel wood pellets and softwood chips utilized in the pulp and paper industry. It operates the largest sawmill in the Nova Scotia and a wood-pellet mill at Upper Musquodoboit. The lumber mill is the source of about 80% of the company's products mainly exported to the United States. MacTara is recognized as a provincial leader within the forest product industry. Through its innovative use of by- products MacTara is one of the only sawmills in Canada to convert 100% of the logs it consumes into economical and environmentally friendly products. Fulghum Fibrefuels Inc. of Georgia holds about 75% interest in the company, and Erskine Investment Ltd. of Nova Scotia holds the rest of the 25% interest. MARATHON FINANCIAL: Submits Schedules of Assets and Liabilities --------------------------------------------------------------- Marathon Financial Corporation submitted to the U.S. Bankruptcy Court for the Eastern District of Michigan its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property B. Personal Property $3,707,767 C. Property Claimed as Exempt D. Creditors Holding $3,940,072 Secured Claims E. Creditors Holding 12,750 Unsecured Priority Claims F. Creditors Holding Unsecured Nonpriority Claims ---------- ----------- TOTAL $3,707,767 $3,959,822 Southfield, Michigan-based Marathon Financial Corporation filed for chapter 11 banrkuptcy on Nov. 26, 2007 (Bankr. E.D. Mich. Case No. 07-61722). Jay S. Kalish, Esq., represents the Debtor in its restructuring efforts. MATRITECH INC: Inverness Medical Finalizes $36 Million Buyout ------------------------------------------------------------- Matritech Inc. disclosed that Inverness Medical Innovations Inc. has finalized its acquisition of the company. The deal was structured as an asset purchase under which a newly formed subsidiary of Inverness acquired substantially all of the assets of Matritech for aggregate consideration of 616,713 shares of Inverness common stock, valued at approximately $36 million. In addition, Inverness has agreed to pay Matritech up to $2 million of incremental consideration, in cash and/or Inverness common stock, conditioned on the achievement of certain revenue targets for the upcoming twelve month period. About Inverness Medical Based in Waltham, Massachusetts, Inverness Medical Innovations Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops, manufactures and markets in vitro diagnostic products for the over-the-counter pregnancy and fertility/ovulation test market and the professional rapid diagnostic test markets. About Matritech Inc. Headquartered in Newton, Massachusetts, Matritech Inc. (Amex: MZT) -- http://www.matritech.com/-- is a marketer and developer of protein-based diagnostic products for the early detection of cancer. The company uses its patented proteomics technology to develop diagnostics for the detection of a variety of cancers. The company's first two products, the NMP22(R) Test Kit and NMP22(R) BladderChek(R) Test, have been FDA cleared for the monitoring and diagnosis of bladder cancer. The company has discovered other proteins associated with cervical, breast, prostate, and colon cancer. Matritech Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $6.7 million in total assets, $16.5 million in total liabilities, and $104,312 in preferred stock, resulting in a $9.9 million total shareholders' deficit. Going Concern Doubt PricewaterhouseCoopers LLP raised substantial doubt about Matritech Inc.'s ability to continue as a going concern citing recurring losses and negative cash flows from operations after auditing the company's financial statements as of Dec. 31, 2006, and 2005. MONEYGRAM INTERNATIONAL: Euronet Confirms Tax-Free All-Stock Offer ------------------------------------------------------------------ Euronet Worldwide Inc., on Dec. 13, 2007, confirmed it delivered a letter to the Board of Directors of MoneyGram International, Inc. on December 4 in which Euronet offered to acquire MoneyGram in a tax-free, all-stock transaction based on a fixed exchange ratio of 0.6179 Euronet common shares for each share of MoneyGram. Based on the closing price of Euronet shares on December 4, the offer is valued at approximately $1.65 billion, or $20.00 per MoneyGram share, a premium of approximately 43% to the closing price of MoneyGram shares that day. Euronet's said that in the letter, it provided compelling rationale for the proposed transaction, which Euronet expects would deliver substantial immediate and long-term value for the shareholders of both companies. Specifically, Euronet believes that the proposed transaction would: * Create a powerful new global player in the money transfer business well positioned to capture share in a highly fragmented market; * Expand the geographic reach of both companies and unlock compelling opportunities by combining Euronet's and MoneyGram's complementary distribution networks, corridors and agent bases; * Enable the companies to further benefit from the rapid growth of the money transfer market in key emerging countries, such as China and India; and * Generate double-digit accretion and deliver significant synergies. About Euronet Worlwide Euronet Worldwide Inc. -- http://www.euronetworldwide.com/-- (Nasdaq: EEFT) is in the business of processing secure electronic financial transactions. The company offers payment and transaction processing solutions to financial institutions, mobile operators and retailers which include comprehensive ATM and POS operation and management services; credit and debit card outsourcing services; card issuing and merchant acquiring services; software solutions; consumer money transfer and bill payment services; and electronic distribution of top-up services for prepaid mobile airtime and other prepaid products. Euronet operates and processes transactions from 39 countries. Euronet's global payment network includes over 10,500 ATMs and approximately 48,000 POS terminals which are under management in 16 countries; a growing portfolio of outsourced debit and credit card services and card software solutions; a prepaid processing network of 370,000 point-of-sale terminals across 189,000 retailer locations in 12 countries; and a consumer-to-consumer money transfer network of over 11,000 sending locations in 13 countries and more than 56,000 payout locations in approximately 100 countries. With corporate headquarters in Leawood, Kansas, USA, and 35 worldwide offices, Euronet serves clients in approximately 130 countries. About MoneyGram International MoneyGram International, Inc. -- http://www.moneygram.com/-- (NYSE: MGI) is a global payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram reported $1.16 billion in revenue in 2006 and approximately 138,000 global money transfer agent locations in 170 countries and territories. * * * As reported in the Troubled Company Reporter on Nov. 20, 2007, Moody's Investors Service downgraded the senior unsecured issuer rating of MoneyGram International to Ba1 from Baa3, has assigned a Ba1 corporate family rating to the company, and has placed these ratings on review for further possible downgrade. MONEYGRAM INTERNATIONAL: Provides Comments on Euronet's Offer ------------------------------------------------------------- MoneyGram International, Inc., confirmed Thursday that it has received an unsolicited letter from Euronet Worldwide, proposing a business combination between MoneyGram and Euronet in which MoneyGram shareholders would receive shares of Euronet common stock at a fixed exchange ratio of 0.6179 shares of Euronet common stock in exchange for each MoneyGram share. This ratio would represent approximately $20.00 per MoneyGram share based on the closing price of Euronet shares on the December 4 date of that letter but would represent approximately $16.75 per MoneyGram share as of the trading price of Euronet shares at noon Dec. 13, 2007. The proposal was explicitly conditioned on Euronet having had the ability to conduct a due diligence review, and suggested that the two companies enter into a confidentiality agreement so that each could conduct due diligence and discussions could begin. After review of the letter with the MoneyGram board, MoneyGram sent a letter to Euronet on Dec. 11, 2007 indicating that MoneyGram would be willing to meet to discuss Euronet's proposal, subject to the execution of a mutual confidentiality and standstill agreement. On Dec. 12, 2007, MoneyGram received a communication from Euronet stating that Euronet is not prepared to pursue discussions with MoneyGram on that basis. As previously announced, during the third quarter of 2007, MoneyGram's Board of Directors authorized hiring JP Morgan to complete a strategic review of MoneyGram's Payment Systems business. The Payment Systems business includes official check outsourcing services, money orders sold through financial institutions and controlled disbursement processing services. The strategic review includes all aspects of the Payment Systems business, including the portfolio strategy and capital implications. While no final determinations have been made as to the strategic review, the Company is currently in discussions with certain potential investors regarding financing alternatives. No assurances can be given that any financing alternative will be agreed upon or consummated. MoneyGram has not yet concluded its valuation of its securities portfolio as of Nov. 30, 2007. About Euronet Worlwide Euronet Worldwide Inc. -- http://www.euronetworldwide.com/-- (Nasdaq: EEFT) is in the business of processing secure electronic financial transactions. The company offers payment and transaction processing solutions to financial institutions, mobile operators and retailers which include comprehensive ATM and POS operation and management services; credit and debit card outsourcing services; card issuing and merchant acquiring services; software solutions; consumer money transfer and bill payment services; and electronic distribution of top-up services for prepaid mobile airtime and other prepaid products. Euronet operates and processes transactions from 39 countries. Euronet's global payment network includes over 10,500 ATMs and approximately 48,000 POS terminals which are under management in 16 countries; a growing portfolio of outsourced debit and credit card services and card software solutions; a prepaid processing network of 370,000 point-of-sale terminals across 189,000 retailer locations in 12 countries; and a consumer-to-consumer money transfer network of over 11,000 sending locations in 13 countries and more than 56,000 payout locations in approximately 100 countries. With corporate headquarters in Leawood, Kansas, USA, and 35 worldwide offices, Euronet serves clients in approximately 130 countries. About MoneyGram International MoneyGram International, Inc. -- http://www.moneygram.com/-- (NYSE: MGI) is a global payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram reported $1.16 billion in revenue in 2006 and approximately 138,000 global money transfer agent locations in 170 countries and territories. * * * As reported in the Troubled Company Reporter on Nov. 20, 2007, Moody's Investors Service downgraded the senior unsecured issuer rating of MoneyGram International to Ba1 from Baa3, has assigned a Ba1 corporate family rating to the company, and has placed these ratings on review for further possible downgrade. MONITOR OIL: U.S. Trustee Appoints Five-Member Creditors Committee ------------------------------------------------------------------ The U.S. Trustee for Region 2 appointed five creditors to serve on an Official Committee of Unsecured Creditors of Monitor Oil P.L.C. and its debtor-affiliates' Chapter 11 cases. The Creditors Committee members are: a) Credit Suisse Attn: Didier Siffer and Kyle Lanphear Cayman Islands Branch 11 Madison Avenue New York, New York 10010 Tel: (917) 326-8363 http://www.creditsuisse.com b) Karl Otto Kalsnes Sjohagen Terasse 15E 1539 Moss, Norway Tel: (86) (631) 538-0016 Fax: (86) (631) 538-0018 http://www.dyvi.no/ c) Ante Podrug Basini 1 21210 Solin, Croatia Tel: (86) (150) 631-0136 d) Kresimir Madjar K. Zvonimira 29 51260 Crikvenica, Croatia Tel: (385) (51) 241-240 e) Norsk Tillitsmann ASA P.O. Box 1470 Viha N-0116 Oslo, Norway Tel: (47) (22) 87-9406 Fax: (47) (22) 87 9410 http://www.trustee.no Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Monitor Oil, P.L.C. -- htpp://www.monitoroil.com/ -- an oil and gas service company that provides oil and gas production solutions, offshore services and engineering services. The company and two of its affiliates, Monitor Single Lift 1, Ltd., and Monitor US FinCo, Inc., filed for Chapter 11 Protection on Nov. 21, 2007 (Bankr. S.D.N.Y. Case No. 07-13709). Eric Lopez Schnabel, Esq., at Dorsey & Whitney, L.L.P., represents the Debtor. As of June 30, 2007, the company disclosed total assets of $130,000,000 and total debts of $247,800,000. MORGAN STANLEY: Moody's Slashes Rating on Class M-2 Loan to Ba1 --------------------------------------------------------------- Moody's Investors Service has downgraded four tranches from Morgan Stanley ABS Capital I Inc. Trust 2002-HE3. The transaction is backed by first-lien, fixed and adjustable-rate, subprime mortgage loans that were originated by Accredited Home Lenders, Inc. and Decision One Mortgage Company, LLC. The loans are serviced by Provident Bank. Although the deal's losses are performing within the area of original expectations, the certificates have been downgraded based upon recent and expected pool losses and the resulting actual and expected erosion of credit support. Overcollateralization has been fully depleted and the Class B-2 certificates are currently realizing losses. Generally, existing credit enhancement levels were too low for the previous ratings given the current projected losses on the underlying pools. Credit support deterioration can be partially attributed to the deal passing performance triggers and therefore releasing a large amount of overcollateralization. Furthermore, the deal is realizing tail-end losses with a pool factor of only 9%. Complete rating actions are: Downgrade Issuer: Morgan Stanley ABS Capital I Inc., Series 2002-HE3 -- Class M-1, downgraded from Aa2 to A1 -- Class M-2, downgraded from A2 to Ba1 -- Class B-1, downgraded from B1 to Caa2 -- Class B-2, downgraded from B3 to C MUZAK HOLDINGS: Sept. 30 Balance Sheet Upside-Down by $400 Mil. --------------------------------------------------------------- Muzak Holdings LLC disclosed in a regulatory filing on Form 10-Q with the U.S. Securities and Exchange Commission its financial results for the quarter ended Sept. 30, 2007. At Sept. 30, 2007, the company's balance sheet showed total assets of $367,626,000 and total liabilities of $767,698,000, resulting in a members' deficit of $400,072,000. For the quarter ended Sept. 30, 2007, the company reported a net loss of $8,072,000 on revenues of $62,064,000. This compares to a net loss of $10,433,000 on revenues of $62,961,000 for the quarter ended Sept. 30, 2006. Securities Purchase Agreement Violations The company discloses that as of Sept. 30, 2007, it was in violation of unit coverage ratio, leverage ratio, and annualized operating cash flow under the Securities Purchase Agreement. The company relates that it has been in default: * of the unit coverage ratio since June 2003, * of leverage ratio since December 31, 2003, and * of annualized operating cash flow since June 2004. As a result of the defaults, the preferred units accrue at a preferential return of 17% per annum as long as the default is continuing. The company says it is projecting to be out of compliance with the unit coverage ratio, the ratio of consolidated operating cash flow to the sum of consolidated interest expense plus the aggregate Series A preferred return, as more specifically defined in the Securities Purchase Agreement, and leverage ratio for the foreseeable future. As a result of non-compliance with unit coverage ratio and leverage ratio for four consecutive quarters, a Class B and Class A default under the Securities Purchase Agreement, respectively, two of the three preferred unit holders were each entitled to be designated as either a Class B or Class A Director, although neither party has elected to so designate a Class B or Class A Director pursuant to their rights under the Securities Purchase Agreement. As such, the company further says, the number of Class B Directors and Class A Directors remains unaffected by these defaults. Compliance with either one of the leverage or unit coverage ratios and not the other still entitles the same two preferred unit holders to designate a director as provided in the Securities Purchase Agreement until such time as the Company complies with the applicable ratio. The foregoing defaults do not result in a cross default under the New Senior Credit Facility or the indentures governing the Senior Notes, the Senior Subordinated Notes, and the Senior Discount Notes. New Senior Credit Facility Amendment On March 16, 2007, the company amended the New Senior Credit Facility, by extending the maturity from April 2008 to January 2009 and reducing the applicable margin by 1.0%. The company believes that its cash flow from operations, combined with its cash balance on hand will be sufficient to fund its growth in new client locations and debt service for at least the next 12 months. Given that the company no longer has a revolving credit facility, if it requires cash in excess of amounts on hand, it may be required, among other things, to incur additional indebtedness, enter into other financing transactions, defer business opportunities, reduce its expenses, or sell assets. The company's substantial indebtedness, including significant principle maturities due in 2009, could prove to be difficult to refinance or restructure at favorable terms or at all. A full-text copy of the company's financial result for the quarter ended Sept. 30, 2007 may be viewed for free at: http://ResearchArchives.com/t/s?2667 About Muzak Holdings Headquartered in Fort Mill, South Carolina, Muzak Holdings LLC -- http://www.muzak.com-- provides business music programming to clients through its integrated nationwide network of owned operations and franchises. All of the operating activities are conducted through the company's subsidiaries. As of September 30, 2007, ABRY Partners, LLC and its respective affiliates, collectively own 64.2% of the beneficial interests in the Company's voting interests. MUZAK HOLDINGS: S&P Affirms Ratings and Removes Positive Watch -------------------------------------------------------------- Standard & Poor's Ratings Services removed from Credit Watch and affirmed its ratings, including the 'CCC+' corporate credit ratings, on Muzak Holdings LLC and Muzak LLC. S&P analyze Muzak Holdings LLC and its operating subsidiary, Muzak LLC, on a consolidated basis. The ratings were placed on CreditWatch with positive implications on April 16, 2007. The outlook is developing. "The rating action is based on our concern over approaching maturities of Muzak's long-term debt obligations," explained Standard & Poor's credit analyst Tulip Lim. As of Sept. 30, 2007, total debt outstanding was $463 million including capital leases and debt-like preferred stock was $260 million. Muzak is contemplating a merger with its competitor, DMX, and a subsequent sale of the combined companies. The company is awaiting clearance by the U.S. Department of Justice for the merger and has received a second request for documents. The combination of the two companies would be contingent on a sale of the two entities to a potential buyer. The contemplated transaction could improve Muzak's liquidity, resolve upcoming maturities, and improve the company's operating efficiency. Still, S&P are concerned that unfavorable current market conditions will persist and will harm the prospects of completion of this transaction, even if Muzak receives DOJ approval. Muzak's term loan and senior subordinated notes mature Jan. 19, 2009, and March 15, 2009, respectively. Muzak's liquidity is limited and will cover only its near-term needs. The very low speculative-grade rating also reflects the company's high leverage, the noncritical nature of its products, its lack of business diversity, and the threat of substitution from competitive alternatives. These factors are minimally offset by the company's leading position in its niche market and by some recurring revenue from its five-year contracts. NCO GROUP: $325 Million OSI Deal Cues Moody's Ratings Review ------------------------------------------------------------ Moody's Investors Service placed all the credit ratings of NCO Group, Inc. on review for possible downgrade following its announcement that it has entered into a definitive agreement to acquire Outsourcing Solutions Inc. for $325 million in cash. The transaction is expected to close in the first quarter of 2008 and is subject to OSI stockholder approval and the satisfaction of customary closing conditions. NCO announced that it expects to finance the acquisition with borrowings under its senior secured credit facility and an investment by its financial sponsor, One Equity Partners. Moody's review will focus on the degree of leverage used to finance the acquisition, the terms of the financing package, the profitability of OSI and NCO's integration strategy. These ratings were placed on review for possible downgrade: -- $165 million senior floating rate notes due 2013, B3 (LGD 4, 63%) -- $200 million senior subordinated notes due 2014, Caa1 (LGD 6, 90%) -- $465 million senior secured term loan due 2013, Ba3 (LGD 2, 29%) -- $100 million senior secured revolver due 2011, Ba3 (LGD 2, 29%) -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 Based in Horsham, Pennsylvania, NCO is a global provider of business process outsourcing services, primarily focused on accounts receivable management and customer relationship management. The company reported revenues of about $1.2 billion for the twelve month period ending Sept. 30, 2007. OSI is a leading provider of business process outsourcing services, specializing primarily in accounts receivable management services. NEUMANN HOMES: Trade Creditors Want Official Committee Appointed ---------------------------------------------------------------- The Ad Hoc Group of Secured Trade Creditors of Neuman Homes Inc. and its debtor-affiliates asks the U.S. Bankruptcy Court for the Northern District of Illinois to permit the United States Trustee for Region 11 to appoint a second official committee, with some of its members serving in the committee. Zhiyuan Xu, Esq., at Schiff Hardin LLP, in Chicago, Illinois, says the representation of a second official committee is needed to protect the interest of the Trade Creditors Group's new members as well as other companies that wanted to join the group. In the past week, several former contractors and material suppliers either joined the Trade Creditors Group or registered their interest to join, most of whom are small companies or holders of relatively small claims. Mr. Xu tells the Court that the Trade Creditors Group's concern is well justified and is supported by the events occurring in the Debtors' cases to date. Mr. Xu cites that at the emergency hearing to consider the Debtors' request for postpetition financing, the Trade Creditors Group objected to the priming-lien terms of the request while the Official Committee of Unsecured Creditors stood silent. "The Trade Creditors Group was also the only party to object to the Debtors' request to establish sale procedures to dispose of their miscellaneous assets," Mr. Xu notes. He adds that the group also objected to the Debtors' request to sell developed properties to their prepetition lenders while the Creditors Committee did not. Mr. Xu says that many parties, which are not members of the Trade Creditors Group, benefit from the group's opposition to certain plans of the Debtors, however, it is the members alone that shoulder the cost and expenses. "If the Trade Creditors Group decides, however, to disband or focus more narrowly on only their individual interests, many smaller contractors and materialmen will suffer," Mr. Xu notes. Mr. Xu says the Trade Creditors Group's members are very much up to speed on the Debtors' Chapter 11 cases, and have resolved among themselves which of their five members are qualified to serve in the second official committee should one be formed and should the U.S. Trustee look to the Trade Creditors Group's membership to serve in the committee. The Trade Creditors Group already informed the U.S. Trustee about its intention, according to Mr. Xu. "The Trade Creditors Group is hopeful that the U.S. Trustee may exercise the authority it has under Section 1102(a)(1) of the Bankruptcy Code that would render the group's request moot," Mr. Xu states. The Trade Creditors Group, however, determined to file the request at this time to meet the filing deadline for the next omnibus hearing if the U.S. Trustee does not act before the hearing." The Trade Creditors Group was formed in November 2007 by eight former contractors and material suppliers of the Debtors to address issues faced by mechanics-lien claimants, which the Creditors Committee may not likely represent. Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The company have built more than 11,000 homes in some 150 residential communities. The company offer formal business training to employees through classes, seminars, and computer- based training. The company filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. When the Debtors filed for protection against its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). NEUMANN HOMES: Court Approves Drinker Biddle as Special Counsel --------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Illinois gave Neumann Homes Inc. and its debtor-affiliates permission to employ Drinker Biddle & Reath LLP, as its special counsel, nunc pro tunc to Nov. 1, 2007. The Court held that the firm should not be compensated for any services performed on behalf of Jean Neumann and Kenneth Neumann in their individual personal capacities. As reported in Troubled Company Reporter on Nov. 27, 2007, under the terms of the engagement letter dated Oct. 3, 2007, Drinker Biddle will assist in matters related to financing and other matters as requested by the Debtors. Specifically, the firm is expected to: a) assist the Debtors dispose Precision Framing Systems, LLC; b) assist in negotiating and implementing DIP financing; c) represent the Debtors in intellectual property and certain litigation matters, employee labor and benefit issues; and d) provide other necessary legal services and advice to the Debtors. The Debtors told the Court that Drinker Biddle agreed to be compensated on an hourly basis. The firm's hourly rates range from $260 to $550 for partners, counsel and associates, and $80 to $250 for legal assistants. In addition, the Debtors would reimburse the firm for any costs incurred in the rendition of services. Dennis J. Carlin, Esq., at Drinker Biddle, in Chicago, Illinois, tells Judge Wedoff that the firm does not hold any interest adverse to the Debtors or their estates. He assured Judge Wedoff that Drinker Biddle is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The company have built more than 11,000 homes in some 150 residential communities. The company offer formal business training to employees through classes, seminars, and computer- based training. The company filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. When the Debtors filed for protection against its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). NEUMANN HOMES: Wants Court's OK to Sell Property for $1.4 Million ----------------------------------------------------------------- The Neumann Homes Inc. and its debtor-affiliates seek the United States Bankruptcy Court for the Northern District of Illinois' authority to sell to Infinity Homes, Inc., about 50 lots of non- residential real property owned by Neumann Homes of Michigan, LLC, in Flatrock, Michigan. Pursuant to a Real Estate Purchase Agreement, dated Oct. 2, 2007, Infinity Homes offered to purchase the property for $1,450,000 on these terms: (i) Infinity Homes will pay the amount at the closing of sale, less the earnest money, credits and proration in cash. (ii) The property and any improvements made, or any other items located at the property are sold "as is" and without any representation or warranty of any kind. (iii) At closing, the Debtors will assign and set over without representation or warranty, all of its rights and any agreements on planned unit development, site improvement, annexation or other agreement. Infinity Homes will accept the assignment and agree to perform all the obligations provided in the agreements. (iv) Infinity Homes will defend, hold harmless and indemnify Neumann Homes of Michigan and its personnel from damages, liabilities, costs, among others, as a result of its inspection of the properties. George N. Panagakis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, states that Infinity Homes' offer provides the highest financial return for the property. Mr. Panagakis relates that Infinity Homes offered to buy each lot for $29,000, which is substantially similar to the prices the Debtors received for the non-residential real properties they sold in auction in the Detroit-metropolitan area sometime in July and October, 2007. "Since the two auctions, the non-residential real estate market in the Detroit area has deteriorated significantly," Mr. Panagakis states. "Infinity Homes is the only entity the Debtors are aware of that is currently interested in acquiring the property at a price close to the purchase price." Mr. Panagakis tells the Court that the property is no longer necessary for the Debtors' operations and that its value will likely diminish with each succeeding day. "Under the present circumstances, the proposed transaction will result in the reduction of certain prepetition secured claims against the estate and avoid the continued expense of maintaining the property," Mr. Panagakis points out. He adds that the Debtors already reached an agreement with Guaranty Bank regarding the transaction. The Debtors acquired the property through loans from Guaranty Bank, which has various liens and encumbrances on the property. Guaranty Bank will reduce its prepetition secured claim by the amount of the purchase price after consummation of the proposed sale transaction. It will also release all liens and encumbrances on the property in exchange for the Debtors' immediate payment of funds equal to the purchase price. Headquartered in Warrenville, Illinois, Neumann Homes Inc. -- http://www.neumannhomes.com/-- develops and builds residential real estate throughout the Midwest and West US. The company is active in the Chicago area, southeastern Wisconsin, Colorado, and Michigan. The company have built more than 11,000 homes in some 150 residential communities. The company offer formal business training to employees through classes, seminars, and computer- based training. The company filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. N.D. Ill. Case No. 07-20412). George Panagakis, Esq., at Skadded, Arps, Slate, Meagher & Flom L.L.P., was selected by the Debtors to represent them in these cases. When the Debtors filed for protection against its creditors, they listed assets and debts of more than $100 million. (Neumann Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). NEW YORK UNITED: Court Says Disclosure Statement is Adequate ------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of New York approved the adequacy of New York United Hospital Medical Center and its debtor-affiliate, U.H. Housing Corp.'s Disclosure Statement explaining their Joint Chapter 11 Plan of Liquidation. The Debtors select Mark D. Hammond as the plan administrator. Mr. Hammond will bill $200 per hour for his services. Treatment of Claims Under the Plan, Administrative Claims, totaling $1.75 million, will be paid in full on the effective date. At the sole option of the plan administrator, Holders of Secured Claims, totaling $25,000, will be entitled to receive, either: a) the collateral securing the claim; b) cash in an amount up to the allowed amount of the claim; or c) other treatment as may be agreed upon by the plan administrator and the holder. Each holder of Priority Claims, totaling $350,000, will receive cash from the available fund after all valid claims have been paid. Holders of UH Housing Corp.'s General Unsecured Claims have already received full payment on account of their allowed claim. Holders of New York United Hospital Medical Center General Unsecured Claims, totaling $50 million, will be entitled to receive it ratable share of available cash on the effective date. Holders of these claims will be expected to recover between 30% and 35%. A full-text copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=071213201721 About New York United Headquartered in Port Chester, New York, New York United Hospital Medical Center is a community healthcare provider and a member of the New York-Presbyterian Healthcare System, serving several Westchester communities, including Port Chester, Rye, Mamaroneck, Rye Brook, Purchase, Harrison and Larchmont. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. S.D.N.Y. Case No. 04-23889). Burton S. Weston, Esq., at Garfunkel, Wild & Travis P.C. and Lawrence M. Handelsman, Esq., at Stroock & Stroock & Lavan LLP represent the Debtor in its restructuring efforts. Craig Freeman, Esq. and Martin G. Bunin, Esq., at Alston & Bird LLP represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $39,000,000 and total debts of $78,000,000. NEW YORK UNITED: Plan Confirmation Hearing Slated on January 17 --------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York set a hearing on Jan. 17, 2008, at 10:30 a.m., to consider confirmation of New York United Hospital Medical Center and its debtor-affiliate, U.H. Housing Corp.'s Joint Chapter 11 Plan of Liquidation. Objection to the confirmation are due on Jan. 10, 2008, at 12:00 p.m. Headquartered in Port Chester, New York, New York United Hospital Medical Center is a community healthcare provider and a member of the New York-Presbyterian Healthcare System, serving several Westchester communities, including Port Chester, Rye, Mamaroneck, Rye Brook, Purchase, Harrison and Larchmont. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. S.D.N.Y. Case No. 04-23889). Burton S. Weston, Esq., at Garfunkel, Wild & Travis P.C. and Lawrence M. Handelsman, Esq., at Stroock & Stroock & Lavan LLP represent the Debtor in its restructuring efforts. Craig Freeman, Esq. and Martin G. Bunin, Esq., at Alston & Bird LLP represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $39,000,000 and total debts of $78,000,000. NICHOLS BROTHERS: Selects Miles Stover as Financial Advisor ----------------------------------------------------------- Nichols Brothers Boat Builders Inc. asks the U.S. Bankruptcy Court for the Western District of Washington to employ Miles R. Stover and Turnaround Inc. as its financial advisor. Miles Stover will assist the Debtor as it intends to sustain operations on a limited basis, sufficient to maintain value for a sale of its assets. The fees chargeable by the Advisor will be at a rate of $245 per hour for Mr. Stover and $55 to $80 per hour for administrative assistance, if any. Miles R. Stover, the sole employee of the firm, assures the Court that he is aware of no conflicts between his firm and the Debtor, and other interested parties. Whidbey Island, Washington-based Nichols Brothers Boat Builders Inc. -- http://www.nicholsboats.com/-- provide expertise in the construction of steel and aluminum vessels. The Debtor filed for chapter 11 bankruptcy on Nov. 16, 2007 (W.D. Wash. Case No. 07-15522). David C. Neu, Esq., and Marc L. Barreca, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP represent the Debtor in its restructuring efforts. The Debtor's schedules disclose total assets of $3,413,495 and total liabilities of $43,949,987. NICHOLS BROTHERS: Wants James Murphy as Estate Appraiser -------------------------------------------------------- Nichols Brothers Boat Builders Inc. asks the U.S. Bankruptcy Court for the Western District of Washington to employ James G. Murphy Company as its estate appraiser. The Debtor relates that it possesses inventory and equipment that must be valued so that the Debtor can intelligently negotiate the terms of a sale of its assets. The Murphy will bill at about $2,000 for its services. Tim Murphy of the firm assures the Court that he is aware of no conflicts between his firm, the Debtor, and other interested parties. The firm can be reached at: Tim Murphy James G. Murphy Company http://www.murphyauction.com/ Whidbey Island, Washington-based Nichols Brothers Boat Builders Inc. -- http://www.nicholsboats.com/-- provide expertise in the construction of steel and aluminum vessels. The Debtor filed for chapter 11 bankruptcy on Nov. 16, 2007 (W.D. Wash. Case No. 07-15522). David C. Neu, Esq., and Marc L. Barreca, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP represent the Debtor in its restructuring efforts. The Debtor's schedules disclose total assets of $3,413,495 and total liabilities of $43,949,987. NICHOLS BROTHERS: Committee Can Retain Lasher Holzapfel as Counsel ------------------------------------------------------------------ The Hon. Samuel J. Steiner of the U.S. Bankruptcy Court for the Western District of Washington gave the Official Committee of Unsecured Creditors in Nichols Brothers Boat Builders Inc.'s chapter 11 case permission to employ Lasher Holzapfel Sperry & Ebberson PLLC as its counsel. According to Danial D. Pharris, Esq., his firm has the expertise necessary to perform legal services on behalf of the Debtor and the estate. Mr. Pharris assures the Court that he is does not have any interest materially adverse to the interest of the estate. Mr. Pharris will bill at $320 per hour. Other firm's attorneys will bill between $160 and $375 per hour. Paralegals bill between $110 and $150 per hour. The firm can be reached at: Danial D. Pharris, Esq. Lasher Holzapfel Sperry & Ebberson PLLC 2600 Two Union Square, 601 Union Street Seattle, WA 98101 Tel: (206) 624-1230 Fax: (206) 340-2563 http://www.lasher.com/ Whidbey Island, Washington-based Nichols Brothers Boat Builders Inc. -- http://www.nicholsboats.com/-- provide expertise in the construction of steel and aluminum vessels. The Debtor filed for chapter 11 bankruptcy on Nov. 16, 2007 (W.D. Wa. Case No. 07-15522). David C. Neu, Esq., and Marc L. Barreca, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP represent the Debtor in its restructuring efforts. The Debtor's schedules disclose total assets of $3,413,495 and total liabilities of $43,949,987. NOVASTAR: Fitch Cuts Rating on Class B-4 Certs. to B from BBB- -------------------------------------------------------------- Fitch has taken rating actions on these Novastar mortgage pass- through certificates: Novastar 2003-1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class M-3 downgraded to 'BB' from 'BBB'; Novastar 2004-4 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- Class M-5 affirmed at 'A+'; -- Class M-6 affirmed at 'A+'; -- Class B-1 affirmed at 'A'; -- Class B-2 downgraded to 'BBB+' from 'A-'; -- Class B-3 downgraded to 'BBB-' from 'BBB'; -- Class B-4 downgraded to 'B' from 'BBB-'. The affirmations, affecting approximately $427.1 million of the outstanding balances, are taken as a result of a satisfactory relationship of credit enhancement to expected losses. The downgrades, affecting approximately $76.1 million of the outstanding balances, are taken as a result of a deteriorating relationship between expected losses and credit enhancement. The collateral of the above transaction consists of fixed and adjustable-rate subprime mortgage loans secured by first and second liens on residential properties. As of the November 2007 distribution date, delinquencies (loans delinquent more than 60 days, inclusive of loans in foreclosure, bankruptcy, and real estate owned) range from 9.1% (2003-1) to 15.1% (2004-4), with losses to date of 1.33% and 1.39% respectively. The above transactions are seasoned from 36 months (2004-4) to 57 months (2003-1), with pool factors (current mortgage loans outstanding as a percentage of the initial pool) of 16% and 10% respectively. Servicing of the above transactions has recently been sold to Saxon Mortgage Services (rated 'RPS2+' by Fitch). OPTION ONE: Fitch Downgrades Ratings on Six Certificate Classes --------------------------------------------------------------- Fitch Ratings has affirmed nine classes and downgraded six classes from these Option One Mortgage Corporation trusts: Series 2004-1 -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'A'; -- Class M-4 affirmed at 'A-'; -- Class M-5 downgraded to 'BBB-' from 'BBB+' and removed from Rating Watch Negative; -- Class M-6 downgraded to 'BB' from 'BB+'; -- Class M-7 downgraded to 'CC/DR3' from 'BB-'. Series 2004-2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'A'; -- Class M-4 affirmed at 'A-'; -- Class M-5 downgraded to 'BBB-' from 'BBB+' and removed from Rating Watch Negative; -- Class M-6 downgraded to 'BB' from 'BB+'; -- Class M-7 downgraded to 'B' from 'B+'. The affirmations affect approximately $219.3 million in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. The downgrades reflect the deterioration in the relationship of CE to future loss expectations and affect $18.8 million in outstanding certificates. The aforementioned transactions are experiencing higher delinquencies which eventually result in increased losses. Monthly losses are greater than the available excess spread, which has caused the overcollateralization amount to decline below the target amount. This decline in credit enhancement has put negative pressure on the subordinate bonds. As of October distribution date, series 2004-1 has a pool factor of 12%. Loans 60 days or more delinquent is approximately 25.68% of the current pool balance. The cumulative loss to date is 1.23% of the original collateral balance. Overcollateralization is below target by approximately $1.8 million. For the same distribution date, series 2004-2 has a pool factor of 15%. Loans 60 days or more delinquent is approximately 20.36% of the current pool balance. The cumulative loss to date is 1.02% of the original collateral balance. Overcollateralization is below target by approximately $930,000. The mortgage loans for the above transactions consist of fixed- and adjustable-rate conforming and non-conforming mortgage loans that are secured by first or second liens on mortgaged properties. All of the mortgage loans were originated and are being serviced by Option One Mortgage Corporation (rated 'RPS2+' Rating Watch Negative by Fitch). PACIFIC CROSSING: Submits Schedules of Assets and Liabilities ------------------------------------------------------------- Pacific Crossing LLC submitted to the U.S. Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property B. Personal Property $2,688,240 C. Property Claimed as Exempt D. Creditors Holding $2,400,000 Secured Claims E. Creditors Holding Unsecured Priority Claims F. Creditors Holding 5,590,181 Unsecured Nonpriority Claims ---------- ----------- TOTAL $2,688,240 $7,990,181 Headquartered in Irvine, California Pacific Crossing LLC, -- http://www.pacificcrossing.com/-- is an information technology consulting, systems integration and outsourcing company. The Debtor filed for chapter 11 bankruptcy on Nov. 16, 2007 (Bankr. C.D. Calif. Case No. 07-13860). Evan D. Smiley, Esq., at Weiland, Golden, Smiley, Wang, Ekvall & Strok LLP represents the Debtor in its restructuring efforts. PACIFIC CROSSING: Section 341(a) Meeting Slated for January 9 ------------------------------------------------------------- The United States Trustee for Region 16 will convene a meeting of creditors of Pacific Crossing LLC at 10:00 a.m., on Jan. 9, 2008, at Room 1-159, 411 W Fourth Street in Santa Ana, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Irvine, California Pacific Crossing LLC -- http://www.pacificcrossing.com/-- is an information technology consulting, systems integration and outsourcing company. The Debtor filed for chapter 11 bankruptcy on Nov. 16, 2007 (Bankr. C.D. Calif. Case No. 07-13860). Evan D. Smiley, Esq., at Weiland, Golden, Smiley, Wang, Ekvall & Strok LLP represents the Debtor in its restructuring efforts. PACIFIC LUMBER: Fifth Circuit Affirms Bankruptcy Court Ruling ------------------------------------------------------------- The U.S. Court of Appeals for the Fifth Circuit agrees with U.S. Bankruptcy Judge Richard Schmidt for the Southern District of Texas's ruling that Scotia Pacific Lumber is not a "single asset real estate" debtor under Section 101(51B) of the Bankruptcy Code. The Ad Hoc Group of the holders of Scotia Pacific Timber Notes previously challenged the Bankruptcy Court's holding that Scopac is not a "SARE" debtor and is therefore not subject to expedited reorganization procedures set forth in Section 362(d)(3) of the Bankruptcy Code. The Bankruptcy Court ruled in April 2007 that because Scopac operates substantial business on its property, it is not a SARE debtor. Scopac owns approximately 200,000 acres of timberlands in Humboldt County in Northern California as well as the contractual right to harvest timber on an additional 10,500 acres owned by its affiliates. Had the Bankruptcy Court ruled that Scopac was a SARE Debtor, the company would have 30 days from the date a SARE Order is issued to file a plan of reorganization. The Timber Noteholders subsequently asked the Fifth Circuit to review the SARE Order. Fifth Circuit Jurisdiction Scopac previously argued that the Fifth Circuit should not entertain the SARE Appeal as it was not certified to the Fifth Circuit in accordance with applicable rules. The certification of bankruptcy cases for appeal from the bankruptcy court to the Court of Appeals under Section 158 of the Judicial and Judiciary Procedures Code is a new procedure added by the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005. The procedure to be followed in such certification provides that a bankruptcy court will make the certification while the matter is pending in the bankruptcy court. It is uncontested that when the U.S. District Court for the Southern District of Texas certified the case for appeal it had not yet been docketed in the District Court and therefore was still pending in the Bankruptcy Court, the Fifth Circuit conceded. Thus, Fifth Circuit Judge W. Eugene Davis noted, it is clear that the proper court to certify the SARE Bankruptcy Court Order was the Bankruptcy Court rather than the District Court. The record makes it clear that both the Bankruptcy Court and the District Court sought to certify SARE Order to the Fifth Circuit for appeal, Judge Davis averred. After the SARE Order was appealed to the District Court, the Bankruptcy Court recommended certification to the District Court. The fact that the Bankruptcy Court and the District Court overlooked the fact that the case was still technically pending in the Bankruptcy Court under Interim Bankruptcy Rule 8001(f)(2) apparently prompted the District Court to certify the judgment for appeal, Judge Davis pointed out. "Under these circumstances, where both courts wish to certify the case to th[e Fifth] Court for appeal, this error is technical in nature, does not affect the substantial rights of the parties, and prompts us to exercise our discretion in favor of proceeding to the merits of this appeal," the Fifth Circuit opined. Scopac, Not a SARE Debtor The Fifth Circuit agrees with the Bankruptcy Court's holding that Scopac conducts substantial business other than operating the real property and activities incidental to it. "Scopac's timberland is clearly more than a passive investment," Judge Davis said. Scopac has more than 60 employees and at times hires additional independent contractors to assist in conducting its business, the Fifth Circuit noted. Sophisticated operations take place on the timberland like planning, growing, and maintaining the timber as well as building and maintenance of roads on the real estate which constitute substantial business other than the operation of the real property and activities incidental to it, the Fifth Circuit added. Furthermore, Scopac's sale of timber is an activity which extends beyond the sale or lease of the underlying land. The Fifth Circuit is also convinced that a holding that Scopac is a SARE would violate the plain language of the statute and is inconsistent with the meaning given that term by the courts. Section 101(51B) of the Bankruptcy Code severely limits the class of debtors which qualify as SAREs, and Judge Davis holds that the Fifth Circuit does not have warrant to expand that definition. To be considered a SARE debtor, a debtor must (i) must have real property constituting a single property or project, other than residential real property with fewer than 4 residential units; (ii) which generates substantially all of the gross income of the debtor, and (iii) on which no substantial business is conducted other than the business of operating the real property and activities incidental thereto. If a debtor fails to meet any of the prong, it is not a SARE. SARE debtors are subject to special provisions of the Bankruptcy Code. SARE debtors are carved out and subjected to stringent requirements in Section 362(d)(3) which expedite the time for SARE debtors to file a plan of reorganization or commence making monthly payments, failing which the automatic stay is promptly lifted. "If Scopac is considered a SARE debtor, this narrow exception to the ordinary bankruptcy process would sweep broadly and require us to include such entities as owners of land or mineral interests who operate sophisticated businesses such as mining, oil and gas drilling, and large commercial farms simply by virtue of the debtor owning the land," the Fifth Circuit contends. "Such a result is obviously contrary to the plain language of Section 101(51B)." For the reasons stated, the Fifth Circuit affirmed the Bankruptcy Court's SARE Order. A full-text copy of the Fifth Circuit's affirmation of the SARE Order is available for free at: http://www.bankrupt.com/misc/5thCirAffirm_SAREOrd.pdf The Timber Noteholders are further ordered by the Fifth Circuit to pay to Scopac and the Pacific Lumber Company costs incurred related to the defense of the SARE Appeal. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007. The Debtors' exclusive period to file a chapter 11 plan expired on the same date. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 36, http://bankrupt.com/newsstand/or 215/945-7000). PANTRY INC: Earns $5.6 Million in Quarter Ended September 27 ------------------------------------------------------------ The Pantry, Inc. disclosed financial results for its fourth fiscal quarter and year ended Sept. 27, 2007. Total revenues for the fourth quarter were approximately $2.0 billion, a 19.9% increase from last year's fourth quarter. Net income was $5.6 million, compared with $26.7 million a year ago. Results for the fourth quarter of fiscal 2007 included a one-time after-tax charge of $1.8 million related to the company's organizational restructuring. For the full fiscal year, total revenues were approximately $6.9 billion, a 15.9% increase from fiscal 2006. Net income for the year was $26.7 million, compared with $89.2 million in fiscal 2006. "Our strong revenue growth for both the quarter and the year primarily reflects the continued successful execution of our regional acquisition strategy," Peter J. Sodini, Chairman and Chief Executive Officer of The Pantry, said. "While we again delivered solid gains in our merchandise operations, net income declined significantly, primarily due to difficult year-over-year comparisons with unusually high gasoline margins in the fiscal 2006 periods." Merchandise revenues for the fourth quarter were up 16.3% overall and 2.8% on a comparable store basis. The merchandise gross margin was 37.0%, unchanged from the corresponding period last year. Total merchandise gross profits for the quarter were $160.9 million, a 16.1% increase from a year ago. The company acquired 152 convenience stores in fiscal 2007, an increase from the 113 stores acquired in fiscal 2006. The company also opened 16 new large format stores in fiscal 2007, and expects to open approximately 15 additional new large format stores in fiscal 2008. For fiscal 2008, the company remains comfortable with its previous outlook for merchandise sales, which have been relatively strong so far in the first fiscal quarter. The company also continues to expect that retail gasoline margins for the year will be between 11 and 13 cents per gallon, even though margins for the first quarter to date continue to be challenging. The rapid increase in gasoline prices has softened demand and the company expects that if prices remain high, comparable store gas gallons for the year could be flat to down slightly, with total retail volume of approximately 2.2 billion gallons. However, the company believes that through additional targeted expense reductions, it may be able to offset most of the impact of lower gasoline volume. "With our expanded store base, the benefits of our year-end restructuring, and the continued successful implementation of our merchandising initiatives, we believe the Company is well- positioned to deliver stronger results when conditions improve in the gasoline market," Mr. Sodini concluded. About The Pantry Headquartered in Sanford, North Carolina, The Pantry Inc. (NASDAQ: PTRY) -- http://www.thepantry.com/-- operates convenience store chains in the southeastern United States, with revenues for fiscal 2006 of approximately $6.0 billion. As of Sept. 20, 2007, the company operated 1,645 stores in eleven states under select banners, including Kangaroo Express(SM), its primary operating banner. * * * As reported in the Troubled Company Reporter on Aug. 14, 2007, Moody's stated that an announced share repurchase program by The Pantry Inc. does not impact the company's ratings (corporate family rating of B1) or stable rating outlook. PENN NATIONAL: Wins Sumner County's Endorsement for Casino Project ------------------------------------------------------------------ Penn National Gaming Inc. received the unanimous endorsement of the Sumner County Commissioners for its proposed $365 million Hollywood Casino Resort in Wellington, Kansas. The endorsement came at a review process instituted by the Sumner County Commissioners whereby interested applicants vying to develop a destination casino resort in Sumner County submitted proposals by November 28 to the County Commissioners, followed by in-person presentations on Dec. 10 and 11. Under the state's new Gaming Act, an endorsement of the host county is a prerequisite in negotiating for, and ultimately securing, a state lottery gaming facility management contract. In addition to Penn National's Wellington proposal, the Commissioners received a proposal from Binion Family Trust (Marvel Gaming) for a competing Wellington location, and proposals from Harrah's Entertainment and MGM Mirage-Foxwoods Development for competing sites in the City of Mulvane. The Commission voted to endorse only the two Wellington proposals. Beginning on or around December 28, Penn National and the Binion Family Trust will enter into separate negotiations with the State Lottery Commission for management contracts, which will later be sent to an independent review board to determine which is in the best interest of the State. Final selection is scheduled for May 12, 2008. "We are very grateful to the Sumner County Commissioners for their unanimous endorsement of our proposal and we are delighted with their decision," Steven Snyder, sr. vice president of corporate development, said. "As we expressed during our presentation, as the nation's top operator of regional gaming facilities, this project is right in our 'sweet spot.' The Commissioners' endorsement of the Wellington proposals reflects the tremendous amount of local support in Wellington and the city's strategic location in the middle of the county. We're confident in our ability to create an economic catalyst for Wellington and the entire region, and anxiously await the next step in this process." The proposed Hollywood Casino Resort - Wellington is a 450,000 square foot facility featuring a 350 room resort hotel with luxury suites, spa and fitness center, and a 70,000 square foot gaming floor with 1,500 slot machines and 40 table games; capable of quick expansion to 2,000 slots. In addition, the casino will feature Hollywood themed-memorabilia, a variety of culinary options, a sports bar, retail center, and a 1,750-seat entertainment and convention center. The facility is master-planned for up to $200 million in additional investment and expansion, including mixed use and retail space, an executive golf course and another first-class hotel, bringing the total project to an estimated cost of $565 million. Penn National also has a lottery gaming facility management application pending with the State Lottery Commission for its proposed $295 million Hollywood Casino Resort in Cherokee County, Kansas. By operating Hollywood Casino resorts in both Sumner and Cherokee Counties, Penn National looks to create critical mass along the southern Kansas border and to generate important marketing synergies to better compete against the ongoing proliferation of Oklahoma tribal gaming. About Penn National Gaming Headquartered in Wyomissing, Pennsylvania, Penn National Gaming Inc. (PENN: Nasdaq) -- http://www.pngaming.com/-- owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The company presently operates eighteen facilities in fourteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature nearly 23,000 slot machines, over 400 table games, approximately 1,731 hotel rooms and approximately 808,000 square feet of gaming floor space. * * * Moody's Investor Service placed Penn National Gaming Inc.'s long term corporate family and probability of default ratings at 'Ba2' in June 2007. The ratings still hold to date. PENN NATIONAL: 99.3% of Shareholders Vote to Approve Merger Deal ---------------------------------------------------------------- Penn National Gaming Inc. disclosed that 99.3% of the shares voted in favor of the merger agreement providing for the acquisition of the company by certain funds managed by affiliates of Fortress Investment Group LLC and Centerbridge Partners L.P. at a special meeting of shareholders. The tally of shares voted reflected 81.6% of the company's outstanding shares participated in the voting. Penn National is seeking to complete the transaction late in the second quarter of 2008. The timing of any closing is subject to obtaining certain regulatory approvals and satisfying other customary closing conditions. Under the terms of the agreement, if the merger is completed by June 15, 2008, the company's shareholders will be entitled to receive $67 in cash, without interest, for each share of company common stock they own. If the merger is not completed by June 15, 2008, the $67 per share merger consideration will be increased $0.0149 per day. About Fortress Investment Group LLC Headquartered in New York, Fortress Investment Group LLC is a leading global alternative asset manager with approximately $36 billion in assets under management as of March 31, 2007. Fortress manages private equity funds, hedge funds and publicly traded alternative investment vehicles. Fortress was founded in 1998, and has affiliates with offices in Dallas, San Diego, Toronto, London, Rome, Frankfurt and Sydney. About Centerbridge Partners LP Centerbridge is a $3.2 billion multi-strategy private investment fund. The firm is dedicated to partnering with world class management teams in a range of industry verticals. Centerbridge's investment style provides the flexibility to employ various structures to help companies achieve their operating and financial objectives. The limited partners of Centerbridge include many of the world's most prominent financial institutions, university endowments, pension funds, and charitable trusts. About Penn National Gaming Headquartered in Wyomissing, Pennsylvania, Penn National Gaming Inc. (PENN: Nasdaq) -- http://www.pngaming.com/-- owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The company presently operates eighteen facilities in fourteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature nearly 23,000 slot machines, over 400 table games, approximately 1,731 hotel rooms and approximately 808,000 square feet of gaming floor space. * * * Moody's Investor Service placed Penn National Gaming Inc.'s long term corporate family and probability of default ratings at 'Ba2' in June 2007. The ratings still hold to date. PIKE NURSERY: Section 341(a) Meeting Slated for December 20 ----------------------------------------------------------- The U.S. Trustee for Region 21 scheduled a meeting of Pike Nursery Holding LLC's creditors for Dec. 20, 2007, 11:00 a.m. at Room 365, Russell Federal Building, 75 Spring Street Southwest in Atlanta, Georgia. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Norcross, Georgia, Pike Nursery Holding LLC dba Pike Family Nurseries and Pike Nurseries, operates plant nurseries in 22 locations at Georgia, North Carolina, and Alabama. The Debtor filed for Chapter 11 protection on Nov. 14, 2007, (Bankr. N.D. Ga. Case No. 07-79129). J. Robert Williamson, Esq. of Scroggins and Williamson represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it has estimated assets and debts of $1 million to $100 million. QUAKER FABRIC: Asks Court to Extend Exclusivity Period to April 14 ------------------------------------------------------------------ Quaker Fabric Corp. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to extend their exclusive periods to: a) file a chapter 11 plan until April 14, 2008; and b) solicit acceptances of that plan until June 11, 2008. The Debtors tell the Court that they have been in chapter 11 for just over three months and have only recently obtained approval from the Court to secure DIP financing from their prepetition secured lenders. In addition the Debtors have devoted substantial time and resources in effectuating the sale of their assets which resulted in the sale of the their Bleachery Pond and the Tupelo Lee Industrial Park properties to separate buyers in September 2007. The Debtors add that their cases are large and complex and they need more time to focus on the formulation, filing and solicitation of a plan of liquidation that will be accepted by their creditors and approved by the Court. The Debtors also tell the Court that they have made progress in the collection of their receivables and are not seeking an extension to pressure creditors. The Debtors' exclusive period to file a plan expired on Dec. 14, 2007, and the Debtors initial exclusive solicitation period will expire on Feb. 12, 2008. About Quaker Fabric Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB) -- http://www.quakerfabric.com/-- designs, manufactures, and markets woven upholstery fabrics primarily for residential furniture manufacturers and jobbers. It also develops and manufactures specialty yarns, including chenille, taslan, and spun products for use in the production of its fabrics, as well as for sale to distributors of craft yarns, and manufacturers of homefurnishings and other products. The company is one of the largest producers of Jacquard upholstery fabrics. Quaker Fabric sells its products through sales representatives andindependent commissioned sales agents in the United States, Canada, Mexico, and internationally. The company and its affiliate, Quaker Fabric Corporation of Fall River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D. Del. Case No. 07-11146). John D. Sigel, Esq. at Wilmer Cutler Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor LLP are co-counsels to the Debtors. Epiq Bankruptcy Solutions is the Debtors' claims agent. The Official Committee of Unsecured Creditors has selected Shumaker, Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch, Friedlander, Coplan & Aronoff, LLP, as co-counsel. The Debtors' schedules reflect total assets of $41,375,191 and total liabilities of $54,435,354. QWEST COMMUNICATIONS: 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. The Rating Outlook for Qwest and its subsidiaries remains Stable. Approximately $14.5 billion of debt outstanding as of Sept. 30, 2007 is affected by Fitch's action. Fitch's action follows Qwest's announcement that its Board of Directors has declared a $0.32 annual dividend. Based on the current amount of common stock outstanding, the cash requirement to fund the dividend is approximately $575 million on an annual basis. The current stock repurchase program, which Fitch anticipates will have approximately $600 million of capacity remaining as of the end of 2007 will be completed over the course of 2008. Fitch believes that the creation of a dividend will not materially limit Qwest's financial flexibility and that there is sufficient capacity within the current ratings to accommodate the dividend. Importantly, Fitch expects Qwest will continue to balance the allocation of capital between shareholders and bondholders as Fitch anticipates that the company will retire a substantial amount of the $1.4 billion of debt schedule to mature through 2009 out of free cash flow. Supported by the operating margin improvement derived from ongoing cost reductions and productivity enhancements coupled with the debt reduction achieved by Qwest to date, Fitch believes that the company's credit profile is strong within the current ratings category. 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. Qwest's leverage metric as of the latest twelve month period ended Sept. 30, 2007 was 3.2 times (x), reflecting steady improvement from 3.4x as of year-end 2006 and 3.8x as of year-end 2005. 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. The Stable Rating Outlook reflects Fitch's expectation for continued stabilization of Qwest's revenue base driven by further strengthening of the company's service bundling strategy and investment in growth products such as high speed internet and advanced data products. Fitch has affirmed these IDRs and individual issue ratings of Qwest and its subsidiaries as outlined: * Qwest Communications International, Inc. -- IDR 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'. REGENCY ENERGY: $655 Million CDM Deal Cues Moody's Rating Review ---------------------------------------------------------------- Moody's Investors Service placed the ratings of Regency Energy Partners LP (Regency, Ba3 CFR) under review for possible downgrade upon Regency's announcement that it had agreed to acquire CDM Resource Management, Ltd. (not rated, CDM) for $655 million. This news soon follows Regency's announcement earlier this week that it would acquire FrontStreet Hugoton LLC from its general partner sponsor GE Energy Financial Services for $139 million. Moody's rating action reflects uncertainties as to Regency's realizing the cash flows incorporated in its valuations, particularly in regards to CDM, which represents an entree into the natural gas compression services business and roughly doubles Regency's debt. Moody's expects to conclude this review around January 2008, when Regency plans to close the two acquisitions upon receipt of the requisite regulatory approvals and acquisition bridge financing. The potential for GE to drop down FrontStreet had been factored into Moody's upgrade of Regency's ratings this past September. Subject to further review, this acquisition by itself appears to be rating neutral, given the modest size and high proportion of equity financing entailing little execution risk (about $127 million of LP units issued to GE, $9 million of debt). FrontStreet represents an expansion of Regency's core gas gathering and processing business. On the other hand, the CDM transaction is a departure from Moody's expectations that are incorporated into the current ratings. CDM is a sizable investment in a new business segment for Regency, outside its current midstream energy focus. It nearly doubles the company's total debt and appears to be fully valued (18 times annualized EBITDA for the nine months ended September 30, 2007 of about $36 million, according to CDM Resource Partners, L.P.'s Form S-1 filing). As in the case of FrontStreet, the equity will be issued to the sellers (private equity firm Carlyle/Riverstone and CDM's management), which avoids financing risk in the current choppy capital markets. The step-up in debt against the modest incremental cash flow make it uncertain that Regency's financial metrics will stay within the ranges cited in Moody's September Credit Opinion of 3 times debt/EBITDA and EBITDA/interest. Regency seeks from CDM a new fee-based business, reduction in commodity price sensitivity, opportunities for cost savings from Regency's own compression fleet, and a foothold in producing basins where Regency does not currently have operations. Over the course of the rating review, Moody's will examine CDM and FrontStreet's operating and financial performance to gauge their business risk, as well as the execution risk in Regency integrating them and realizing its forecasts. A key milestone would be Regency exercising the accordion feature in its existing credit facility from $500 to $750 million to bridge finance this acquisition. Regency's near-term liquidity resource and financing plans will be assessed, as these acquisitions will utilize most of the capacity on its credit facility, even if upsized, and CDM will require additional capital. Moody's will also assess the potential for further shifts in strategic direction and financial policy, as the CDM acquisition appears to indicate. These ratings are placed under review for possible downgrade: On Review for Possible Downgrade: Issuer: Regency Energy Partners LP -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently Ba3 -- Speculative Grade Liquidity Rating, Placed on Review for Possible Downgrade, currently SGL-3 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently Ba3 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently 79 - LGD5 Outlook Actions: Issuer: Regency Energy Partners LP -- Outlook, Changed To Rating Under Review From Stable Headquartered in Dallas, Texas, Regency Energy Partners LP is a publicly traded master limited partnership engaged in natural gas gathering, processing, and transportation. RESIDENTIAL CAPITAL: Extends Early Tender Time to December 19 ------------------------------------------------------------- Residential Capital LLC has extended the early tender time to 12:00 midnight EST on Dec. 19, 2007, for its cash tender offer for up to $750 million aggregate principal amount of its floating rate notes due June 9, 2008, floating rate notes due Nov. 21, 2008, 6.125% Notes due Nov. 21, 2008, and subordinated floating rate Notes due April 17, 2009. The new early tender time is the same time as the tender offer expiration time. Each of the early tender time and the tender offer expiration time is subject to extension by ResCap in its sole discretion. As a result of the extension of the early tender time, all holders that validly tender their notes in the tender offer will be eligible to receive the total consideration offered in the tender offer, including the early tender premium included as part of the total consideration. The withdrawal rights with respect to the tender offer have terminated and, accordingly, notes tendered in the tender offer may no longer be withdrawn. The tender offer is conditioned on the satisfaction of certain conditions. If any of the conditions are not satisfied or waived, ResCap is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, in each event, subject to applicable laws, and may terminate the tender offer. The terms and conditions of the tender offer remain unchanged. Banc of America Securities LLC and Citi are the dealer managers for the tender offer. Global Bondholder Services Corporation is the information agent and depositary. Deutsche Bank Luxembourg S.A. is the Luxembourg tender agent for the tender offer. Persons with questions regarding the tender offer should contact the dealer managers: Banc of America Securities LLC toll-free at (866) 475-9886 or collect at (704) 386-3244 and Citi toll-free at (800) 558-3745 or collect at (212) 723-6106, or the information agent, toll- free at (866) 294-2200. About Residential Capital Headquartered in Minneapolis, Minnesota, Residential Capital LLC - - http://www.rescapholdings.com/-- is a real estate finance company, focused primarily on the residential real estate market in the United States, Canada, Europe, Latin America and Australia. The company's diversified businesses cover the spectrum of the U.S. residential finance industry, from origination and servicing of mortgage loans through their securitization in the secondary market. It also provides capital to other originators of mortgage loans, residential real estate developers, and resort and timeshare developers. Residential Capital is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. * * * As reported in the Troubled Company Reporter on Nov. 5, 2007, Moody's downgraded to Ba3, from Ba1, its ratings on the senior debt of Residential Capital LLC. The outlook is negative. At the same time, Standard & Poor's Ratings Services removed its ratings on Residential Capital LLC from CreditWatch, where they were placed with negative implications on Oct. 17, 2007. S&P also lowered its long-term counterparty credit rating on Residential Capital LLC to 'BB+/B' from 'BBB-/A-3'. The outlook is negative. The company, as of Nov. 16, 2007, holds Fitch's B short-term ratings and BB+ long-term ratings. Fitch has placed the ratings under review for possible downgrade. SAN DIEGO: S&P Lowers Rating on $10 Million Certificates to BB -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating to 'BB' from 'BBB-' on the $10 million certificates of participation issued by San Diego County, California, for San Diego-Imperial Counties Developmental Services Foundation, based on weak debt service coverage, soft liquidity, and a change in the initial documents, such that the San Diego-Imperial Counties Developmental Services Inc., doing business as San Diego Regional Center for the Developmentally Disabled, parent of the foundation, is no longer pledging its gross revenues under the lease, but has instead provided assurance that the source of lease payments will be included in the annual budget of the regional center of the lease rents. The current pledge is much narrower and coverage is much weaker than previously demonstrated. The outlook is stable. "The major credit risk for the bonds is that the model of service delivery for developmentally disabled services, namely the regional centers, could be altered by legislative action, although center management is not aware of plans to change or alter the model," said Standard & Poor's credit analyst Keith Dickinson. "A secondary credit risk is the risk of earthquake, as the office building is not insured for earthquake damage. Should the building be damaged by an earthquake, the regional center may no longer be able to use it for office space, and the rental payments, the source of bond principal and interest payments, would be interrupted or cease. However, the building passed Standard & Poor's earthquake risk analysis model, and this is not considered a credit factor." Unrestricted cash and investments at the foundation has grown to $811,000, although this amount is much weaker than the liquidity at the regional center, which is no longer available for debt service. In addition coverage of maximum annual debt service for fiscal 2006 is weak at 1.4x for fiscal 2006, although this figure is above the 1.25x covenant. San Diego-Imperial Counties Developmental Services Inc. has the contract with California Department of Developmental Services to be the sole regional center for San Diego and Imperial counties. The regional center serves as the sole community-based intake point for San Diego and Imperial counties, through which individuals with developmental disabilities can access services as mandated by the State of California Welfare & Institutions Code Section 4500 et. seq., considered by the state to be an entitlement. The foundation owns and operates the building that serves as the corporate headquarters of the regional center, which is the sole corporate member of the foundation. SIGNAL SECURITIZATION: Fitch Holds 'BB' Rating on Class B Certs. ---------------------------------------------------------------- Fitch Ratings has affirmed four classes from these three Signal Securitization Corp manufactured housing pass-through certificates: Series 1997-3 -- Class A affirmed at 'AAA'; -- Class B affirmed at 'BB'. Series 1998-1 -- Class A affirmed at 'AA-'. Series 1998-2 -- Class A affirmed at 'BB-'. The affirmations affect approximately $29.3 million in outstanding certificates and reflect adequate relationships of credit enhancement to future loss expectations. As of the October 2007 distribution date, series 1997-3 has a pool factor of 27%, is seasoned 122 months, has loss to date of 14.70% and has 60+ delinquencies of 5.06%. Series 1998-1 has a pool factor of 24%, is seasoned 117 months, has loss to date of 15.58% and has 60+ delinquencies of 7.77%. Series 1998-2 has a pool factor of 33%, is seasoned 114 months, has loss to date of 17.90% and has 60+ delinquencies of 6.01%. The collateral of the above transactions consists of fixed-rate manufactured housing contracts. Signal Bank, N.A purchased the manufactured housing contracts through Mobile Consultants, Inc. All of the mortgage loans are being serviced by Vanderbilt Mortgage and Finance. SINCLAIR BROADCAST: Paying $0.175/Share Dividend on January 15 -------------------------------------------------------------- Sinclair Broadcast Group Inc.'s board of directors has declared a quarterly cash dividend of $0.175 per share on the company's Class A and Class B common stock. The dividends are payable on Jan. 15, 2008, to the holders of record at the close of business on Dec. 31 2007. The common stock will trade ex-dividend on Dec. 27, 2007. Headquartered in Baltimore, Maryland, Sinclair Broadcast Group Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- is a diversified television broadcasting company that owns and operates programs or provides sales services to 58 television stations in 35 markets. Sinclair's television group is affiliated with all networks and reaches approximately 22% of all U.S. television households. * * * Moody's Investors Service placed Sinclair Broadcast Group's long term corporate family and probability of default ratings at 'Ba3' in September 2006. The ratings still hold to date with a stable outlook. SMART-TEK SOLUTIONS: Sept. 30 Balance Sheet Upside-Down by $4.2MM ----------------------------------------------------------------- Smart-Tek Solutions Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $1.5 million in total assets and $5.7 million in total liabilities, resulting in a $4.2 million total shareholders' deficit. At Sept. 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $1.0 million in total current assets available to pay $5.7 million in total current liabilities. The company reported a net loss of $2.9 million on total revenue of $806,690 for the first quarter ended Sept. 30, 2007, compared with a net loss of $87,851 on total revenue of $690,075 in the same period last year. Total operating expenses increased by $2.8 million from $182,721 for the three months ended Sept. 30, 2006, to $3.0 million for the same period ending in 2007. The increase in operating expenses was principally attributable to consulting fees accrued to consultants. 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?2663 Going Concern Doubt John Kinross-Kennedy, in Irvine, Calif., expressed substantial doubt about Smart-tek Solutions Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditor reported that the company incurred a net loss of $381,409 and a negative cash flow from operations of $321,585 during the year ended June 30, 2007, and a working capital deficiency of $1,773,345 and a shareholders' deficiency of $1,314,359 at June 30, 2007. About Smart-tek Solutions Based in Reno, Nev., Smart-tek Solutions, Inc. (OTC BB: STTK) -- http://www.smart-teksolutions.com/-- through its subsidiary, Smart-tek Communications Inc., engages in the design, sale, installation, and service of electronic hardware and software products in Canada. SOFA EXPRESS: Wants Deadline to File Schedules Extended to Jan. 17 ------------------------------------------------------------------ Sofa Express Inc. asks the United States Bankruptcy Court for the Middle District of Tennessee to extend until Jan. 17, 2008, the period within which it can file its schedules of assets and liabilities and statement of financial affairs. The Debtor tell the Court that because of the complexity and diversity of its operations, it anticipates that it will be unable to file the required schedules with the deadline set under Bankruptcy Rule 1007(c), even as significant amount of employee time has been devoted to the task of securing the necessary information. Headquartered in Groveport, Ohio, Sofa Express Inc. is a furniture retailer. The company filed for Chapter 11 protection on Dec. 6, 2007 (Bankr. M.D. Tenn. Case No. 07-09024). William L. Nortor III, Esq., at Boult, Cummings, Conners & Berry PLC, represent the Debtor. When the Debtor filed for bankruptcy, it listed estimated assets of between $10 million to $50 million, and estimated debts of between $50 million and $100 million. SOFA EXPRESS: Section 341(a) Meeting Set for January 11 ------------------------------------------------------- The U.S. Trustee for Region 8 will convene a meeting of creditors in Sofa Express Inc.'s Chapter 11 cases on Jan. 11, 2008, at 10:00 a.m. The meeting will be held at Room 100, Customs House, 701 Broadway, in Nashville, Tennessee. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Groveport, Ohio, Sofa Express Inc. is a furniture retailer. The company filed for Chapter 11 protection on Dec. 6, 2007 (Bankr. M.D. Tenn. Case No. 07-09024). William L. Nortor III, Esq., at Boult, Cummings, Conners & Berry PLC, represent the Debtor. When the Debtor filed for bankruptcy, it listed estimated assets of between $10 million to $50 million, and estimated debts of between $50 million and $100 million. SONJA WILKES: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Sonja Wilkes Leonard Wikes 19930 Rose Street Lynwood, IL 60411 Bankruptcy Case No.: 07-23391 Chapter 11 Petition Date: December 13, 2007 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedof Debtors' Counsel: Karen J Porter, Esq. Law Offices of Karen J. Porter, Ltd. 11 East Adams St., Suite 906 Chicago, IL 60603 Tel: (312) 673-0333 Fax: (312) 673-0334 Estimated Assets: $1 million to $10 million Estimated Debts: Unstated The Debtors did not file a list of their 20 largest unsecured creditors. STANFIELD ARNAGE: Moody's Assigns Ba2 Rating on $20MM Notes ----------------------------------------------------------- Moody's Investors Service has assigned these ratings to Notes issued by Stanfield Arnage CLO, Ltd.: (1) Aaa to $120,200,000 Class A-1L Floating Rate Notes Due August 2021; (2) Aaa to $300,000,000 Class A-1LA Floating Rate Notes Due August 2021; (3) Aa1 to $44,800,000 Class A-1LB Floating Rate Notes Due August 2021; (4) Aa2 to $30,000,000 Class A-2L Floating Rate Notes Due August 2021; (5) A2 to $26,000,000 Class A-3L Floating Rate Notes Due August 2021; (6) Baa2 to $21,000,000 Class B-1L Floating Rate Notes Due August 2021; and (7) Ba2 to $20,000,000 Class B-2L Floating Rate Notes Due August 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of commercial loans and high yield corporate or other debt obligations due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Stanfield Capital Partners LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. SUNCOAST ROOFERS: U.S. Trustee Forms Seven-Member Creditors Panel ----------------------------------------------------------------- Donald F. Walton, acting United States Trustee for Region 21, appointed seven creditors to serve in the official committee of unsecured creditors in the case of Suncoast Roofers Supply Inc. The members are: 1. Jacob Miguel, Managing Member Anchor Matcon, LLC P. O. Box 431260 Miami, FL 33243 Phone: 305-443-2011 Fax: 305-443-5225 2. Beverly I. Cote, Manager, Customer Financial Services Carlisle Syntec, Inc. P. O. Box 7000 Carlisle, PA 17013 Phone: 717-245-7000 Fax: 717-245-7208 3. Ronald F. Tuturice, Director, Credit Services CertainTeed Corporation 750 East Swedesford Rd. P.O. Box 860 Valley Forge, PA 19482 Phone: 610-341-7931 Fax: 610-341-5414 4. Mark Brock, Controller Continental Materials, Inc. Continental Plaza 1614 Old York Road Abington, PA 19001 Phone: 215-884-4930 Fax: 715-887-4485 5. Michael D. Merson, Director of Credit GAF Materials Corp. 1361 Alps Road Wayne, NJ 07470 Phone: 973-628-3706 Fax: 973-628-4112 6. George W. Rumer, Corporate Credit Manager Johns Manville P.O. Box 5108 Denver, CO 80217 Phone: 303-978-2834 Fax: 303-978-4929 7. Steve Steele, Vice President Millenium Metals, Inc. 10200 Eastport Road Jacksonville, FL 32218 Phone: 904-358-8366 Fax: 904-358-8285 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Tampa, Florida-headquartered Suncoast Roofers Supply Inc. -- http://www.suncoastrooferssupply.com/-- is a roofing contractor. The Debtor filed for chapter 11 bankruptcy on Nov. 14, 2007 (Bankr. M.D. Fla. Case No. 07-11039). Russell M. Blain, Esq., at Stichter, Riedel, Blain & Prosser PA represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and liabilities between $1 million and $100 million. SUNCOAST ROOFERS: Court Approves Stichter Riedel as Counsel ----------------------------------------------------------- Suncoast Roofers Supply Inc. obtained from the U.S. Bankruptcy Court for the Middle District of Florida authority to employ Stichter, Riedel, Blain & Prosser PA as its bankruptcy counsel. Stichter Riedel will: a. render legal advice with respect to the Debtor's powers and duties as a debtor-in-possession, the continued operation of the Debtor's businesses, and the management of its property; b. prepare on behalf of the Debtor necessary motions, applications, orders, reports, pleadings, and other legal papers; c. appear before the Court and the United States Trustee to represent and protect the interests of the Debtor; d. assist with and participate in negotiations with creditors and other parties-in-interest in formulating a plan of reorganization, drafting the plan and related disclosure statement, and taking necessary legal steps to confirm the plan; e. represent the Debtor in adversary proceedings, contested matters, and matters involving administration of the case; f. represent the Debtor in negotiations with potential financing sources and preparing contracts, security instruments, or other documents necessary to obtain financing; and g. perform other legal services that may be necessary for the proper preservation and administration of the chapter 11 case. Stichter Riedel's attorneys proposed to represent the Debtor in its case will bill at these hourly rates: Professional Rate ------------ ---- Rusell M. Blain, Esq. $400 Charles A. Postler, Esq. $375 Stephen R. Leslie, Esq. $290 Elena Paras Ketchum, Esq. $225 Amy Denton Harris, Esq. $200 Other attorneys and paralegals may render services to the Debtor as needed and are paid at these hourly rates: Designation Hourly Rate ----------- ----------- Partners $225 - $425 Associates $150 - $200 Paralegals $75 - $120 To the best of the Debtor's knowledge, the firm does not represent any interest adverse to the Debtor or to the estate. The firm can be reached at: Stichter, Riedel, Blain & Prosser PA 110 East Madison Street, Suite 200 Tampa, Florida 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 http://www.srbp.com/ Tampa, Florida-headquartered Suncoast Roofers Supply Inc. -- http://www.suncoastrooferssupply.com/-- is a roofing contractor. The Debtor filed for chapter 11 bankruptcy on Nov. 14, 2007 (Bankr. M.D. Fla. Case No. 07-11039). Russell M. Blain, Esq., at Stichter, Riedel, Blain & Prosser PA represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and liabilities between $1 million and $100 million. THOMAS HUTCHINSON: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Thomas P. Hutchinson 657 Herold Harbor Road Crownsville, MD 21032 Bankruptcy Case No.: 07-22658 Chapter 11 Petition Date: December 13, 2007 Court: District of Maryland (Baltimore) Judge: Duncan W. Keir Debtor's Counsel: John C. Gordon, Esq. 532 B & A Boulevard Severna Park, MD 21146 Tel: (410) 747-8784 Estimated Assets: Unstated Estimated Debts: $1 million to $100 million Debtor's 7 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service Centralized $216,000 Insolvency Operations P.O. Box 21226 Philadelphia, PA 19114 Comptroller of the Treasury $92,000 Compliance Division - Room 409 301 West Preston Street Baltimore, MD 21201 Chase $15,561 800 Brooksedge Boulevard Westerville, OH 43081 Bank One - Southwest Airlines $69,887 ASPIRE $1,180 Bank of America $1,800 Shell Oil Co. $700 TROPICANA ENTERTAINMENT: New Jersey Denies Renewal of License ------------------------------------------------------------- Tropicana Entertainment, LLC, disclosed in a regulatory filing on Form 8-K with the U.S. Securities and Exchange Commission that it will repay its senior debt with proceeds of the sale of its Tropicana Casino and Resort in Atlantic City. The action is a result of the denial of the company's gaming license renewal application by the New Jersey Casino Control Commission denied the company's gaming license renewal application. The Commission determined on Dec. 12, 2007 not to renew the company's license to operate the Tropicana Casino and Resort in Atlantic City, directing instead that control of the casino resort be transferred immediately to a trustee until the sale of the property to a third party can be arranged by the trustee. In the interim, the Tropicana AC will continue to operate under the direction of the trustee. Tropicana Entertainment intends to appeal the Commission's determination through the New Jersey appellate court system. Concurrently, the company will immediately seek the permission of the Commission to work collaboratively with the trustee to maximize value by facilitating a prompt and orderly sale of the Tropicana AC. The trustee is required to complete the sale of the Tropicana Atlantic City within 120 days of the transfer of the property to his control, although this period of time may be extended by the Commission. The company intends to use the net proceeds it receives from any sale of the Tropicana AC to repay debt under its Senior Credit Facility. Because this is only the second time that the Commission has refused to renew a license, many details remain unclear regarding the operation of the Tropicana AC, the trustee's sale process, and the company's rights pending a sale. The company intends to seek clarification as to these matters which impact on the company's cash flows, comply with its loan agreements and maximize value from the sale. Moreover, the company is analyzing the potential impact of the Commission's determination on its gaming licenses in other states. Possible Default & Bankruptcy Warning Unless the company is successful in its appeal to stay or reverse the Commission's determination by Dec. 19, 2007, an event of default will result under the company's Senior Credit Facility. If an event of default occurs under the Senior Credit, among other things, the lenders will be entitled to accelerate the unpaid principal amount of, and accrued interest on, borrowings thereunder. Such an acceleration of the Senior Credit Facility would constitute an event of default under the Indenture governing the Company's Senior Subordinated Notes, as well as the Company's Las Vegas Term Loan. Accordingly, Tropicana Entertainment intends to continue its efforts to work with the lenders under its Senior Credit Facility to prevent an acceleration from occurring. There can be no assurance that the lenders will not accelerate, which could compel the company to seek alternatives, including, without limitation, bankruptcy protection. About Tropicana Entertainment Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. TROPICANA ENT: Denied License Renewal Cues S&P to Junk Rating ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Tropicana Entertainment LLC and its unrestricted subsidiary, Tropicana Las Vegas Resort & Casino LLC. The corporate credit rating was lowered to 'CCC' from 'B'. At the same time, the ratings on TELLC and TLV were placed on CreditWatch with developing implications. The downgrade and CreditWatch listing reflect the recent announcement that the New Jersey Casino Control Commission has denied the company's gaming license renewal application, citing, among other reasons, the commission's opinion that management failed to appreciate the workings of the Atlantic City marketplace. Barring a successful appeal of this ruling, which S&P view as unlikely, particularly given the fact that the vote was 4 to 1 against renewal, TELLC will pursue the sale of the Tropicana Casino and Resort in Atlantic City. A trustee has assumed control of the property, and will likely lead efforts around coordinating a sale. According to the terms of TELLC's credit agreement, any license revocation continuing for more than five business days constitutes an event of default. While TELLC's senior subordinated notes and TLV's term loan facility are not currently in default, should TELLC's lenders under the credit agreement accelerate the loan, cross-default provisions at both the notes and the TLV term loan would be triggered. The developing implications of our CreditWatch listing contemplate a number of potential rating downside factors and some potential upside factors. Drivers of further downward rating momentum include: -- TELLC's inability to reach an agreement with lenders under its credit agreement, the terms under which it will be in default on Dec. 19, 2007, barring a successful appeal. An agreement would need to address both the company's plans to repay debt with proceeds from the sale of the Atlantic City asset and the need to revise covenant levels to reflect the remaining portfolio and current operating prospects. -- A failure to address ongoing poor performance across the remainder of Tropicana's portfolio of assets. -- The potential inability of the company to access cash generated from the Atlantic City resort as a source to fund near-term debt service requirements. -- Any complications delaying or preventing the receipt of cash proceeds from the sale of the Atlantic City asset. Potential upside factors revolve around the company's ability to sell the Atlantic City asset for a multiple sufficient to drive debt repayment to the point that the company is capable of servicing its remaining debt obligations with cash flows generated from the remaining portfolio of assets. Upside momentum would also be contingent upon the company demonstrating some success in stabilizing performance across the other assets in its portfolio. "We will continue to monitor the progress of the appeal of the commission's decision, discussions with lenders, and the progress toward the sale of the Atlantic City asset in resolving the CreditWatch listing," said Standard & Poor's credit analyst Ben Bubeck. TROPICANA ENT: In Compliance with Credit Facility as of Dec. 5 -------------------------------------------------------------- Tropicana Entertainment, LLC, disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that as of Dec. 5, 2007, it has determined that it is in compliance with the covenants in its credit facility and is accordingly not in default under the agreement. The company has submitted a compliance certificate to its credit facility lenders showing that it was in compliance with all of its financial maintenance covenants as of Sept. 30, 2007, including the leverage ratio that it previously announced it had not met in the third quarter. As of Sept. 30, 2007, the company's leverage ratio was 7.49 to 1 rather than 7.53 to 1, as previously reported. While preparing financial information requested by its lenders in connection with negotiations for an amendment to the covenants in the credit facility, the company discovered that its calculation of EBITDA, as defined in the credit facility, which is used in the leverage ratio covenant test, had not taken into account amortization of prepaid rent relating to its Evansville property. This amortization is a non-cash charge that is allowed to be added back in calculating EBITDA under the credit agreement. The amortization of prepaid rent was properly classified as a component of rent expense in the company's statement of operations and, therefore, had not been included with other depreciation and amortization in its previous calculations of EBITDA. Depending on its future results, management cannot assure that the company will be in compliance with the financial ratio covenants in the credit facility as of the end of its next fiscal quarter absent additional capital contributions by its owner or additional repayments of debt prior to December 31, 2007. Accordingly, Tropicana Entertainment also confirmed that it will continue the process of seeking to amend the financial covenants in the credit facility in order to better position the company to achieve compliance with them in future periods. About Tropicana Entertainment Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. US SHIPPING: Moody's Junks Corporate Family Rating -------------------------------------------------- Moody's Investors Service lowered its ratings of U.S. Shipping Partners L.P. debt -- Corporate Family and Probability of Default, each to Caa1 from B2, senior secured to B3 from B1 and second lien senior secured to Caa3 from Caa1. The rating outlook is stable. The ratings were downgraded because Moody's expects further deterioration in USS' credit metrics as debt increases at USS Products Investor LLC (the "joint venture" USS created to finance the new tanker order) to fund construction of the tankers on order. Further, funds from operations are likely to be further stressed over the near term because a majority of USS' ITB vessels could trade in the spot market, which could result in Time Charter Equivalent rates below recently contracted levels and reduced utilization of the ITB fleet. Consequently, Moody's believes USS will increasingly rely on its revolver to meet debt service obligations and Master Limited Partnership distributions because of weaker operating profit and increasing interest costs. Liquidity is weak, even after considering the potential retention of about $13 million of cash, in the event the partnership foregoes paying distributions in 2008 on the subordinated units, as it recently disclosed it could do. Compliance with covenants of the credit agreement is not assured, which implies that USS might need to seek additional waivers to maintain access to the revolver. Since the end of 2006, EBIT to Interest expense declined to about 0.6 times and Debt to EBITDA remained in the mid-six times range, which are levels consistent with the Caa1 corporate family and probability of default ratings. Moody's expects these metrics are likely to weaken as debt increases to fund tanker construction while funds from operations is pressured down. Funds from operations are likely to remain pressured until the ATB's and the first few new tankers deliver and begin contributing earnings. This assumes that USS' will obtain control of the new tankers, by either purchasing them from the joint venture upon each delivery or by in-chartering from either the joint venture or a third-party acquirer. Purchases would likely be mostly debt-financed which implies leverage will remain high beyond the intermediate term. As well, competition within the company's Jones Act petroleum transportation segment, which the ITB's serve, is likely to increase because of higher vessel orders than previously anticipated. This unexpected increase in the orderbook is likely to increase competition and could pressure the sector's operating and financial performance. The outlook is stable because funding for the fleet expansion is covered through either pre-funding or a financing commitment in place at the joint venture, which should limit the ultimate debt level, and that USS will begin to generate cash flow from new vessels as each delivers. While fundamentals in the company's core petroleum trades are not likely to improve over the near term for the ITB's to achieve rates that would support free cash flow to de-lever, USS does operate in the Jones Act trade, which provides significant barriers to entry over time. The ratings could be downgraded if USS lost access to the revolver, if funds from operations turned negative, if significant cost overruns on either of the fleet expansion programs were to occur or if USS was to provide support to the new tanker joint venture. The ratings could be upgraded if EBIT to Interest is sustained above 1.0 time and Debt to EBITDA is sustained near six times. Downgrades: Issuer: U.S. Shipping Partners LP -- Corporate Family Rating, Downgraded to Caa1 from B2 -- Probability of Default Rating, Downgraded to Caa1 from B2 -- Senior Secured Bank Credit Facility, Downgraded to B3, 38- LGD-3 from B1, 37 - LGD3 -- Second Lien Senior Secured Regular Bond/Debenture, Downgraded to Caa3, 89-LGD5 from Caa1, 89-LGD5 U.S. Shipping Partners L.P., based in Edison, New Jersey, is a leading, U.S. Jones Act qualified, provider of marine transportation of petroleum and petroleum based products. WASHINGTON MUTUAL: Fitch Affirms 'BB-' Ratings on Two Classes ------------------------------------------------------------- Fitch Ratings has affirmed all asset-backed securities ratings for outstanding notes issued from the Washington Mutual Master Trust and Washington Mutual Master Note Trust. The affirmation affects approximately $11.16 billion of 144A classified and private credit card securities backed by a pool of Visa and MasterCard receivables originated by Washington Mutual Bank. These transactions for which Fitch has public ratings are listed below: Washington Mutual Master Trust Class A: -- $650,000,000 class A (2001-D) affirmed at 'AAA'; -- $400,000,000 class A (2001-G) affirmed at 'AAA'. Washington Mutual Master Trust Class E: -- $40,419,190 class E (2004-G) affirmed at 'BB-'; -- $35,519,000 class E (2004-C) affirmed at 'BB-'. Washington Mutual Master Note Trust Class A: -- $643,600,000 class A (2005-1) affirmed at 'AAA'; -- $775,000,000 class A (2005-2) affirmed at 'AAA'; -- $900,000,000 class A (2006-1) affirmed at 'AAA'; -- $750,000,000 class A (2006-2) affirmed at 'AAA'; -- $1,250,000,000 class A (2006-3) affirmed at 'AAA'; -- $500,000,000 class A (2006-4) affirmed at 'AAA'; -- $1,100,000,000 class A (2007-1) affirmed at 'AAA'; -- $875,000,000 class A (2007-2) affirmed at 'AAA'; -- $425,000,000 class A (2007-4) affirmed at 'AAA'; -- $200,000,000 class A (2007-5) affirmed at 'AAA'. Washington Mutual Master Note Trust Class M: -- $90,400,000 class M (2005-1) affirmed at 'AA'; -- $125,000,000 class M (2005-2) affirmed at 'AA'; -- $300,000,000 class M (2006-1) affirmed at 'AA'. Washington Mutual Master Note Trust Class B: -- $87,800,000 class B (2005-1) affirmed at 'A'; -- $150,000,000 class B (2005-2) affirmed at 'A'; -- $200,000,000 class B (2006-1) affirmed at 'A'; -- $150,000,000 class B (2007-1) affirmed at 'A'. Washington Mutual Master Note Trust Class C: -- $93,100,000 class C (2005-1) affirmed at 'BBB'; -- $150,000,000 class C (2005-2) affirmed at 'BBB'; -- $200,000,000 class C (2006-1) affirmed at 'BBB'; -- $150,000,000 class C (2006-2) affirmed at 'BBB'; -- $200,000,000 class C (2006-3) affirmed at 'BBB'; -- $125,000,000 class C (2007-1) affirmed at 'BBB'. Washington Mutual Master Note Trust Class D -- $85,100,000 class D (2005-1) affirmed at 'BB'. -- $506,164,000 class D (2005-2) affirmed at 'BB-'. Fitch publishes an update on Washington Mutual Master Note Trust each month, including current performance, outstanding debt, and break even stress scenarios. WASTEQUIP INC: Moody's Cuts Corporate Family Rating to B3 --------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of Wastequip Inc. to B3 from B2 and its senior first lien bank loans to B1 from Ba3. The rating outlook remains stable. The rating action is predicated on the materially weaker EBITDA performance and higher leverage than expected at the time of the LBO transaction in January 2007. As of Sept. 30, 2007, the leverage ratio, using Moody's standard adjustments, reached approximately 7 times trailing pro forma EBITDA and is expected to further deteriorate in the last quarter of 2007, excluding annualized cost savings that have yet to be achieved. However, Moody's expects liquidity to remain adequate in the short term. In the first nine months of 2007, Wastequip was negatively impacted by the 30% reduction of the waste container purchases by the national waste haulers, which cut their capital spending, faced with lower waste volumes in residential construction, and shifted their idle containers to other more favorable end markets. This issue is exacerbated by the fact that some haulers carry excess waste equipment after a period of over-buying in 2004-2006. Next year, due to potentially weaker conditions in non residential construction combined with continuous distress in residential construction, Wastequip's operating performance could remain sluggish. While Moody's typically expects waste container demand to be partly driven by replacement needs, it also cautions that the timing for a recovery will depend on the evolution of end market conditions and how fast excess waste equipment capacity will be eliminated. The stable outlook reflects Moody's expectation that Wastequip's liquidity will remain adequate in 2008. Free cash flow is expected to be positive in 2007, helped by the anticipated working capital decline in the last quarter. Additionally, the company currently has no borrowings under its $50 million revolving credit facility due 2012. The rating agency also expects the company to remain in compliance with its fixed charge coverage covenant in the short term, based on our current assumption of relatively flat operating performance in 2008, which takes into consideration the realization by Wastequip of procurement and transportation cost savings and on-going headcount adjustments. The B1 rating of the senior first lien credit facilities reflects Wastequip's probability of default rating lowered to B3 and a LGD 2 loss given default assessment for these loans, which are secured by a pledge of substantially all of the company's assets and benefit from the material cushion of unrated subordinated debt. These ratings have been lowered: -- Corporate Family Rating to B3 from B2 -- Probability of Default Rating to B3 from B2 -- $330 million senior first lien term loan to B1 (LGD2/29%) from Ba3 (LGD3/30%) -- $50 million senior first lien revolver to B1 (LGD2/29%) from Ba3 (LGD3/30%) Wastequip, based in Cleveland, Ohio, is a leading manufacturer of non-mobile equipment used to collect, process and transport waste materials. Pro forma for recent acquisitions, trailing twelve month revenues as of September 30, 2007 totaled approximately $540 million. WINSTAR COMMS: Chapter 7 Trustee Says Company Controlled by Lucent ------------------------------------------------------------------ Lucent Technologies, Inc., was Winstar Communications, Inc.'s "strategic partner" -- turnkey builder of Winstar's network, primary vendor, supplier, subcontractor and financier, all rolled into one, Stephen M. Rathkopf, Esq., at Herrick Feinstein LLP in New York, on behalf of Christine C. Shubert, the Chapter 7 Trustee for Winstar. Evidence at trial established, and the United States District Court for the District of Delaware found, that Lucent was not simply enforcing its legitimate contractual rights, he says. The District Court had awarded the Winstar Trustee (1) $188,180,000, plus interest, for recovery of a preferential payment Winstar made to Lucent; (2) $55,750,742, plus interest, for breach of a subcontract between Lucent and Winstar Wireless, Inc.; and (3) equitable subordination of all of Lucent's claims against the Winstar estate. In its appeal, Lucent trots out most of the same tired arguments raised unsuccessfully before the lower courts. This is its third -- and hopefully last -- strike, Mr. Rathkopf says. Lucent cavalierly ignores or deliberately mischaracterizes the very things that demonstrate its continued and growing influence and control over Winstar, according to Mr. Rathkopf. Influence and control, Mr. Rathkopf tells the U.S. Court of Appeals for the Third Circuit, had nothing to do with Lucent exercising legitimate contract rights or legitimate financial leverage. End of quarter after end of quarter, Mr. Rathkopf contends, Winstar was required to purchase Lucent equipment and services that Winstar did not need to give Lucent the revenue Lucent demanded. Mr. Rathkopf points out that the trial court's findings of fact are underpinned by massive end of quarter sales and related conduct spanning the year in which the preferential payment was made, in which Lucent required Winstar to purchase hundreds of millions of dollars of unneeded Lucent goods and services and to otherwise create fake revenue for Lucent -- sometimes requiring Winstar's knowing participation in outright fraud -- so that Lucent could appear to be more profitable than it was. Those instances, he explains, include the fraudulent September 2000 end of quarter software deal in which Lucent required Winstar to participate, which generated 26% of Lucent's profits for the quarter, and which led to penalties imposed by the U.S. Securities and Exchange Commission for Lucent and suits against Lucent and Winstar executives. According to Mr. Rathkopf, one Winstar executive summed up the non-arm's-length nature of the deal: "it was priced at whatever number Lucent needed for its revenue." Other instances, Mr. Rathkopf relates, include the December 1999 end of quarter deal in which Winstar purchased, among other unneeded Lucent equipment, $36,000,000 of unneeded optronics equipment which remained in Lucent's warehouses undelivered 15 months later, when Winstar filed in bankruptcy in April 2001; the fake bill and hold deals where Winstar employees knowingly signed fraudulent documents to create revenue for Lucent, because "it was a Lucent requirement"; and the repeated threats by Lucent to dishonor Lucent's contractual obligations to pay Winstar Wireless under their subcontract or to permit Winstar to draw under their Second Credit Agreement unless and until Winstar did what Lucent wanted. Lucent, Mr. Rathkopf says, asserts that, whether a statutory or non-statutory test for insider is used, no corporation can be an insider of another unless it has directors or officers in common with that other corporation or otherwise "exercise[s] the type of authority . . . that an officer, director or general partner exercises -- actual managerial control over the debtor's day to day operations." The term "insider" is to be flexibly applied on a case by case basis and means "one who has a sufficiently close relationship with the debtor that his conduct is made subject to closer scrutiny than those dealing at arm's-length with the debtor," Mr. Rathkopf contends, citing S. Rep. No 989, 95th Cong., 1st Sess. 25 (1978), reprinted 1978 U.S.C.C.A.N. 5787, 5810, 6269; and Collier on Bankruptcy, 547-42 (15th Ed.). Mr. Rathkopf notes that under Section 101(31)(B)(iii) of the Bankruptcy Code, for corporations, insiders include any "person in control" of the debtor. Because Congress used the word "include" in its definition, Mr. Rathkopf says courts uniformly cite to the legislative history to include as "nonstatutory" insiders other persons or entities who do not deal at arm's- length with the debtor. Mr. Rathkopf points to In re Holloway, 955 F.2d 1008, 1010-11 (5th Cir. 1992); In re Three Flint Hill Ltd. P'ship, 213 B.R. 292, 297-98 (D. Md. 1997); HR Rep No. 595, 95th Cong. 1st Sess 312 (1977); S Rep No. 989, 95th Cong, 2d Sess 25 (1978), U.S. Code Cong. & Admin. News, p. 5787; Colliers on Bankruptcy, Section 547.03[6], (15th Ed.) "Actual managerial control over the debtor's day to day operations" is but one example of what might cause a person or entity to be an insider of another; it is not the sole example, Mr. Rathkopf argues. The fact that Winstar preserved its business life by acceding to Lucent's demands -- rather than being forced to file bankruptcy even sooner -- does not mean that the two companies were dealing at arm's-length with each other, Mr. Rathkopf tells the Third Circuit. Mr. Rathkopf explains that Winstar capitulated to Lucent's threats and non-contractual pressure to save its life, much like a victim of armed robbery would. This constitutes acting under duress, and is the antithesis of dealing at arm's- length," Mr. Rathkopf says. "Lucent argues that this is the first time one public company has been deemed an insider of another. But Lucent is just another in a growing list of public companies (Enron, Worldcom, Cendant, Tyco, etc.) that have acted in surprising ways," Mr. Rathkopf says. "That to date no other public company has been deemed an insider by reason of using a close relationship with the debtor to engage in the type of overreaching and self-dealing Lucent admits to is of no moment. There have been many unfortunate firsts in Corporate America in the 21st Century, and this is but another." The District Court's decision should be affirmed, Mr. Rathkopf argues. Bingham Attorney Says Lucent Wrong G. Eric Brunstad, Jr., a partner at Bingham McCutchen LLP, says Lucent and its amici are mistaken in insisting that payment cannot be recovered because Lucent was not an "insider" and, therefore, the 90-day limit, rather than the one-year limit, applies. Mr. Brunstad points out that the purpose of allowing a longer preference recovery period -- one year instead of 90 days -- for payments made to insiders is that insiders, by virtue of their non-arm's length relationship with the debtor, are likely to be in a position to influence the timing of payments -- or delay the debtor's bankruptcy filing -- to circumvent the ordinary 90-day preference recovery rule. Under the highly unusual facts of the Winstar case, Lucent clearly occupied the position of an insider, Mr. Brunstad says. A creditor that was so close to and that exerted so much control over the debtor that the creditor could require the debtor to engage repeatedly in possibly criminal schemes to deceive the creditor's auditors plainly exercises the kind of non-arm's length influence that the concept of "insider" embraces, Mr. Brunstad tells the Third Circuit in his amicus curiae brief. Mr. Brunstad points out that the Bankruptcy Court properly rejected Lucent's argument that Winstar's payment cannot be a preference because it did not constitute a transfer of the interest of the debtor in a property. Mr. Brunstad explains that the purpose of the earmarking doctrine Lucent suggested is to recognize that, in transactions in which the debtor serves as a mere conduit for the payment of funds from one person to another, the debtor's interest in the funds being transferred may not rise to the level of "an interest of the debtor in property." Rather, the debtor may have so little interest in the funds that it is transferring that the funds can be said to belong to some other party. In Winstar's case, however, according to Mr. Brunstad, the Debtors borrowed funds under its bank facility, deposited the funds into its own bank account, and then afterwards paid a portion of the borrowed funds -- $188,180,000 -- to Lucent. Winstar thus owned the funds before it transferred them to Lucent, and thus transferred its property to Lucent, Mr. Brunstad says. The earmarking doctrine cannot apply, he says. Mr. Brunstad calls Lucent's interpretation of "person in control of the debtor" to include only those who exercise day-to-day managerial control "restrictive." If accepted as a gloss on the statute, it would render superfluous certain of the other expressly enumerated categories of persons in Section 101(31)(B) of the Bankruptcy Code, Mr. Brunstad says. Courts lack "carte blanche to redraft statutes in an effort to achieve that which Congress is perceived to have failed to do," Mr. Brunstad reminds the Third Circuit, citing United States v. Locke, 471 U.S. 84, 95 (1985). If Congress had intended to limit Section 101(31) in the manner that Lucent prefers, it would have done so expressly, Mr. Brunstad says, citing F.C.C. v. NextWave Personal Commc'ns, Inc., 537 U.S. 293, 302 (2003), and Ohio v. Kovacs, 469 U.S. 274, 279 (1985). "The fact that Congress has not limited the definition of insider in the manner Lucent seeks, and that adding such a limitation would be at war with the text and structure of the [Bankruptcy] Code as a whole, demonstrates that no such limitation is warranted," according to Mr. Brunstad. Mr. Brunstad filed an amicus curiae brief to bring to the Third Circuit Court's attention matters that other parties have not addressed on the issue whether Lucent was an "insider" of Winstar for purposes of the Bankruptcy Court's preference analysis and whether the $188,180,000 payment that Winstar made to Lucent was "earmarked." Mr. Brunstad is the Macklin Fleming Visiting Lecturer of Law at the Yale Law School where he teaches courses on bankruptcy, business reorganizations, secured transactions, commercial transactions, and argument and reason. He began teaching at Yale in 1990 and has also taught at the Harvard Law School. Mr. Brunstad is also the current Chair of the ABA Business Bankruptcy Committee and serves as a member of the Judicial Conference Advisory Committee on the Federal Bankruptcy Rules. At Bingham McCutchen, Mr. Brunstad focuses in the areas of bankruptcy law, bankruptcy appeals, and general commercial appeals. He is a contributing author to the Collier treatise on bankruptcy responsible for writing multiple chapters of the treatise. Mr. Brunstad has argued five bankruptcy cases in the U.S. Supreme Court: Travelers Casualty & Surety Co. v. Pacific Gas & Electric Co., 127 S. Ct. 1199 (2007); Marrama v. Citizens Bank of Massachusetts, 127 S. Ct. 1105 (2007); Marshall v. Marshall, 547 U.S. 293 (2006); Till v. SCS Credit Corp., 541 U.S. 465 (2004); and Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1 (2000). He has participated in numerous other bankruptcy cases in the Supreme Court, including as counsel for respondent in Central Virginia Community College v. Katz, 546 U.S. 356 (2006), a case involving whether a preference action may be maintained against a State notwithstanding a State's assertion of sovereign immunity. He has participated as an amicus curiae in numerous bankruptcy matters, including those in the Supreme Court and the Third Circuit, including Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440 (2004); Archer v. Warner, 538 U.S. 314 (2003); Official Comm. of Unsecured Creditors of Cybergenics Corp. v. Chinery, 330 F.3d 548 (3d Cir. 2003) (en banc). About Winstar Communications Based in New York, New York, Winstar Communications, Inc., provides broadband services to business customers. The company and its debtor-affiliates filed for chapter 11 protection on April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462). The Debtors obtained the court's approval converting their case to a chapter 7 liquidation proceeding in Jan. 24, 2002. Christine C. Shubert serves as the Debtors' chapter 7 trustee. The chapter 7 trustee is represented by Fox Rothschild LLP and Kaye Scholer LLP. When the Debtors filed for bankruptcy, they listed $4,975,437,068 in total assets and $4,994,467,530 in total debts. (Winstar Bankruptcy News, Issue No. 82; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WINSTAR COMMS: Chapter 7 Trustee Wants AG Edwards as Stockbroker ---------------------------------------------------------------- Christine C. Shubert, the Chapter 7 Trustee for the estates of Winstar Communications, Inc., seeks authority from the U.S. Bankruptcy Court for the District of Delaware to employ A.G. Edwards & Sons, Inc., as her stockbroker, nunc pro tunc to Nov. 21, 2007. The Chapter 7 Trustee also seeks to sell certain shares of stock of Global Crossing Limited. Pursuant to a settlement agreement between the Debtors and Global Crossing, the Debtors acquired 648 of Global Crossing's shares of stock, consisting of a minority equity interest in a privately held company, the Chapter 7 Trustee relates. According to the Chapter 7 Trustee, the Shares are largely illiquid by nature, rendering it difficult to identify a market of potential purchasers. The estimated value of the Shares is approximately $14,000. The Chapter 7 Trustee seeks to liquidate the Shares through a sale and maximize the return for the benefit of the estate and creditors. The Chapter 7 Trustee believes that the proposed sale is a prudent and proper exercise of business judgment. The Chapter 7 Trustee tells the Court that A.G. Edwards is well- qualified and competent to sell the Shares at a marketable price, because it has extensive knowledge and experience as stock brokers under the provisions of the Bankruptcy Code. A.G. Edwards will be compensated based on a percentage of the sale's gross proceeds. The Chapter 7 Trustee notes that it is not the practice of the stock sale industry for A.G. Edwards to file a fee application for a single transaction, and that its entire trading mechanism is electronic and handled through the New York Stock Exchange and other national markets. To the best of the Chapter 7 Trustee's knowledge, A.G. Edwards has not represented the Debtors, their creditors, equity security holders, or any other parties-in-interest, in any matter relating to the Debtors or their estates, and is a "disinterested person" as the term is defined in Section 101(4) of the Bankruptcy Code. About Winstar Communications Based in New York, New York, Winstar Communications, Inc., provides broadband services to business customers. The company and its debtor-affiliates filed for chapter 11 protection on April 18, 2001 (Bankr. D. Del. Case Nos. 01-01430 through 01-01462). The Debtors obtained the court's approval converting their case to a chapter 7 liquidation proceeding in Jan. 24, 2002. Christine C. Shubert serves as the Debtors' chapter 7 trustee. The chapter 7 trustee is represented by Fox Rothschild LLP and Kaye Scholer LLP. When the Debtors filed for bankruptcy, they listed $4,975,437,068 in total assets and $4,994,467,530 in total debts. (Winstar Bankruptcy News, Issue No. 82; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WYLE HOLDINGS: Moody's Assigns B2 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service assigned to Wyle Holdings, Inc. a B2 Corporate Family Rating and a B2 Probability of Default Rating. Concurrently, a Ba3 rating was assigned to the proposed $230 million senior secured credit facility in which subsidiaries Wyle Laboratories, Inc. and RSIS LLC will be co-borrowers. The rating outlook is stable. This is the first time Moody's has rated the debt of this privately-held provider of engineering and information technology services to federal government entities. The B2 Corporate Family Rating is constrained by integration risks related to the acquisition of RSIS, uneven revenue and profitability trends at RSIS stemming primarily from its obligatory transition away from federal government 8(a) small business contracts, and the potential for reduced spending or delays in funding of government contracts. Financial metrics, including pro forma Debt to EBITDA of about 5.1 times, will position the company well in the B2 rating category. The ratings are also supported by revenue visibility provided by long-term contracts, funded backlog of over $300 million, historically high recompete win rates when Wyle Holdings is the prime contractor, and the company's long-standing relationships with its largest government clients. The stable rating outlook anticipates that the company will be successful in transitioning most of its remaining small business contracts while achieving modest growth from new business development. Moody's further expects that working capital and profitability margins will be maintained at recent levels, as adjusted for certain one-time and non-recurring items. Wyle Holdings has recently signed an agreement to acquire RSIS. Including the refinancing of certain Wyle indebtedness, the transaction will be financed with a $200 million senior secured first lien term loan, a $50 million senior secured second lien term loan (unrated by Moody's) held by a financial sponsor, $31.5 million of holding company subordinated notes (unrated by Moody's) held by RSIS's selling shareholders and total equity of about $50 million, including an additional investment from Wyle's majority owner Littlejohn & Co., LLC. A $30 million senior secured first lien revolver is not expected to be drawn at close. These ratings were assigned to Wyle Holdings, Inc.: -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 These ratings (assessments) were assigned to Wyle Laboratories, Inc. and RSIS LLC (co-borrowers): -- $200 million senior secured first lien term loan due 2014, Ba3 (LGD3, 31%) -- $30 million senior secured first lien revolver due 2014, Ba3 (LGD3, 31%) The ratings are subject to the conclusion of the proposed transaction and Moody's review of final documentation. Wyle Holdings, Inc. is a leading provider of engineering and information technology services to the federal government. About two-thirds of the company's revenues are derived from the U.S. Navy, NASA and the U.S. Air Force. For the twelve months ended Sept. 30, 2007, the company generated pro forma revenue of approximately $800 million. YRC WORLDWIDE: Reaches Tentative Pact with Teamsters ---------------------------------------------------- YRC Worldwide Inc. said last Thursday that its TMI member subsidiaries have reached a tentative agreement with the International Brotherhood of Teamsters on a new five-year labor contract covering most dockworkers, drivers and certain other union employees. The present National Master Freight Agreement expires March 31, 2008. "The early outcome of these negotiations is positive for our employees and positive for our customers," said Mike Smid, President and CEO of YRC North American Transportation. "With the major hurdle of the NMFA behind us, we are now positioned to remain competitive in a very challenging industry environment." Trucking Management Inc. is the multi-employer bargaining representative for these YRC Worldwide subsidiaries: Yellow Transportation, Roadway and USF Holland. The YRC Worldwide subsidiary New Penn has also agreed to accept the terms of the tentative agreement. The agreement does not become effective until ratification by the Teamster membership. About YRC Worldwide YRC Worldwide Inc. -- http://www.yrcw.com/-- (NASDAQ: YRCW) provides transportation service and is the holding company for a portfolio of brands including Yellow Transportation, Roadway, Reimer Express, YRC Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide employs approximately 66,000 people. YRC WORLDWIDE: Inks New Amendment to Receivables Purchase Pact -------------------------------------------------------------- YRC Worldwide Inc. disclosed that it amended the Second Amended and Restated Receivables Purchase Agreement in connection with its asset-backed securitization facility to, among other things, conform the financial covenant definitions in the Purchase Agreement to the financial covenant definitions in the company's Credit Agreement dated as of Aug. 17, 2007. The ABS facility utilizes the accounts receivables of these subsidiaries of the company: * Yellow Transportation, Inc.; * Roadway Express, Inc.; * USF Holland Inc.; and * USF Reddaway Inc. Yellow Roadway Receivables Funding Corporation, a special purpose entity and wholly owned subsidiary of the company, operates the ABS facility. Under the terms of the ABS facility, the relevant company subsidiaries may transfer trade receivables to YRRFC, which is designed to isolate the receivables for bankruptcy purposes. A third-party conduit must purchase from YRRFC an undivided ownership interest in those receivables. The percentage ownership interest in receivables that the conduit purchases may increase or decrease over time, depending on the characteristics of the receivables, including delinquency rates and debtor concentrations. A copy of Amendment No. 4 to Second Amended and Restated Receivables Purchase Agreement may be viewed for free at: http://ResearchArchives.com/t/s?2669 About YRC Worldwide YRC Worldwide Inc. -- http://www.yrcw.com/-- (NASDAQ: YRCW) provides transportation service and is the holding company for a portfolio of brands including Yellow Transportation, Roadway, Reimer Express, YRC Logistics, New Penn, USF Holland, USF Reddaway, and USF Glen Moore. The enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, YRC Worldwide employs approximately 66,000 people. YRC WORLDWIDE: Poor Performance Cues S&P to Cut Rating to BB+ ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on YRC Worldwide Inc., to 'BB+' from 'BBB-'. S&P removed the ratings from CreditWatch, where they were placed with negative implications on Oct. 29, 2007. The outlook is negative. "The rating actions reflect worse-than-expected financial performance and operating profitability, weak credit metrics, and concerns regarding YRC's near-term operating outlook. The company recently lowered its free cash flow guidance by 25% for full-year 2007 to $150 million-$175 million. YRC has experienced meaningful deterioration in earnings and cash flow because of the soft freight environment and challenging conditions in the trucking sector," said Standard & Poor's credit analyst Anita Ogbara. "As a result, we expect YRC's operating performance and financial profile to remain weaker than previously expected." Ratings on Overland Park, Kan.-based YRC Worldwide Inc. reflect the company's satisfactory market position in the long-haul, less- than-truckload trucking industry, which is more than offset by its participation in the highly competitive and cyclical trucking and logistics industries as well as its below-average profitability relative to its peers. YRC is the largest LTL trucking company in North America, generating about $10.0 billion in annual revenues. YRC competes with the other large LTL companies\Arkansas Best Corp. ($1.8 billion in revenue) and Con-Way Inc. ($4.2 billion in revenue)\and with numerous smaller long-haul and regional LTL companies. The trucking industry is cyclical and is capital intensive, has relatively low margins because of the commodity nature of the product, and is very price competitive. Conditions in the trucking sector have deteriorated over the past year and will likely not improve materially over the near term, given the slowing U.S. economy. Still, S&P expect to see some improvement in volumes and pricing during the latter half of 2008. Total debt to EBITDA was about 3.3x as of Sept. 30, 2007. Standard & Poor's expects the company to reduce debt by at least $100 million by fiscal year-end 2007. Additionally, S&P expect the company to refrain from significant shareholder-friendly activities, such as large dividend payouts or share buybacks. The company has a share repurchase authorization of $100 million, of which $45 million remains available for share repurchase. S&P expect YRC's financial results to improve by late 2008 in response to various operating initiatives and as the freight environment improves. S&P could lower the ratings if financial results fail to improve and the expected improvement in credit protection measures fails to materialize. S&P could revise the outlook to stable if YRC's credit metrics return to expected levels, and the improvement appears sustainable. * Fitch Says Housing Contraction to Extend to 2008 -------------------------------------------------- The housing contraction unexpectedly gained momentum in 2007 and looks to extend, with some ferocity, at least well into 2008, according to Fitch Ratings. Affordability and wavering buyer confidence were the key issues in 2006, while significantly tighter mortgage standards (for subprime and Alt-A) and disrupted mortgage markets were the 'other shoes to drop' in 2007. A continuation of these pressures and possible tightening of the conforming loan market segment, as well as still considerable inventories of new and existing homes for sale, suggest another dismal year for housing in 2008. If mortgage rates should rise or credit terms further tighten, then Fitch's housing forecast could turn even more pessimistic. And, of course, if the economy slides into recession then the downturn would not only deepen, but possibly extend further into 2009. Operational and financial pressures will persist and, perhaps, intensify for the public homebuilders. Yet homebuilders have to successfully operate within this challenging environment or wither away. 'Companies have to continue to downsize to the point where they can remain profitable, excluding non-recurring real estate charges, which means further cuts in staffing and other overhead, as well as other cost reductions,' said Managing Director and lead Homebuilding analyst Bob Curran. 'The public homebuilders cannot significantly influence profitability, but they can manage their balance sheets and their liquidity.' Fitch believes that, overall, the U.S. homebuilding sector has good liquidity, although some weaker companies face greater risk. Many companies in this sector have generated meaningful free cash flows over the past twelve months, while terming out borrowings and maintaining access to committed bank facilities which together provide ample room to handle maturities and fund working capital needs. As compared to the last major housing downturn in the latter 1980's into the early 1990's, leverage was lower during the later part of this upcycle, at the peak and currently. For the majority of public homebuilders, debt composition 15-to-20 years ago was mostly, or all, short-term construction loans and possibly a secured credit line, while the debt is often weighted most heavily to well laddered public debt, and, to a lesser degree, to an unsecured revolving credit facility. (All of the public homebuilders in Fitch's coverage have unsecured revolving credit facilities except for Beazer Homes USA and TOUSA, Inc., which have secured revolving credit facilities.) Fitch will continue to assess each homebuilder's approach and performance relating to land and development spending, balance sheet contraction, free cash flow generation and debt reduction in consideration of its ratings, as well as builders' credit metrics, liquidity, size, geographic and product diversification, margins, frequency and size of real estate write-downs and option write- offs, etc. The Rating Outlook for the Homebuilding sector is Negative. Fourth-quarter 2007 (4Q'07) and calendar 2008: The Outlook for U.S. GDP growth depends critically on the path for consumption. Probably the single most important driver will be the state of the labor market. The Dec. 7 payroll release showed a 94,000 increase in non-farm jobs in November, but the trend has been erratic in recent months, especially since June. Job growth has fallen to a level which is consistent with below trend GDP growth and probably rising unemployment. Increasing uncertainty about income prospects and job security - as reflected in the weakening of consumer confidence indicators - is likely to take a toll on consumer spending. Employment growth has been a key support to the consumer outlook in the face of pressures from the housing market and debt servicing and current and expected volatility and deterioration comes just as these other pressures are intensifying. Various national house price measures are now showing sizeable annual declines in nominal terms which will reduce net wealth and further reduce possibilities for home equity extraction. And despite Fed rate cuts (including 25 basis points on Dec. 11) and stable to lower prime mortgage rates, debt servicing pressures are set to rise as borrowers who took out mortgages in 2005 and 2006 with lower rates for the initial two years face upward resets - a shock which the IMF estimates will be equivalent to a 0.4% decline in disposable income. Moreover, financial market turmoil over the summer resulted in a decline in the supply of new consumer and housing credit. The October Fed survey of loan officers shows that commercial banks have substantially tightened lending standards in all major components of the home mortgage market. Consumption is expected to slow in the 4Q'07 and into 2008 and to grow by just 1% in 2008 as a whole. This would be the lowest growth rate since the 0.2% recorded in 1991. Even allowing for some pick up in government expenditure, domestic demand is forecast to grow by just over 1% in 2008, similar to the rate seen in 2001. The gap between domestic demand and GDP growth points to the role of net trade as a key support for growth. While recent trade data have been erratic, the pattern of strong export performance - running at about 10% per annum in terms of volume indices for goods - and a sharp slowdown in imports is well established. Export growth may moderate a little in the face of weaker growth elsewhere but with the dollar down sharply in real effective terms so far this year and the high import propensity of U.S. demand, net trade should make a sizeable positive contribution to growth in 2008. Public policy responses will also likely support growth. The aggressive Fed easing so far and anticipated should help to head off a more pronounced retrenchment by the household sector and underpin corporate spending, while some measures have been announced to ease the household sector's financial burden. Following recent improvements in the fiscal deficit there may also be scope for higher public spending and tax cuts. However the impact of policy adjustments may not be felt until the second half of 2008. Quarterly GDP growth is expected to fall to 0.2% in fourth quarter-2007 - with domestic demand virtually flat - before recovering towards the middle of 2008. This translates to GDP growth of 1.7% in 2008 as a whole. The Fed implemented quarter point cuts in both the federal funds rate and the discount rate at the end of October, following half point cuts enacted at the September FOMC (Federal Open Market Committee) meeting. On Dec. 11, the Fed cut the federal funds rate by a quarter point to 4.25% and lowered the discount rate, the rate it charges to lend directly to banks, by 25 basis points to 4.75%. Fed officials signaled that further cuts are possible if the severe downturn in housing and the crisis in mortgage lending worsen. The FOMC noted that some inflation risks remain and it will continue to monitor inflation developments carefully. 30- year fixed mortgage rates, which averaged 6.4% in 2006, up 50 bps compared to 2005, should be down slightly in 2007 and moderately decrease in 2008. With distinct weakness in many business sectors in 2001, 2002 and 2003, construction and housing in particular stood out as bulwarks of the economy. The combination of consumption and private investment spending on housing represented about 15% of GDP in 2001 and close to that percentage in 2002 and 2003. In a more broadly growing economy, housing was still a significant, positive stimulant in 2004 and in 2005. That was not the case in 2006, and certainly not in 2007. For 2007 as a whole, real GDP should advance 2.3% with consumption (plus 3.1%) and exports (plus 6.7%) providing the impetus. Inflation (as represented by CPI) is expected to moderate from 3.2% in 2006 to 2.5% in 2007. 10-year bond yields should average about 10 basis points lower than last year. Fitch's forecast for the housing sector became more bearish as 2007 evolved. This is principally due to the impact from even tighter credit standards for homebuyers and the effect of disruptions in the secondary markets for subprime, Alt-A and Jumbo mortgages. Looking ahead, should mortgage rates rise, new mortgage underwriting standards will mean a more expensive mortgage or the inability to qualify for a mortgage, depending on one's financial position and credit history. Of course, most potential homebuyers, absent any real urgency to buy, are deferring the purchase decision, concerned that selling their existing home at a fair price may be challenging, and fearing that real home prices might further decline as builders increase the level of incentives being offered to the advantage of those who wait to buy. Total housing starts are forecast to be 1.37 million in 2007, 23.9% lower than in 2006. Single family starts are expected to be 1.06 million, down 27.4% as compared to a year ago. Multi-family starts should decrease 8.8% to 310,000. New single family home sales should fall 23.9% to 800,000, while existing home sales ease 12.7% to 5.66 million. For the full year of 2007, production, as represented by housing starts, is expected to fall slightly faster than sales, but unfortunately the supply of homes is expected to still be excessive entering 2008. The average single family new home price is expected to drop 2% in 2007, while the median new home price slips 1%. The 'real' price reductions surely are larger than shown by the government's published transaction prices as, for example, sales incentives are not included. However, in 2007 a greater portion of the 'real' price reduction was due to overt sales price decreases than was the case in 2006. Unfortunately, home prices have not yet reached market-clearing levels in most places. Home prices definitely had been 'sticky' on the downside, at least until recently. This is a similar pattern to price behavior exhibited in earlier major housing corrections. Fitch is forecasting a growing economy in 2008, although still below historic trend line. Real GDP is forecast to only grow 1.7%, paced by healthy exports (plus 6.6%), a slight rebound in investment (plus 1%) and modest consumption (plus 1%). Inflation is expected to slow to 2% from 2.5% in 2007. Interest rates are expected to slightly recede. The modestly expanding economy will aid the housing sector in 2008, but will not be robust enough to counter continuing negative buyer psychology, and tight credit qualification standards. Fitch is now depicting two housing scenarios for 2008. Although the economy isn't likely to fluctuate much off the base case (scenario 1), housing metrics are potentially much more variable. Fitch has estimated the probability of scenario 1 as 60% with scenario 2 (the weaker case) as 40%. In Fitch's base case, total housing starts are projected to fall 13.9% to 1.18 million with single family volume declining 15.1% to 900,000. New home sales are forecast to decrease 5% to 760,000, while existing home sales slip 8% to 5.2 million. Average and median single family new home prices are projected to fall 3% and 2%, respectively, in 2008. However, the combination of overt price decreases and sales incentives should represent a less significant percentage of the base home price next year than was the case in 2007. Implications for the Companies and the Ratings: Through the three quarters of calendar 2007 builder revenues are down about 25%, home deliveries are off 27%, and EBTIDA margins (before non-recurring, non-cash real estate charges) are 660 basis points lower than year earlier levels. Net new unit orders are down 21%, on average, and unit backlog at the conclusion of the third quarter, on average, is 37% beneath year earlier levels. These companies have been contracting staffing as demand has evaporated with personnel typically down 30-35% as compared to year end 2005. Just as important, builders have been reducing inventories in 2007, down 23% on average as of the end of the 3Q'07 as compared to the peak quarter end in 2006. The companies have lowered debt - on average 21% since the peak last year. Free cash flow comparisons have generally improved. Credit metrics are considerably lesser than at this time last year. Even debt/capitalization ratios have modestly deteriorated for the majority of builders when compared to September 2006, largely as a result of erosion in shareholders' equity from sizeable real estate charges. Given Fitch's adjusted macro forecasts for the balance of 2007 and 2008, it appears likely that builders' financial pressures will continue unabated. For the full year of 2007 homebuilders' revenues could drop 30%, on average, while pretax profits, before real estate charges, could plummet 75-80%. Price competition will likely persist at current levels well into 2008. Consequently, margins will remain under pressure and more land value write downs are a distinct possibility. However, fewer option write-offs are likely. Deterioration in credit metrics will continue during the fourth quarter of 2007 and next year, particularly for profit related metrics. Tangible net worth covenants will be challenged. Most of the public builders that Fitch tracks have negotiated new revolving credit agreements or amendments to existing agreements that should prevent the companies from violating interest coverage covenants in the fourth quarter of 2007 and into 2008. Some have also secured adjustments in covenants applicable to speculative inventories and tangible net worth. The few remaining builders that haven't changed their covenants may yet have to do so in 2008. Some builders may have to revisit their bank syndicates and request further covenant adjustments in 2008. If Fitch's year-end forecast for 2007 is correct, then 2008 will start off with still considerable inventory over-hang. Should the Fitch base case prove out, then new home sales comparisons would likely bottom late in 2008 with housing starts bottoming three-to- six months later. If scenario two prevails, then new home sales and starts would be under greater pressure in 2008 and not bottom until mid-2009. There is a high probability that public builders' revenues and profits will fall further in 2008 and drop rather sharply from already depressed levels. Credit pressures will continue. It will be imperative that builders continue to contract their balance sheets, further reducing land and development spending. Even more aggressive pricing may be necessary to lower inventories, especially specs. Positive free cash flow comparisons should result as well as improved liquidity. Fitch expects homebuilders to reduce debt where possible and to exercise restraint as to share repurchase, dividends and acquisitions in these uncertain times. Although some builders have been more proactive than others in reducing inventories and lowering debt levels, most, in retrospect, started relatively late during this cyclical downturn. Fitch rates the builders within the context of a typical cycle. In the midst of an untypical upcycle, as took place in the 1992-2005 period, a number of builders realized higher credit ratings. Conversely, in this sharper than expected contraction, which now appears will last longer, and as builders' credit metrics are likely to be even more stressed, ratings have been downgraded. There is potential for further downgrades due to 'macro economic and/or housing events' as well as company specific situations. This is a list of Fitch-rated issuers and their current Issuer Default Ratings in the U.S. homebuilding sector: -- Beazer Homes U.S.A., ('BB-'; Rating Watch Negative); -- Centex Corp. ('BBB'; Outlook Negative); -- D.R. Horton, Inc. ('BBB-'; Outlook Negative); -- Hovnanian Enterprises, Inc. ('BB-'; Outlook Negative); -- KB Home ('BB+'; Outlook Negative); -- Lennar Corporation ('BBB'; Outlook Negative); -- M.D.C. Holdings, Inc. ('BBB'; Outlook Negative); -- M/I Homes, Inc. ('BB-', Outlook Negative); -- Meritage Homes Corp ('BB-'; Outlook Negative); -- NVR, Inc. ('BBB'; Outlook Stable); -- Pulte Homes, Inc. ('BBB'; Outlook Negative); -- Ryland Group, Inc. ('BBB-'; Outlook Negative); -- Standard Pacific Corp. ('BB-'; Outlook Negative); -- TOUSA, Inc. ('C'; Rating Watch Negative); -- Toll Brothers, Inc. ('BBB'; Outlook Negative). * Fitch Believes Gaming Issuers Can Manage Credit Profiles ---------------------------------------------------------- Within the context of a modestly decelerating economy that could continue to deteriorate in 2008, Fitch believes issuers within its Gaming, Lodging & Leisure portfolio have the ability to manage credit profiles amid weakening consumer trends and generally maintain credit ratings in the upcoming year. Fitch expects nominal and real GDP growth of 3.7% and 1.7% growth, respectively, and expects some adverse economic trends to continue to affect consumers, including high energy costs, a weak housing sector, and deteriorating employment trends. Such trends could result in eroding consumer confidence and spending in 2008 with lower-end consumers likely to be more affected than higher-end consumers. Casino and cruise line consumers have higher-than-average income levels, which should help financial performance of those sub- sectors in 2008 relative to others that target a mid-to-lower income consumer, such as regional theme parks. In addition, casino and cruise line consumers are often empty-nest retirees who will likely feel less economic pressure than younger consumers. Lodging companies' performance within the Fitch-rated portfolio should benefit from being more exposed to the corporate sector, although Fitch does expect pressure on business travel in 2008 and some non-Fitch rated lodging companies may be more sensitive to consumer weakness. 2008 Credit Outlook Since the industry is highly capital intensive, credit fundamentals and metrics for gaming operators in 2008 are more tied to specific issuers' development pipelines than to economic sensitivity. That said, while the gaming industry has historically performed well in economic downturns, Fitch believes it is likely to be more economically sensitive in the future due to the secular growth of discretionary, non-gaming amenities at casino locations in recent years. The lodging industry has historically been more economically sensitive than the gaming industry, which could result in some operating pressure if the economy slows more dramatically than expected or dips into a recession. However, in the absence of a dramatic economic slowdown, the supply/demand environment remains favorable for 2008. Fitch does expect business travel demand patterns to soften early in 2008 in response to weaker corporate profits. Corporate travel demand softening is likely to be most acute among financial services firms, where weaker earnings and reduced deal activity could pressure corporate travel budgets through much of 2008. As a result, there could be some operating pressure on the lodging companies' 2008 outlooks, which currently call for RevPAR growth roughly in the 5%-8% range. Even if that RevPAR range is pressured, the effect will be offset by tame supply growth that is below its historical average of 2%. With most of the Fitch-rated Gaming, Lodging & Leisure portfolio having Stable Outlooks, Fitch does not anticipate a high number of rating actions in 2008. Liquidity in the sector remains solid, providing financial flexibility for companies in the sector with significant capital expenditure programs, which should mitigate downside rating pressure. Sub-sectors that could generate strong free cash flow such as lodging, cruise lines and Native American gaming issuers are more inclined to return cash to shareholders/make cash distributions, which will likely limit upside rating potential. The current credit environment is likely to somewhat limit event risk and debt issuance in the sector due to the higher cost of capital, although well-capitalized companies/sponsors may remain active. Investment grade issuers in the sector that have successfully placed debt since September include Marriott, Starwood, and Seminole Tribe of Florida. Blackstone closed its Hilton Hotels LBO transaction in less than four months on Oct. 24, 2007 despite the current credit environment. Although the bulk of the deal has not been syndicated yet, Blackstone did privately place $500 million of senior unsecured floating-rate notes used to repay some of the mezzanine loans related to the transaction. Liquidity Remains Solid In order to manage the volatility of the casino development cycle, Fitch views solid liquidity and access to capital markets as a key credit consideration. Rising construction and development costs are expected to continue to have an impact on gaming project budgets in 2008. Many of the corporate gaming issuers rated by Fitch have extensive development and project pipelines that will require a significant amount of capital funding, often resulting in negative free cash flow. Despite this concern, Fitch believes that adequate liquidity exists for corporate gaming issuers in its rated portfolio because debt maturities are mostly limited; there is adequate availability and time to expiration on credit revolvers; and operations are solid and producing stable cash flow before capital expenditures, the timing of which can be somewhat flexible. For Native American gaming operators, liquidity is typically more limited but internal free cash flow generation is often more robust. The lack of bullet maturities given the level debt service structures of most deals in the Fitch-rated Native American gaming portfolio, and less extensive capital development pipelines offset a more limited liquidity profile. The lodging industry is also somewhat capital intensive, although less so than the gaming industry. Lodging issuers with business models that have a greater emphasis on the management/franchise fee business relative to hotel ownership generate more stable cash flows and have less capital expenditure obligations, thereby requiring less liquidity. Weak U.S. Dollar Could Continue to Attract Foreign Capital The weak U.S. dollar has attracted foreign investment into the U.S. gaming industry supporting valuations and Las Vegas real estate value. Fitch expects that trend to continue in 2008 given expectations for secular U.S. dollar weakness. Foreign gaming companies such as PBL/Crown Ltd have invested in projects such as Fontainebleau on the Las Vegas Strip and just announced a $1.8 billion purchase of Cannery Casino Resorts LLC. Dubai World invested in MGM MIRAGE's CityCenter project and purchased a stake in MGM which it aims to increase. Israeli investors paid nearly $35 million per acre for Las Vegas Strip land with plans to redevelop. Gaming Trends in 2008 Despite the economic challenges to the consumer and an increase in smoking bans in certain markets, gaming revenues have held up reasonably well in 2007. Gaming revenues in major jurisdictions with publicly available information increased roughly 7% year-to- date through October 2007 fueled by new commercial gaming states such as Pennsylvania and Florida, as well as a ramp up in the New York video lottery terminal market. Excluding those three newer markets, gaming revenues in more mature jurisdictions still increased roughly 2%-3% year-to-date despite markets such as Atlantic City and Connecticut being hit by the new competition from Pennsylvania and New York. Those markets are likely to continue to feel pressure in 2008. In 2008, Fitch expects revenues in established jurisdictions will be pressured from the consumer impacts of a weakening economy and the further proliferation of smoking bans, which Fitch views as a secular challenge to the industry. Due to their sovereign status, Native American gaming operators are able to avoid the latter challenge. In recent years, growth in Native American gaming revenues has outpaced growth in commercial gaming revenues. Fitch expects this trend to continue in 2008, with Native American gaming narrowing the gap between the two market segments. There has been some recent evidence that the economic slowdown has begun to affect the industry, and this is incorporated into Fitch's 2008 outlook of low-to-mid-single-digit revenue growth. Las Vegas visitation and revenue trends have historically been driven by clusters of new casino-resort supply. Las Vegas supply growth will remain below average in 2008 and will not increase significantly until 2009-2010 with high profile openings such as Wynn Encore, CityCenter, and Boyd's Echelon. The imminent opening of Las Vegas Sands' Palazzo on Dec. 20 will be the first major opening since Wynn Las Vegas in April 2005. However, the economic slowdown in the U.S. and the increase of significant new supply in Macau is likely to keep Las Vegas visitation and revenue trends modest in 2008. As a result, Fitch expects Las Vegas revenue growth in the low-to-mid-single-digit range until the impact of a new supply cluster toward the end of the decade. International growth will continue to trend higher than domestic growth in 2008, particularly in Macau, which has overtaken the Las Vegas Strip as the world's largest gaming market. Macau revenues increased 48% year-to-date 2007 and Fitch expects the strong growth trend will continue in 2008, driven in part by the development of the Cotai Strip. Wynn Resorts and Las Vegas Sands' credit have the most exposure to international growth. Regulatory Issues in 2008 Due to the highly regulated nature of the gaming industry, regulatory risk remains a significant credit consideration particularly with respect to the tax/revenue sharing environment and gaming expansion. Notable regulatory issues to monitor in 2008 that could affect the credit quality of gaming issuers include a proposal for a 3- percentage point increase in the Nevada gaming tax, a proposal to award three Massachusetts casino licenses, proposals for gaming expansion in Illinois including the potential auctioning of the state's 10th gaming license, and the awarding of Kansas gaming licenses that are currently in the bidding stage. In addition, there are a number of regulatory issues to monitor in 2008 related to Native American gaming including the challenge of newly signed gaming compacts in California and Florida, the potential for legislative changes to the Indian Gaming Regulatory Act, and proposed revisions to Class II gaming standards. Gaming Sub-Sector Outlooks Corporate Gaming Operator Sub-Sector (Stable Outlook): Historically, corporate gaming operators have performed comparatively well when the economy slows, which should help relative credit profiles in 2008 and support Fitch's stable outlook. However, economic sensitivity going forward is likely to be greater than historical trends due to the secular growth in recent years of discretionary, non-gaming amenities at casino locations, in Fitch's view. Capital requirements for project pipelines and other gaming investment opportunities are likely to prevent much upside rating potential for the sub-sector, while solid liquidity should provide enough financial flexibility to prevent downside rating pressure. Native American Gaming Operator Sub-Sector (Stable Outlook): Fitch's stable outlook is supported by the highly attractive competitive environment and protected market of many Native American gaming operations that could prove to be a benefit in a slowing economic environment. There should be less pressure to increase promotional costs relative to commercial operations in highly competitive markets. Fitch expects the Native American gaming sector to show continued diversification in 2008, with an increasing portion of revenues from non-gaming sources and off- reservation gaming operations. Gaming Supplier Sub-Sector (Stable Outlook): Fitch has a stable outlook for ratings in this sub-sector. The product portfolios of most 2nd-tier suppliers have improved significantly in recent years, thereby increasing competitiveness with market leader IGT. The industry will enter a new technology- driven upcycle in the next 12-24 months with the onset of server- based gaming, which could drive an accelerated replacement cycle and benefit all suppliers. However, IGT's market share has historically benefited when the industry enters a new replacement cycle, which poses risk to 2nd-tier suppliers. Lodging Sector Outlook (Stable Outlook) With a stable outlook on ratings in the lodging sector, Fitch believes the operating environment for lodging companies is likely to remain positive in 2008 given an attractive supply/demand outlook even in a modestly decelerating economy with some pressure on business travel demand. The industry has had only three years of RevPAR declines in the last 20 years and supply growth is expected to remain below its historical average of 2% in 2008. Although companies may have the ability to improve their credit profiles, Fitch believes upside rating potential will be limited by capital allocation decisions that appear to be biased toward returning cash to shareholders. Leisure Sub-Sector Outlooks Cruise Lines (Stable Outlook): Cruise lines have performed well historically in challenging economic times and responded well to travel demand shocks. This resiliency is due to a favorable value relative to land-based vacations and ownership of mobile assets. In 2008, early indications on demand are positive with a firming of some Caribbean softness seen in 2007 and continued strong European demand. As a result, the industry appears poised to show positive net yield growth despite 6%-9% capacity growth, although the heavy booking season occurs from January-March, so that outlook could change in the next three months. The industry should continue to benefit in the current environment from increasing international exposure and a focus on a higher-end consumer. Cruise lines recently implemented a broader fuel surcharge, which should help mitigate continued fuel cost pressure. However, it remains to be seen if it will have a material negative effect on demand. A bias toward returning excess cash to shareholders is likely to limit upside rating potential. Theme Parks (Stable Outlook): Theme park performance is highly susceptible to cyclical factors, and if the economy slips into a recession, theme park attendance could be negatively affected. In a full-fledged downturn attendance could be down 10%-20%, pricing could slip slightly and EBITDA would likely be down more than 2 times the percentage decline in revenue. Given the solid margins (mid-to-high 20% range) and maintenance capital expenditures at around 5% of revenue, Fitch would not expect theme parks to drop below EBITDA less maintenance capex - breakeven in a downturn, but highly leveraged companies would not cover interest expense. Fitch-Rated Issuers Corporate Gaming (IDR) -- Harrah's Entertainment ('BB+'/Negative Watch) -- MGM MIRAGE ('BB'/Outlook Stable) -- Boyd Gaming ('BB-'/Outlook Stable) -- Pinnacle Entertainment ('B'/Outlook Stable) -- Bally Technologies ('B-'/Outlook Stable) Native American Gaming (Issuer Rating) -- Seminole Tribe of Florida ('BBB-'/Outlook Positive) -- Agua Caliente Band of Cahuilla Indians, CA ('BBB-'/ Outlook Stable) -- San Manuel Entertainment Authority, CA ('BBB-'/Outlook Stable) -- Pueblo of Santa Ana, NM ('BB'/Outlook Stable) -- Laguna Development Corp., NM ('BB-'/Outlook Stable) -- Quechan Tribe of the Fort Yuma Indian Reservation ('BB-'/ Outlook Stable) -- Cow Creek Band of Umpqua Indians, OR ('B+'/Outlook Stable) Lodging (IDR) -- Marriott International ('BBB'/Outlook Stable) -- Starwood Hotels and Resorts Worldwide ('BBB-'/Outlook Stable ) -- Host Hotels & Resorts, Inc. ('BB+'/Outlook Stable) Leisure (IDR) -- Carnival Corp. and plc ('A-'/ Outlook Stable) -- Six Flags ('B-' Negative Outlook); * ABI Study Shows Examiners Found to Drive Up Bankruptcy Costs -------------------------------------------------------------- A new study done by the American Bankruptcy Institute found out that bankruptcy court-appointed examiners and investigators substantially add to the costs of a bankruptcy reorganization, the Associated Press reports. According to the study, examiner expenses costs an additional $515,000. The study also found out that bankruptcy cases in 2004 reflected examiner costs ranging from around $20,000 to $2 million. "Examiner professionals seem to add the most cost to the Chapter 11 process," the AP says, citing the study. Examiners are usually appointed to investigate alleged mismanagement and fraud done by a debtor company or its affiliates, or to analyze professional fees. The study was conducted by Stephen J. Lubben, a law professor at Seton Hall University. Mr. Lubben, the AP states, expressed that appointing examiners may not be a "bargain", and apparently does not help in lowering down bankruptcy costs. "They're not meant to add value... it's like buying an insurance policy," the AP quotes Deirdre Martini, a CIT Group Inc. restructuring consultant, as saying. Mr. Lubben's study indicated that examiner costs are greater in large, publicly-traded companies. In a study of 99 debtor companies, examiner costs averaged approximately $940,000, the AP says. Fee examiners and auditors command costs at an average of $69,000 for all cases, and $72,000 in large bankruptcy filings. * BOND PRICING: For the Week of Dec. 10 - Dec. 14, 2007 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 0 ABC Rail Product 10.500% 12/31/04 0 Alesco Financial 7.625% 05/15/27 66 Alltel Corp 6.800% 05/01/29 69 Ambac Inc 6.150% 02/15/37 68 Ambassadors Intl 3.750% 04/15/27 69 Amer & Forgn Pwr 5.000% 03/01/30 62 Amer Color Graph 10.000% 06/15/10 62 Amer Pad & Paper 13.000% 11/15/05 0 Americredit Corp 0.750% 09/15/11 59 Americredit Corp 0.750% 09/15/11 64 Americredit Corp 2.125% 09/15/13 59 Ames True Temper 10.000% 07/15/12 65 Antigenics 5.250% 02/01/25 62 Archibald Candy 10.000% 11/01/07 0 Arvinmeritor Inc 4.000% 02/15/27 71 Ashton Woods USA 9.500% 10/01/15 75 At Home Corp 4.750% 12/15/06 0 Ata Holdings 12.125% 06/15/10 0 Atherogenics Inc 1.500% 02/01/12 17 Atherogenics Inc 4.500% 03/01/11 36 Bank New England 8.750% 04/01/99 9 Bank New England 9.500% 02/15/96 14 Bank New England 9.875% 09/15/99 7 BankUnited Cap 3.125% 03/01/34 65 BBN Corp 6.000% 04/01/12 0 Bearingpoint Inc 2.750% 12/15/24 67 Beazer Homes USA 4.625% 06/15/24 72 Beazer Homes USA 6.500% 11/15/13 72 Beazer Homes USA 6.875% 07/15/15 71 Beazer Homes USA 8.125% 06/15/16 73 Beazer Homes USA 8.375% 04/15/12 74 Beazer Homes USA 8.625% 05/15/11 75 Borden Inc 7.875% 02/15/23 74 Bowater Inc 6.500% 06/15/13 69 Bowater Inc 9.375% 12/15/21 72 Buffets Inc 12.500% 11/01/14 47 Burlington North 3.200% 01/01/45 55 Calpine Gener Co 11.500% 04/01/11 3 Central Tractor 10.625% 04/01/07 0 Charming Shoppes 1.125% 05/01/14 72 Charter Comm Inc 6.500% 10/01/27 67 CIH 9.920% 04/01/14 62 CIH 10.000% 05/15/14 64 CIH 11.125 01/15/14 64 Clark Material 10.750% 11/15/06 0 Claire's Stores 9.250% 06/01/15 74 Claire's Stores 10.500% 06/01/17 62 Clear Channel 4.900% 05/15/15 75 Coinmach Service 11.000% 12/01/24 1 Collins & Aikman 10.750% 12/31/11 2 Columbia/HCA 7.500% 11/15/95 75 Complete Mgmt 8.000% 12/15/03 0 Compucredit 3.625% 05/30/25 55 CompuCredit 5.875% 11/30/35 49 Compudyne Corp 6.250% 01/15/11 75 Constar Intl 11.000% 12/01/12 70 Countrywide Cap 8.050 06/15/27 74 Countrywide Finl 4.500% 06/15/10 72 Countrywide Finl 5.800% 06/07/12 74 Countrywide Finl 6.000% 03/23/21 70 Countrywide Finl 6.000% 12/14/35 57 Countrywide Finl 6.250% 05/15/16 59 Countrywide Finl 6.300% 04/2836 56 Countrywide Home 4.000% 03/22/11 72 Countrywide Home 4.125% 09/15/09 75 Countrywide Home 6.000% 01/24/18 61 Countrywide Home 6.150% 06/25/29 58 Countrywide Home 6.200% 07/16/29 58 Crown Cork & Seal 7.500% 12/15/96 75 Curagen Corp 4.000% 02/15/11 71 Dana Corp 5.850% 01/15/15 72 Dana Corp 6.500% 03/01/09 74 Dana Corp 7.000% 03/15/28 72 Dana Corp 7.000% 03/01/29 73 Dana Corp 9.000% 08/15/11 70 Decode Genetics 3.500% 04/15/11 68 Decode Genetics 3.500% 04/15/11 67 Delta Air Lines 8.000% 12/01/15 66 Delta Mills Inc 9.625% 09/01/07 15 Delphi Corp 6.197% 11/15/33 33 Delphi Corp 6.500% 08/15/13 66 Delphi Corp 8.250% 10/15/33 36 Dura Operating 8.625% 04/15/12 28 Dura Operating 9.000% 05/01/09 1 Encysive Pharma 2.500% 03/15/12 52 Epix Medical Inc 3.000% 06/15/24 68 Exodus Comm Inc 11.625% 07/15/10 0 Fedders North Am 9.875% 03/01/14 8 Finlay Fine Jwly 8.375% 06/01/12 68 Finova Group 7.500% 11/15/09 17 Ford Motor Co 6.375% 02/01/29 68 Ford Motor Co 6.500% 08/01/18 72 Ford Motor Co 6.625% 02/15/28 66 Ford Motor Co 6.625% 10/01/28 66 Ford Motor Co 7.125% 11/15/25 67 Ford Motor Co 7.400% 11/01/46 66 Ford Motor Co 7.450% 07/16/31 74 Ford Motor Co 7.500% 08/01/26 70 Ford Motor Co 7.700% 05/15/97 67 Ford Motor Co 7.750% 06/15/43 68 Ford Motor Cred 5.650% 01/21/14 73 Ford Motor Cred 5.750% 01/21/14 75 Ford Motor cred 5.900% 02/20/14 73 Ford Motor Cred 6.000% 01/21/14 75 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 11/20/14 72 Ford Motor Cred 6.000% 11/20/14 75 Ford Motor Cred 6.000% 01/20/15 71 Ford Motor Cred 6.000% 02/20/15 75 Ford Motor Cred 6.050% 03/20/14 74 Ford Motor Cred 6.050% 02/20/15 70 Ford Motor Cred 6.100% 02/20/15 73 Ford Motor Cred 6.250% 03/20/15 75 Ford Motor Cred 6.300% 05/20/14 74 Ford Motor Cred 6.300% 05/20/14 74 Ford Motor Cred 6.500% 02/20/15 72 Ford Motor Cred 7.250% 07/20/17 73 Ford Motor Cred 7.250% 07/20/17 73 Ford Motor Cred 7.500% 08/20/32 72 General Motors 6.750% 05/01/28 69 General Motors 7.375% 05/23/48 69 General Motors 7.400% 09/01/25 72 Georgia Gulf Crp 10.750% 10/15/16 70 GMAC 5.250% 01/15/14 73 GMAC 5.350% 01/15/14 74 GMAC 5.700% 06/15/13 75 GMAC 5.700% 12/15/13 75 GMAC 5.850% 06/15/13 73 GMAC 5.850% 06/15/13 73 GMAC 5.850% 06/15/13 66 GMAC 5.900% 01/15/19 67 GMAC 5.900% 01/15/19 61 GMAC 5.900% 02/15/19 65 GMAC 5.900% 10/15/19 65 GMAC 6.000% 07/15/13 73 GMAC 6.000% 12/15/13 72 GMAC 6.000% 02/15/19 70 GMAC 6.000% 02/15/19 68 GMAC 6.000% 02/15/19 68 GMAC 6.000% 03/15/19 66 GMAC 6.000% 03/15/19 66 GMAC 6.000% 03/15/19 71 GMAC 6.000% 03/15/19 67 GMAC 6.000% 03/15/19 67 GMAC 6.000% 04/15/19 66 GMAC 6.000% 09/15/19 61 GMAC 6.000% 09/15/19 63 GMAC 6.050% 08/15/19 64 GMAC 6.050% 08/15/19 68 GMAC 6.050% 10/15/19 66 GMAC 6.100% 11/15/13 65 GMAC 6.100% 09/15/19 68 GMAC 6.125% 10/15/19 61 GMAC 6.150% 11/15/13 65 GMAC 6.150% 12/15/13 64 GMAC 6.150% 08/15/19 66 GMAC 6.150% 09/15/19 67 GMAC 6.150% 10/15/19 67 GMAC 6.200% 11/15/13 72 GMAC 6.200% 04/15/19 65 GMAC 6.250% 07/15/13 74 GMAC 6.250% 11/15/13 69 GMAC 6.250% 12/15/18 69 GMAC 6.250% 01/15/19 65 GMAC 6.250% 04/15/19 73 GMAC 6.250% 05/15/19 68 GMAC 6.250% 07/15/19 65 GMAC 6.300% 11/15/13 74 GMAC 6.300% 08/15/19 65 GMAC 6.300% 08/15/19 68 GMAC 6.350% 04/15/19 66 GMAC 6.350% 07/15/19 65 GMAC 6.350% 07/15/19 66 GMAC 6.375% 08/01/13 68 GMAC 6.400% 12/15/18 69 GMAC 6.400% 11/15/19 66 GMAC 6.400% 11/15/19 69 GMAC 6.500% 05/15/12 72 GMAC 6.500% 06/15/12 73 GMAC 6.500% 06/15/12 72 GMAC 6.500% 02/15/13 74 GMAC 6.500% 06/15/13 68 GMAC 6.500% 11/15/13 74 GMAC 6.500% 06/15/18 68 GMAC 6.500% 11/15/18 70 GMAC 6.500% 12/15/18 70 GMAC 6.500% 12/15/18 67 GMAC 6.500% 05/15/19 67 GMAC 6.500% 01/15/20 66 GMAC 6.500% 02/15/20 66 GMAC 6.550% 12/15/19 69 GMAC 6.600% 06/15/12 73 GMAC 6.600 06/15/12 73 GMAC 6.600% 08/15/16 72 GMAC 6.600% 05/15/18 68 GMAC 6.600% 06/15/19 68 GMAC 6.600% 06/15/19 68 GMAC 6.650% 06/15/18 67 GMAC 6.650% 10/15/18 70 GMAC 6.650% 10/15/18 71 GMAC 6.650% 02/15/20 69 GMAC 6.700% 07/15/12 73 GMAC 6.700% 05/15/14 73 GMAC 6.700% 06/15/14 73 GMAC 6.700% 06/15/18 71 GMAC 6.700% 06/15/18 69 GMAC 6.700% 11/15/18 67 GMAC 6.700% 06/15/19 71 GMAC 6.700% 12/15/19 70 GMAC 6.700% 06/15/14 72 GMAC 6.750% 07/15/16 72 GMAC 6.750% 08/15/16 72 GMAC 6.750% 09/15/16 74 GMAC 6.750% 06/15/17 72 GMAC 6.750% 03/15/18 68 GMAC 6.750% 07/15/18 71 GMAC 6.750% 09/15/18 71 GMAC 6.750% 10/15/18 71 GMAC 6.750% 11/15/18 68 GMAC 6.750% 05/15/19 66 GMAC 6.750% 05/15/19 67 GMAC 6.750% 06/15/19 72 GMAC 6.750% 06/15/19 72 GMAC 6.750% 03/15/20 71 GMAC 6.800% 09/15/18 68 GMAC 6.800% 10/15/18 69 GMAC 6.850% 05/15/18 72 GMAC 6.875% 08/15/16 74 GMAC 6.875% 07/15/18 72 GMAC 6.900% 06/15/17 73 GMAC 6.900% 07/15/18 72 GMAC 6.900% 08/15/19 71 GMAC 6.950% 06/15/17 74 GMAC 7.000% 07/15/12 74 GMAC 7.000% 06/15/17 75 GMAC 7.000% 07/15/17 71 GMAC 7.000% 02/15/18 74 GMAC 7.000% 02/15/18 69 GMAC 7.000% 02/15/18 67 GMAC 7.000% 03/15/18 73 GMAC 7.000% 05/15/18 73 GMAC 7.000% 08/15/18 70 GMAC 7.000% 09/15/18 69 GMAC 7.000% 02/15/21 71 GMAC 7.000% 09/15/21 66 GMAC 7.000% 09/15/21 68 GMAC 7.000% 06/15/22 68 GMAC 7.000% 11/15/23 71 GMAC 7.000% 11/15/24 72 GMAC 7.000% 11/15/24 70 GMAC 7.000% 11/15/24 66 GMAC 7.050% 03/15/18 73 GMAC 7.050% 03/15/18 74 GMAC 7.050% 04/15/18 73 GMAC 7.100% 07/15/12 74 GMAC 7.125% 10/15/17 74 GMAC 7.150% 07/15/12 75 GMAC 7.150% 09/15/18 73 GMAC 7.150% 01/15/25 65 GMAC 7.150% 03/15/25 66 GMAC 7.200% 10/15/17 75 GMAC 7.200% 10/15/17 73 GMAC 7.250% 09/15/17 75 GMAC 7.250% 09/15/17 73 GMAC 7.250% 01/15/18 74 GMAC 7.250% 04/15/18 73 GMAC 7.250% 04/15/18 75 GMAC 7.250% 08/15/18 74 GMAC 7.250% 08/15/18 71 GMAC 7.250% 09/15/18 74 GMAC 7.250% 01/15/25 73 GMAC 7.250% 02/15/25 69 GMAC 7.250% 03/15/25 68 GMAC 7.300% 12/15/17 73 GMAC 7.300% 01/15/18 75 GMAC 7.350% 04/15/18 73 GMAC 7.375% 11/15/16 73 GMAC 7.375% 04/15/18 71 GMAC 7.400% 12/15/17 73 GMAC 7.500% 11/15/17 74 GMAC 7.500% 03/15/25 74 GMAC 8.000% 11/15/17 73 GMAC 8.000% 03/15/25 72 GMAC 8.650% 08/15/15 70 Gulf States STL 13.500% 04/15/03 0 Harrahs Oper Co 5.625% 06/01/15 74 Harrahs Oper Co 5.750% 10/01/17 70 Headwaters Inc 2.500% 02/01/14 74 Herbst Gaming 7.000% 11/15/14 67 Herbst Gaming 8.125% 06/01/12 68 Hines Nurseries 10.250% 10/01/11 74 HNG Internorth 9.625% 03/15/06 19 Ion Media 11.000% 07/31/13 67 Iridium LLC/CAP 10.875% 07/15/05 2 Iridium LLC/CAP 11.250% 07/15/05 1 Iridium LLC/CAP 13.000% 07/15/05 2 Iridium LLC/CAP 14.000% 07/15/05 2 K Hovnanian Entr 6.000% 01/15/10 68 K Hovnanian Entr 6.250% 01/15/16 68 K Hovnanian Entr 6.250% 01/15/16 68 K Hovnanian Entr 6.375% 12/15/14 70 K Hovnanian Entr 6.500% 01/15/14 69 K Hovnanian Entr 7.500% 05/15/16 71 K Hovnanian Entr 7.750% 05/15/13 57 K Hovnanian Entr 8.625% 01/15/17 72 K Hovnanian Entr 8.875% 04/01/12 59 Kaiser Aluminum 9.875% 02/15/02 5 Kaiser Aluminum 12.750% 02/01/03 6 Kimball Hill Inc 10.500% 12/15/12 51 Kmart Corp 9.350% 01/02/20 5 Kmart Corp 9.780% 01/05/20 0 KMart Funding 8.800% 07/01/10 9 KMart Funding 9.440% 07/01/18 60 Knight Ridder 6.875% 03/15/29 74 Liberty Media 3.250% 03/15/31 75 Liberty Media 3.750% 02/15/30 58 Liberty Media 4.000% 11/15/29 64 Lifecare Holding 9.250% 08/15/13 59 LTV Corp 8.200% 09/15/07 0 Magna Entertainm 7.250% 12/15/09 74 McSaver Financl 7.400% 02/15/02 5 McSaver Financl 7.600% 08/01/07 5 McSaver Financl 7.875% 08/01/03 5 Meritage Homes 6.250% 03/15/15 71 Metaldyne Corp 11.000% 06/15/12 67 Morris Publish 7.000% 08/01/13 73 Mosler Inc 11.000% 04/15/03 0 Movie Gallery 11.000% 05/01/12 27 Mrs Fields 9.000% 03/15/11 74 Muzak LLC 9.875% 03/15/09 53 National Steel Corp 8.375% 08/01/06 0 Neff Corp 10.000% 06/01/15 60 New Orl Grt N RR 5.000% 07/01/32 61 Northern Pacific RY 3.000% 01/01/47 51 Northern Pacific RY 3.000% 01/01/47 51 Northpoint Comm 12.875% 02/15/10 0 Northwest Steel & Wire 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 58 Nutritional Src 10.125% 08/01/09 5 Nuveen Invest 5.500% 09/15/15 70 Oakwood Homes 7.875% 03/01/04 13 Oakwood Homes 8.125% 03/01/09 3 Oscient Pharma 3.500% 04/15/11 58 Oscient Pharma 3.500% 04/15/11 55 Outboard Marine 9.125% 04/15/17 5 Pac-West Telecom 13.500% 02/01/09 1 Pac-West Telecom 13.500% 02/01/09 3 Pegasus Satellite 13.500% 03/01/07 0 Phelps Dodge 6.125% 03/15/34 71 Pixelworks Inc 1.750% 05/15/24 70 Polaroid Corp 11.500% 02/15/06 0 Pope & Talbot 8.375% 06/01/13 26 Pope & Talbot 8.375% 06/01/13 24 Portola Packagin 8.250% 02/01/12 75 Primus Telecom 3.750% 09/15/10 59 Primus Telecom 8.000% 01/15/14 53 Propex Fabrics 10.000% 12/01/12 34 PSInet Inc 10.000% 02/15/05 0 Pulte Homes Inc 6.000% 02/15/35 74 Radian Group 5.375% 06/15/15 74 Radnor Holdings 11.000% 03/15/10 0 Rayovac Corp 8.500% 10/01/13 67 Read-Rite Corp 6.500% 09/01/04 0 Realogy Corp 10.500% 04/15/14 73 Realogy Corp 12.375% 04/15/15 64 Residential Cap 6.000% 02/22/11 62 Residentail Cap 6.125% 11/21/08 75 Residential Cap 6.375% 06/30/10 63 Residential Cap 6.500% 06/01/12 61 Residential Cap 6.500% 04/17/13 61 Residential Cap 6.875% 06/30/15 61 Rite Aid Corp 7.700% 02/15/27 71 RJ Tower Corp. 12.000% 06/01/13 3 Saint Acquisition 12.500% 05/15/17 50 ServiceMaster Co 7.100% 03/01/18 70 ServiceMaster Co 7.250% 03/01/38 70 ServiceMaster Co 7.450% 08/15/27 66 Six Flags Inc 4.500% 05/15/15 70 Six Flags Inc 9.625% 06/01/14 71 Six Flags Inc 9.750% 04/15/13 73 SLM Corp 5.000% 06/15/28 74 SLM Corp 5.050% 03/15/23 73 SLM Corp 5.250% 03/15/19 71 SLM Corp 5.250% 03/15/28 73 SLM Corp 5.250% 12/15/28 71 SLM Corp 5.400% 03/15/30 68 SLM Corp 5.400% 06/15/30 70 SLM Corp 5.400% 06/15/30 67 SLM Corp 5.450% 12/15/20 74 SLM Corp 5.450% 06/15/28 70 SLM Corp 5.500% 06/15/29 69 SLM Corp 5.500% 06/15/29 71 SLM Corp 5.500% 03/15/30 71 SLM Corp 5.500% 06/15/30 68 SLM Corp 5.500% 12/15/30 71 SLM Corp 5.500% 12/15/30 70 SLM Corp 5.550% 03/15/29 74 SLM Corp 5.600% 03/15/29 70 SLM Corp 5.600% 06/15/29 75 SLM Corp 5.600% 12/15/29 69 SLM Corp 5.600% 12/15/29 72 SLM Corp 5.650% 03/15/29 73 SLM Corp 5.650% 03/15/29 70 SLM Corp 5.650% 12/15/29 69 SLM Corp 5.650% 12/15/29 71 SLM Corp 5.650% 09/15/30 74 SLM Corp 5.700% 03/15/29 67 SLM Corp 5.700% 03/15/29 70 SLM Corp 5.700% 03/15/29 70 SLM Corp 5.700% 12/15/29 75 SLM Corp 5.700% 03/15/30 70 SLM Corp 5.750% 03/15/29 73 SLM Corp 5.750% 03/15/29 73 SLM Corp 5.750% 03/15/29 72 SLM Corp 5.750% 06/15/29 72 SLM Corp 5.750% 09/15/29 69 SLM Corp 5.750% 09/15/29 74 SLM Corp 5.750% 12/15/29 71 SLM Corp 5.750% 12/15/29 72 SLM Corp 5.750% 12/15/29 73 SLM Corp 5.750% 12/15/29 69 SLM Corp 5.750% 03/15/30 70 SLM Corp 5.800% 12/15/29 70 SLM Corp 5.850% 09/15/29 74 SLM Corp 5.850% 09/15/29 71 SLM Corp 5.850% 12/15/31 73 SLM Corp 6.000% 06/15/26 74 SLM Corp 6.000% 06/15/26 74 SLM Corp 6.000% 12/15/28 75 SLM Corp 6.000% 06/15/29 70 SLM Corp 6.000% 06/15/29 75 SLM Corp 6.000% 06/15/29 75 SLM Corp 6.000% 09/15/29 72 SLM Corp 6.000% 09/15/29 73 SLM Corp 6.000% 12/15/31 72 SLM Corp 6.000% 12/15/31 75 SLM Corp 6.050% 12/15/31 71 SLM Corp 6.100% 12/15/31 72 SLM Corp 6.150% 09/15/29 75 SLM Corp 6.200% 12/15/31 70 SLM Corp 6.250% 06/15/29 75 SLM Corp 6.250% 09/15/29 73 SLM Corp 6.350% 09/15/31 75 SLM Corp 6.400% 09/15/31 75 SLM Corp 6.500% 09/15/31 74 Spacehab Inc 5.500% 10/15/10 54 Special Devices 11.375% 12/15/08 66 Spectrum Brands 7.375% 02/01/15 72 Standard Pac Corp 5.125% 04/01/09 69 Standard Pac corp 6.000% 10/01/12 43 Standard Pac Corp 6.250% 04/01/14 62 Standard Pacific 6.500% 08/15/10 66 Standard Pac Corp 6.875% 05/15/11 65 Standard Pac corp 7.000% 08/15/15 62 Standard Pacific 7.750% 03/15/13 63 Standard Pacific 9.250% 04/15/12 36 Stanley-Martin 9.750% 08/15/15 67 Station Casinos 6.625% 03/15/18 74 Tekni-Plex Inc 12.750% 06/15/10 54 Teligent Inc 11.500% 12/01/07 0 Tenet Healthcare 6.875% 11/15/31 73 Times Mirror Co 6.610% 09/15/27 58 Times Mirror Co 7.250% 03/01/13 72 Times Mirror Co 7.250% 11/15/96 58 Times Mirror-New 7.500% 07/01/23 62 Tom's Foods Inc 10.500% 11/01/04 1 Tousa Inc 7.500% 03/15/11 5 Tousa Inc 7.500% 01/15/15 3 Tousa Inc 9.000% 07/01/10 37 Tousa Inc 9.000% 07/01/10 37 Tousa Inc 10.375% 07/01/12 4 Toys R Us 7.375% 10/15/18 74 Trans Mfg Oper 11.250% 05/01/09 60 TransTexas Gas 15.000% 03/15/05 0 Tribune Co 5.250% 08/15/15 63 True Temper 8.375% 09/15/11 62 TXU Corp 6.500% 11/15/24 71 TXU Corp 6.550% 11/15/34 69 United Air Lines 9.200% 03/22/08 49 United Air Lines 9.350% 04/07/16 30 United Air Lines 9.560% 10/19/18 54 United Air Lines 10.020% 03/22/14 49 United Air Lines 10.850% 02/19/15 30 Universal Stand 8.250% 02/01/06 0 US Air Inc. 10.750% 01/15/49 0 US Air Inc. 10.900% 01/01/49 0 Venture Holdings 9.500% 07/01/05 0 Venture Holdings 11.000% 06/01/07 0 Venture Holdings 12.000% 06/01/09 0 Vertis Inc 10.875% 06/15/09 66 Vesta Insur Grp 8.750% 07/15/25 2 Vicorp Restaurant 10.500% 04/15/11 58 Wachovia Corp 9.250% 04/10/08 54 Wachovia Corp 15.500% 12/05/07 48 WCI Communities 4.000% 08/05/23 72 WCI Communities 6.625% 03/15/15 54 WCI Communities 7.875% 10/01/13 58 WCI Communities 9.125% 05/01/12 60 Webster Capital 7.650% 06/15/37 75 Westpoint Steven 7.875% 06/15/05 0 William Lyon 7.500% 02/15/14 57 William Lyon 7.625% 12/15/12 60 William Lyon 10.750% 04/01/13 60 Wimar Op LLC/Fin 9.625% 12/15/14 69 Wimar Op LLC/Fin 9.625% 12/15/14 69 Winstar Comm Inc 10.000% 03/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 Wornick Co 10.875% 07/15/11 69 Young Broadcasting 8.750% 01/15/14 73 Ziff Davis Media 12.000% 08/12/09 56 ********* 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 ***