/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071221.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 21, 2007, Vol. 11, No. 302 Headlines ACA CAPITAL: Obtains January 18 Waiver on Posting Requirements ACAMBRO MEXICAN: Case Summary & Eight Largest Unsecured Creditors ADVANCED MEDICAL: Posts $25.9MM Net Loss in Quarter Ended Sept. 28 AIG GLOBAL: Ratings on Class B Notes Downgraded by S&P to D ALDEAVISION SOLUTIONS: Files Plan of Arrangement Under CCAA ALLIED WASTE: Unit Completes Offerings of $40 Mil. Demand Bonds ALLSTATE BLASTING: Case Summary & 20 Largest Unsecured Creditors AMEREN CORP: Earns $244 Million in Third Quarter Ended Sept. 30 AMORTIZING RESIDENTIAL: Fitch Retains Junk Rating on Cl. M2 Certs. ANTONIO WILLIAMS: Case Summary & 14 Largest Unsecured Creditors ARRIVA PHARMA: Court Sets January 16 Plan Confirmation Hearing AVAGO TECH: Moody's Holds B2 Ratings with Positive Outlook AVISTAR COMMS: Renews $10 Million Revolving Debt Facility BASIS YIELD: Able to Repay Banks that Seized Fund Assets BASIS YIELD: Hearing on Summary Judgment Motion Set for Jan. 15 BASIS YIELD: To Convert Case to Official Liquidation BLACKHAWK AUTOMOTIVE: Can Use LaSalle DIP Funds on a Final Basis BOYD GAMING: Earns $31.8 Million in Third Quarter Ended Sept. 30 BRIAN TOMECEK: Voluntary Chapter 11 Case Summary C-BASS MORTGAGE: Moody's Places Five Tranches' Ratings on Watch CALPINE CORP: Court Confirms Sixth Amended Plan of Reorganization CAPITAL AUTO: Fitch Affirms 'BB' Rating on Class D Notes CASTLETON GROUP: Shuts Down Operations Ahead of Expected Date CAT-CAN-DO MARINE: Involuntary Chapter 11 Case Summary CBA GROUP: Moody's Cuts Senior Secured Loan Rating to B2 CENTRO NP: Amends $350 Million Revolving Credit Agreement CENTRO NP: Moody's Lowers Senior Unsecured Debt Rating to B1 CHC HELICOPTER: Earns $11.4 Million in Quarter Ended October 31 CHEMTURA CORP: Board Authorizes Review of Strategic Alternatives CHEMTURA CORP: Moody's Puts Ba2 Rating Under Review CHEMTURA CORP: S&P Puts BB+ Rating Under Developing CreditWatch CITGO CORP: $1 Billion Bridge Loan Cues Fitch to Cut IDR to BB- CLAIRE'S STORES: Posts $13.8 Mil. Net Loss in Qtr. Ended Nov. 3 COMMUNITY HOSPICE: Case Summary & 18 Largest Unsecured Creditors CONNECTICUT AVENUE: Case Summary & 17 Largest Unsecured Creditors CRAIG ROEDER: Case Summary & 12 Largest Unsecured Creditors CRESCENT RESOURCES: Moody's Cuts Corporate Rating to Ba3 from Ba2 CROSSWINDS AT MESQUITE: Voluntary Chapter 11 Case Summary DEERFIELD TRIARC: Agrees to Buy Triarc's Stake in Deerfield & Co. DELTA FINANCIAL: Selects AlixPartners as Claims & Noticing Agent DELTA FINANCIAL: Wants De Minimis Asset Sale Procedures Okayed DLJ COMMERCIAL: Fitch Holds 'B-' Rating on Class B-7 Certs. DOLLARAMA GROUP: Good Performance Cues Moody's to Revise Outlook DOMTAR INC: Discloses Total Consideration Payable Under Offers DORMITORY AUTHORITY: Fitch Assigns 'BB+' Rating on $260MM Bonds DOUBLE D TRANSPORT: Case Summary & 17 Largest Unsecured Creditors DR HORTON: Moody's Puts Corporate Family Rating at Ba1 DRS TECHNOLOGIES: Earns $43 Million in 2nd Quarter Ended Sept. 30 EL PASO: Moody's Maintains B3 Ratings on $5 Mil. Mortgage Bonds EPICOR SOFTWARE: Board Inks $322 Mil. Buyout Deal w/ NSB Retail EPICOR SOFTWARE: S&P Holds BB+ Rating with Negative Outlook FERRELLGAS PARTNERS: S&P Holds B+ Corporate Credit Rating FINANCE AMERICA: Fitch Downgrades Ratings on Eight Classes FIRST MAGNUS: Court Plans February 1 Confirmation Hearing GENERAL MOTORS: Inks Pact with Navistar on Medium Duty Truck Biz GOLDEN NUGGET: Moody's Holds All Ratings with Negative Outlook GREENBRIAR CLO: S&P Assigns BB Rating on $40 Mil. Class E Notes HARRAH'S ENT: Gets Pa. Gaming Board's OK on Apollo/TPG Merger HEALTH INSURANCE: Fitch Affirms 'BB+' Issuer Default Rating HENRICKS JEWELERS: Files for Bankruptcy; To Close Six Stores HIGDON FURNITURE: Court Approves Coman C. Leonard as Accountant HOVNANIAN ENTREPRISES: Moody's Puts All Ratings Under Review HYDRAULIC TECHNOLOGIES: Committee Hires Buckely King as Counsel INNOVATIVE COMM: Provides Positive Reorganization Developments INPHONIC INC: Sells Substantially All Assets for $50 Million INTERGRAPH CORP: Moody's Upgrades B1 Loan Rating to Ba3 ISLAND INVESTMENTS III: Involuntary Chapter 11 Case Summary JOHN HENSLEY: Voluntary Chapter 11 Case Summary JOHNSON RUBBER: Gets Initial OK to Use JPMorgan's $10MM Facility JOHNSON RUBBER: Hires Donlin Recano as Claims and Balloting Agent JOHNSON RUBBER: Wants To Access CIT Group's Cash Collateral JPMCC 2005-LDP5: Stable Performance Cues Fitch to Hold Ratings KIMBALL SQUARE: Voluntary Chapter 11 Case Summary KINGSWAY FINANCIAL: S&P Lowers Credit and Debt Ratings to BB+ LANDRY'S RESTAURANTS: High Leverage Cues Moody's to Affirm Ratings LEVEL 3: Selling Advertising Distribution Unit for $129 Million LIONEL LLC: Obtains Bridge Order Extending Exclusive Periods LUKASZ REMIASZ: Case Summary & 14 Largest Unsecured Creditors LYNN LYTHGOE: Voluntary Chapter 11 Case Summary MAAX HOLDINGS: Unit Defaults Interest Payment on 9.75% Sr. Notes MAAX HOLDINGS: Interest Payment Default Cues S&P's Default Ratings MARCAL PAPER: U.S. Trustee Amends Creditors' Committee Members MBIA INC: Denies Claims of Added Risk Exposure on $30.6 Bil. CDOs MGM MIRAGE: Earns $183.9 Million in Third Quarter Ended Sept. 30 MINDGENT HEALTHCARE: Involuntary Chapter 11 Case Summary MORGAN STANLEY: Fitch Downgrades Ratings on $386.7 Million Certs. MTI TECHNOLOGY: Court OKs Winthrop as Panel's Insolvency Counsel MTI TECHNOLOGY: Sells European Assets to Copper for $7.2 Million NASDAQ STOCK: Holders Okay Issuance of 60,561,515 Common Stock NATIONAL RV: Taps Omni Management as Claims and Noticing Agent NATIONAL RV: Wants to Access Wells Fargo's Cash Collateral NAVISTAR INT'L: Inks Pact with GM on Medium Duty Truck Business NEWMARKET CORP: Moody's Lifts Rating on $150 Mil. Notes to Ba3 NORTEL NETWORKS: Sues Vonage Holdings for Patent Infringement NWT URANIUM: Says Azimut's Default Notice is Without Merit NWT URANIUM: Inks Arrangement Deal with Nu-Mex on Schedule PAIKO RIDGE: Case Summary & 13 Largest Unsecured Creditors PERFORMANCE TRANS: Committee Taps Blank Rome as Bankr. Counsel PERFORMANCE TRANS: Court Denies Asset Sale's Bidding Procedures PERFORMANCE TRANS: Section 341(a) Meeting Set for December 27 PHOTOGRAPHIC SERVICES: Case Summary & 18 Largest Unsec. Creditors PRESTIGE BRANDS: S&P Holds Ratings with Negative Outlook PRIORITY PRIMARY: Case Summary & 18 Largest Unsecured Creditors PROTECTIVE FINANCE: Fitch Assigns Low-B Ratings on Six Classes PRUDENTIAL AMERICANA: Jones Vargas Approved as Local Counsel PRUDENTIAL AMERICANA: Wants to Hire Murray as Valuation Consultant QUALITY DISTRIBUTION: Unit Completes $50 Million Notes' Offering QUEBECOR WORLD: Moody's Junks Corporate Family Rating RELIANT PHARMACEUTICALS: Moody's Withdraws All Ratings RESIDENTIAL CAPITAL: Reports Final Results for $750MM Tender Offer RICHARD WAGNER: Case Summary & Seven Largest Unsecured Creditors ROBERT BISHOP: Case Summary & 16 Largest Unsecured Creditors ROCKFORD PRODUCTS: Court Converts Case to Chap. 7 Liquidation ROO GROUP: Appoints Kaleil Isaza Tuzman as Chairman and CEO RYLAND GROUP: Moody's Cuts Ratings to Ba1 with Negative Outlook SAGE CREEK: Voluntary Chapter 11 Case Summary SAIL: Fitch Junks Ratings on Three Certificate Classes SAKS INC: Moody's Holds All Ratings with Positive Outlook SASCO: Fitch Affirms 'BB+' Ratings on Two Certificate Classes SAXON ASSET: Fitch Chips Rating on $12.6MM Certs. to B from BBB- SEE WHY GERARD: Hearing on Comedy Works Feud Set for February 1 SOMERSET MEDICAL: Declining Liquidity Cue Moody's to Cut Rating SOUTHERN STATES: S&P Holds B+ Ratings with Stable Outlook STRUCTURED ASSET: Fitch Cuts Rating on Class B5 Certs. to B- SUFFIELD CLO: Fitch Lowers Rating on $14.7MM Notes to B from BB SUNRIDGE LAND: Case Summary & Five Largest Unsecured Creditors SYNOVA HEALTHCARE: Files for Bankruptcy in Delaware TEKNI-PLEX INC: Obtains February 14 Waiver from Citicorp & GECC TEKNI-PLEX INC: James A. Mesterharm to Lead Restructuring Efforts TEKNI-PLEX INC: Sept. 28 Balance Sheet Upside-Down by $370.2 Mil. TERADYNE INC: Inks $325 Mil. Buyout Deal with Nextest Systems TQS INC: Obtains Protection from Creditors Under Canada's CCAA TRIBUNE COMPANY: Completes Merger Transaction with Tribune ESOP TRIBUNE CO: Dennis FitzSimons Leaves After Going Private Deal TRIBUNE CO: Pays $15 Million Under Circulation Issue Settlement TRIBUNE CO: November 2007 Revenues Down 3.3% to $413 Million TROPICANA ENT: Wants to Sell Atlantic City and Indiana Casinos TWEETER HOME: Wants Removal Period Extended to May 8 TYCO INTERNATIONAL: Judge Awards $460 Million to Three Law Firms TYCO INTERNATIONAL: Paying $0.15 Per Share Dividend on Feb. 1 UNITED RENTALS: Balks at Judge's Decree to Forgo Summary Judgment VISIPHOR CORP: Completes CDN$500MM Priv. Offering of 8% Notes VONAGE HOLDINGS: Facing Nortel's Lawsuit for Patent Infringement WESTERN POWER: Oct. 31 Balance Sheet Upside-Down by $10.5 Million WICKES INC: Judge Black Confirms Joint Amended Chapter 11 Plan WOO CORP: Voluntary Chapter 11 Case Summary XYTRANS INC: Case Summary & 20 Largest Unsecured Creditors * Fitch Performs Review on Rated Cash U.S. Real Estate CDOs * Notice of Liquidation and Termination Cue S&P to Cut Ratings * S&P Cuts Ratings on 1,292 Classes of Mortgage-Backed Securities * S&P Puts Ratings of 74 Tranches on CreditWatch Negative * BOOK REVIEW: How to Measure Managerial Performance ********* ACA CAPITAL: Obtains January 18 Waiver on Posting Requirements -------------------------------------------------------------- ACA Capital Holdings Inc. said it has entered into a forbearance agreement with its structured credit and other similarly situated counterparties. Under the agreement, ACA Capital said the counterparties have waived all collateral posting requirements and termination rights relating to the rating of ACA Financial Guaranty Corporation, ACA Capital's financial guaranty insurance subsidiary, under their respective transaction documents including any credit support annexes and similar agreements. The forbearance will remain effective until Jan. 18, 2008. Auditor Comments on Collateral Requirement During the forbearance period, ACA Capital will continue to work with its counterparties in seeking a more permanent solution to stabilize its liquidity and capital position. Deloitte Touche LLP, ACA Capital's independent auditor, said in the company's 10-Q filing for the quarter ended Sept. 30, 2007, that should S&P ultimately downgrade ACA Financial Guaranty's financial strength rating below "A-", under the existing terms of the company's insured credit swap transactions, the company would be required to post collateral based on the fair value of the insured credit swaps as of the date of posting. The failure to post collateral would be an event of default, resulting in a termination payment in an amount approximately equal to the collateral call. This termination payment would give rise to a claim under the related ACA Financial Guaranty insurance policy. Based on current fair values, neither the company nor ACA Financial Guaranty would have the ability to post such collateral or make such termination payments. S&P Junks Credit Rating Standard & Poor's downgraded ACA Financial Guaranty's financial strength and financial enhancement ratings to 'CCC' (Developing Outlook) from 'A' (CreditWatch Negative). According to Serena Ng of The Wall Street Journal, S&P said it had "significant doubt" that the company can come up with the capital needed to resolve its problems. ACA Capital Responds Commenting on the rating agency's action, ACA Capital said it was surprised by the magnitude of the downgrade given that all of its structured credit exposures that were originally rated 'AAA' are all still rated 'AAA' by S&P, and many of which have been recently affirmed. "We believe that the current 'AAA' ratings on the individual exposures would not imply the significant level of ultimate loss as suggested by S&P in its ratings analysis of ACA FG. ACA Capital will continue to work with S&P over the next several weeks to better understand its methodology," ACA Capital said. NYSE Non-Compliance Notice ACA Capital earlier said that on Dec. 7, 2007, it was notified by the New York Stock Exchange that it is not in compliance with the NYSE's continued listing standards. ACA Capital is considered "below criteria" due to the fact that its total market capitalization is less than $75 million over a consecutive 30 trading-day period and its stockholders' equity is less than $75 million. The NYSE will make available on its consolidated tape beginning on Dec. 14, 2007, an indicator, ".BC," indicating that ACA Capital is below the NYSE's quantitative continued listing standards. Under applicable rules and regulations of the NYSE, ACA Capital must respond to the NYSE within 45 days from receipt of the notice with a business plan that demonstrates its ability to achieve compliance with the continued listing standards. ACA Capital does not believe that it can take steps which will permit it to satisfy the financial continued listing criteria of the NYSE within the 18 month cure period provided for under the NYSE rules and regulations. Therefore, ACA Capital does not intend to submit a plan to the NYSE. ACA Capital has been informed by the NYSE that it will commence suspension and delisting procedures as a result of the failure to submit a plan. About ACA Capital ACA Capital Holdings Inc. (NYSE: ACA) -- http://www.aca.com/-- is a holding company that provides financial guaranty insurance products to participants in the global credit derivatives markets, structured finance capital markets and municipal finance capital markets. It also provides asset management services to specific segments of the structured finance capital markets. The company participates in its target markets both as a provider of credit protection through the sale of financial guaranty insurance products, for risk-based revenues, and as an asset manager, for fee-based revenues. ACA Capital has offices in New York, London, and Singapore. ACA Capital, through ACA Financial Guaranty Corporation, provides credit protection products. ACA Financial insures the principal and interest of bonds issued in the public finance market and targets the low investment grade ("BBB-") to high non-investment grade ("BB") portion of the public finance market. Typically, ACA Financial is paid one payment for insurance, up-front, based on the total amount of principal and interest insured. The payments received are held in reserve and earn out over the life of the related financial guaranty, nominally 30 years. At Sept. 30, 2007, ACA Financial had $7.0 billion of gross par exposure in its public finance business. ACA Capital's balance sheet as of Sept. 30, 2007, showed total assets of $4.9 billion, total liabilities of $5.8 billion, and minority interest of $9.5 million, resulting in total stockholders' deficit of $883.3 million. ACAMBRO MEXICAN: Case Summary & Eight Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Acambaro Mexican Restaurant, Inc. 406 N. Bloomington Lowell, AR 72745 Bankruptcy Case No.: 07-74066 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Garcia's Distributor Inc. 07-74067 Garibaldi Mexican Restaurant Inc. 07-74068 Type of Business: The Debtors provides catering services. The Debtor also offers mexican cuisine. see: http://acambaromexicanrestaurant.com/ Chapter 11 Petition Date: December 18, 2007 Court: Western District of Arkansas (Fayetteville) Judge: Ben T. Barry Debtor's Counsel: John M. Blair, Esq. John M. Blair Attorney at Law P.O. Box 1715 Rogers, AR 72757-1715 Tel: (479) 631-0100 Fax: (479) 631-8052 http://www.johnmblair.com/ Estimated Assets Estimated Debts ---------------- --------------- Acambro Mexican Restaurant $4,183,347 $3,230,197 Inc. Garibaldi Mexican Restaurant $3,315,859 $3,230,197 Inc. Garcia's Distributor Inc. $3,730,603 $3,230,196 Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Arvest real property; $398,362 PO Box 1229 value of security: 215 South 8th 550,121; value of Bentonville, AR 72712 senior lien: 399,929 Rogers, AR 72756 Performance Food Group $43,077 Little PO Box 4908 Little Rock, AR 72214 Stephenson Refrigeration $36,492 Servi 1704 N. Main Street Cave Springs, AR 72718 Sysco Food Services of $31,559 C & F Foods Inc. $9,280 Daisy Brand $3,552 Arvest Bank Lowell $2,245 Farmers Insurance $1,567 ADVANCED MEDICAL: Posts $25.9MM Net Loss in Quarter Ended Sept. 28 ------------------------------------------------------------------ Advanced Medical Optics Inc. reported a net loss of $25.9 million for the third quarter ended Sept. 28, 2007, which included the loss sales related to the May 2007 contact lens care solutions recall. These results also included the following items: -- $5.3 million in pre-tax charges related to integration of acquisitions. -- $2.4 million pre-tax loss on derivative instruments. -- Estimated tax effects related to the aforementioned items totaling $3.1 million. In the same period last year, AMO reported net income of $87.2 million. Results for the 2006 quarter included a pre-tax net gain of $102.9 million related to the settlement of legal matters and a $2.3 million unrealized gain on derivative instruments, which were partially offset by charges of $3.9 million associated with note repurchases and $4.0 million associated with business rationalization and repositioning initiatives. The company's third-quarter 2007 net sales rose 5.6% to $273.2 million. The sales increases related to the IntraLase Corp. and WaveFront Sciences Inc. acquisitions and organic growth were partially offset by lost sales related to the May 2007 contact lens care solutions recall. Foreign currency impacts increased net sales by 2.1%. "Through well-integrated acquisitions and consistent delivery of organic innovations, we remained focused throughout the third quarter on executing our strategy to provide a complete refractive solution to eye care practitioners worldwide," said Jim Mazzo, AMO chairman, president and chief executive officer. "While our third-quarter results were significantly impacted by the recall, we are pleased with continued progress of our cataract and laser vision correction businesses. Moreover, we expect future quarters' financial results to reflect continued progress as we fully re-enter the multipurpose solution market, continue to strengthen our leadership in the elective refractive procedure market and deploy our advanced technologies through our global infrastructure." Additional Third Quarter 2007 Highlights Gross profit declined 6.7% to $152.2 million. Gross profit was impacted by approximately $20.7 million in returns and costs, and an estimated $24.5 million impact related to lost sales associated with the recall. R&D expense rose 30.2% to $21.0 million, or approximately 7.7% of sales, compared to 6.2% of sales in the third quarter of 2006. The increase was due primarily to the additions of IntraLase and WaveFront Sciences. SG&A expense rose 43.2% to $137.9 million or approximately 50.5% of sales, compared to 37.2% in the third quarter of 2006. SG&A expense was impacted by the additions of IntraLase and WaveFront Sciences, and costs associated with the May 2007 recall. Operating loss of $6.7 million included an estimated negative impact from the recall of approximately $47.6 million, including a $17.5 million net impact of estimated lost sales. Third-quarter 2006 operating income of $154.2 million included a $102.9 million net gain related to the settlement of legal matters, and $4.0 million in net charges associated with rationalization and repositioning initiatives. Non-operating expense increased 103.9% to $24.5 million, and included a $2.4 million unrealized loss on currency derivatives. Interest expense rose to $20.6 million, due primarily to increased debt associated with the IntraLase acquisition. Third-quarter 2006 non-operating expense of $12.0 million included $3.9 million in charges and write-offs associated with a note repurchase, and a $2.3 million unrealized gain on derivative instruments. Interest expense in the year-ago quarter was $9.8 million. The company reported an income tax benefit of $5.3 million. The recall continued to impact lower-tax foreign jurisdictions and resulted in a reduced tax benefit for the quarter. AMO expects the recall to adversely affect its future tax liability and effective tax rate, and estimates its 2008 effective tax rate to be 38 to 40%. The company also expects that the rate will decline to the low 30% range by 2010. Nine-Month Financial Results Net sales for the first nine months of 2007 rose 4.3% to $786.3 million, including a 2.1% increase related to foreign currency fluctuations. The rise reflects the addition of the IntraLase and WaveFront Sciences acquisitions and organic growth, which were largely offset by declines in eye care sales primarily related to the recall. The company reported a net loss for the first nine months of 2007 of $180.6 million. For the first nine months of 2006, the company reported net income of $87.1 million. Balance Sheet At Sept. 28, 2007, the company's consolidated balance sheet showed $2.7 billion in total assets, $2.1 million in total liabilities, and $604,531 in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 28, 2007, are available for free at http://researcharchives.com/t/s?2680 About Advanced Medical Headquartered in Santa Ana, Calif., Advanced Medical Optics -- http://www.amo-inc.com/-- develops, manufactures and markets ophthalmic surgical and contact lens care products. AMO employs employs approximately 4,200 worldwide. The company has operations in 24 countries and markets products in approximately 60 countries. * * * As reported in the Troubled Company Reporter on Oct. 12, 2007, Moody's Investors Service downgraded Advanced Medical Optics, Inc.'s Corporate Family Rating and Probability of Default Rating to B2 from B1. The rating outlook was revised to stable. These rating actions conclude the review process for possible downgrade, which began on May 29, 2007. AIG GLOBAL: Ratings on Class B Notes Downgraded by S&P to D ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on the class A-1 and A-2 notes issued by AIG Global Investment Corp. CBO- 3 Ltd., a cash flow collateralized debt obligation of high-yield corporate bonds transaction. Both the class A-1 and A-2 notes were rated 'AAA' due to a financial guarantee policy issued by Financial Security Assurance Inc. Concurrently, S&P downgraded class B to 'D'. The trustee distributed a notification of disposition of collateral on Oct. 3, 2007. The proceeds from the liquidation of the portfolio were used to pay down the class A-1 and A-2 notes under section 5.8 of the indenture. The proceeds were insufficient to make any payments on the class B notes. Ratings Withdrawn AIG Global Investment Corp. CBO-3 Ltd. Rating Balance ------ ------- Class To From Current Previous ----- -- ---- ------- -------- A-1 NR AAA $0.00 $27.949 Mil. A-2 NR AAA $0.00 $38.570 Mil. NR - Not rated. Rating Lowered AIG Global Investment Corp. CBO-3 Ltd. Rating Balance ------ ------- Class To From Current Previous ----- -- ---- ------- -------- B D CC $20,000,000 $20,000,000 ALDEAVISION SOLUTIONS: Files Plan of Arrangement Under CCAA ----------------------------------------------------------- AldeaVision Solutions Inc. said that after careful consideration of available alternatives, the board of directors of the company, which has been hampered by market, operational and financial challenges, has determined that it is in the best interests of all of its stakeholders to file a plan of arrangement and reorganization under the Companies' Creditors Arrangement Act (Canada) and the Canada Business Corporations Act (Canada). As a consequence, a motion was filed on Dec. 20, 2007, seeking the sanction of the plan with the Quebec Superior Court. The plan will affect the company's shareholders, debenture holders and its secured creditor. Given the prior approval of the debenture holders and the secured creditor, no stay of proceedings is being sought. Accordingly, the company has filed the plan directly and is requesting its immediate sanction by the Court. All other creditors remain unaffected and the Company's day-to-day business will continue undisturbed. The Plan includes, among others, these transactions: -- the cancellation and write-off of issued and outstanding common shares of the Company; -- the cancellation of issued and outstanding stock options issued under the company's stock option plan and the cancellation of the plan; -- the issuance of 3,570,000 new Class A common shares of the company to certain existing creditors of the company; -- the cancellation and discharge of convertible debentures issued to Miralta Capital II Inc., Almiria Capital Corp. and GTR Capital Inc. without any payment or other consideration; -- the cancellation and discharge of convertible debentures issued to Capital R�gional et Coop�ratif Desjardins and Desjardins Capital de Developpement Montreal Ouest et Nord du Quebec Inc. in exchange for 170,000 Class A common shares; -- the granting to Desjardins of an option to subscribe an additional 200,000 Class A common shares at a price of $1.00 per share which option is set to expire on the later of: (i) 90 days following the closing date of the plan; or (ii) April 30, 2008; -- the cancellation and discharge of the $900,000 short-term credit facility granted by Almiria to the company in exchange for 900,000 Class A common shares; -- the cancellation and discharge of all other remaining debt in the aggregate amount of $3 750 000 owed by the company to Almiria in exchange for 2,000,000 Class A common shares; and -- the subscription by Almiria of 500,000 Class A common shares for an aggregate subscription price of $500,000. If the plan is approved by the Court, the company will cease to be a reporting issuer in all Canadian provinces and its common shares will be delisted from the TSX Venture Exchange. Following the Court's approval, the transactions contemplated in the plan and filing of the company's articles of reorganization will occur on or before Jan. 15, 2008. In the event that the Court does not approve the plan, the board of directors will review other available options including placing the company into receivership or bankruptcy. About AldeaVision Solutions Montreal-based AldeaVision Solutions Inc. (TSX Venture: AVS) -- http://www.aldeavision.com/-- provides broadcast video services and solutions for the television, film and media industries. The company provides end-to-end worldwide transmissions services using fiber and satellite facilities. The company also operates the first pan-American fully automated fiber-based network for broadcast services with points-of-service in 16 cities and 9 countries: Miami, New York, Washington D.C, Los Angeles, Boston, Toronto, Montreal, Mexico City, Guadalajara (Mexico), Lima (Peru), Rio de Janeiro (Brazil), Sao Paulo (Brazil), Santiago (Chile), Buenos Aires (Argentina), Bogota, (Colombia), and Madrid (Spain). ALLIED WASTE: Unit Completes Offerings of $40 Mil. Demand Bonds --------------------------------------------------------------- Allied Waste Industries Inc.'s subsidiary, Allied Waste North America Inc., completed the concurrent offerings of: -- $30 million in principal amount of Indiana Finance Authority Solid Waste Revenue Variable Rate Demand Bonds Series 2007A due 2017; and -- $10 million in principal amount of The Industrial Development Authority of the County of Yavapai Solid Waste Revenue Variable Rate Demand Bonds Series 2007A due 2017. Both offerings are backed by a letter of credit as credit enhancement for the bonds. Inclusive of the letter of credit fees, the initial all-in cost to Allied is approximately 4.85%. As of the date of issuance, the bonds bear variable interest rates reset weekly based on market rates. "We are pleased to be able to partner with the Indiana Finance Authority in Indiana and The Industrial Development Authority of the County of Yavapai in Arizona," Pete Hathaway, executive vice president and chief financial officer of Allied Waste, said. "This attractive rate financing promotes continued economically beneficial investment throughout the State of Indiana and the State of Arizona, home to our Operations Support Center." About Allied Waste Industries Inc. Based in Scottsdale, Arizona, Allied Waste Industries Inc. -- http://www.alliedwaste.com/and http://www.disposal.com/-- (NYSE: AW) provides waste collection, transfer, recycling, and disposal services for residential, commercial, and industrial customers in over 100 major markets spanning 37 states and Puerto Rico. The company has 24,000 employees. * * * Moody's Investor Services placed Allied Waste Industries Inc.'s long term corporate family and probability of default ratings at 'B1' in February 2007. The ratings still hold to date with a positive outlook. ALLSTATE BLASTING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Allstate Blasting Corp. 201 Wheatsworth Road Hamburg, NJ 07419 Bankruptcy Case No.: 07-28684 Type of Business: The Debtor is a heavy construction company. Chapter 11 Petition Date: December 20, 2007 Court: District of New Jersey (Newark) Debtor's Counsel: David L. Bruck, Esq. Greenbaum, Rowe, Smith & Davis, L.L.P. P.O. Box 5600 Woodbridge, NJ 07095 Tel: (732) 549-5600 Fax: (732) 549-1881 Total Assets: $150,000 Total Debts: $3,036,541 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Estate of William H. Wurster $2,700,000 940 Haverford Road Bryn Mawr, PA 19010 Explosives Supply $253,408 695 Westbrook Road Ringwood, NJ 07456 All State Property Management Rent $42,000 201 Wheatsworth Road Related Party Hamburg, NJ 07419 Atlas Copco. C.M.T. U.S.A., $7,809 Inc. Verizon $5,453 Embarq $3,738 Mohawk Exxon $3,340 Carista, Kulsar & Wade $3,250 CitiCapital Equipment $2,955 Home Depot $1,513 Exxon Mobil $1,061 State of New Jersey $960 Dayton Inspections $750 New Jersey Department of $630 Motor Vehicles Geosonics $581 Standard Roofing, Inc. $477 Ford World, L.L.C. $471 North Jersey Pest Control $107 Net Access Corp. $75 Guardian Life Insurance $40 AMEREN CORP: Earns $244 Million in Third Quarter Ended Sept. 30 --------------------------------------------------------------- Ameren Corporation reported third quarter 2007 GAAP net income of $244 million, compared to third quarter 2006 GAAP net income of $293 million. GAAP net income for the first nine months of 2007 was $510 million, compared to $486 million in the first nine months of 2006. Excluding unusual items in 2007 and 2006, third quarter 2007 non- GAAP net income was $282 million, compared to third quarter 2006 non-GAAP net income of $312 million. Non-GAAP net income for the first nine months of 2007 was $567 million, compared to $511 million in the first nine months of 2006. Ameren's earnings in the third quarter and first nine months of 2007 were reduced by $38 million, after taxes, as a result of costs associated with an Illinois rate relief and customer assistance settlement agreement. The impact of these costs on the first nine months of 2007 was reduced because of the reversal of a $10 million charge, after taxes, originally recorded in 2006 related to funding commitments for low-income energy assistance and energy efficiency programs. These commitments were terminated in early 2007 and ultimately replaced by the Illinois settlement. Earnings in the first nine months of 2007 were also reduced by $19 million, after taxes, because of restoration costs following severe January ice storms. Earnings in 2006 reflected costs of severe storms of approximately $19 million, after taxes, for the third quarter and approximately $25 million, after taxes, for the first nine months of 2006. Earnings for the first nine months of 2007 were also reduced $10 million, after taxes, as a result of a Federal Energy Regulatory Commission order retroactively adjusting prior years' regional transmission organization costs. "Our 2007 third quarter earnings were lower than the 2006 period primarily because of the Illinois rate relief settlement, changes in our Illinois electric summer rate structure and the rising costs of operating our regulated utility businesses, including increased reliability expenditures," said Gary L. Rainwater, chairman, president and chief executive officer of Ameren Corporation. "These factors more than offset warmer summer weather and higher electric margins from our non-rate-regulated generation business segment. Through the first nine months of operations this year, our Illinois regulated business experienced a significant earnings decline compared to 2006 due to, among other things, our current levels of electric and gas delivery service rates being insufficient to recover our current costs of providing service to our customers and provide a reasonable return on our investments. Our Nov. 2 requests for $247 million in increased electric and gas rates in Illinois are clearly needed in order for us to provide safe and reliable service to our customers, as well as earn a reasonable return on our investments." The company said that while earnings were significantly lower in the Illinois regulated business segment, earnings improved in the Missouri regulated and non-rate-regulated electric generation business segments. Overall, Ameren's earnings in the third quarter of 2007 were negatively impacted by increases in fuel and related transportation costs, distribution system reliability expenditures, plant maintenance, labor and benefits, depreciation and amortization, and financing costs. In addition, a change in the summer rate structure for the delivery of electricity in Illinois also reduced earnings compared to the prior-year period. Higher-priced power sales contracts in Ameren's non-rate-regulated generation business segment, as well as the June 2007 implementation of the Missouri electric rate order, reduced the negative impact of these items on Ameren's earnings. In addition, electric margins in Ameren's Missouri and Illinois rate-regulated business segments benefited from greater cooling demand caused by warmer summer weather. Cooling degree days increased 16% in the third quarter of 2007, compared to the same period in 2006, and were 30% above normal. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $20.40 billion in total assets, $13.43 billion in total liabilities, $195.0 million in preferred stock of subsidiaries not subject to mandatory redemption, $20.0 million in minority interest in consolidated subsidiaries, and $6.76 billion in total stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $2.34 billion in total current assets available to pay $2.50 billion in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2683 About Ameren Corp. Headquartered in St. Louis, Mo., Ameren Corporation (NYSE: AEE) -- http://www.ameren.com/-- serves approximately 2.4 million electric customers and nearly one million natural gas customers in a 64,000 square mile area of Missouri and Illinois. Ameren owns a diverse mix of electric generating plants strategically located in its Midwest market with a generating capacity of more than 16,400 megawatts. * * * As reported in the Troubled Company Reporter on Aug. 31, 2007, Moody's Investors Service Ratings confirmed Ameren Corp.'s Baa2 Issuer Rating and Prime-2 short-term rating for commercial paper. Moody's also confirmed Ameren Corp. principal subsdiaries' Central Illinois Public Service Company's Ba1 Issuer Rating, CILCORP Inc's Ba1 Corporate Family Rating, Central Illinois Light Company's Ba1 Issuer Rating, Illinois Power Company's Ba1 Issuer Rating, AmerenEnergy Generating Company's Baa2 Senior Unsecured Rating, and Union Electric Company's Baa1 Senior Unsecured Rating. AMORTIZING RESIDENTIAL: Fitch Retains Junk Rating on Cl. M2 Certs. ------------------------------------------------------------------ Fitch has taken rating action on these Amortizing Residential Collateral mortgage pass-through certificates: Series 2001-BC5 -- Class A affirmed at 'AAA'; -- Class M1 downgraded to 'CCC/DR2' from 'BB+'; -- Class M2 remains at 'C/DR5'. Series 2004-1 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'; -- Class M7 affirmed at 'BBB+'; -- Class M8 rated 'BBB', is placed on Rating Watch Negative; -- Class M9 downgraded to 'CCC/DR1' from 'BB+'. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $133.25 million in outstanding certificates. The downgrades reflect deterioration in the relationship between CE and expected losses, and affect approximately $14.53 million in outstanding certificates. In addition, approximately $4.48 million is placed on Rating Watch Negative. For transactions 2001-BC2 and 2004-1, respectively, the pool factors are approximately 4% and 23%, and are 74 months and 37 months seasoned. The delinquencies in the 60+ buckets (inclusive of Real Estate Owned, Foreclosure, and Bankruptcy) are 39.15% and 17.69%, respectively, and have cumulative losses of 2.34% and 1.63%. ANTONIO WILLIAMS: Case Summary & 14 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Antonio M. Williams 502 Pryor Street Atlanta, GA 30312 Bankruptcy Case No.: 07-81294 Chapter 11 Petition Date: December 18, 2007 Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: Paul Reece Marr, Esq. Paul Reece Marr, P.C. 300 Galleria Parkway, North West Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual Bank House and Lot, 400 $760,000 P.O. Box 100576 Roberta Avenue, ($700,000 Florence, SC 29501-0576 Pleasant Hill, CA secured) 94523 House and Lot, 2841 $470,000 Ranchero Lane, ($390,000 Marced, CA 93548 secured) Homeq Servicing Corp. 2nd Mortgage on 4350 $120,000 Correspondence Laurel Grove, Suwanee, P.O. Box 13716 GA 30024 (house was foreclosed by holder of the 1st mortgage) Select Portfolio Servicing Inc 2nd Mortgage on house $100,000 P.O. Box 65250 and lot, 203 Roberta Salt Lake City, UT 84165-0250 Avenue, Pleasant Hill, CA 84523 (1st mortgage foreclosed) EMC Mortgage Services House and Lot, 400 $310,000 Cretin Avenue (240,000 South, St. Paul, MN secured) 55105 Internal Revenue Service Income Tax, interest $59,000 and penalty Darice Good, Esq. Unsecured loan from $56,802 MuiMui Ngenda-rey, Bibomba Kadima, and Kankolonga Boyer Wells Fargo Auto Finance 2002 Lexus LS 430 $54,000 ($17,000 secured) Cardmember Service Chase Credit Card $37,000 account Ameriquest Mortgage Company House and Lot, 107 $170,000 5th Avenue, St. Paul, ($145,000 MN secured) AMC Mortgage Services House and Lot, 298 $170,000 Cottage Avenue, ($145,000 St. Paul, MN 55417 secured) Bank of America Business credit card $24,000 account Contra Costa County Property taxes on $18,000 foreclosed house, 203 Roberta Avenue Capital One Credit card account $10,000 Nordstrom Credit card account $9,800 ARRIVA PHARMA: Court Sets January 16 Plan Confirmation Hearing -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California scheduled a Jan. 16, 2008 confirmation hearing after giving its approval on the disclosure statement explaining Arriva Pharmaceuticals Inc.'s Chapter 11 plan, Bill Rochelle of Bloomberg News reports. According to Bloomberg, the Plan, which is funded with $6 million in new financing to continue drug development, proposes to pay unsecured creditors in full or "something close" with a pool of $776,000 available to satisfy their claims. Alameda, California-based Arriva Pharmaceuticals Inc. -- http://www.arrivapharm.com/-- is a privately-held biopharmaceutical company focused on the development and commercialization of anti-inflammatory therapies for the treatment of respiratory diseases. The Debtor is also known as AlphaOne Pharmaceuticals Inc. The Debtor filed for Chapter 11 bankruptcy protection on Aug. 29, 2007 (Bankr. N.D. Calif. Case No. 07-42767). Ori Katz, Esq., at Sheppard, Mullin, Richter and Hampton LLP represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million to $100 million. AVAGO TECH: Moody's Holds B2 Ratings with Positive Outlook ---------------------------------------------------------- Moody's Investors Service affirmed Avago Technologies Finance Pte. Ltd.'s corporate family (B2) and long-term ratings, and changed the outlook to positive. Simultaneously, Moody's raised the company's speculative grade liquidity rating to SGL-1 from SGL-2. Moody's cited the positive rating outlook reflects Avago's progress towards improving its operating profile, cost structure and financial position, plus demonstrating a good two-year track record as a standalone entity since the November 2005 LBO and spin-off from Agilent Technologies. It also incorporates Moody's expectations that the company will continue to improve credit protection measures over the next year as a result of new product introductions, enhanced operating cash flow and ongoing focus on cost reductions. In fiscal 2007, Avago delivered gross and operating margin expansion, market share gains as well as increased design win activity, particulary in enterprise ASICs (wired infrastructure segment), which should translate into higher margin revenue in 2009/2010. The company is also repositioning its business by selling non-core operations and entering new markets with better growth prospects through strategic acquisitions. Uncertainty surrounding the company's overhead cost structure following separation from its parent company has been mitigated by a successful standalone operating history, evidenced by improvement in operating costs and working capital management. Avago has continued to implement cost reduction programs and expand its 'asset-lite' strategy by outsourcing an increasing share of its manufacturing needs to foundry partners, thus enabling it to efficiently allocate more resources to R&D initiatives as labor and capex costs subside. Moody's expects the company to review further opportunities to reduce its manufacturing footprint and corporate infrastructure expense. Finally, the positive outlook takes into consideration Avago's enhanced credit protection measures and focus on financial leverage improvement through EBITDA expansion, lower interest expense and solid free cash flow generation applied to debt reduction. As recent as Dec. 18, 2007, the company redeemed $200 million of the senior floating rate notes, further reducing leverage to 2.4x EBITDA (on a pro forma Moody's adjusted basis), which is comparable to B1-rated industry peers, thus lending additional support to the positive outlook. As Avago's fabless operating model lessens the company's capex burden, working capital intensity may increase. Hence, the B2 corporate family rating factors the irregular nature and limited visibility of working capital, which could temporarily pressure liquidity. Moody's also notes the CFR is currently constrained due to some uncertainty surrounding growth prospects in 2008 in Avago's addressable markets, particularly in wired infrastructure and industrial segments. Factors that would contribute to a ratings upgrade include continued market share gains and cost improvements resulting in sustained gross and operating margins above 40% and 14%, respectively, free cash flow generation at or above current levels and prudent financial policies targeting balance sheet de-leveraging, reduced working capital volatility and enhanced liquidity. The CFR factors Moody's expectations of a conservative acquisition strategy in view of the company's stated desire to grow via strategic acquisitions. To date, all acquisitions have been relatively small in size and funded with internal cash. The upgrade to SGL-1 reflects Avago's improved liquidity position. Internal liquidity has strengthened owing to better working capital management, solid levels of free cash flow generation ($107 million as of fiscal 2007) and roughly $103 million of balance sheet cash (pro forma for the $200 million floating rate note redemption). External liquidity was bolstered by the recent upsizing of its secured revolving credit facility to $375 million from $250 million. Avago, which retains the $200 million accordion feature on its credit facility, has sufficient cushion under its bank covenants (maintenance and incurrence tests) and is expected to remain covenant compliant over the next twelve months. * These ratings were affirmed: -- Corporate Family Rating: B2 -- Probability of Default Rating: B2 -- $375 Million Senior Secured Revolving Credit Facility due 2011: Ba2 (LGD-1, 8%) -- $750 Million Senior Unsecured Fixed and Floating Rate Notes due 2013: B2 (LGD-4, 51%) -- $250 Million Senior Unsecured Subordinated Notes due 2015: Caa1 (LGD-5, 89%) * This rating was upgraded: -- Speculative Grade Liquidity Rating to SGL-1 from SGL-2 -- The outlook is positive. Headquartered in San Jose, California with principal operations in Singapore, Avago designs, develops, manufactures and sells a broad array of semiconductor components for consumer and commercial electronic applications. Revenues and EBITDA for the fiscal year ended Oct. 31, 2007 were $1.5 billion and $313 million, respectively. AVISTAR COMMS: Renews $10 Million Revolving Debt Facility --------------------------------------------------------- Avistar Communications Corporation has signed, as of Dec. 17, 2007, a renewal of its $10 million revolving credit facility with a major financial institution, a 2,000 seat order that represents its customer expansion to date, and the acquisition of two new clients. Avistar's renewal of its $10 million dollar revolving credit facility provides financing that will be used to fund business operations, and has a term through December 2008. "With this facility confirmed, Avistar will complete its restructuring, aggressively engage the market and leverage the already significant patent and intellectual property portfolio at its disposal," Robert J. Habig, chief financial officer of Avistar, said. "Growing momentum in customer acquisitions, the installation of a new management team, a refocused patent portfolio and the restructuring of our cost structure all bode well for continuing the growth rate of 40-50% in revenue plus income from settlement and licensing activities that we have enjoyed over the last few years." Management's confidence in its new strategy was buoyed by news of a contract win for 2,000 additional seats at an investment bank - the company's single deal for customer expansion. It adds to the 3,500 seats already in place at this bank, and is a demonstration of the benefits gained from extending video-enabled unified communications across the enterprise. Two additional customer wins, Avistar related, will result in deployments at an international investment management institution and a worldwide consumer products company. "Avistar is executing a long list of business building, cost leverage, productivity and turn-around initiatives," Simon Moss, the newly-hired president of Avistar and CEO, said. "Without Avistar's patented ability to deliver rich communication with no additional network infrastructure, the bold promises of unified communications - labor mobility, reduced carbon contribution, increased business and product leverage, and improved customer management - are much more expensive to achieve than the market currently perceives. We intend to position ourselves both to prove this and to offer a solution to the market which truly delivers." About Avistar Communications Headquartered in San Mateo, California, Avistar Communications Corporation (NASDAQ: AVSR) -- http://www.avistar.com/-- holds a portfolio of 76 patents for inventions in the primary areas of video and network technology and offers technology and IP licenses to companies in video conferencing, rich-media services, public networking and related industries. Current licensees include Sony Corporation, Polycom Inc., Tandberg ASA, Radvision Ltd. and Emblaze-VCON. As reported in the Troubled Company Reporter on Oct. 24, 2007, At Sept. 30, 2007, the company's consolidated balance sheet showed $12.1 million in total assets and $19 million in total liabilities, resulting in a $6.9 million total shareholders' deficit. BASIS YIELD: Able to Repay Banks that Seized Fund Assets -------------------------------------------------------- Basis Yield Alpha Fund (Master) said in a statement that it has returned to solvency and can now afford to repay certain banks that seized the fund's assets when it missed margin calls earlier this year, The Financial Times reports. The fund said it started the year with about $700,000,000. According to the paper, the "stronger than expected financial position" resulted from continued payouts by structured credits invested by the fund. Grant Thornton, the provisional liquidator in Basis Yield's Chapter 15 case in the Cayman Islands, had warned that "further hedge fund collapses were likely early next year, when banks have finalized the books for their year-ends," the Financial Times says. Steve Akers, a partner at Grant Thornton, told the Financial Times that "banks had not been forcing troubled funds out of business because they did not want to realize the losses now." He added that, "[t]he banks know if they push them into insolvency that they would have to reflect that on their own balance sheets and they've been holding off on doing that for fear of damaging their share prices." In a letter to its investors, Basis Yield stated that it has enough cash to repay creditors, even without putting any value on its collateralized debt obligations. Mr. Akers told the Financial Times that the Fund had $60,000,000 cash from continued coupon payments from the CDOs in which it invested. The paper said the amount was enough to repay creditors who had filed claims so far. Mr. Akers noted, however, that the level of claims would not be certain until a formal process was complete. "There's the possibility of a payout to the investors," Mr. Akers told the Financial Times. "But I really wouldn't want to raise people's hopes in that respect." Mr. Akers is currently considering on whether to sell Basis Yield's remaining portfolio or hold for possible continued receipts, the paper said. About Basis Yield Basis Yield Alpha Fund (Master) is a Cayman Islands mutual fund. It operates as a master-feeder structure that allows investors' funds to be channeled through two companies operating in a single jurisdiction to a "master" company operating in the same jurisdiction. These two feeder funds are Basis Yield Alpha Fund (US), a US feeder fund for US taxable investors, and Basis Yield Alpha Fund, a non-US feeder for all other investors. On Aug. 29, 2007, Hugh Dickson, Stephen John Akers, and Paul Andrew Billingham filed a chapter 15 petition for Basis Yield (Bankr. S.D.N.Y. Case No. 07-12762). Karen Dine, Esq. at Pillsbury Winthrop Shaw Pittman LLP represents the petitioners. (Basis Yield Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). BASIS YIELD: Hearing on Summary Judgment Motion Set for Jan. 15 --------------------------------------------------------------- Representing the Joint Provisional Liquidators, Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, notified the U.S. Bankruptcy Court for the Southern District of New York that, as of December 7, 2007, no answer, objection or other responsive pleading has been received with respect to the Foreign Representatives' request for summary judgment for recognition of Basis Yield Alpha Fund (Master)'s Chapter 15 case as a foreign main proceeding. Ms. Dine states that the JPL's counsel has reviewed the Bankruptcy Court's docket and no answer, objection or other pleading to the Motion appeared so far. Pursuant to the Motion, objections, if any, were to be filed and served no later than December 6. On November 29, the Bankruptcy Court signed a stipulation scheduling a hearing on the Summary Judgment Motion, to be held on January 15, 2008, at 9:45 a.m. Objections to the request are due by January 8. About Basis Yield Basis Yield Alpha Fund (Master) is a Cayman Islands mutual fund. It operates as a master-feeder structure that allows investors' funds to be channeled through two companies operating in a single jurisdiction to a "master" company operating in the same jurisdiction. These two feeder funds are Basis Yield Alpha Fund (US), a US feeder fund for US taxable investors, and Basis Yield Alpha Fund, a non-US feeder for all other investors. On Aug. 29, 2007, Hugh Dickson, Stephen John Akers, and Paul Andrew Billingham filed a chapter 15 petition for Basis Yield (Bankr. S.D.N.Y. Case No. 07-12762). Karen Dine, Esq. at Pillsbury Winthrop Shaw Pittman LLP represents the petitioners. (Basis Yield Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). BASIS YIELD: To Convert Case to Official Liquidation ---------------------------------------------------- Australian hedge fund group Basis Capital Funds Management Ltd. said in a statement that its Basis Yield Alpha Fund (Master) unit will move from provisional liquidation to official liquidation, Dow Jones reports. In a letter to Basis Yield Fund investors, dated December 14, 2007, Basis Capital stated that Basis Yield had "returned to solvency," but Grant Thornton, Basis Yield's joint provisional liquidator, advised official liquidation. According to Basis Capital, the Basis Yield Fund invest predominately all of its cash into the Basis Yield Alpha Feeder Fund, which in turn invests all of its cash into the fund. In its letter, Basis Capital expressed disappointment "with the overall outcome but support the decision of the JPLs and the Directors of the BYAFF as being the means by which this matter can be expedited on behalf of all investors in the Fund." Basis Capital, as "Responsible Entity" for Basis Yield, received the correspondence from the Feeder Fund regarding Basis Yield's current status and the JPLs intentions for its future. On August 28, 2007, Basis Yield filed a petition before the Grand Court of the Cayman Islands for authority to wind up operations under the provisions of the Companies Law of the Cayman Islands. About Basis Yield Basis Yield Alpha Fund (Master) is a Cayman Islands mutual fund. It operates as a master-feeder structure that allows investors' funds to be channeled through two companies operating in a single jurisdiction to a "master" company operating in the same jurisdiction. These two feeder funds are Basis Yield Alpha Fund (US), a US feeder fund for US taxable investors, and Basis Yield Alpha Fund, a non-US feeder for all other investors. On Aug. 29, 2007, Hugh Dickson, Stephen John Akers, and Paul Andrew Billingham filed a chapter 15 petition for Basis Yield (Bankr. S.D.N.Y. Case No. 07-12762). Karen Dine, Esq. at Pillsbury Winthrop Shaw Pittman LLP represents the petitioners. (Basis Yield Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). BLACKHAWK AUTOMOTIVE: Can Use LaSalle DIP Funds on a Final Basis ---------------------------------------------------------------- Blackhawk Automotive Plastics Inc. obtained authority, on a final basis, from the U.S. Bankruptcy Court for the Northern District of Ohio to borrow postpetition funds from LaSalle Business Credit LLC. The Court's order did not disclose amounts of the allowed financing. As of Oct. 19, 2007, the Debtor and its parent, Tier e Automotive Group Inc., owe La Salle approximately $34,179,405. The prepetition loan is secured by substantially all of the Debtor's assets. As security for the postpetition financing, the Debtor grants La Salle valid and perfected senior security interests in, and liens on all property and interests in property acquired by the Debtor from and after its bankruptcy filing. The Debtor will use the funds according to a weekly budget, a copy of which is available for free at: http://researcharchives.com/t/s?2682 Salem, Ohio-based Blackhawk Automotive Plastics Inc., formerly Warren Molded/Custom Plastics, manufactures injection molded plastic products and motor vehicle parts and accessories. BAP's customers include General Motors, Delphi, Lear, Chrysler, Honda, Navistar, and Visteon. BAP employs about 1,574 workers domestically, and generated $136 million in sales in 2006. BAP owns Canadian subsidiary, Blackhawk Automotive Plastics Ltd. which operated a manufacturing facility in Ontario until Johnson Controls Inc. bought BAP Canada's assets in May 2005. BAP Canada's remaining assets consist primarily of net operating loss carryforwards for Canadian tax purposes. The NOLs had a book value of about $8.2 million as of December 2005. BAP also owns a plant in Upper Sandusky, Ohio, which ceased operations in 2006. The company filed for chapter 11 protection on Oct. 22, 2007 (Bankr. N.D. Ohio, Case No. 07-42671). Its parent company, Tier e Automotive Group Inc., filed a separate chapter 11 petition on the same day (Bankr. N.D. Ohio, Case No. 07-42673). Tier e acquired BAP from Worthington Industries Inc. in 1999. Tier e also owns 49% stake in Nescor Holdings Inc., a holding company for Nescor Plastics Corporation, also an automotive plastics supplier. William I. Kohn, Esq., David M. Neumann, Esq., Stuart A. Laven, Jr., Esq., at Benesch, Friedlander, Coplan & Aronoff LLP represent the Debtors in their restructuring efforts. Donlin Recano & Company Inc. provides the Debtors with claims, noticing, balloting and distribution services. No Official Committee of Unsecured Creditors has been appointed in either of the Debtors' cases. The Debtors' schedules disclose total assets of $58,665,229 and total liabilities of $51,244,592. As of bankruptcy filing, BAP's aggregate debt to its senior facility lenders was about $33 million. BOYD GAMING: Earns $31.8 Million in Third Quarter Ended Sept. 30 ---------------------------------------------------------------- Boyd Gaming Corporation reported net income of $31.8 million, including discontinued operations, for the third quarter ended Sept. 30, 2007, compared with a net loss of $12.9 million, including discontinued operations, in the same period last year. Net revenues were $490.1 million for the third quarter of 2007, a decrease of 7.7% from the same quarter in 2006. Total Adjusted EBITDA was $144.0 million in the third quarter of 2007, compared to $149.9 million for the same period in 2006. The decreases were primarily due to the opening of a new competitor in the northern Indiana market, normalization of operating results at Treasure Chest, and the closure of the Stardust. The company reported third quarter 2007 income from continuing operations of $31.9 million, compared with $28.1 million in the same period in 2006. Adjusted Earnings from continuing operations for the third quarter 2007 were $38.4 million, compared to $38.8 million for the same period in 2006. During the third quarter 2007, certain pre-tax adjustments that reduced income from continuing operations by $10.1 million were as follows: -- $5.3 million for preopening charges primarily associated with the company's Echelon development; -- $3.5 million charge for the decrease in value of the company's derivative instruments; and -- $1.2 million for other charges. By comparison, the third quarter 2006 included certain pre-tax adjustments that reduced income from continuing operations by $16.6 million. Management's Comments Keith Smith, president and chief operating officer of Boyd Gaming, commented, "We were very encouraged by our performance in the Las Vegas Locals region, where business continues to trend upward as margins improved. We were especially proud of our Downtown Las Vegas business, which had its best third quarter ever. The Midwest and South region performed to expectations, with the effects of normalization at Treasure Chest and additional competition for Blue Chip offsetting steady results from the other four casino operations in that sector. However, Treasure Chest has now stabilized well ahead of pre-hurricane levels. We are also optimistic about our long-term competitive position at Blue Chip, given the scheduled opening of our new hotel late next year." Year-To-Date Results Income from continuing operations for the nine months ended Sept. 30, 2007, was $89.9 million, as compared to $105.7 million for the nine months ended Sept. 30, 2006. Net income, which includes the results from discontinued operations, was $271.8 million for the 2007 year-to-date period compared to $60.5 million for the nine-month period ended Sept. 30, 2006. Net income for the 2007 period includes a $285 million gain on the disposition of the Barbary Coast. Net revenues were $1.52 billion and $1.67 billion for the nine months ended Sept. 30, 2007, and 2006, respectively. Key Financial Statistics The following is additional information as of and for the three months ended Sept. 30, 2007: -- September 30 debt balance: $2.21 billion -- September 30 cash: $152.8 million -- Dividends paid in the quarter: $13.2 million -- Maintenance capital expenditures during the quarter: $27.3 million -- Expansion capital expenditures during the quarter: $77.1 million -- Capitalized interest during the quarter: $5.3 million -- Cash distribution to the company from Borgata in the quarter: $14.5 million -- September 30 debt balance at Borgata: $655.9 million Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $4.37 billion in total assets, $3.00 billion in total liabilities, and $1.37 billion in total stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $307.9 million in total current assets available to pay $364.7 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2685 About Boyd Gaming Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) -- http://www.boydgaming.com/ -- is a diversified owner and operator of 17 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana, Louisiana, and Florida. The company is also developing Echelon, a world-class destination resort on the Las Vegas Strip, expected to open in the third quarter 2010. * * * As reported in the Troubled Company Reporter on Nov. 23, 2007, Fitch Ratings affirmed Boyd Gaming's Issuer Default Rating at 'BB- ', Senior Credit Facility at 'BB', and Senior Subordinated Debt at 'B+'. BRIAN TOMECEK: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Brian K. Tomecek aka Tomecek Creations, L.L.C. dba Creative Woodworking 6522 West Bent Tree Drive Phoenix, AZ 85083 Bankruptcy Case No.: 07-06946 Chapter 11 Petition Date: December 19, 2007 Court: District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. Debtor's Counsel: D. Lamar Hawkins, Esq. Hebert Schenk P.C. 4742 North 24th Street, Suite 100 Phoenix, AZ 85016 Tel: (602) 248-8203 Fax: (602) 248-8840 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of his largest unsecured creditors. C-BASS MORTGAGE: Moody's Places Five Tranches' Ratings on Watch --------------------------------------------------------------- Moody's Investors Service placed on watch the rating of five tranches issued by C-BASS. The collateral backing each tranche consists primarily of first-lien, fixed- and adjustable-rate scratch and dent mortgage loans. The deals being reviewed have seen the amount of projected available credit enhancement reduced due to a significant build-up of the pipeline of delinquent loans. * Complete rating actions are: - Issuer: C-BASS Mortgage Loan Asset-Backed Certificates, Series 2006-RP2 -- Cl. M3; Currently A3 on review for possible downgrade -- Cl. B1; Currently Baa1 on review for possible downgrade -- Cl. B2; Currently Baa2 on review for possible downgrade -- Cl. B3; Currently Baa3 on review for possible downgrade -- Cl. B4; Currently Ba1 on review for possible downgrade CALPINE CORP: Court Confirms Sixth Amended Plan of Reorganization ----------------------------------------------------------------- The Honorable Burton R. Lifland of the United States Bankruptcy Court for the Southern District of New York issued a decision confirming Calpine Corp.'s Sixth Amended Joint Plan of Reorganization. The Court ruled that Calpine had met all of the statutory requirements to confirm its Plan. Calpine remains on track with its current timetable and expects to emerge from Chapter 11 prior to Feb. 7, 2008. A day before the Confirmation Hearing, the Debtors delivered to the Court their Sixth Amended Joint Plan of Reorganization, which contains "non-material" modifications and resolutions of Plan confirmation objections. The Sixth Amended Plan provides that: (a) the New Calpine Total Enterprise Value is set at $18,950,000,000, reflecting a compromise between estimates by the Debtors, the Official Committee of Unsecured Creditors, and the Official Committee of Equity Security Holders; (b) Interest Holders is entitled with warrants to purchase up to 10% of the total issued and outstanding equity of reorganized Calpine on the Plan's effective date; (c) Calpine's reorganized equity value is $11,942,000,000; and (d) holders of Subordinated Equity Securities Claims will not be entitled to receive a distribution under the Plan but may assert distribution from applicable insurance proceeds, if any. Shareholders had insisted Calpine had a value of at least $24,500,000,000, using different assumptions about future fuel prices and power prices than the company used. That compared with a midpoint valuation of $19,350,000,000 put forward by the company and $16,250,000,000 by unsecured creditors. A blacklined copy of the Sixth Amended Plan is available for free at http://bankrupt.com/misc/calpine_blackline6thAmendedPlan.pdf The Debtors also submitted further amendments to Plan exhibits, consisting of: * a list of contingent or unliquidated claims, available for free at http://ResearchArchives.com/t/s?268d * a list of executory contracts and unexpired leases to be assumed by the Debtors after the Effective Date, available for free at: http://bankrupt.com/misc/calpine_amended3assumedpacts.pdf * a list of guaranty schedule and non-executory obligations, available for free at: http://bankrupt.com/misc/calpine_amendedguarantyschedule.pdf * a copy of reorganized Calpine's by laws, available for free at http://bankrupt.com/misc/calpine_amended2byaaws.pdf * a copy of Shareholders' Warrant Term Sheet, available for free at: http://bankrupt.com/misc/calpine_warranttermsheet.pdf * a list of agreements between the Debtors and each of TransCanada Pipelines Limited, and NOVA Gas Transmission, Ltd., available for free at: http://bankrupt.com/misc/calpine_tcpl&novapacts.pdf "The Court's confirmation of our Plan is a very welcome step -- and one of the final steps for us -- as we look to emerge from court protection early next year," Robert P. May, Calpine's Chief Executive Officer, said. "We continue to be very proud of what we have been able to accomplish as we work to emerge as a financially stable, stand-alone company with an improved competitive position in the energy industry. I would personally like to thank Greg Doody for his leadership and stewardship, as well as the efforts of our entire team who worked on our restructuring. Additionally, on behalf of the Board and management team, I would like to thank the employees of Calpine for their hard work, dedication and loyalty, during these uncertain and challenging times. Calpine would not have been able to accomplish all that we have during our restructuring without the outstanding effort and commitment of our employees." "This has been the largest and most complex reorganization conducted under the new bankruptcy laws, and our progress as a Company has been truly remarkable," Calpine's General Counsel, who has acted as the company's Chief Restructuring Officer, Gregory L. Doody, said. "We'd also like to thank our dedicated professionals for their tireless efforts throughout this process and we look forward to continuing our work with our creditors and key constituencies after our emergence from bankruptcy protection." Voting by classes of creditors entitled to vote on the Plan illustrate broad-based support for the Plan. All ten classes of creditors entitled to vote on the Plan in fact voted overwhelmingly in favor of the Plan. About Calpine Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. The hearing to consider confirmation of that Plan has been adjourned to today, Dec. 19, 2007. (Calpine Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CAPITAL AUTO: Fitch Affirms 'BB' Rating on Class D Notes -------------------------------------------------------- Fitch Ratings affirms the Capital Auto Receivables Asset Trust 2007-1 transaction, as: -- Class A-1 notes at 'F1+'; -- Class A-2 notes at 'AAA'; -- Class A-3a notes at 'AAA'; -- Class A-3b notes at 'AAA'; -- Class A-4a notes at 'AAA'; -- Class A-4b notes at 'AAA'; -- Class B notes at 'A'; -- Class C notes at 'BBB'; -- Class D notes at 'BB'. The rating affirmation is a result of continued available credit enhancement. The collateral continues to perform within Fitch's expectations and, under the credit enhancement structure, the securities can withstand stress scenarios consistent with the current ratings and still make full payments to investors in accordance with the terms of the documents. As before, the ratings reflect the quality of GMAC, LLC retail auto loan originations, the strength of its servicing capabilities, and the sound financial and legal structure of the transaction, and the strength of the servicing provided by GMAC. CASTLETON GROUP: Shuts Down Operations Ahead of Expected Date ------------------------------------------------------------- Castleton Group Inc. has shut down its operations despite an order by the Superior Court of Wake County directing it to come up with a plan to wind down its business by Jan. 11, 2008, Chris Coletta of the Triangle Business Journal reports. In an order cited by the Triangle Business Journal, the Court said that an immediate shutdown would cause harm to Castleton's clients. However, the report says, Castleton terminated its services well ahead of schedule blaming the company's financial position. Castleton earlier fought a ruling by the North Carolina Department of Insurance declaring it insolvent and ordering the company to stop operations. As reported in the Troubled Company Reporter on Dec. 11, 2007, Insurance Commissioner Jim Long, on December 4, said that it had reached a decision in the licensure case of Castleton. According to the Department, it denied approval of a license to operate citing the company's "hazardous financial condition," and that these financials have dipped to the point of insolvency. That ruling, Department officials said, could affect 89 of Castleton's client companies, including approximately 3,000 employee, with many client companies seeing a flurry of end-of- year activity, including processing holiday pay checks and preparing W-2 tax forms. "We want Castleton's client companies to be fully aware of this decision so they can review their situations," said Commissioner Long. The Department contended that the company has never been licensed under the 2005 law but that same law has allowed Castleton to keep operating pending the resolution of the licensing dispute. Because of its appeal to the Court, Castleton was granted a temporary stay of the license denial pending a full hearing. The decision from the hearing officer in this case determined that the Castleton Group's liabilities exceed its assets by some $6 million. In addition, evidence showed that the company's former chief financial officer admitted to filing false federal payroll tax reports, resulting in an estimated $8 million in unpaid federal payroll taxes. The Department recommended that any client companies of Castleton Group immediately review their human resources needs in light of the decision. Companies that choose to seek services from a new professional employer organization have 90 licensed organizations in North Carolina from which to choose. In response, Castleton verified the claims that the tax reports filed were false but said that it disclosed the improper accounting when it was discovered, the Triangle Business Journal said in a previous report, citing a company spokesperson. The Castleton Group -- http://www.castletongroup.com/-- provides outsourced human resources services including human resources compliance, training, risk management and safety, benefits and payroll administration. CAT-CAN-DO MARINE: Involuntary Chapter 11 Case Summary ------------------------------------------------------ Alleged Debtor: Cat-Can-Do Marine, Inc. aka Patrick Arthur Padgett aka Pat Padgett aka Padgett Custom Boats, Inc. 2372 Cortez Road Jacksonville, FL 32245 Case Number: 07-05826 Type of Business: The Debtor manufactures boats. Involuntary Petition Date: December 20, 2007 Court: Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Petitioner's Counsel: Brett A. Mearkle, Esq. Wilcox Law Firm 6817 Southpoint Parkway Suite 1302 Jacksonville, FL 32216 Tel: (904) 281-0700 Fax: (904) 513-9201 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ James Hanson breach of promissory $100,000 238 Temple Circle note; foreclosure of Eustis, FL 32726 Chattel Mortgage Steve Nichols breach of promissory $25,000 13030 Sugarbluff Road note; foreclosure of Clermont, FL 34715 Chattel Mortgage Darren Gibson breach of promissory $25,000 13030 Sugarbluff Road note; foreclosure of Clermont, FL 34715 Chattel Mortgage CBA GROUP: Moody's Cuts Senior Secured Loan Rating to B2 -------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of the CBA Group LLC to B3 from B2 and the ratings of the $110 million senior secured term loan B facility and $25 million senior secured revolving credit facility to B2 from B1. The ratings assigned to the facilities reflect both the overall probability of default of the company, to which Moody's assigns a Caa1, and a loss given default of LGD 3 for the facilities. In addition, the ratings will be placed on review for possible downgrade. * These ratings/assessments were downgraded: -- Corporate family rating to B3 from B2; -- Probability-of-default rating to Caa1 from B2; -- The $25 million senior secured revolving credit facility to B2 from B1 (LGD 2, 26%); -- The $110 million senior secured term loan B to B2 from B1 (LGD 2, 26%); The rating changes reflect Moody's concerns that challenging end- market conditions and lower than expected financial performance have continued in the fourth quarter and will be a strain on liquidity into 2008. In addition, the downgrade reflects the agency's concerns about CBA's ability to meet and/or modify financial covenants in its senior secured facilities. The review for possible downgrade will focus on the CBA Group's ability to meet and/or modify its covenants. In addition, the review will assess the company's plans to improve operations in 2008 and the impact of any waiver or amendment on ongoing operations. The previous rating action was the Oct. 16, 2006 assignment of the B2 corporate family rating and B1 senior secured ratings. The CBA Group, LLC is a global leader in circuit board assembly technologies, products and services. CENTRO NP: Amends $350 Million Revolving Credit Agreement --------------------------------------------------------- Centro NP LLC has entered into an amendment to its $350 million unsecured revolving credit facility with Bank of America N.A., as administrative agent, according to a company regulatory filing with the Securities and Exchange Commission. The amendment extends the maturity date from Dec. 31, 2007, to Feb. 15, 2008, subject to certain conditions. The amendment also amends the applicable margin of the interest rate of the loans under the revolving credit facility to 1.75%. The loans under the revolving credit facility bear interest at a rate per annum equal to, at Centro NP LLC's option, (i) a base rate equal to the prime rate plus the applicable margin or (ii) the LIBOR rate plus the applicable margin. The amendment provides for certain additional events of default, including, among others, defaults occurring due to defaults, borrowing or prepayments under credit facilities of certain affiliates of Centro NP LLC. The amendment also provides that Centro NP LLC may not request, and the lenders under the revolving credit facility will have no obligation, to make any extensions of credit under the revolving credit facility. Centro NP LLC will pay an extension fee under the revolving credit facility of $3,292,952 on the maturity date. Centro NP LLC's parent, Super LLC, a Maryland limited liability company, has also extended its outstanding indebtedness under the bridge loan to Feb. 15, 2008, and during such time is seeking to negotiate a refinancing of its indebtedness as well as Centro NP LLC's under the revolving credit facility. Contribution Pact On Dec. 6, 2007, Centro NP LLC entered into a contribution, distribution and assumption agreement with Super LLC; Centro NP Residual Holding LLC, a newly formed limited liability company owned by Super LLC; and certain of Centro NP LLC's wholly owned subsidiaries. Pursuant to the agreement, Centro NP LLC contributed 49% of its interest in certain subsidiaries owning real properties with an approximate value of $610 million to NP Residual Holding. The company distributed 51% of its interest in the transferred entities to its parent, Super LLC, and Super LLC contributed such interest in the transferred entities to NP Residual Holding. Following the transactions, Centro NP LLC owned 49% of the non-managing interest in NP Residual Holding, and Super LLC owned 51% of the managing member interest in NP Residual Holding. About Centro NP LLC Headquartered in New York City, Centro NP LLC owns and operates 465 community and neighborhood shopping in 38 states. The company had assets of $6.3 billion and equity of $3.8 billion at September 30, 2007. CENTRO NP: Moody's Lowers Senior Unsecured Debt Rating to B1 ------------------------------------------------------------ Moody's Investors Service downgraded the senior unsecured debt ratings of Centro NP LLC to B1, from Baa3, after the company incurred problems refinancing its $2.4 billion bridge loan that was taken out during the acquisition by Centro Properties Group and Centro Retail Trust (50% owned by Centro Properties Group) of New Plan Excel on April 20, 2007. The ratings remain under review for possible downgrade. These ratings actions reflect the financial difficulties and uncertainty Centro NP's parent is facing in refinancing its own debt in addition to Centro NP's $2.4 billion bridge facility. Moody's also expects that Centro NP LLC will have heightened leverage and secured debt following the take-out of the bridge financing, significant property sales to fund debt, and a reduction in transparency due to increased organizational complexity. Moody's review will focus on the final capital structure and strategic profile of the company in light of Centro NP's and Centro Properties Group's short-term pressure to refinance debt. Moody's will continue to monitor Centro NP's compliance with its bond covenants and the quality and composition of its portfolio as it works though these financings. Moody's acknowledges that Centro NP has a defensive portfolio with a $6.3 billion market value that may afford opportunities for asset sales or financing to pay off debt. Since the acquisition, the bridge loan has been reduced to approximately $1.75 billion due to a $300 million CMBS issuance and the conversion of $400 million to a one-year term loan. Centro Properties Group is operating its US community and neighborhood shopping center portfolio from Centro NP's New York City headquarters, utilizing New Plan's nationwide operating infrastructure and staff as its base. A confirmation of the B1 rating with a stable outlook would be contingent upon Centro NP refinancing the bridge facility by Feb. 15, 2008 without materially pressuring their leverage, secured debt, and other credit metrics, while complying with bond covenants. A downgrade to B2 or more would most likely reflect Centro NP's continued issues refinancing its line and/or Centro Properties Group's inability to finance its debt, noncompliance with bond covenants at the Centro NP level, acceleration of bond payments, or a firesale of assets. The maturity date of both the bridge facility and the line of credit were extended to Feb. 15, 2008. These ratings were lowered to B1, and continue to remain under review for downgrade: Centro NP LLC -- Senior unsecured debt to B1, from Baa3; -- Medium-term notes to B1, from Baa3. Centro NP LLC, headquartered in New York City, owns and operates 465 community and neighborhood shopping in 38 states. The company had assets of $6.3 billion and equity of $3.8 billion at September 30, 2007. Centro Properties Group, headquartered in Melbourne, Victoria, Australia, is an Australian Listed Property Trust that specializes in the ownership, management and development of retail shopping centers in Australia, New Zealand and the USA. The company's equity market cap is A$8.1 billion, with A$26.6 billion in assets under management. CHC HELICOPTER: Earns $11.4 Million in Quarter Ended October 31 --------------------------------------------------------------- CHC Helicopter Corporation reported unaudited financial results for the three and six months ended Oct. 31, 2007. Net earnings for the second quarter were $11.4 million, an increase of $2.5 million from $8.9 million net income for the same period last year. For six months ended Oct. 31, 2007, the company's net income was $39.6 million, compared to net income of $17.7 million for the same period in the prior year. Other significant variances include: -- interest expense increases of approximately $0.7 million and $1.7 million for the three and six months ended Oct. 31, 2007, as a result of higher debt levels related to investment in growing fleet and associated working capital; and -- lease expense increases of approximately $3.3 million and $10.8 million for the three and six months ended Oct. 31, 2007, due to additional leased aircraft. Capital and Liquidity During the second quarter the company declared an annual dividend of $0.50 per share payable quarterly at $0.125 on each Class A subordinate voting share and Class B multiple voting share. The company generated $32.6 million in cash from operations and invested $48.8 million in property and equipment during the three months ended Oct. 31, 2007. The number of aircraft in the fleet increased by three aircraft during the second quarter. This change consisted of the addition of eight new aircraft, including four Sikorsky S92 aircraft. In addition, the company disposed of or returned to lessors five older technology aircraft. The company has 85 aircraft, 42 heavy and 43 medium aircraft, on order, 24 of which are expected to be delivered in the current year, with the remaining 61 aircraft to be delivered over the next five years. The company also has the option to purchase up to 30 additional heavy and medium aircraft over the next seven years. The company had unused capacity under its credit facilities of $73.8 million and cash and cash equivalents of $38.6 million for a total of $112.4 million at Oct. 31, 2007. The company has approximately $360 million in total credit- approved aircraft specific financing facilities. About CHC Helicopter Corporation Headquartered in Richmond, British columbia, CHC Helicopter Corporation (TSE:FLY.A)V7B - http://www.chc.ca/-- is a commercial helicopter operator. The company, through its subsidiaries, operates in over 30 countries, on all seven continents and in most of the offshore oil and gas producing regions of the world. The company's operating units are based in the United Kingdom, Norway, the Netherlands, South Africa, Australia and Canada. It provides helicopter transportation services to the oil and gas industry for production and exploration activities through its European and global operations segments. It also provides helicopter transportation services for emergency medical services and search and rescue activities and ancillary services, such as flight training. The company's Heli-One segment is a non-original equipment manufacturer helicopter support company, providing repair and overhaul services, aircraft leasing, integrated logistics support, helicopter parts sales and distribution and other related services. * * * As reported in the Troubled Company Reporter on Oct. 27, 2006, Standard & Poor's Ratings Services revised its outlook on CHC Helicopter Corp. to stable from positive. At the same time, Standard & Poor's affirmed its 'BB-' long-term corporate credit and 'B' senior subordinated debt ratings on the company. CHEMTURA CORP: Board Authorizes Review of Strategic Alternatives ---------------------------------------------------------------- Chemtura Corporation's Board of Directors has authorized management to consider a wide range of strategic alternatives available to the company to enhance shareholder value. In support of this ongoing initiative, a Special Committee of independent directors of the Board of Directors has been formed to oversee the process. To assist in this process, Chemtura has retained the services of Merrill Lynch & Co., which is acting as its exclusive financial advisor. Strategic alternatives to be considered may include, among others, select business divestitures, value-creating acquisitions, changes to the company's capital structure, or a possible sale, merger or other business combination involving the entire company. There can be no assurance that this review will result in any specific transaction. The company does not expect to disclose any further developments with respect to the exploration of strategic alternatives unless and until its Board of Directors has approved a transaction or other strategic alternative. Headquartered in Middlebury, Connecticut, Chemtura Corp. (NYSE:CEM) -- http://www.chemtura.com/-- is a global manufacturer and marketer of specialty chemicals, crop protection, and pool, spa and home care products. The company has approximately 6,400 employees around the world and sells its products in more than 100 countries. The company has facilities in Singapore, Australia, China, Hong Kong, India, Japan, South Korea, Taiwan, Thailand, Brazil, Belgium, France, Germany, Mexico, and The United Kingdom. CHEMTURA CORP: Moody's Puts Ba2 Rating Under Review --------------------------------------------------- Moody's Investors Service placed the ratings of Chemtura Corporation (corporate family rating, CFR of Ba2) under review for possible downgrade following the announcement that its "Board of Directors has authorized management to consider a wide range of strategic alternatives available to the company to enhance shareholder value." While this process may not be resolved within the next three months, Moody's review will examine the company's ratings given the lack of improvement in financial metrics over the past year, the potential impact of a slowdown in the US economy in 2008, potential further weakness in the company's Non- Flame Retardant Polymer Additives businesses, and the likelihood of additional restructuring charges. Moody's review will focus on the company's expected financial metrics in 2008 as well as any indications from management on the size or scope of the actions they may consider as part of the strategic review. Headquartered in Middlebury, Connecticut, Chemtura manufactures specialty chemicals, crop protection and pool, spa and home care products. The combined company had LTM Sept. 30, 2007 revenues, EBITDA and total debt (as estimated by Moody's and EBITDA adjusted for one time charges) of $3.9 billion, $432 million, and $1.6 billion, respectively. CHEMTURA CORP: S&P Puts BB+ Rating Under Developing CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB+' corporate credit and senior unsecured debt ratings of Chemtura Corp. on CreditWatch with developing implications, following the recent announcement that management is considering strategic alternatives, including sale or merger of the company. Alternatives under consideration also include select business divestitures, acquisitions, or changes to its capital structure. The CreditWatch with developing implications means S&P could raise, lower, or affirm the ratings, depending on management's actions. Chemtura's diversified portfolio of specialty and industrial chemical businesses (generating annual revenues of roughly $3.7 billion) presents management with a range of options. "We would lower the ratings if a leveraged buyout of the firm were to occur or if management was unable to find an interested buyer for the entire business and Chemtura's credit fundamentals deteriorated during this review process," said Standard & Poor's credit analyst Mr. Wesley E. Chinn. "Conversely, we would raise the ratings if a substantially stronger entity acquired Chemtura, but this does not appear to have a high probability." Management could continue to sell assets and use proceeds for debt reduction as well as share repurchases, but the business profile would suffer. Currently, S&P views the direction of credit quality as having a significantly greater bias on the downside versus upside prospects. This announcement, which throws into question management's intermediate-term financial policies, occurs at a time when the company's credit quality metrics, including the key funds from operations to adjusted debt ratio, are substandard for the current ratings. Recent overall earnings were disappointing and debt reduction for 2007 will be less-than-expected. S&P expects the ratio of funds from operations to adjusted debt to finish 2007 at less than 20%, versus the 25% target. Cost-cutting initiatives and the divestiture of noncore operations are near- term positives for earnings and operating margins. On the other hand, challenging conditions in the polymer additives business, elevated raw material costs, and other factors viewed against the backdrop of Chemtura's aggressive debt load could constrain to a meaningful extent the anticipated strengthening of financial measures during 2008. S&P will resolve the CreditWatch when information becomes available regarding the company's plans, including any potential change in ownership that would result from management's review of possible transactions. CITGO CORP: $1 Billion Bridge Loan Cues Fitch to Cut IDR to BB- --------------------------------------------------------------- CITGO Corporation's Issuer Default Rating was lowered to 'BB-' from 'BB' following the company's announcement that it has taken out a $1 billion bridge loan and used the proceeds to make a $1 billion loan to parent PDVSA (IDR 'BB-', Negative Outlook). Under terms of the deal, CITGO plans to term out the debt on its own balance sheet with a combination of secured term loan and accounts receivable securitizations. The move will increase CITGO's leverage in the short term by approximately 80% and underscores Fitch's long term concerns about the use of CITGO's cash flows and asset base to fund activity by parent Petroleos de Venezuela, which is controlled by the Bolivarian Republic of Venezuela. On a forward-looking basis, Fitch also remains concerned about the possibility of additional financial pressure PDVSA may place on CITGO in a lower-priced oil environment. Note that this move follows a pattern of sizable distributions made from subsidiary CITGO to PDVSA through PDV America, including distributions of $1.74 billion for the LTM ending Sept. 30, 2007. Fitch's secured credit rating on CITGO remains unchanged at 'BBB-' on the strength of the underlying collateral, including the Lake Charles and Corpus Christi refineries. Currently, Fitch rates CITGO Corporation as: -- Issuer Default Rating 'BB-'; -- Senior Secured Credit Facility 'BBB-'; -- Secured Term Loan 'BBB-'; -- Fixed Rate IRBs 'BBB-'. The Rating Outlook is Stable and reflects the fact that the company must obtain approval from secured lenders for further asset-sale based distributions to its parent or additional secured debt on its balance sheet. Current covenants also subject the company to a 55% debt/capitalization ratio which limits total debt. CLAIRE'S STORES: Posts $13.8 Mil. Net Loss in Qtr. Ended Nov. 3 --------------------------------------------------------------- Claire's Stores Inc. reported net loss of $13.81 million for the third quarter of fiscal 2008 ended Nov. 3, 2007, compared to a net income of $36.6 million for three months ended Oct. 28, 2006. "This quarter concludes my first full quarter as Claire's CEO," Gene Kahn, chief executive officer, said. "Our third quarter results are reflective of a softening retail environment. In response to consumer demand, we began to shift our product mix from jewelry to accessory classifications in order to capitalize on the strength of handbags, fashion accessories and cosmetics as we completed Back to School and transitioned into Fall." "Jewelry sales are currently challenging, except among our younger customers," Mr. Kahn added. "Our repositioning of Icing is still in its early stages as we work to refine and improve the concept and content. Our merchandise margins improved and through disciplined buying and markdown activity, inventory levels remained low and fresh." At Nov. 3, 2007, the company's $200 million revolving credit facility was undrawn aside from a $4.5 million letter of credit. Cash and cash equivalents were $78 million. During the third quarter of Fiscal 2008, cash provided by operating activities was approximately $24.4 million, compared with cash provided by operating activities of $56.6 million during the third quarter of Fiscal 2007. The change in cash provided by operating activities was impacted by the interest expense associated with debt incurred to fund the acquisition. Capital expenditures during the third quarter of Fiscal 2008 were $23.8 million, of which $19 million related to store openings and remodeling projects, with the remainder relating primarily to the enhanced POS rollout. Capital expenditures during the third quarter of Fiscal 2007 were $30.1 million. At Nov. 3, 2007, the company's balance sheet showed total assets of $3.4 billion, total liabilities of $2.8 billion and total shareholders' equity of $0.6 billion. About Claire's Stores Headquartered in Pembroke Pines, Florida, Claire's Stores Inc. (NYSE: CLE) -- http://www.clairestores.com/-- is a specialty retailer of value-priced jewelry and accessories for girls and young women through its two store concepts: Claire's and Icing. While the latter operates only in North America, Claire's operates internationally. As of Dec. 1, 2007, Claire's Stores operated 3,061 stores in the United States, Canada, Puerto Rico, the Virgin Islands, the United Kingdom, Ireland, France, Switzerland, Austria, Germany, Spain, Portugal, Belgium, and the Netherlands. Claire's Stores operates through its subsidiary, Claire's Nippon, Co. Ltd., 202 stores in Japan as a 50:50 joint venture with AEON, Co. Ltd. The company also franchises 162 stores in the Middle East, Turkey, Russia, Poland, and South Africa. * * * As reported in the Troubled Company Reporter on Oct. 29, 2007, Standard & Poor's Ratings Services revised its bank loan and recovery rating on Claire's Stores Inc.'s $1.65 billion senior secured credit facilities. S&P raised the loan rating to 'B+' from 'B' and revised the recovery rating to '2' from '3'. The '2' recovery rating indicates that lenders can expect substantial (70%-90%) recovery in the event of a payment default. COMMUNITY HOSPICE: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Community Hospice Care, Inc. dba Prime Care Hospice P.O. Box 276 Hollandale, MS 38748 Bankruptcy Case No.: 07-14636 Type of Business: The Debtor owns and manages intermediate care facility. Chapter 11 Petition Date: December 19, 2007 Court: Northern District of Mississippi (Aberdeen) Debtor's Counsel: Jeffrey A. Levingston, Esq. P.O. Box 1327 Cleveland, MS 38732 Tel: (662) 843-2791 Total Assets: $120,000 Total Debts: $1,334,353 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Palmetto G.B.A., L.L.C. Business Debt $920,259 P.O. Box 100183 Columbus, SC 29202-0183 Internal Revenue Service Business Debt $225,895 Memphis, TN 38103 Autumn Leaves Nursing Home Business Debt $25,641 570 North Solomon Street Greenville, MS 38704 Serving Communities, L.L.C. Business Debt $24,277 First Choice Medical Supplies Business Debt $21,742 Village Pharmacy Business Debt $20,993 South Street Pharmacy Business Debt $16,801 M.S. Employment Business Debt $13,724 M.S. Employment Security Business Debt $13,019 Commission Lincare Business Debt $9,622 Community Transfer Services, Business Debt $9,000 L.L.C. Blue Cross Blue Shield Business Debt $5,895 Haire Drug Store Business Debt $5,031 Vaiden, C.L.C. Business Debt $4,908 Quality Medical Equipment Business Debt $3,708 Triple S Consulting, Inc. Business Debt $3,500 Heritage Manor of Rolling Fork Business Debt $3,164 City Drug Store Business Debt $2,806 CONNECTICUT AVENUE: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Connecticut Avenue Partners, LLC dba Days Hotel 925 Broad Street New Bern, NC 28560-4831 Bankruptcy Case No.: 07-04806 Chapter 11 Petition Date: December 18, 2007 Court: Eastern District of North Carolina (Wilson) Debtor's Counsel: Trawick H Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 http://www.stubbsperdue.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wyndham Hotel Group $124,113 Franchise Administration 1 Sylvan Way Parsippany, NJ 07054 Bank of America $121,984 P.O. Box 1758 Newark, NJ 07101 Internal Revenue Service $94,789 320 Federal Place Greensboro, NC 27402 Colson Services Corp. $73,853 Craven County Tax Coll. tax $68,429 N.C. Department of Revenue $66,376 American Express $38,948 City of New Bern Tax tax $9,759 American Hotel Register $4,573 Arch Professional Group $3,401 Max 6004, Inc. $3,000 Country-Aire Rental, Inc. $2,461 Pittard Perry Crone $2,450 American International Co $2,150 Vistagraphics, Inc. $2,080 Indep Elevator Service $1,824 A G Salem & Associates $1,242 CRAIG ROEDER: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Craig C. Roeder 1203 Timber Climb Drive Avon, IN 46123 Bankruptcy Case No.: 07-12478 Chapter 11 Petition Date: December 17, 2007 Court: Southern District of Indiana (Indianapolis) Judge: Frank J. Otte Debtor's Counsel: Rubin & Levin, P.C. Edward R. Cardoza, Esq. John C. Hoard, Esq. 342 Massachusetts Avenue Suite 500 Indianapolis, IN 46204 Tel: (317) 860-2931 Fax: (317) 263-9411 Total Assets: $619,405 Total Debts: $13,720,221 Debtor's list of its 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Judith A. butler Order in $11,937,000 9100 Island Pond Road dissolution of Quincy, IN 47456 marriage Internal Revenue Service Federal income tax, $191,497 Attn: Insolvency Operation includes interest P.O. Box 21126 through 12/15/07 Philadelphia, PA 19114 Penalty $13,249 Indiana Department of Revenue State income tax and $6,855 Attn: Bankruptcy Section interest through Room N203, 100 North Senate 12/15/07 Avenue Indianapolis, IN 46204-2253 Penalty $2,661 Income taxes Unknown Michigan Department of Treasury Taxes includes interest $4,874 through 12/15/07 Penalty $1,486 Honda Credit Corp. 2007 Honda Pilot $26,869 ($22,000 secured) South Carolina Department of Taxes includes interest $90 Revenue through 12/15/07 Taxable Processing Center Penalty $20 Arizona Department of Revenue Unknown Clifton Gunderson Ex-wife's financial Unknown consultants First National Bank Real estate at 1900 Unknown Island Pond Road, (Unknown Quincy, IN 47456 secured) Franchise Tax Board Unknown Georgia Department of Revenue Unknown Katzman & Katzman, PC Ex-wife's attorney Unknown CRESCENT RESOURCES: Moody's Cuts Corporate Rating to Ba3 from Ba2 ----------------------------------------------------------------- Moody's Investors Service lowered the ratings to Ba3 from Ba2 on Crescent Resources, LLC's senior secured bank facility and corporate family rating as a result of material deterioration in credit metrics stemming from challenges facing the company's residential development business. Moody's also changed Crescent Resources' ratings outlook to negative from stable, reflecting a weak housing environment which is likely to persist for at least the next twelve months. According to Moody's, the downturn in the housing markets combined with much tighter credit markets has placed significant pressure on Crescent Resources to generate cash flows from sales in its upscale residential businesses. As a result, the firm has experienced a decline in fixed charge coverage to 1.2x (four quarters ending 9/30/07), down significantly from year end 2006, and a spike in debt to cash flow to above 12x. Crescent Resources was granted a waiver from its lenders as the fixed charge coverage was beneath the covenant threshold. Moody's expects improvement in credit metrics going forward as the company reduces expenses and increases land sales to boost cash flows, though the environment is likely to remain challenging and credit metrics are unlikely to return to pre-2007 levels. Crescent Resources can return its rating to stable by stabilizing cash flows and improving fixed charge coverage to at least 2x on a sustained basis, while reducing net debt to EBIDA to below 6x. Moody's is likely to downgrade Crescent Resources' ratings should cash flows continue to decline and coverage ratios persist below 2x, with leverage (debt to EBIDA) remaining above 6x. The primary factors pressuring credit metrics in a downgrade are likely to be the poor housing market and weak pricing in Crescent Resources' land sales. * These ratings were downgraded with a negative outlook: -- Crescent Resources, LLC: Ba3 guaranteed senior unsecured debt from Ba2; Ba3 corporate family rating from Ba2. Crescent Resources, LLC is a private land and commercial property development company based in Charlotte, North Carolina. The approximate book value of the company's assets at Sept. 30, 2007 was $2.6 billion. CROSSWINDS AT MESQUITE: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Crosswinds at Mesquite Trails, L.L.C. 2929 North Power Road Suite 101 Mesa, AZ 85215 Bankruptcy Case No.: 07-02939 Debtor-affiliate filing a separate Chapter 11 petition on December 20, 2007: Entity Case No. ------ -------- Crosswinds at Thomas and Jackrabbit, 07-07009 L.L.C. Debtor-affiliate filing a separate Chapter 11 petition on August 22, 2007: Entity Case No. ------ -------- Crosswinds at Arroyo Seco, L.L.C. 07-04162 Type of business: The Debtors own and manage real estate. Chapter 11 Petition Date: June 22, 2007 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Bryan A. Albue, Esq. Fennemore Craig 3003 North Central Avenue, Suite 2600 Phoenix, AZ 85012-2913 Tel: (602) 916-5311 Fax: (602) 916-5511 Crosswinds at Mesquite Trails, LLC's Financial Condition: Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtors did not file lists of their 20 largest unsecured creditors. DEERFIELD TRIARC: Agrees to Buy Triarc's Stake in Deerfield & Co. ----------------------------------------------------------------- Deerfield Triarc Capital Corp. has entered into a definitive agreement to will acquire Deerfield & Company LLC, a Chicago-based fixed income asset manager in which Triarc Companies Inc. owns a majority interest and which, through a subsidiary, externally manages DFR. The sale is expected to be completed prior to year- end 2007, subject to satisfaction of customary closing conditions. The total nominal consideration to be received by Triarc and other members of Deerfield is approximately $225 million, consisting of approximately $75 million aggregate principal amount of five-year senior secured notes bearing an initial interest rate of LIBOR plus 500 basis points and 15 million shares of newly issued DFR convertible preferred stock (having a liquidation value of $10.00 per share and a value of $7.06 per share based on the current market value of DFR's common stock as of the close of business on Dec. 17, 2007). In addition, the sellers will receive a distribution of approximately 329,000 shares of DFR common stock currently owned by Deerfield (having a current market value of approximately $2.3 million). Accordingly, Triarc expects to receive total nominal consideration of approximately $145 million, consisting of approximately $48 million in senior secured notes, approximately 9.6 million shares of DFR convertible preferred stock (having a liquidation value of $10.00 per share and a value of $7.06 per share based on the current market value of DFR's common stock as of the close of business on Dec. 17, 2007), in consideration for its interest in Deerfield. Triarc will also receive approximately 205,000 shares of DFR common stock (having a current market value of approximately $1.5 million) currently owned by Deerfield. Each share of DFR preferred stock will be convertible into one share of DFR common stock upon receipt of DFR stockholder approval of the issuance of the underlying common stock. It is currently expected that a DFR shareholder meeting will be held in the first quarter of 2008. The DFR shares to be owned by Triarc following the closing of the transaction would represent approximately 16% of DFR's outstanding common stock on an as converted basis. In connection with the transaction, Nelson Peltz, Triarc's Chairman resigned from the DFR Board of Directors, and Peter W. May, Vice Chairman of Triarc, was elected to fill the vacancy created by Mr. Peltz's resignation. Following the consummation of the transaction, DFR will discontinue the use of "Triarc" in its name and will be renamed Deerfield Capital Corp. Following the sale of Deerfield, Triarc's sole operating business will be the Arby's(R) restaurant business. Commenting on the sale of Deerfield, Roland C. Smith, Triarc's Chief Executive Officer, said: "We are proud of what we have accomplished with Deerfield and believe we have realized substantial value from this investment." Mr. Smith added: "We have worked diligently to prepare for the day when Triarc will be a 'pure play' restaurant company. Now that our corporate restructuring is about to be accomplished, we believe that Arby's will be able to significantly increase value through both organic growth and the acquisition of other restaurant companies." In October 2007, the parties mutually terminated a prior April 2007 acquisition agreement because of instability in the credit markets and DFR's inability to complete on acceptable terms the financing necessary to consummate the acquisition of Deerfield contemplated by the April 2007 agreement. Triarc said that alternatives for the shares of DFR convertible preferred stock as well as the underlying DFR common stock to be received by Triarc in the transaction are under review. Goldman Sachs & Co. acted as Triarc's financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as Triarc's legal counsel. About Deerfield & Company LLC With offices in Chicago, New York and London, Deerfield & Company LLC, through its wholly owned subsidiary Deerfield Capital Management LLC, is an asset manager offering a diverse range of fixed income and credit-related strategies to institutional investors. Since July 2004, assets under management have grown from approximately $8.1 billion to approximately $15.4 billion (including $718 million of assets relating to DFR) as of Nov. 1, 2007. About Triarc Companies Inc. Triarc Companies Inc. (NYSE: TRY; TRY.B) is a holding company and, through its subsidiaries, is the franchisor of the Arby's restaurant system and the owner of approximately 94% of the voting interests, 64% of the capital interests and at least 52% of the profits interests in Deerfield & Company LLC. The Arby's restaurant system is comprised of approximately 3,600 restaurants, of which, as of Sept. 30, 2007, 1,097 were owned and operated by subsidiaries of Triarc. About Deerfield Triarc Capital Corp. Deerfield Triarc Capital Corp. [NYSE: DFR] is a diversified financial company, structured as a REIT, that invests in single- family mortgage securities and various other asset classes. * * * As reported in the Troubled Company Reporter on Nov. 29, 2007, Moody's Investors Service downgraded Deerfield Triarc Capital Corp's corporate family rating to Ba3, from Ba2. Concurrently, Moody's withdrawn provisional (P)B1 senior secured term loan rating assigned to the REIT's external manager Deerfield & Company LLC. Rating outlook is negative. As reported in the Troubled Company Reporter on July 13, 2007, Standard & Poor's Ratings Services assigned its 'BB-' long-term counterparty credit rating to Deerfield Triarc Capital Corp. The outlook is stable. At the same time, S&P assigned 'B' bank loan rating to the company's $155 million senior secured term loan; the recovery rating is '6'. The ratings still applies to date. DELTA FINANCIAL: Selects AlixPartners as Claims & Noticing Agent ---------------------------------------------------------------- Delta Financial Corp. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ AlixPartners LLP, as claims, balloting, noticing and administrative agent, nunc pro tunc to Dec. 17, 2007. AlixPartners is one of the country's premier Chapter 11 administrators with substantial experience in, among other things, noticing, ballot tabulation, claims processing, and claims reconciliation. Hugh Miller, chief executive officer of Delta Financial Corporation, relates the creditor matrices in the Debtors' cases aggregate over 3,500 parties to whom certain notices must be sent. He avers that the extremely large number of creditors and parties in interest will undoubtedly impose heavy administrative and other burdens on the Court and the Bankruptcy Clerk. In addition, the Debtors will need assistance in managing and addressing the myriad of administrative issues that will likely arise in the cases. To relieve and assist with these burdens, the Debtors request the appointment of the firm as claims, balloting, noticing and administrative agent in the Chapter 11 cases. As claims, noticing and balloting agent, AlixPartners will: (a) assist with developing the complete notice database system to inform all potential creditors as to the filing of the case and the bar date notice; (b) process and mail all notices including the initial bankruptcy notices and bar date notice; (c) receive and process all proofs of claim and maintain the claims register; (d) track all claims transfers and update ownership of claims in the claims register accordingly; (e) provide both the Debtors and their counsel access to the claims database system; (f) provide all voting ballots to necessary parties, quantify the ballot results and provide a final report to the Court; (g) be available for testimony regarding various matters as required; (h) prepare the creditors' matrix listing all potential creditors; (i) file monthly claims registers with the Court; and (j) assist with other matters as may be requested that fall within the firm's expertise and that are mutually agreeable. Accordingly, the Debtors ask the Bankruptcy Clerk to turn over all filed claims directly to AlixPartners. The Debtors and the AlixPartners agree, among other things, that: (1) the firm will not consider itself employed by the United States government and will not seek any compensation from the United States government in its capacity as administrative agent in the Chapter 11 cases; (2) the firm will not be an agent of the United States and will not act on behalf of the United States; and (3) the firm will not employ any past or present employees of the Debtors in connection with its work as the claims and noticing agent in the Chapter 11 cases. AlixPartners will be paid on an hourly basis in accordance with its discounted hourly rates: Professional Rate ------------ ---- Managing Directors $450 Directors $355 Vice Presidents $320 Associates $245 Analysts $185 Paraprofessionals $105 The Debtors propose to pay AlixPartners, in the ordinary course and without need for further notice or order of the Court. The Debtors do not believe that the firm is a "professional person" for purposes of Section 327(a) of the Bankruptcy Code and should not be subject to the fee application process because the firm will only be charged with administrative functions in the bankruptcy cases. Mr. Miller discloses that in the year prior to the Petition Date, the firm has been paid a total of $25,000, as well as a $10,000 prepetition retainer from the Debtors for services rendered and to be rendered in connection with these cases. There are no amounts owed to the Firm as of the Petition Date, according to Mr. Miller. Todd B. Brents, a managing director at AlixPartners, discloses, among others, that: -- three private equity funds sponsored by Hellman & Friedman, LLC, acquired indirectly through H&F Astro LLC, a controlling stake in AlixPartners, LLC, as of Oct. 12, 2006; no material nonpublic information about the Debtors has been furnished by AlixPartners to H&F; -- Angelo Gordon, a lienholder of the Debtors, was a creditor, bondholder and lender to current and former AlixPartners and AP Services, LLP, clients in matters unrelated to the Debtors; -- AT&T Corp., a creditor of the Debtors, was a creditor, executory contract counterparty, vendor, lender and shareholder to current and former AlixPartners' and APS' clients in matters unrelated to the Debtors; -- Bank of America, an executory contract counterparty of the Debtors, is a current and former client of AlixPartners, as well as a professional, executory contract counterparty, creditor and lender to current and former AlixPartners and APS clients in matters unrelated to the Debtors; and -- Deutsche Bank, a lienholder of the Debtors, is affiliated with entities that are shareholders, lenders, adverse parties, indenture trustees, creditors, limited partners and professionals to current and former AlixPartners' and APS' clients in matters unrelated to the Debtors; Deutsche Bank is a current AlixPartners client in matters unrelated to the Debtors; and Deutsche Bank provides banking services to AlixPartners. Mr. Brents assures the Court that AlixPartners does not: (a) represent any interest adverse to the Debtors or the estates; (b) have any connection with the Debtors, creditors, any other party in interest, their respective attorneys and accountants, the United States Trustee, or any person employed in the Office of the United States Trustee; or (c) employ any person that is related to a judge of the Delaware Bankruptcy Court or the United States Trustee for the District of Delaware. In addition, to the best of the Debtors' knowledge, the firm is a "disinterested person" under the Bankruptcy Code. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. The company filed a chapter 11 petition on December 17, 2007 (Bankr. D. Del. Lead Case No. 07-11880). On the same day, three affiliates filed separate chapter 11 petitions -- Delta Funding Corp., Renaissance Mortgage Acceptance Corp., and Renaissance R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to 07-11883). The Debtors selected David B. Stratton, Esq. and James C. Carignan, Esq. at Pepper Hamilton LLP as their counsel. The Debtors' amended consolidated quarterly financial condition as of Sept. 30, 2007, showed $7,223,528,000 in total assets and $7,108,232,000 in total liabilities. The Debtors' petition listed D.B. Structured Products Inc. as their largest unsecured creditor holding a $19,500,000 claim. The Debtors' exclusive period to file a plan expires on April 15, 2008. (Delta Financial Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). DELTA FINANCIAL: Wants De Minimis Asset Sale Procedures Okayed -------------------------------------------------------------- Delta Financial Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve procedures by which they may sell de minimis assets. The Debtors will sell some of the assets which are unnecessary for the continued operation of their businesses and are of relatively de minimis value compared to the total asset base. Proposed Procedures The De Minimis Sale Procedures will apply only to each asset whose cash and other consideration totals not more than $100,000. The Debtors will be allowed to sell assets that are encumbered by liens or encumbrances other interests only if those liens and other interests are capable of monetary satisfaction or the holders consent to the sale. The Debtors will be permitted to sell assets co-owned by a Debtors and a third party, only if the sale does not violate Section 363(h) of the Bankruptcy Code. After the Debtors enter into a contract or contracts contemplating a de minimis asset sale, the Debtors will serve a notice of the proposed sale to: 1. the U.S. Trustee for the District of Delaware; 2. counsel to any statutory committees appointed in the Chapter 11 cases; and 3. all known parties holding or asserting liens on or other interests in the assets that are subject of the proposed sale and their respective counsel, if known; otherwise referred as "interested parties." Interested parties will have 10 calendar days from the service of the sale notice to file and serve any objections to the sale. The Debtors will also file the notice with the Court. The sale notice will include: a. a description of the assets proposed to be sold and their locations; b. the identity of the non-debtor purchaser or other party or parties to the sale and any relationship with the Debtors; c. the identities of any parties holding liens on or other interests in the assets and a statement indicating that all the liens or interests are capable of monetary satisfaction; d. the major economic terms and conditions of the sale; and e. instructions consistent with the objection procedures. The Debtors may consummate a sale prior to expiration of the applicable notice period if the Debtors obtain each interested party's written consent. If any significant economic terms of a sale are amended after transmittal of the notice, but before the expiration of the notice period, the Debtors must send a revised notice to all the interested parties describing the proposed sale, as amended. If a revised notice is required, the notice period will be extended for an additional five calendar days. On or before the 15th day of every calendar month, the Debtors will file with the Court, and serve upon all parties requesting notice in the cases, a report summarizing any de minimis sale that were consummated during the immediately preceding calendar month. Each monthly report will include with respect to each of the sale: (i) a description of the assets proposed to be sold and their locations; (ii) the identity of the non-debtor purchaser or other party or parties to the sale and any relationship with the Debtors; (iii) the identities of any parties holding liens on or other interests in the assets and a statement indicating that all the liens or interests are capable of monetary satisfaction; and (iv) the major economic terms and conditions of the sale. Any objections to a sale must be in writing, filed with the Court and served on the interested parties and counsel to the Debtors to be received by all the parties before the end of the notice period. Each objection must specify its grounds. If an objection is properly filed: a. the objection will be deemed a request for a hearing which will be held at the next scheduled omnibus hearing that is not less than 10 days after the service of the objection; and b. the sale may not proceed absent withdrawal of the objection or Court order approving the sale. If no objection is filed consistent with the Sale Procedures, the Sale will be deemed final and fully authorized by the Court. All buyers will take assets sold pursuant to the De Minimis Sale Procedures "as is" and "where is," without any representations or warranties from the Debtors as to the quality or fitness of the assets. Buyers will, however, take title to the assets free and clear of all liens, encumbrances, claims and other interests. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. The company filed a chapter 11 petition on December 17, 2007 (Bankr. D. Del. Lead Case No. 07-11880). On the same day, three affiliates filed separate chapter 11 petitions -- Delta Funding Corp., Renaissance Mortgage Acceptance Corp., and Renaissance R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to 07-11883). The Debtors selected David B. Stratton, Esq. and James C. Carignan, Esq. at Pepper Hamilton LLP as their counsel. The Debtors' amended consolidated quarterly financial condition as of Sept. 30, 2007, showed $7,223,528,000 in total assets and $7,108,232,000 in total liabilities. The Debtors' petition listed D.B. Structured Products Inc. as their largest unsecured creditor holding a $19,500,000 claim. The Debtors' exclusive period to file a plan expires on April 15, 2008. (Delta Financial Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). DLJ COMMERCIAL: Fitch Holds 'B-' Rating on Class B-7 Certs. ----------------------------------------------------------- DLJ Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 1998-CG1, are upgraded by Fitch Ratings as: -- $66.5 million class B-4 to 'AA- from 'A+'; -- $15.6 million class B-5 to 'A' from 'A-'. In addition, Fitch affirms these classes: -- $235.5 million class A-1B at 'AAA'; -- $39.1 million class A-1C at 'AAA'; -- Interest-only class S at 'AAA'; -- $39.1 million class A-2 at 'AAA'; -- $78.2 million class A-3 at 'AAA'; -- $23.5 million class A-4 at 'AAA'; -- $70.4 million class B-1 at 'AAA'; -- $23.5 million class B-2 at 'AAA'; -- $15.6 million class B-3 at 'AAA'; -- $27.4 million class B-6 at 'BB+'; -- $15.6 million class B-7 at 'B-'. Fitch does not rate the $13.8 million class C certificates. Class A-1A has been paid in full. The upgrades are the result of increased subordination levels due to additional paydown since Fitch's last rating action. To date, 59 loans (36.5%) have defeased including the top four largest loans (10.9%) in the transaction. As of the December 2007 distribution date, the pool's aggregate certificate balance has decreased 57.6% since issuance, to $663.8 million from $1.56 billion. Ninety-seven loans (24.5%) are scheduled to mature in 2008. The loans have interest rates ranging from 6.7% to 7.7%. Of the 97 loans maturing, 13.6% are defeased. The largest maturing loan (2.1%) is the fifth largest loan in the deal. The loan is secured by an industrial warehouse facility located in Silver Springs, Pennsylvania and has a servicer reported year-end 2006 DSCR of 1.68 times and is 100% occupied. Currently, there are two assets (0.5%) in special servicing. The largest asset (0.3%) is secured by an office property located in Endicott, New York and is currently 90 days delinquent. The special servicer is pursuing foreclosure and has appointed a receiver to take control of the property. The property is currently 35% occupied. The other specially serviced asset is secured by a retail property located in Jackson, Mississippi and is currently real estate owned. The special servicer continues to market the property and the vacant space. The property is currently 67% occupied. Expected losses on the specially serviced assets will be absorbed by the non-rated class C. Ten loans (3.9%) have been identified as Fitch loans of concern due to declines in occupancy and performance. Five (1.8%) of the 10 loans are scheduled to mature in 2008. The largest maturing loan (0.6%) is secured by a hotel located in Richmond, California. The servicer reported YE 2006 DSCR is 1.00x and the property is 60% occupied. Fitch will continue to monitor the performance of these loans for any further declines. DOLLARAMA GROUP: Good Performance Cues Moody's to Revise Outlook ---------------------------------------------------------------- Moody's Investors Service changed the outlook of Dollarama Group Holdings L.P. and its operating subsidiary Dollarama Group L.P. to stable from negative and affirmed all ratings of both Holdings and Group, including Holdings' B1 corporate family rating and SGL-2 speculative grade liquidity rating. The outlook change to stable reflects the company's continued strong operating performance and cash flow generation which, when combined with modest debt reduction, has led to Dollarama's leverage ratio reducing below the 6.5 times hurdle that was set in December 2006. Moody's expects key operating and cash flow trends to remain favorable, which may enable the company to further reduce its leverage through the next couple of years. Ratings affirmed * Dollarama Group Holdings L.P. -- Corporate family rating at B1; -- Probability of default rating at B1; -- Senior floating rate deferred interest notes at B3 (LGD 5, 84%); -- Speculative Grade Liquidity Rating at SGL-2; * Dollarama Group L.P. -- Senior subordinated notes at B2 (LGD 4, 63%); -- Sr. Secured Term Loans at Ba1 (LGD 2, 19%); -- Sr. Secured Revolving Facility at Ba1 (LGD 2, 19%); The B1 corporate family rating considers Dollarama's strong franchise and leading market share in the Canadian extreme value retailing segment. The rating also recognizes the company's high operating margins, which are scored Aaa by Moody's Global Retail Rating Methodology, and are driven to a large extent by Dollarama's expertise in direct sourcing from low cost areas overseas. The ratings are constrained by the sizable amount of debt and low tangible asset coverage, the company's relatively small scale, and the aggressive financial policy of Bain Capital Partners LLC, which positions certain credit metrics weakly within the rating category. The SGL-2 speculative grade liquidity rating, representing good liquidity, reflects Moody's expectation that Dollarama's internally generated cash flow, combined with minimal borrowings under the secured $75 million revolver, will be sufficient to fund working capital, capital expenditures and debt repayments for the next four quarters. The credit agreement is subject to two financial covenants -- a leverage ratio and an interest coverage ratio -- with which Moody's expects the company to remain in compliance. Dollarama Group L.P., headquartered in Montreal, Quebec, Canada is a leading extreme value retailer operating 505 stores in Eastern Canada and the Atlantic Provinces with revenue for the LTM August 2007 of CDN$944 million. DOMTAR INC: Discloses Total Consideration Payable Under Offers -------------------------------------------------------------- Domtar Inc., a subsidiary of Domtar Corporation, disclosed the total consideration payable under the offers to purchase for cash any and all of its outstanding Canadian dollar denominated 10% Debentures due 2011 and 10.85% Debentures due 2017. The total consideration for both series of debentures was calculated as of 2:00 p.m., Montreal time, on Dec. 13, 2007, by reference to: (i) an offer spread of 125 basis points over the yield to maturity on the 6% Government of Canada bond due June 2011 for the 10% debentures; and (ii) an offer spread of 150 basis points over the yield to maturity on the 4% Government of Canada bond due June 2017 for the 10.85% debentures. Assuming an Early consent deadline of 5:00 p.m., Montreal time, on Dec. 17, 2007, and an Early Settlement Date of Dec. 20, 2007, the total consideration for: (i) each $1,000 principal amount of 10% debentures validly tendered and not withdrawn prior to the early consent deadline, will be $1,143.83; and (ii) each $1,000 principal amount of 10.85% debentures validly tendered and not withdrawn prior to the early consent deadline, will be $1,385.04. In each case, the total consideration includes an early consent amount of $30. Holders who validly deposit their debentures under the offers and deliver their consent to the proposed amendments after the early consent deadline and prior to the expiration time, which is scheduled to be 5:00 p.m., Montreal time, on Jan. 3, 2008, unless extended or earlier terminated, will only receive the purchase price, which is equal to the total consideration as of the final settlement date less the early consent amount, and which will be payable promptly after the expiration time on the final settlement date. Assuming a final settlement date of Jan. 7, 2008, the purchase price for: (i) each $1,000 principal amount of 10% debentures validly tendered after the early consent deadline, will be $1,111.86; and (ii) each $1,000 principal amount of 10.85% debentures validly tendered after the early consent deadline, will be $1,353.60. Domtar Inc. will also pay accrued and unpaid interest from the last interest payment date to, but not including, the applicable settlement date on those debentures accepted for payment pursuant to the offers. In connection with the offers, certain debentureholders who hold, directly or indirectly, or exercise control or direction over, approximately 66.9% and 64.7% of the 10% Debentures and the 10.85% debentures, have entered into lock-up agreements with Domtar Inc. pursuant to which they have agreed, subject to the terms and conditions contained therein, to irrevocably deposit all of their debentures and deliver their consents on or prior to the early consent deadline in valid acceptance of the offers and consent solicitations. Domtar Inc. has retained Scotia Capital to act as Dealer Manager and Solicitation Agent for the offers and consent solicitations. Domtar Inc. has also retained Georgeson Shareholder Communications Canada Inc. to act as information agent and Computershare Investor Services Inc. to act as depositary in connection with the Offers and the Consent Solicitations. For copies of the offer to purchase and consent solicitation statement and the related letter of transmittal and consent please contact Georgeson at 1-888-605-8384. Holders of debentures in bearer form are advised to contact Computershare at 1-800-245-4053 for instructions regarding how to deposit their debentures. For further inquiries, please contact Scotia Capital at 416-863-7776 or 1-800-372-3930 (for U.S. residents). About Domtar Inc. Domtar Inc. (TSX/NYSE: DTC) is a wholly-owned subsidiary of Montreal, Quebec-based Domtar Corporation (NYSE:UFS) -- http://www.domtar.com/-- Domtar Corp is an integrated producer of uncoated freesheet paper in North America and is also a manufacturer of papergrade pulp. The company designs, manufactures, markets and distributes a wide range of business, commercial printing, publication as well as technical and specialty papers with recognized brands such as First Choice(R), Domtar Microprint(R), Windsor Offset(R), Cougar(R) well as its full line of environmentally and socially responsible papers, Domtar EarthChoice(R). Domtar also produces lumber and other specialty and industrial wood products. The company employs nearly 14,000 people. * * * Moody's Investor Service placed Domtar Inc.'s senior unsecured debt ratings at 'B2' in September 2006. The rating still hold to date. DORMITORY AUTHORITY: Fitch Assigns 'BB+' Rating on $260MM Bonds --------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to the Dormitory Authority of the State of New York (Orange Regional Medical Center Project) $260 million revenue bonds, series 2008, to be issued on behalf of Orange Regional Medical Center. The Rating Outlook is Stable. Bond proceeds will be used to finance the construction of a replacement hospital, finance capitalized interest expense during the construction period, fund a debt service reserve fund, and pay bond issuance expenses. As security for the bonds, bondholders will receive a pledge of gross receipts and a mortgage. The series 2008 bonds are expected to be issued as traditional fixed- rate securities and sell through negotiation by Merrill Lynch around March 15, 2008. The 'BB+' rating reflects ORMC's dominant market share in the primary service area, evidence of strong state support, and stable profitability trends. As the only provider of a full continuum of health care services in the western portion of Orange County, ORMC enjoys a 62.4% market share. The Berger Commission's recommendation for the project and the receipt of almost $48 million in HEAL grants from the state clearly demonstrates the state's support for the project. ORMC has operated profitably or at breakeven since fiscal 2002 in a relatively difficult regulatory environment. Credit concerns include significant construction risk due to the size and nature of the project, historical profitability ratios that are below Fitch's 'BBB' medians and weak liquidity coupled with high pro forma debt ratios. For fiscal 2006 (ending Dec. 31), the hospital essentially broke even, losing $250,000 from operations (negative 0.1% operating margin) and earning $3.5 million in excess income (1.2% bottom line income). Both margins are well below Fitch's 'BBB' medians of 2.2% and 3.8%, respectively. For the nine-month period ending Sept. 30, the hospital earned $1 million from operations (0.5% operating margin) and $8.2 million in excess income (3.7% excess margin). As of Dec. 31, 2006, the hospital had $59.8 million of cash and investments, translating into 86.6 days of cash on hand and 153.2% cash to debt ratio. Pro forma leverage and liquidity (relative to debt) metrics of 84.4% debt to capitalization and 23% cash to debt are well below Fitch's 'BBB' category medians of 47% and 120.3 days, respectively. The Stable Outlook reflects Fitch's belief that the new construction and operational improvement, along with sizable increases in managed care contracts which have recently been awarded to ORMC, will improve the system's financial and operational performance over the near term. ORMC consists of an acute-care hospital (450 beds) operating on two campuses in Middletown and Goshen, New York, with 10 outpatient care facilities in the service area. ORMC provides medical, surgical, dental and other health care services in its primary service area of Orange County, New York. ORMC had total revenue of approximately $269 million in fiscal 2006. DOUBLE D TRANSPORT: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Double D Transport, L.L.C. P.O. Box 190 Troy, TN 38260 Bankruptcy Case No.: 07-14113 Type of Business: The Debtor is a flatbed and specialized open deck carrier operating between Canada and the U.S. on a daily basis. Chapter 11 Petition Date: December 19, 2007 Court: Western District of Tennessee (Jackson) Judge: G. Harvey Boswell Debtor's Counsel: Michael T. Tabor, Esq. 203 South Shannon P.O. Box 2877 Jackson, TN 38302-2877 Tel: (731) 424-3074 Total Assets: $1,326,765 Total Debts: $1,340,303 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Tennessee Bank value of security: $760,324 P.O. Box 31 $657,000 Memphis, TN 38101 Neven & Janice Barnett $26,000 line of $60,000 602 South Main Street credit on personal Troy, TN 38260 property Rogers-Pacific Pride $33,147 204 North Fourth Street Union City, TN 38261-0416 H.&P. Leasing, Inc. $15,871 I.R.S. 2290-Highway use tax $14,750 Midwestern Insurance Alliance $8,844 Tri-State International $5,393 A.T.&T. Mobility $4,722 Bills High Pressure Wash $3,827 Bank of America $3,776 Buddy's Wrecker Service $2,532 Bullion's Consulting Service $1,310 Jackson Trailer Services $1,146 Verizon Wireless $608 The Messenger $555 Reese Automotive $183 Fed-Ex $100 DR HORTON: Moody's Puts Corporate Family Rating at Ba1 ------------------------------------------------------ Moody's Investors Service lowered the ratings of D.R. Horton, Inc., assigning the company a corporate family rating of Ba1 and lowering the ratings on the various issues of senior unsecured notes to Ba1 from Baa3 and on the senior subordinated note issue to Ba2 from Ba1. The ratings were taken off review for downgrade where they had been placed on Oct. 31, 2007, and the outlook is negative. Moody's rating actions stem from its assessment that even though Horton will continue to outperform many of its peers that have already been downgraded, our expectations about its fiscal 2008 and 2009 performance do not conform to that of an investment grade company. The downgrades and negative outlook reflect these considerations: 1) Moody's does not see a sector recovery beginning before well into 2009 at the earliest, with any housing recovery likely to be very measured for some time thereafter, thus prolonging Horton's underperformance on key financial metrics versus prior expectations. 2) While actual inventory levels (i.e., reported inventory levels that are adjusted to reflect land impairment and option abandonment charges) were sharply reduced in the company's fourth fiscal quarter that ended Sept. 30, 2007, that is what typically occurs for nearly all homebuilders, even in years of strong growth. Homebuilders' fourth quarters almost always show seasonal declines in inventory levels as company employees strive to maximize closings in order to meet bonus targets. Moody's remains concerned, however, that Horton will be unable to maintain a pace of substantial actual inventory reduction for all of fiscal 2008, as fiercely competitive local markets, falling new home prices, elevated levels of both new and existing home inventories, high cancellation rates, and Horton's spec housing construction, albeit reduced, all combine to frustrate robust and sustainable cash flow generation. 3) The company will face increasing difficulties in complying with existing financial covenants in fiscal 2008, and Moody's expects to see compliance with potentially relaxed covenants to remain challenging. 4) Moody's does not expect Horton to be able to return to bottom line profitability within the next year, in large part because of our expectation that impairment charges will continue apace but also because the company's debt structure will remain cumbersome. Although the company reduced its debt by nearly $1 billion in the last fiscal year, the decline in its revenue run rate (not to mention earnings) in fiscal 2007 and prospective decline in fiscal 2008 has been and will be substantially greater. Moody's expects investment grade companies, even in cyclical industries, eventually to return to profitability, even those facing large charge-offs. Going forward, the ratings outlook could stabilize if the company were to maintain a pace of robust actual inventory reduction, generate substantial and sustainable cash flow, and use this cash flow both for debt reduction as well as for strengthening its liquidity. The outlook and ratings could be further reduced if actual inventory reduction returned to the levels of the first three quarters of fiscal 2007, i.e., close to zero, and sustainable cash flow generation were thus impeded; if covenant compliance became problematic; and/or if the company were to incur a sizable pre-impairment loss. * These are the ratings changes and new assignment: -- Ba1 corporate family rating assigned -- Senior unsecured notes lowered to Ba1 (LGD4, 55%) from Baa3 -- Senior subordinated notes lowered to Ba2 (LGD6, 96%) from Ba1 Headquartered in Ft. Worth, Texas, D.R. Horton, Inc. is engaged in the construction and sale of homes designed principally for the entry-level and first time move-up markets. The company currently builds and sells homes in 27 states and 83 markets, with a geographic presence in the Northeast, Midwest, Southeast, South Central, Southwest, California and the West. Homebuilding revenues and consolidated net income for the fiscal year that ended Sept. 30, 2007 were approximately $11.1 billion and $(713) million, respectively. DRS TECHNOLOGIES: Earns $43 Million in 2nd Quarter Ended Sept. 30 ----------------------------------------------------------------- DRS Technologies Inc. reported net earnings of $43.0 million for the second quarter of fiscal 2008 ended Sept. 30, 2007, which were 71% higher than net earnings of $25.2 million reported for the second quarter of fiscal 2007 and included approximately $10.4 million in combined after-tax benefits as a result of the curtailment gain related to one of the company's benefit plans and approximately $3.1 million in discrete cumulative tax benefits. Last year's second quarter included $800,000 in discrete cumulative tax benefits. Excluding the gain in the fiscal 2008 three-month period and the tax benefits from the second quarter in both years, the company would have reported net earnings of $32.6 million in the fiscal 2008 second quarter, 34% above the same quarter last year. Consolidated revenues of $783.8 million for the second quarter of fiscal 2008 were 10% higher than revenues of $711.5 million for the same quarter last fiscal year. The increase was attributable entirely to organic growth. "The company generated strong sales and profitability for the second quarter of fiscal 2008, reflecting solid organic revenue growth and higher operating margins," said Mark S. Newman, DRS Technologies' chairman, president and chief executive officer. "A quarterly record in new orders for products and services was achieved, driving funded backlog at the end of the period to $3.6 billion, the highest level reported by the company to date." He continued, "I also am pleased to announce that toward the end of the second quarter the company resumed product deliveries on the U.S. Army's Thermal Weapon Sights II program." Fiscal 2008 second quarter operating income of $92.1 million was 28% above the $71.9 million reported for the same quarter in the previous fiscal year. The increase in the fiscal 2008 second quarter was due primarily to higher aggregate revenues and the positive impact of the pretax $11.7 million curtailment gain. The operating margin for the fiscal 2008 three-month period was 11.8%, compared with 10.1% percent for the same period last year. Excluding the pension gain, fiscal 2008 second quarter operating income was $80.4 million, 12% higher than a year ago, and represented a 10.3% operating margin. Earnings before interest, taxes, depreciation and amortization were $110.2 million for the fiscal 2008 second quarter, 22% higher than EBITDA of $90.6 million for the second quarter of fiscal 2007. EBITDA as a percentage of revenues was 14.1%, compared with 12.7% in the year-earlier period. Interest and related expenses for the second quarter of fiscal 2008 decreased to $28.1 million, 8% lower than $30.6 million a year ago. The decrease was due to lower average borrowings outstanding. The effective income tax rate for the second quarter of fiscal 2008 was approximately 32%, compared with approximately 39% for the same period last fiscal year. Net cash provided by operating activities for the second quarter of fiscal 2008 was $60.2 million, compared with $58.2 million reported for the fiscal 2007 second quarter. Free cash flow, which is net cash provided by operating activities less capital expenditures, was $41.6 million for the second quarter of fiscal 2008, compared with $44.1 million for the second quarter in the prior fiscal year. Fiscal 2008 second quarter free cash flow reflected decreases in accounts receivable, partially offset by decreases in accounts payable and increases in prepaid expenses and inventory. Capital expenditures for the second quarter of fiscal 2008 were $18.6 million, a 32% increase over $14.1 million for same quarter last year. New Contract Awards and Backlog According to DRS, the company secured a quarterly record of $1.11 billion in new orders for products and services during the fiscal 2008 three-month period, 21% above bookings of $915.2 million for the comparable prior-year period. Funded backlog at Sept. 30, 2007, of $3.59 billion was 31% above funded backlog of $2.73 billion at the same time last year. Liquidity and Total Debt At Sept. 30, 2007, the company had $52.3 million in cash and cash equivalents, compared with $95.8 million at March 31, 2007, the company's fiscal 2007 year end. Lower cash and cash equivalents at the end of the second quarter of fiscal 2008 reflected utilization of approximately $75 million in cash to prepay a portion of the company's long-term debt. Total debt at Sept. 30, 2007, was $1.71 billion. The company had no borrowings against its revolving credit facility at Sept. 30, 2007. Stockholders' equity increased to $1.57 billion at the end of the second quarter of fiscal 2008, compared with $1.50 billion at March 31, 2007. Fiscal 2008 Six-Month Results For the first six months of fiscal 2008, DRS posted record revenues of $1.52 billion, 13% above revenues of $1.34 billion for the same period last year. Higher revenues for the first half were attributable to strong organic revenue growth in each of the company's operating segments. Net earnings of $44.7 million for the first six months of fiscal 2008 were reduced by an after-tax charge of $23.2 million on the TWS II program in the first quarter and were increased by $10.4 million in combined after-tax benefits as a result of the curtailment gain and discrete cumulative tax benefits in the second quarter. For the fiscal 2007 first half, net earnings were $46.5 million, which included $1.2 million in discrete cumulative tax benefits. Excluding the impact of these items from both years, the company would have reported net earnings of $57.5 million for the first six months of fiscal 2008, 27% higher than net earnings of $45.3 million for the same period in fiscal 2007. Net cash provided by operating activities for the first six months of fiscal 2008 was $60.7 million, compared with $32.3 million reported for the same period in fiscal 2007. Free cash flow was $28.2 million for the first half of fiscal 2008, significantly higher than the $5.1 million for the same period in the prior fiscal year. Capital expenditures were $32.5 million for the fiscal 2008 first half, a 19% increase over $27.2 million for the same period last year. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $4.15 billion in total assets, $2.58 billion in total liabilities, and $1.57 billion 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?2684 About DRS Technologies Based in Parsippany, N.J., DRS Technologies Inc. (NYSE: DRS) -- http://www.drs.com/-- is a supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide. The company employs approximately 10,000 people. * * * As reported in the Troubled Company Reporter on Aug 20, 2007, Moody's Investors Service affirmed all ratings of DRS Technologies Inc., including the company's Corporate Family rating of B1, and has changed the company's ratings outlook to positive from stable. EL PASO: Moody's Maintains B3 Ratings on $5 Mil. Mortgage Bonds --------------------------------------------------------------- Moody's Investors Service has affirmed the B3 rating on $5,005,000 of outstanding El Paso Housing Financing Corporation, Multifamily Mortgage Revenue Bonds (Las Lomas Apartments) Series 1999A. The outlook on the bonds has been changed to stable from negative. The change in outlook is due to contributions made to reserve funds and the improving performance of Las Lomas Apartments. Legal Security The bonds are secured by a pledge of all project revenues and funds held pursuant to the program. The Series 1999A bonds have a first lien on all program funds and are paid first in the monthly flow of funds. Excess funds can only be released if a 1.45x debt service coverage ratio is met for the Series 1999A bonds and 1.15x for the unrated Series 1999C (Subordinated) bonds. Payment of senior bond principal and interest is given priority in the flow of funds and is senior to the payment of the unrated Series 1999C bonds. Strengths * Audited financial statements for 2006 indicate the debt service coverage ratio improved to 1.20x on the senior bonds from 1.10x in 2005; * Improving physical occupancy (97.4%) and economic occupancy (93.8%) year-to-date for 2007, as reported by management; and * Capital contributions made to the Replacement Reserve Fund during 2006. Challenges * Reduction of the Senior Bond Debt Service Reserve Fund to amounts below the requirements of the original Indenture. Recent Developments On Dec. 15, 2003, the original Indenture was amended and the Senior Debt Service Reserve Fund was subordinated to the Replacement Reserve Fund in the flow of funds. The Debt Service Reserve Requirement was reduced to an amount less than annual debt service. The diminished reserve requirement reduces bondholder security. Pursuant to an agreement between the Majority Bondholder and the property owner dated Nov. 15, 2006, the Majority Bondholder authorized the use of up to $300,000 from the Senior Lien Debt Service Reserve Fund to fund various property repairs and improvements. This follows a decision in January 2004 to requisition funds from the Senior Debt Service Reserve Fund to finance other property repairs. These taps have decreased the Debt Service Reserve Fund to a level well below annual debt service, and increased bondholder exposure to volatility in the affordable housing market. The owner of the project is Las Lomas American Housing Foundation, Inc, a subsidiary of American Village Communities, which owns over 1,600 units in Texas, Kentucky, New Mexico and Maryland. Myan Management Group has managed the property since 2002. Outlook The outlook on the bonds has been changed to stable from negative. The outlook reflects the improving occupancy of the property and debt service coverage on the senior bonds. -- What could change the rating: Up * Revising the Senior Debt Service Reserve Fund Requirement to an amount equal to the annual debt service on the Series 1999A bonds; and * Replenishing the Senior Debt Service Reserve Fund and Replacement Reserve Fund. -- What could change the rating: Down * Further taps on the Senior Debt Service Reserve Fund; and * Decline in debt service coverage. EPICOR SOFTWARE: Board Inks $322 Mil. Buyout Deal w/ NSB Retail --------------------------------------------------------------- The boards of directors of Epicor Software Corporation and NSB Retail Systems PLC have reached an agreement on the terms of the recommended acquisition of NSB by Epicor pursuant to a scheme of arrangement under section 425 of the United Kingdom Companies Act 1985 whereby shareholders of NSB will receive 38 pence in cash per NSB ordinary share. The terms of the transaction value the fully diluted share capital of NSB at approximately �160 million or approximately $322 million, based on the US$:GBP exchange rate on Dec. 14, 2007. As of June 30, 2007, NSB had cash and equivalents balance of $34.6 million and no debt. NSB's board of directors unanimously recommends that NSB shareholders vote in favor of the scheme at the court meeting and in favor of the special resolution to approve the scheme and related matters to be proposed at the NSB general meeting, which will be held on Jan. 16, 2008. Epicor has received undertakings to vote in favor of the scheme at the court meeting to approve the scheme from certain NSB shareholders, including all NSB directors who hold NSB shares, representing approximately 31.2% of the existing issued ordinary share capital of NSB entitled to vote at the court meeting and approximately 36.9% of the existing issued share capital of NSB entitled to vote at the NSB general meeting. Epicor expects the acquisition to be materially accretive to Epicor's non-GAAP earnings for the 12 month period after the close of the transaction. Based on expectations for additional amortization of intangible assets due to the acquisition, Epicor expects the acquisition to be dilutive to GAAP earnings for a period of time after the close of the transaction. David Henning, NSB's CEO, is expected to remain with the combined company in an executive management role heading Epicor's expanded retail business. "We believe that NSB is an excellent next step in our stated commitment to grow Epicor both organically and through highly strategic and accretive acquisitions to create a larger, stronger and more profitable company," Epicor chairman and CEO George Klaus, said. "Over the past five years, we have successfully completed four acquisitions of ever increasing scale and integrated each one on a timely basis while meeting our financial and technology commitments and providing value to our customers, employees and shareholders." "NSB's current retail market focus is well aligned with Epicor's, and NSB brings an attractive, loyal customer base, which complements Epicor's growing presence in the retail vertical and creates a market leader in the highly fragmented specialty retail market," Mr. Klaus said. "We believe this combination will create substantial synergies, excellent cross-selling opportunities and significant economies of scale across the combined company." "We look forward to continuing to provide the high level of service, support and unwavering commitment to utilizing the latest in cutting-edge technology across all product lines that our combined customer base has come to expect from each company," Mr. Klaus continued. "At the same time, we will work with our combined customer base to ensure they have a clear understanding of their product roadmap should they choose to leverage the additional functionality available to them through this combination. We are excited about this opportunity and we look forward to bringing NSB and their customers into the Epicor family." "I am very pleased that we have been able to reach agreement on the terms of this transaction, which I believe is the right strategic outcome for NSB, offering certainty and value to our shareholders and great opportunities for our management and employees as part of the enlarged Epicor," Angus Monro, non- executive chairman of NSB Retail, said. "NSB's product set and customer base should further strengthen Epicor's existing position in retail software, and enable this to be leveraged internationally across Epicor's broader geographic footprint. I am confident that NSB will make a significant contribution to the future of the combined business." The scheme and related proposals will be put to NSB shareholders at the court meeting and at the NSB general meeting, which are both expected to be held on Jan. 16, 2008. In order to become effective, the scheme must be approved by a majority in number of the NSB Shareholders present and voting and entitled to vote at the court meeting, either in person or by proxy, and representing not less than 75% in value of all ordinary shares that are cast/voted at the court meeting. In addition, the special resolution implementing the scheme and related matters must be passed by NSB shareholders representing not less than 75% of the votes cast at the NSB general meeting. The scheme document will be posted to NSB shareholders and for information only to participants in the NSB share incentive schemes and holders of exchangeable shares in NSB soon as practicable and in any event within 28 days of this statement. It is expected that the scheme will become effective during February 2008, subject to satisfaction of all conditions, including certain antitrust approvals and the other conditions set out in appendix I of the scheme document. Epicor also said that it has replaced its credit facility with a new senior secured credit facility arranged by Banc of America Securities LLC as Sole Lead Arranger and Book Manager and with Bank of America N.A. as Administrative Agent, and KeyBank National Association as Syndication Agent. The new credit facility provides Epicor with a secured revolving loan facility in an amount up to $100 million and a secured term loan facility in an amount up to $100 million. Epicor plans to fund the consideration payable under the scheme with approximately $155 million in existing cash balances, with the balance of the consideration funded by drawing from its credit facility. UBS Investment Bank is acting as financial advisor to Epicor. Close Brothers Corporate Finance is acting as financial advisor to NSB. About NSB Retail Systems PLC Headquartered in Stafford, England, NSB Retail Systems plc (LON: NSB) -- http://www.nsbgroup.com/NSBGROUP/fp...-- is engaged in the development and supply of specialist software and associated maintenance, development, consultancy and application management services to the retail industry. The company sector focus continues to be soft goods retailers: fashion, apparel, department stores and other specialty retail. It also provides software, hardware, software services and support to the retail industry. The company's wholly owned subsidiaries include NSB Retail Solutions Inc, NSB Retail Systems Inc, NSB U.S. Sales Inc, NSB Retail Solutions Ltd, NSB Retail No.2 Ltd, NSB Retail No.3 Ltd, NSB Retail, NSB Finance Ltd, NSB Finance No. 2 Ltd, NSB Retail Systems Share Scheme Trustees Ltd and NSB Share Purchase Scheme Trustees Ltd. About Epicor Software Corporation Headquartered in Irvine, California, Epicor Software Corporation (Nasdaq: EPIC) -- http://www.epicor.com/-- provides integrated enterprise resource planning, customer relationship management, supply chain management and professional services automation software solutions to the midmarket and divisions of the Global 1000 companies. Founded in 1984, Epicor serves over 20,000 customers in more than 140 countries, providing solutions in over 30 languages. Epicor offers a comprehensive range of services with its solutions, providing a single point of accountability to promote rapid return on investment and low total cost of ownership. EPICOR SOFTWARE: S&P Holds BB+ Rating with Negative Outlook ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating and revised its outlook on Irvine, California-based Epicor Software Corp., a provider of enterprise resource planning software, to negative from stable. The outlook revision reflects increased pro forma leverage associated with the company's recent announcement to acquire Unites Kingdom-based NSB Retail Systems Plc. for approximately GBP160 million, or $322 million. NSB provides application software to the retail industry. Financing for the transaction will consist of cash on hand and bank debt. "At the same time, we lowered our senior unsecured rating to 'B' from 'B+' (two notches below the corporate credit rating), reflecting the increased amount of secured debt expected to be in the capital structure," said Standard & Poor's credit analyst Mr. Clay Ching. The company partly will fund the NSB acquisition through a proposed $200 million credit facility, to be composed of a $100 million senior secured revolving credit facility and a $100 million senior secured term loan. S&P expects the existing credit facility will be refinanced upon the closing of the transaction, at which point the rating will be withdrawn. The ratings on Epicor reflect the company's second-tier presence in a highly competitive and consolidating industry, integration risk, and high financial leverage for the rating. These factors partly are offset by a solid presence in its mid-market niche, good revenue predictability derived from a largely recurring revenue base spread across a broad spectrum of customers, and demonstrated efficacy of managing acquisitive growth. Epicor's business position is enhanced because 40% of revenues are derived from maintenance contracts, providing solid revenue visibility with customer retention rates in the mid- to high-90% range. The professional services segment (30% of revenues) provides a relatively predictable source of revenue, given the need for implementation and customization by mid-market companies with limited IT resources. While the company's largest targeted market remains the manufacturing sector, the addition of NSB will bolster the company's presence in the retail sector. Growth in license revenues is driven by cross selling and sales of additional functionality and scale to existing customers, and by signing new customers. Epicor's exposure risk to any individual customer, industry, or geographic region is mitigated by a global and diverse base of over 20,000 customers spread throughout 144 countries. FERRELLGAS PARTNERS: S&P Holds B+ Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on propane distributor Ferrellgas Partners L.P. and its operating limited partnership, Ferrellgas L.P. The affirmation follows annual surveillance on the company and incorporates Standard and Poor's expectation for strong margins and a steady financial performance over the next year. The outlook is stable. As of Oct. 31, 2007, Ferrellgas Partners had total debt, adjusted for capitalized operating leases and accounts receivable securitization, of $1.327 billion, with adjusted debt to capital of 88%. The ratings on Overland Park, Kansas-based Ferrellgas Partners are restricted by the partnership's weak business risk profile and highly leveraged financial profile. Ratings concerns include the master limited partnership structure, high leverage, a weaker retail operating performance than its peers, and acquisition risk. These concerns are only partially mitigated by the partnership's improving margins, its large, geographically diverse retail footprint, and portable propane tank exchange business that offset some of the seasonality involved in Ferrellgas Partners' retail operations. The outlook on Ferrellgas Partners is stable. "The stable outlook is based on the expectation that the company will maintain its current financial and operating performance," noted Standard & Poor's credit analyst Mr. Michael V. Grande. Sustained improvement in financial metrics, which could come from deleveraging and further margin improvement, would be necessary for an upgrade or positive outlook. "Conversely, the ratings may be lowered or the outlook revised to negative if the financial profile deteriorates due to liquidity constraints, subpar cash flow, increased leverage, or weaker-than- expected results from acquisitions," he continued. FINANCE AMERICA: Fitch Downgrades Ratings on Eight Classes ---------------------------------------------------------- Fitch has taken rating actions on these Finance America mortgage pass-through certificates: Series 2004-1: -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA'; -- Class M4 affirmed at 'AA-'; -- Class M5 affirmed at 'A'; -- Class M6 downgraded to 'BBB-' from 'A-', and is placed on Rating Watch Negative; -- Class M7 downgraded to 'B-/DR1' from 'BBB+', and is removed from Rating Watch Negative; -- Class M8 downgraded to 'B-/DR1' from 'BBB', and is removed from Rating Watch Negative. Series 2004-3: -- 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 M-7 downgraded to 'BBB-' from 'A-', and is placed on Rating Watch Negative; -- Class M-8 downgraded to 'BB' from 'BBB+', and is placed on Rating Watch Negative; -- Class M-9 downgraded to 'B' from 'BBB'; -- Class B-1 downgraded to 'CCC/DR1' from 'BBB-'; -- Class B-2 downgraded to 'C/DR5' from 'BB'. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $152.6 million in outstanding certificates. The downgrades reflect deterioration in the relationship between CE and expected losses, and affect approximately $32.6 million in outstanding certificates. In addition, approximately $18.3 million is placed on Rating Watch Negative. For transactions 2004-1 and 2004-3, respectively, the pool factors (current collateral balance as percentage of original) are approximately 11% and 17%, and are 42 months and 36 months seasoned. The delinquencies in the 60+ buckets (inclusive of Real Estate Owned, Foreclosure, and Bankruptcy) are 25.38% and 25.67%, respectively, and have cumulative losses of 2.01% and 1.43%. FIRST MAGNUS: Court Plans February 1 Confirmation Hearing --------------------------------------------------------- The Hon. James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona said that should the First Magnus Financial Corporation be able to comply with the revisions on the Debtor's plan of liquidation he requested, he intends to set a hearing to consider confirmation of the plan in early February next year. The time-line is contingent upon the Debtor's submission of the revised Disclosure Statement by Jan. 2, 2008. "The [C]ourt will then review [the Disclosure Statement], and if it passes scrutiny, the [C]ourt intends to set a confirmation hearing, in Tucson, Arizona, on Friday, Feb. 1, 2008," Judge Marlar said. At the confirmation hearing, the Debtor has to present to Court that creditors have voted in favor of the Plan and that the Plan meets the statutory requirements under Section 1129(a) of the Bankruptcy Code. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. (First Magnus Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). GENERAL MOTORS: Inks Pact with Navistar on Medium Duty Truck Biz ---------------------------------------------------------------- General Motors Corp. and International Truck and Engine Corporation, the principal operating subsidiary of Navistar International Corporation, have entered into a non-binding memorandum of understanding under which Navistar would purchase certain assets, intellectual property and distribution rights for GM's medium-duty truck business. As proposed, Navistar would acquire GM's medium-duty truck business, which includes assets and intellectual property rights to manufacture GMC and Chevrolet brand vehicles in the class 4-8 gross vehicle weight range. It also includes purchase of the related service parts business. Navistar would sell a competitive line of Chevrolet and GMC vehicles and service parts through GM's proprietary dealer network in the United States and Canada. The agreement is another step in GM's plan to focus on designing, manufacturing and selling cars and light trucks globally. The deal would leverage Navistar's strengths in commercial trucks and engines, and advance its strategy to build scale and reduce costs. "Navistar's expertise in building International(R) brand commercial trucks and its track record in the medium-duty segment makes them an excellent choice to acquire and continue growing the business. We intend to work closely with Navistar to make this transition seamless to our dealers and customers," Troy Clarke, president of GM North America, said. "This is another example of how we're strategically growing our business for trucks, engines and parts, building scale and reducing costs," Daniel C. Ustian, chairman, president and CEO, Navistar International Corporation, said. "We are proud to incorporate the GM truck brands into our portfolio, and will utilize the scale to build on the success of both the International and GM product lines and their respective distribution networks." Navistar would add the GMC(R) TopKick and Chevrole(R) Kodiak truck brands to its growing portfolio of brands, which currently includes International(R) brand trucks and tractors, IC(R) brand buses, Workhorse(R) brand chassis for motor homes and step vans, and MaxxForce(R) brand engines. When a deal is definitively concluded, production of the vehicles would move from GM's plant in Flint, Michigan, to a Navistar facility to be named. GM would retain ownership of its Flint plant and continue to build other products at the facility. GM will continue its medium-duty truck relationship with Isuzu to market W-Series trucks through GM's medium-duty dealer network. The deal is expected to close in 2008 subject to completion of satisfactory due diligence, the negotiation of a definitive purchase agreement, customary regulatory clearance and board approval. Upon closing, transition of the business could take several months to conclude. About International Truck and Engine International Truck and Engine Corporation, a wholly owned subsidiary of Navistar International Corporation, produces medium trucks, heavy trucks, severe service vehicles, MaxxForce brand diesel engines, parts and service. International and its affiliates sell their products, parts and services through a network of nearly 1,000 dealer outlets in the United States, Canada, Brazil and Mexico and from more than 60 dealers in 90 countries throughout the world. About Navistar International Headquartered in Warrenville, Illinois, Navistar International Corporation (Other OTC: NAVZ) -- http://www.navistar.com/-- is a holding company whose wholly owned subsidiaries produce International(R) brand commercial trucks, MaxxForce brand diesel engines, IC brand school and commercial buses, and Workhorse brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another wholly owned subsidiary offers financing services. About GM 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. GOLDEN NUGGET: Moody's Holds All Ratings with Negative Outlook -------------------------------------------------------------- Moody's Investors Service confirmed all ratings for Golden Nugget, Inc. as: -- Corporate family rating, B2 -- Probability of default rating, B2 -- $50 million guaranteed 1st lien revolving credit facility due 2013, B1 / 34% (previously 32%) / LGD-3 -- $210 million guaranteed 1st lien term loan due 2014, B1 / 34% (previously 32%) / LGD-3 -- $120 million guaranteed 1st lien delayed-draw term loan due 2014, rated B1 / 34% (previously 32%) / LGD-3 -- $165 million guaranteed 2nd lien term loan due 2014, rated Caa1 / 86% (previously 85%) / LGD-5 -- The outlook is negative. The B2 corporate family rating reflects the company's weak debt protection metrics, modest scale, and limited geographic diversification. However, the ratings also incorporate Golden Nuggets improved operating performance, significant facility renovations to date, property and brand recognition, and reasonable liquidity. The negative outlook reflects the expectation of a further deterioration in debt protection metrics, company's inability to maintain effective internal controls over its financial reporting that has resulted in the reporting of material weaknesses, and the re-financing risk associated with Landry's Restaurant Inc. in the context of the consistent history of inter-company support that has existed between Landry's Restaurant Inc. and the Golden Nugget despite the restricted and unrestricted group structure. Golden Nugget, Inc, a wholly owned unrestricted subsidiary of Landry's Restaurants, Inc., headquartered in Las Vegas Nevada, owns and operates the Golden Nugget hotel, casino, and entertainment resorts in downtown Las Vegas and Laughlin, Nevada. For the year ended Dec. 31, 2006, the company reported unaudited revenues and operating income of approximately $259 million and $36.5 million, respectively. GREENBRIAR CLO: S&P Assigns BB Rating on $40 Mil. Class E Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Greenbriar CLO Ltd./ Greenbriar CLO Corp.'s $920 million floating-rate notes due 2021. The preliminary ratings are based on information as of Dec. 19, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit enhancement provided to each class of notes through the subordination of cash flows to the more junior classes and reference shares; -- The transaction's cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The collateral manager's experience; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. Preliminary Ratings Assigned Greenbriar CLO Ltd./Greenbriar CLO Corp. Class Rating Amount ----- ------ ------ A AAA $730,000,000 B AA $60,000,000 C A $50,000,000 D BBB $40,000,000 E BB $40,000,000 Preference shares NR $80,000,000 NR - Not rated. HARRAH'S ENT: Gets Pa. Gaming Board's OK on Apollo/TPG Merger ------------------------------------------------------------- Harrah's Entertainment Inc. received approval from the Pennsylvania Gaming Control Board for the proposed acquisition of Harrah's by affiliates of Apollo Management L.P. and TPG Capital. The transaction remains subject to approval by other jurisdictions in which Harrah's subsidiaries operate and other conditions to closing set forth in the agreement and plan of merger entered into on Dec. 19, 2006. Harrah's expects the transaction to close in early 2008. About Apollo Management L.P. Based in New York, Apollo Management L.P. is a private equity L.P. firm, founded in 1990 by Leon Black. It also has offices in Los Angeles and London. It has invested over $16 billion in companies inside and outside the of the United States. About TPG Capital Headquartered in Fort Worth, Texas, TPG Capital, also known as Texas Pacific Group -- http://www.texaspacificgroup.com/-- has staked its claim on the buyout frontier. The company, which does not get involved in the day-to-day operations of the companies in which it invests, usually holds onto an investment for at least five years, although consistent moneymakers may be kept indefinitely. About Harrah's Entertainment Headquartered in Las Vegas, Nevada, Harrah's Entertainment Inc.(NYSE: HET) -- http://www.harrahs.com/-- has grown through development of new properties, expansions and acquisitions, and now owns or manages casino resorts on four continents and hosts over 100 million visitors per year. The company's properties operate under the Harrah's, Caesars and Horseshoe brand names; Harrah's also owns the London Clubs International family of casinos and the World Series of Poker. Harrah's also owns the London Clubs International family of casinos. * * * Harrah's Entertainment Inc. continues to carry Standard & Poor's "BB" long term foreign and local issuer credit ratings, which were placed in December 2006. HEALTH INSURANCE: Fitch Affirms 'BB+' Issuer Default Rating ----------------------------------------------------------- Fitch Ratings has affirmed the ratings of Health Insurance Plan of Greater New York. The Rating Outlook is Stable. Following a series of mergers and acquisitions in recent years, Fitch views HIP-NY in context of the larger group now owned by EmblemHealth, Inc. The other primary operations of EmblemHealth include Group Health, Inc. and Connecticare Inc. These operations are all considered core operations, as all provide a significant share of total revenue. The ratings favorably consider the organization's leading market share in the New York metropolitan area. By holding such a large market share, the company may be able to leverage its position in contracting with employers and provider networks. After weakening with the acquisition of GHI, consolidated operating company capital has improved somewhat based on an estimated consolidated NAIC risk-based capital ratio, which was over 260% at year-end 2006. Also considered is the company's business profile, which contains heavy concentration risk. While this is modestly offset by the favorable aspects noted above given the company's market leading share, the company is exposed to economic conditions of the New York metropolitan area. Further, the company maintains a very large exposure to its largest group account-the city of New York's group health plan. While Fitch believes the company is well entrenched in this account, the shear size of this plan creates exposure to a significant risk, if this account were to leave. EmblemHealth is also exposed to the New York Medicaid market, where it is one of the leading players. The state's Medicaid program has been challenged for years, as most insurers lose money. Pending changes to this market may improve earnings over time, though Fitch believes Medicaid and Medicare businesses are continually exposed to government budgetary pressures. Despite challenging Medicaid conditions during 2007, EmblemHealth's overall operations are expected to remain profitable through for the full year and in 2008, with underwriting margins in the 1%-2% range or better in Fitch's estimation. Fitch believes that overall membership trends will remain level and the New York City account will remain a long-term client. Following last year's affiliation between HIP-NY and GHI, EmblemHealth is seeking conversion to a for-profit corporation. If this were to occur, Fitch will evaluate any potential changes to the corporate and financial profile. At this time, material changes are not anticipated. Fitch has affirmed these ratings with a Stable Rating Outlook: Health Insurance Plan of Greater New York -- Issuer Default Rating at 'BB+'; -- Insurer financial strength at 'BBB-'. HENRICKS JEWELERS: Files for Bankruptcy; To Close Six Stores ------------------------------------------------------------ Henricks Jewelers has filed for bankruptcy and will shut down six stores in Bonita Springs, Naples, Sarasota, and Alaska on an unknown date, Mark S. Krzos of The News-Press reports, citing chief executive officer Kevin Waters. The store at Bonita, which started in 1982, had previously said that it is closing down operations the day following Thanksgiving, News-Press relates, citing Mr. Waters. According to Mr. Waters, the company was forced to shut down and liquidate assets after its creditor in New England accelerated its loan payments, News-Press says. The sale has been "phenomenal," Mr. Waters told News-Press. Bonita Springs, Florida-based Henricks Jewelers -- http://www.henricksjewelry.com/-- is a manufacturing jeweler in Southwest Florida. It was originally opened in Bonita Springs, Florida in 1982 by Henry Grimes and his son Rick Grimes thus forming the name Henricks. Over the years the small original store on Bonita Beach Road, evolved into its third and current location that houses nearly 12,000 flagship stores. In April 2003, Rick joined forces with Luxury Ventures LLC and investment partners Kevin Waters, CEO and Patrick Hopper, CFO. HIGDON FURNITURE: Court Approves Coman C. Leonard as Accountant --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Florida gave Higdon Furniture Company authority to employ Coman C. Leonard, III as its accountant. Mr. Leonard is expected to: (a) assist the Debtor as may be necessary on a day to day basis in connection with the management of Debtor's finances; (b) assist the Debtor and counsel for Debtor in connection with the development and implementation of budgetary matters and to appear as necessary and appropriate in Court proceedings as Debtor's representative in which the appearance or testimony of Debtor is required; (c) perform any and all other accounting services for the Debtor, to include assisting Debtor's bankruptcy counsel in connection with the development and implementation of Debtor's Chapter 11 plan of reorganization. The Debtor agreed to pay Mr. Leonard a retainer amount of $5,000 and hourly fees at a rate not to exceed $200 per hour for services rendered, plus expenses incurred. To the best of the Debtor's knowledge, Mr. Leonard does not hold or represent any interest adverse to the Debtor's estate and is "disinterested person" as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Quincy, Florida-headquartered Higdon Furniture Company -- http://www.higdonfurniture.com/-- designs, manufactures and ships furniture in Quincy, Florida and originates accounts receivable and inventory on a daily basis. The Debtor filed for chapter 11 petition on Oct. 31, 2007 (Bankr. N.D. Fla. Case No. 07-40562). C. Edwin Rude, Jr., Esq., represents the Debtor in its restructuring efforts. The Debtor's schedules disclose total assets of $11,039,750 and total liabilities of $10,007,737. HOVNANIAN ENTREPRISES: Moody's Puts All Ratings Under Review ------------------------------------------------------------ Moody's Investors Service placed all of the ratings of Hovnanian Enterprises, Inc. under review for downgrade, including its corporate family rating of Ba3, senior unsecured notes rating of Ba3, senior sub debt rating of B2, and trust preferred stock rating of B2. The review will focus on Hovnanian's ability to obtain long-term covenant relief, not just for its tripping of certain covenants in its just ended October quarter but, more importantly, for the continued pressures it will face in the coming year on interest coverage, minimum tangible net worth, and debt leverage. More broadly, the review will concentrate on Hovnanian's ability to achieve sizable and consistent actual inventory reduction, which would then permit the company to begin generating substantial positive cash flow on a trailing twelve-month basis. Finally, the review will center on Hovnanian's ability to scale its operating costs and debt structure to conform with its shrunken revenue run rate and fleeting earnings. Established in 1959 and headquartered in Red Bank, New Jersey, Hovnanian Enterprises, Inc. designs, constructs and markets single-family detached homes and attached condominium apartments and townhouses. Revenues and pretax income for fiscal year 2007, ended October 31, 2007 were $4.8 billion and $(647) million, respectively. HYDRAULIC TECHNOLOGIES: Committee Hires Buckely King as Counsel --------------------------------------------------------------- The Honorable Russ Kendig of the United States Bankruptcy Court for the Northern District of Ohio gave the Official Committee of Unsecured Creditors of Hydraulic Technologies Inc. and its debtor- affiliates' bankruptcy cases, permission to retain Buckley King LPA as its counsel. The Creditors Committee is currently composed of: ESP International; D.A. International Casting Co.; Spuncast Inc.; Integrated Hydraulics Inc.; Griffin Industries Corp.; Youngers and Sons Manufacturing Co. Inc.; and R.G. Smith of Mansfield Inc. As the Committee's counsel, Buckley King is expected to: a) advise the Committee of its rights, powers and duties; b) advise the Committee concerning actions that might take; c) prepare on behalf of the Committee all necessary and appropriate applications, motions, pleadings, draft orders, notices, schedules and other documents, and reviewing all financial and other reports to be filed in the Debtors' Chapter 11 cases; d) advise the Committee in connection with any proposed sale of the Debtors' assets; e) represent the Committee in meetings, hearings, and negotiations with respect to the Debtors' Chapter 11 cases; f) counsel the Committee in connection with the Debtors' formulation, negotiation, and promulgation of a paln of reorganization or liquidation and related documents; and g) peform all other legal services for and on behalf of the Committee which may be necessary or appropriate in the representation of the Committee in the Debtors' Chapter 11 cases. The firm's professioanls and their compensation rates are: Attorneys Hourly Rates --------- ------------ Harry W. Greenfield, Esq. $375 Jeffrey C. Toole, Esq. $275 Dov Y. Frankel, Esq. $225 Harry W. Greenfield, Esq., an attorney of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Galion, Ohio, Hydraulic Technologies (Holdings), Inc. -- http://www.hydraulic-tech.com/-- produces cylinders, utilized in numerous applications and markets, through their flow line areas, as well as their custom cylinder work center. The company and its affiliate, Hydraulic Technologies Inc., filed for Chapter 11 protetcion July 3, 2007 (Bankr. N.D. Ohio Lead Case No. 07-61949). Sean D. Malloy, Esq., at McDonald Hopkins, L.L.C., represents the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, it listed assets and debts between $1 million and $100 million. INNOVATIVE COMM: Provides Positive Reorganization Developments -------------------------------------------------------------- After years of legal wrangling, significant progress has been made in the reorganization and restructuring of Innovative Communication Corporation in the U.S. Virgin Islands. These are positive developments that will help to satisfy ICC's creditors, including Rural Telephone Finance Cooperative, which is a managed affiliate of National Rural Utilities Cooperative Finance Corporation. As reported in the Troubled Company Reporter on Sept. 14, 2007, the Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the Western District of Pennsylvania appointed Trustee Stan Springel to oversee the reorganization of the ICC enterprise. This fall, she appointed James Carroll to oversee the personal bankruptcy of Jeffrey Prosser. There has been significant positive progress on both fronts since these trustees assumed control. "Judge Fitzgerald's appointment of appropriate oversight mechanisms in these cases has made all the difference in our ability to understand what has been happening behind the scenes at Innovative," Sheldon C. Petersen, CEO of both NRUCFC and RTFC, said. "We are now receiving accurate financial reports and the openness and transparency are a welcome change. The trustees are also providing much-needed fiscal management to minimize and eliminate leakages from the bankruptcy estates, which will allow us to resolve this longstanding and difficult situation." On the ICC front, Trustee Springel has disclosed that no rank-and- file employee layoffs are planned, though he has made significant management changes, including the dismissal of Prosser and his long-time directors and officers. A new board of directors has been named at Innovative Telephone, which has installed a new management team led by E. Clarke Garnett. "Mr. Garnett has hands-on experience with rehabilitating telecom companies that will allow him to reaffirm the company's commitment to its employees, high-quality customer service and building a stronger ICC," NRUCFC and RTFC CFO Steven Lilly stated. "Throughout this difficult process," Mr. Lilly continued, "NRUCFC and RTFC have been resolute and patient in their efforts to be repaid and have remained unwavering in their underlying mission to provide capital for rural infrastructure. We believe in and support the work of Trustee Springel and his management team, which will make ICC better able to serve its employees and customers in the Virgin Islands." "All of these developments are good news for the residents of the Virgin Islands," former Senator Roosevelt David, who has been working with NRUCFC and RTFC in the Virgin Islands since last August, said. "New management is changing the way that ICC does business. This new leadership, along with NRUCFC and RTFC, has pledged to work to make the company stronger and to provide excellent telecommunications service in the Virgin Islands. As they continue their work, I would ask for patience from the residents of the Virgin Islands." About RTFC and NRUCFC Rural Telephone Finance Cooperative is a not-for-profit finance cooperative that serves the financial needs of the rural telecommunications industry. RTFC has approximately $2 billion in credit outstanding to its rural telecommunications members and their affiliates and is a managed affiliate of the National Rural Utilities Cooperative Finance Corporation. NRUCFC is a not-for- profit finance cooperative that serves the nation's rural utility systems, the majority of which are electric cooperatives and their subsidiaries. With more than $18 billion in assets, NRUCFC provides its member-owners with an assured source of low-cost capital and state-of-the-art financial products and services. Both NRUCFC and RTFC are headquartered in Herndon, Virginia. About Innovative Communication Based in Christiansted, St. Croix, U.S. Virgin Islands, Innovative Communication Corporation is telecommunications and media company with extensive holdings throughout the Caribbean basin. The company's operations are in Belize, British Virgin Islands, Guadeloupe, Martinique, Saint-Martin, Sint Maarten, U.S. Virgin Islands and France and include local, long distance and cellular telephone companies, Internet access providers, cable television companies, business systems, and The Virgin Islands Daily News, a Pulitzer Prize-winning newspaper. On Feb. 10, 2006, creditors Greenlight Capital Qualified, L.P., Greenlight Capital, L.P., and Greenlight Capital Offshore, Ltd., filed involuntary chapter 11 petition againsts Innovative Communication Company LLC and Emerging Communications, Inc., and Jeffrey J. Prosser, the company's principal (Bankr. D. Del. Case Nos. 06-10133 through 06-10135). The Greenlight creditors disclosed $18,780,614 in total claims. On July 31, 2006, Innovative LLC, Emerging, and Mr. Prosser, filed voluntary chapter 11 petitions (Bankr. D. V.I. Case Nos. 06-30007 through 06-30009). Pursuant to Rule 1003-1 of the Local Bankruptcy Rules of the District Court of the Virgin Islands, Bankruptcy Division, Mr. Prosser, and Bobby Lubana, were designated as the individuals who are the principal operating officers of the alleged debtor. On Dec. 14, 2006, the Delaware Bankruptcy Court entered an order transferring the venue of the involuntary bankruptcy cases transferring to the U.S. District Court for the District of the Virgin Islands, Bankruptcy Division. On July 5, 2007, the Greenlight creditors filed an involuntary chapter 11 petition against Innovative Communication Corporation (Bankr. D. V.I. Case No. 07-30012). The creditors disclosed total aggregate claims of $56,341,843. Matthew J. Duensing, Esq., and Richard H. Dollison, Esq., at Stryker, Duensing, Casner & Dollison, and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the creditors. Stan Springel of Alvarez & Marsal, the Court-appointed chapter 11 trustee, is represented by Andrew Kamensky, Esq., Hunton & Williams. INPHONIC INC: Sells Substantially All Assets for $50 Million ------------------------------------------------------------ The Honorable Kevin Gross of the United States Bankruptcy Court for the District of Delaware granted InPhonic Inc. and its debtor- affiliates to sell substantially all of their assets to Adeptio INPC Funding LLC for $50,000,000 free and clear of interests and liens. Adeptio is the acquisition vehicle set up by Versa Capital Management. "The approval marks a new beginning for InPhonic," Andy Zeinfeld, CEO of InPhonic, said. "We are very excited about the Court approving our sale to Versa. With the sale, we are now able to focus on growing our business, preserving our leadership in the market, achieving profitability, and strengthening our relationships with our marketing and carrier partners. The sale to Versa along with our new direction and operating focus serves the best long-term interest of InPhonic, as well as our customers, partners, vendors and employees. Everyone at InPhonic has worked intensely to retool the organization into one engineered for stability and profitable growth. This is a new day for InPhonic." "We were pleased to receive court approval in connection with our proposed acquisition of InPhonic's assets," Gregory L. Segall, Managing Partner of Versa Capital Management, said. "We believe the business holds great promise. I look forward to working with Andy Zeinfeld and his management team as they complete the upcoming transition and closing, and return their full focus to executing the newly restructured and viable business plan in concert with their critical carrier, supplier and marketing partners to achieve the great potential held by InPhonic's 'best in class' technology and infrastructure in the wireless retail business." As reported in the Trouble Company Reporter on Nov. 12, 2007, the Debtor filed for bankruptcy to implement an agreement selling substantially all of its asset to an affiliate of Versa Capital. Versa Capital is also the Debtors' debtor-in-possession financing lender. The Debtors relate to the Court that Adeptio has acquired all the rights of the lenders' under the senior credit agreement, and purchased all of its right, title and interest. Consequently, the Debtor entered into an agreement with Adeptio to instead purchase all of their assets. Adeptio, however, made clear to the Debtors that it is unwilling to either advance additional funding or consumate the agreement, outside of a Chapter 11 proceeding due to reasons stated in the open Court. The Debtors said that they have struggled with their debt obligations and unable to maintain regular service on their long- term debt, thus, the urgent need for an immediate sale is needed to maximize and preserve the value of their assets. The Debtors further say that, although, the DIP loan allows them to continue to operate their business; But the Debtors believe that the sale is the only viable solution to increase, among other things, inventory and cash. The Debtors' board of directors assures the Court that the sale is in the best interest of the Debtors' creditors and its subsidiaries. Goldsmith, Agio, Helms Securties Inc. assists in the marketing process of the Debtors' assets. Headquartered in Washington, DC, InPhonic Inc. (NASDAQ:INPC)-- http://www.inphonic.com/-- is an online seller of wireless services in the United States. The company operates its business through three business segments: wireless activation and services; mobile virtual network enabler services, and data services. The company and its debtor-affiliates filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to 07-11673). Mary E. Augustine, Esq., and Neil B. Glassman, Esq., at The Bayard Firm, in Wilmington, Delaware, represent the Debtors. The Debtors selected BMC Group Inc. as their claims, noticing and balloting agent. The United States Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Kurt F. Gwynne, Esq., and Robert P. Simons, Esq., at Reed Smith LLP, represent the Committee. When the Debtors filed from protection from their creditors, they listed total assets of $120,916,991 and total debts of $179,402,834. INTERGRAPH CORP: Moody's Upgrades B1 Loan Rating to Ba3 ------------------------------------------------------- Moody's Investors Service upgraded the ratings for the first lien loan of Intergraph Corporation to Ba3 from B1 and second lien term loan to B3 from Caa1 due to changes in the company's capital structure arising from the reduction of debt. The corporate family rating remains unchanged at B2 with a stable outlook. For the first nine months of 2007, the company had a net debt pay down of approximately $78 million primarily against the $420 million first lien term loan. In addition to the first lien term loan, the company currently has an undrawn $75 million first lien revolver, $200 million in second lien term loans, and an un-rated, non-recourse collateralized mortgage backed note. This structural change impacts the individual tranches of debt based on Moody's Loss Given Default methodology as well as new LGD assessments. * These ratings have been changed: -- $75 million Senior Secured Revolving Credit Facility, to Ba3, LGD2, 26% from B1 -- $352 million Senior Secured First Lien, to Ba3, LGD2, 26% from B1 -- $200 million Senior Secured Second Lien, to B3, LGD5, 72% from Caa1 * These ratings are unchanged: -- Corporate family rating, B2 -- Probability of default, B2 -- Outlook, stable Intergraph Corporation, with revenues of $677 million for the twelve months ended Sept. 30, 2007, is a market leader in producing spatial information management software for multiple industries. In November 2006, the company was acquired by a consortium of private equity investors including Hellman & Friedman LLC, Texas Pacific Group, and JMI Equity for $1.3 billion. The company is headquartered in Huntsville, Alabama. ISLAND INVESTMENTS III: Involuntary Chapter 11 Case Summary ----------------------------------------------------------- Alleged Debtor: Island Investments III, L.L.C. 813 Downtowner Boulevard, Suite D Mobile, AL 36609 Case Number: 07-13836 Involuntary Petition Date: December 20, 2007 Court: Southern District of Alabama (Mobile) Petitioner's Counsel: Jeffery J. Hartley, Esq. P.O. BOX 2767 Mobile, AL 36652-2767 Tel: (251) 432-5521 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Joe B. Byrum loan or mortgage $3,534,754 1055 Hillcrest Road Suite C-3 Mobile, AL 36695 J.B.M. IV Investments, L.L.C. loan or mortgage $3,534,754 3675 A Government Street Mobile, AL 36693 Jesmic Investments, L.L.C. loan or mortgage $3,534,754 3675 A Government Street Mobile, AL 36693 JOHN HENSLEY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: John A. Hensley, Jr. Joanne M. Hensley 11 Yorktown Court Front Royal, VA 22630-4269 Bankruptcy Case No.: 07-50941 Chapter 11 Petition Date: December 19, 2007 Court: Western District of Virginia (Harrisonburg) Judge: Ross W. Krumm Debtor's Counsel: William L. Stables, Jr., Esq. 57 South Main Street, Suite 209 Harrisonburg, VA 22801 Tel: (540) 434-0337 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. JOHNSON RUBBER: Gets Initial OK to Use JPMorgan's $10MM Facility ---------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Ohio authorized Johnson Rubber Company Inc. and its debtor- affiliate, JR Holding Corp., to access, on an interim basis, up to $10,000,000 in postpetition financing from JPMorgan Chase Bank N.A. The Debtors tell the Court that JPMorgan's facility will provide the necessary liquidity to sustain the operation of their business and to avoid immediate harm to the estate and their creditors. Under the DIP agreement, the facility will incur interest rate of 2% plus the greater of (i) the prime rate; or (ii) Federal Funds effective rate plus 0.5%. The facility will mature on March 31, 2008. As adequate protection, the Debtors grant the DIP lender: a) senior liens in postpetition accounts receivable and inventory; b) junior liens in prepetition property subject to valid prepetition lien; and c) superpriority claim over all administrative claims, except carve-out, of the Debtors. Additionally, the DIP lender will be entitled to: a) retain priority of prepetition liens and prepetition collateral; b) collect prepetition accounts receivable and proceeds of declared inventory and apply to prepetiton indebtedness; and c) monthly cash payment of $100,000. Headquartered in Middlefield, Ohio, Johnson Rubber Company Inc. -- http://www.johnsonrubber.com/-- designs, develops and manufactures polymer components. The company filed for Chapter 11 protection on December 11, 2007 (Bankr. N.D. Ohio Case No. 07- 19391). The Debtor selected William I Kohn, Esq., at Benesch Friedlander Coplan & Aronoff LLP, as its counsel. The U.S. Trustee for Region 9 has not appointed creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's case. When the Debtor filed for protection against its creditors, it listed total assets at $15,346,607 and total debts at $19,869,931. JOHNSON RUBBER: Hires Donlin Recano as Claims and Balloting Agent ----------------------------------------------------------------- Johnson Rubber Company Inc. and its debtor-affiliate, JR Holding Corp., obtained authority from the United States Bankruptcy Court for the Northern District of Ohio to employ Donlin Recano & Company Inc. as their claims, notice, and balloting agent. Donlin Recano is expected to: a) notify all potential creditors of the filing of the Debtors' bankruptcy petitions and of the seeting of the first meeting of creditors, pursuant to Bankruptcy Code Section 341, under the proper provisions of the Bankruptcy Code and the Bankruptcy Rules; b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs listing the Debtors' known creditors and the amounts owed; c) notify all potential creditors of the existince and amount of their respective claims, as evidenced by the Debotrs' books and records and as set forth in their schedules; d) furnish a notice of the last day for the filing of proofs of claim and a form for the filing of a proof of claim, after such notice and form are approved by this Court; e) file with the clerk and affadivit or certificate of service which includes a copy of the notice, a list of person to whom it was mailed, and the date the notice was mailed, within 10 days of service; f) docket all claims received, maintain the official claims registers for each of the Debtors on behalf of the clerk, and provide the clerk certified duplicate unofficial claims registers on a monthly basis, unless otherwise directed; g) specify, in the applicable claims register, these information for each claim docketed: -- claim number assigned; -- date received; -- name and address of the claimant of the claim, if applicable, who filed the claim; -- filed amount of the claim, if liquidated; and -- classification of the claim according to the proof of claim; h) record all transfers of claims and provide any notices of the transfers required by Bankruptcy Rule 3001; i) make changes in the claims register pursuant to Court order; j) upon completion of the docketing process for all claims received to date by the clerk's office, turn over to the clerk copies of the claims registers for the clerl's review; l) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which list shall be available upon request by a part-in-interest or the clerk; m) assist with, among other things, solicitation, calculation, and tabulation of votes and distribution, as required in furtherance of confirmation of the plan; n) provide and maintain a website where parties can view claims filed, status of claims, and pleadings or other documents filed with the Court by the Debtors; o) 30 days prior to the close of these cases, an order dismissing the firm would be submitted terminating its service upon completion of its duties and responsibilities and upon the closing of these cases; and p) at the close of the case, box and transport all original documents in proper format, as provided by the clerk's office, to the Federal Records Center. The firm's professionals and their compensation rates are: Designation Hourly Rates ----------- ------------ Attorneys $200-$250 Consultants $200-$250 Bankruptcy Consultants $130-$195 IT Programming Consultants $115-$135 Data Input/Clerical $35 Administrative Project Specialist $65 Louis A. Recano, a principal of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Recanon can be reached at: Louis A. Recanon Donlin Recano & Company, Inc. 419 Park Avenue South New York, New York 10016 Tel: (212) 481-1411 Fax: (212) 481-1416 http://donlinrecano.com/ Headquatered in Middlefield, Ohio, Johnson Rubber Company Inc. -- http://www.johnsonrubber.com/-- designs, develops and manufactures polymer components. The company filed for Chapter 11 protection on December 11, 2007 (Bankr. N.D. Ohio Case No. 07- 19391). The Debtor selected William I Kohn, Esq., at Benesch Friedlander Coplan & Aronoff LLP, as its counsel. The U.S. Trustee for Region 9 has not appointed creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's case. When the Debtor filed for protection against its creditors, it listed total assets at $15,346,607 and total debts at $19,869,931. JOHNSON RUBBER: Wants To Access CIT Group's Cash Collateral ----------------------------------------------------------- Johnson Rubber Company Inc. and its debtor-affiliate, JR Holding Corp., ask the United States Bankruptcy Court for the Northern District of Ohio for authority to use CIT Group/Business Credit's cash collateral. The Debtors tell the Court that the proceeds of CIT Group's cash collateral will be used to protect the Debtors' operation. The Debtors confirm before the Court that the asserted liens and security interest of CIT Group are valid and duly perfected on all of the real and personal property of the Debtors as of Dec. 11, 2007. The Debtors, as adequate protection, intend to provide CIT Group with: a) a monthly cash payment in the amount of $100,000; b) payments arising from the Debtors' purchase of released inventory; c) payments received on the prepetition accounts receivable; and d) a replacement lien on the prepetition collateral. The Debtors also ask the Court that CIT Group be provided relief from the automatic stay as of the Debtors' bankruptcy filing, to use the proceeds of the preptiton accounts receivable and released inventory. Headquatered in Middlefield, Ohio, Johnson Rubber Company Inc. -- http://www.johnsonrubber.com/-- designs, develops and manufactures polymer components. The company filed for Chapter 11 protection on December 11, 2007 (Bankr. N.D. Ohio Case No. 07- 19391). The Debtor selected William I Kohn, Esq., at Benesch Friedlander Coplan & Aronoff LLP, as its counsel. The U.S. Trustee for Region 9 has not appointed creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's case. When the Debtor filed for protection against its creditors, it listed total assets at $15,346,607 and total debts at $19,869,931. JPMCC 2005-LDP5: Stable Performance Cues Fitch to Hold Ratings -------------------------------------------------------------- Fitch Ratings has affirmed JPMCC 2005-LDP5 commercial mortgage pass-through certificates as: -- $221.2 million class A-1 at 'AAA'; -- $200 million class A-2FL at 'AAA'; -- $297.5 million class A-2 at 'AAA'; -- $171.5 million class A-3 at 'AAA'; -- $1,395.9 million class A-4 at 'AAA'; -- $169.5 million class A-SB at 'AAA'; -- $451.5 million class A-1A at 'AAA'; -- Interest only class X-1 at 'AAA'; -- Interest only class X-2 at 'AAA'; -- $419.7 million class A-M at 'AAA'; -- $299 million class A-J at 'AAA'; -- $26.2 million class B at 'AA+'; -- $73.4 million class C at 'AA'; -- $42 million class D at 'AA-'; -- $21 million class E at 'A+'; -- $52.5 million class F at 'A'; -- $36.7 million class G at 'A-'; -- $52.5 million class H at 'BBB+'; -- $42 million class J at 'BBB'; -- $63 million class K at 'BBB-'; -- $26.2 million class L at 'BB+'; -- $15.7 million class M at 'BB'; -- $15.7 million class N at 'BB-'; -- $5.2 million class O at 'B+'; -- $5.2 million class P at 'B'; -- $10.5 million class Q at 'B-'. Fitch does not rate the $51.6 million NR or HG-1 through HG-5 classes. The rating affirmations reflect stable transaction performance and minimal paydown since issuance. As of the December 2007 distribution date, the pool's aggregate certificate balance decreased 0.7% to $4.3 billion from $4.33 billion at issuance. Currently one loan (0.1%) is in special servicing which is secured by a 73,341 square foot retail property in Three Rivers, Michigan. The loan was transferred to the special servicer due to a monetary default and is currently 90+ days delinquent. The special servicer is pursuing foreclosure. Current appraisal value indicates losses upon liquidation of the loan which are expected to be absorbed by the non-rated class NR. Fitch reviewed the three shadow-rated loans: Brookdale Office Portfolio (8.1%), Houston Galleria (7%) and Jordan Creek (4.1%). All loans maintain their investment grade shadow ratings due to their stable performance since issuance. Brookdale Office Portfolio is secured by twenty-one office buildings totaling 3.1 million sf located in various states. The loan consists of an A note and a B note, with only the A note in the trust. As of July 2007, the weighted average portfolio occupancy remained relatively stable at 81.3% compared to 84.1% at issuance. The loan has a five-year interest only period followed by 30-year amortization and is scheduled to mature in September 2015. Houston Galleria is secured by a 1.3 million sf retail property located in Houston, Texas. The whole loan consists of A-1, A-2, B and C notes, with only the A-1 note in the pooled trust. The C note collateralizes the HG classes which are not rated by Fitch. As of December 2007, occupancy remained relatively stable at 87% compared to 89.5% at issuance. The loan is interest only and is scheduled to mature in December 2015. Jordan Creek is secured by a 939,085 sf retail property in West Des Moines, Iowa. The loan consists of an A note and a B note, with only the A note in the trust. As of September 2007, occupancy has increased significantly to 98% from 85.9% at issuance. The loan has a 30-year amortization schedule and matures in March 2009. KIMBALL SQUARE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Kimball Square, Ltd. 1124 Rutland Drive Austin, TX 78758 Bankruptcy Case No.: 07-12360 Chapter 11 Petition Date: December 18, 2007 Court: Western District of Texas (Austin) Debtor's Counsel: Gray Byron Jolink, Esq. 4131 Spicewood Springs Road, Building C-8 Austin, TX 78759 Tel: (512) 346-7717 Fax: (512) 346-7714 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. KINGSWAY FINANCIAL: S&P Lowers Credit and Debt Ratings to BB+ ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its senior unsecured and long-term counterparty credit ratings on Toronto-based Kingsway Financial Services Inc. to 'BB+' from 'BBB-'. S&P also lowered the debt ratings on Kingsway's subsidiaries to 'BB+' from 'BBB-'. The outlook is negative. The downgrade follows Kingsway's announcement that its lead U.S. operating company, Lincoln General Insurance Co. would be taking another unfavorable reserve adjustment for between $95 million and $125 million (all reserve adjustments quoted on a pretax basis). "The negative outlook reflects the uncertainty that Kingsway has come to the end of its reserve adjustments, and also reflects the reduced level of financial flexibility that the company has given the decline in its net income," said Standard & Poor's credit analyst Mr. Donald Chu. The total increase in net estimates for unpaid claims occurring in prior periods for Lincoln General, including the announcement, were $76 million in 2006 and $178 million-$208 million in 2007. These adjustments continue to be attributed primarily to the trucking and general liability lines of Lincoln General. Partially offsetting these unfavorable reserve developments were the $12 million and $35 million in reserve releases that were recognized elsewhere within the Kingsway group during 2006 and 2007. While Kingsway has demonstrated the capacity to absorb these reserve adjustments for the most part without dipping into its consolidated capital, and has continued to maintain solid capital ratios, it is the ongoing reserve adjustments at Lincoln General and the lack of definitive proof that these issues are now behind the firm that raise continued concerns over the quality of governance, senior management oversight, and enterprise risk management within its U.S. operations. This lingering uncertainty remains the primary rationale for the downgrade. Senior management is aware of these issues, and continues to take steps to address them. Following this rating action, notionally the ratings on the group's major operating companies would still be in the investment-grade category. The negative outlook reflects the uncertainty around the level of Kingsway's reserves at Lincoln, and also reflects the company's reduced level of financial flexibility given the decline in its net income. If Kingsway is able to demonstrate stability around its reserves, earnings, and capital, S&P could revise the outlook to stable within the next 12 months. Further negative news could lead to a one notch downgrade. It remains our belief that Kingsway will continue to maintain its strong or leading market position in the nonstandard auto, trucking, and motorcycle insurance market; its conservative investment portfolio; and relatively strong capital adequacy ratios. As both the U.S. and Canadian markets continue to soften, premium growth will be challenged, as the company has indicated that it would be willing to give up market share to defend its operating margins. To restore the previous ratings, Kingsway will need to improve its ERM score from Standard & Poor's to adequate, from weak and improve the quality and consistency in its earnings. For the current rating, Standard & Poor's expects Kingsway to maintain a leverage ratio of less than 40%, a hybrid-to-total capital ratio of less than 15%, a fixed-charge coverage ratio of 4x or better, and a consolidated combined ratio of between 100%- 102%. Double leverage should be maintained at less than 125%. LANDRY'S RESTAURANTS: High Leverage Cues Moody's to Affirm Ratings ------------------------------------------------------------------ Moody's Investors Service confirmed all debt ratings for Landry's Restaurants Inc. and assigns a negative outlook. * Ratings withdrawn are: -- $150 million senior secured term loan B, due Dec 28, 2010, Ba2, 7%,LGD1 * Ratings confirmed are: -- Corporate family rating rated B2 -- Probability of default rating of B2 -- $300 million senior secured revolving credit facility, due Dec. 28, 2009, Ba2, 14%, LGD2 (previously 7%, LGD1) -- $400 million, guaranteed senior global notes, due Dec. 15, 2014, B3, 75%, LGD5 (previously 70%, LGD5) -- Speculative grade liquidity rating is SGL-4 The B2 corporate family rating reflects the company's high leverage, weak coverage, modest scale and competitive pressures, in addition to management's adoption of a more aggressive financial policy, which includes potential acquisitions and the continued use of Landry's balance sheet to fund initiatives outside the restricted group of companies. The ratings also incorporate the brand value of the various restaurant concepts and reasonable geographic diversity. The negative outlook reflects Moody's view that Landry's liquidity remains weak due to the re-financing risk associated with the company's $400 million of senior unsecured notes and noteholders option to redeem the notes at 1% above par from Feb. 28, 2009 to Dec. 15, 2011. The outlook also incorporates the company's inability to maintain effective internal controls over its financial reporting that has resulted in the reporting of material weaknesses. Landry's Restaurants, Inc., headquartered in Houston, Texas, owns and operates full service casual dining restaurants concepts including Landry's Seafood House, Rainforest Cafe, The Crab House, Charley's Crab, The Chart House, and Saltgrass Steak House. In addition, Landry's owns and operates the Golden Nugget Hotel and Casino through a wholly-owned unrestricted subsidiary. For the year end Dec. 31, 2006, the company generated revenue of approximately $869.0 million. LEVEL 3: Selling Advertising Distribution Unit for $129 Million --------------------------------------------------------------- Level 3 Communications, Inc. has signed a definitive agreement to sell the advertising distribution business of Vyvx LLC to DG FastChannel, Inc. Vyvx, LLC is a wholly owned subsidiary of Level 3 Communications, LLC. Under the terms of the agreement, Level 3 will receive total consideration of $129 million payable in cash at closing. The purchase price is subject to customary working capital and certain other post-closing adjustments. Revenue and Adjusted EBITDA for the Vyvx Services Advertising Distribution Business for 2007 are expected to be approximately $36 million and $11 million, respectively. Level 3 will retain ownership of Vyvx, LLC and its core broadcast business including all of the Vyvx Services Broadcast Business' content distribution capabilities. Level 3 will also retain an ongoing network services relationship with DG FastChannel, enabling DG FastChannel to distribute advertising content between its regional offices. "We are pleased that we have reached this agreement with DG FastChannel," Brady Rafuse, president of Level 3's Content Markets Group, said. "The Vyvx Services Advertising Distribution Business is not core to Level 3's strategy as it relies primarily on satellite and physical dub and ship methods for distribution and does not utilize the Level 3 network to deliver content to end destinations. We are focused on services that enable the distribution of large volumes of content over the Level 3 network. Additionally, Level 3's core communications services continue to grow and represent attractive future growth opportunities. The proceeds from the sale of the Vyvx Services Advertising Distribution Business will be deployed toward opportunities that are more central to Level 3's communications business." The sale is subject to regulatory approvals as well as certain other customary closing conditions, and is expected to close in the first quarter of 2008. Headquartered in Broomfield, Colorado, Level 3 Communications Inc. (Nasdaq: LVLT) -- http://www.level3.com/-- is an international communications company. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. * * * As reported in the Troubled Company Reporter on Aug. 28, 2007, Fitch has upgraded Level 3 Communications, Inc. and its wholly owned subsidiary Level 3 Financing, Inc.'s Issuer Default Rating to 'B-' from 'CCC'. LIONEL LLC: Obtains Bridge Order Extending Exclusive Periods ------------------------------------------------------------ The Hon. Burton R. Lifland of the U.S. Bankruptcy Court approved the request of Lionel LLC and its debtor-affiliate, Liontech Company, for a bridge order extending the Debtors exclusive period to file a chapter 11 plan and solicit acceptances of that plan. Judge Lifland ruled that the Debtors' exclusive periods are extended until such time as the Court has entered an order determining the relief requested in the Motion. Judge Lifland has scheduled a hearing on Jan. 10, 2008 at 10:00 a.m. As previously reported in the Troubled Company Reporter, the Court extended the Debtors exclusive period to file a chapter 11 plan to Dec. 17, 2007. This was the Debtors sixth extension of their exclusive periods. In their seventh request for an extension, the Debtors asked that the their exclusive periods to: * file a chapter 11 plan to March 31, 2008, * solicit acceptances of that plan to May 30, 2008. The Debtors said that although they have filed the Plan, outstanding contingencies to the Plan's confirmation, namely obtaining an exit financing, requires an additional extension of the exclusive periods. About Lionel LLC Headquartered in Chesterfield, Michigan, Lionel LLC -- http://www.lionel.com/-- markets model train products, including steam and die engines, rolling stock, operating and non-operating accessories, track, transformers and electronic control devices. The Company and its affiliate, Liontech Company, filed for chapter 11 protection on Nov. 15, 2004 (Bankr. S.D.N.Y. Case Nos. 04-17324 and 04-17324). Adam C. Harris, Esq., Abbey Walsh, Esq., and Adam L. Hirsch, Esq., at Schulte Roth & Zabel LLP; Dale Cendali, Esq., at O'Melveny & Myers LLP; and Ronald L. Rose, Esq., at Dykema Gossett PLLC, represent the Debtors. Houlihan Lokey Howard & Zukin Capital, L.P. and Ernst & Young LLP are the Debtors' financial advisors. Kurtzman Carson Consultants LLC acts as the Debtors' noticing and claims agent. As of May 31, 2007, the Debtor disclosed total assets of $39,161,000 and total debts of $62,667,000. Alan D. Halperin, Esq., and Robert D. Raicht, Esq., at Halperin Battaglia Raicht, LLP, represent the Official Committee of Unsecured Creditors. FTI Consulting, Inc., is the Committee's financial advisor. Alec P. Ostrow, Esq. in New York, represents Mike's Train House, Inc. LUKASZ REMIASZ: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Lukasz Remiasz 5823 South Austin Avenue Chicago, IL 60638 Bankruptcy Case No.: 07-23899 Chapter 11 Petition Date: December 19, 2007 Court: Northern District of Illinois (Chicago) Judge: A. Benjamin Goldgar Debtor's Counsel: Bert J. Zaczek, Esq. 415 North LaSalle Street, Suite 300 Chicago, IL 60610 Tel: (312) 527-1090 Fax: (312) 527-1082 Total Assets: $10,000 Total Debts: $1,942,900 Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First American Bank Stock of Mission $1,020,000 Crowley & Lamb, P.C. Bay Multisports, 350 North LaSalle Street, Inc. and Mission Suite 900 Bay Ski & Bike, Chicago, IL 60610 Inc. William Linneman and Shares of stock in $896,000 Valerie Gervai Mission Bay Campion Curran Dunlop & Lamb Multisports, Inc. 8600 U.S. Highway 14, Suite 201 Crystal Lake, IL 60012-2759 I.D.A.P.P. student loans $15,000 21225 Network Place Chicago, IL 60673-1212 Bank of America Credit Card $5,375 Alexian Brothers medical services $2,722 Illinois Department of Damage to $1,911 Transportation property from vehicle accident Itasca F.P.D. ambulance service $1,185 M.E.A. Elk Grove, L.L.C. $536 Elk Grove Radiology medical services $170 F.I.A. Card Services credit card Unknown Illinois Department of Revenue Retailer's Unknown Springfield, IL 62796-0001 Occupation Tax Illinois Department of Revenue Withholding tax Unknown Springfield, IL 62702 Internal Revenue Service Withholdig taxes Unknown National City Credit Card credit card Unknown purchases LYNN LYTHGOE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Lynn H. Lythgoe, Jr. 13720 Jarvi Drive Anchorage, AK 99515 Bankruptcy Case No.: 07-00658 Chapter 11 Petition Date: December 17, 2007 Court: District of Alaska Debtor's Counsel: John C. Siemers, Esq. Burr, Pease & Kurtz 810 North Street Anchorage, AK 99501 Tel: (907) 276-6100 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor does not have any creditors who are not insiders. MAAX HOLDINGS: Unit Defaults Interest Payment on 9.75% Sr. Notes ---------------------------------------------------------------- MAAX Holdings Inc.'s subsidiary, MAAX Corporation has not made its interest payment on its outstanding 9.75% senior subordinated notes due 2012. The Senior Subordinated Notes Indenture under which the Notes were issued, provides a thirty day grace period, which began on Dec. 15, 2007, before such failure to pay interest constitutes an Event of Default under the Indenture. The company is engaged in discussions with its stakeholders regarding strategic alternatives to improve its capital structure and increase liquidity for general corporate purposes. The company has determined it is in its best interests to use the thirty day grace period provided in the Indenture to continue these discussions and evaluate whether the company will make its interest payment under the Notes during such period. In addition, while it is not known with certainty at this time, it is likely that the company is in breach of the minimum consolidated adjusted EBITDA covenant set forth in the Company's Credit and Guaranty Agreement by a small margin. Such covenant requires that the company's consolidated adjusted EBITDA as of Nov. 30, 2007, for the 12-month period then ended be not less than $33 million. If it is determined that the company is in breach of this covenant, an Event of Default will have occurred under the Credit Agreement which, if not waived, could lead to an acceleration of payment demand by the company's senior creditor. At this time, the company's senior creditor has not granted such a waiver. About MAAX Holdings Headquartered in Brooklyn Park, Minnesota, MAAX Holdings Inc. -- http://www.maax.com/-- is a North American manufacturer of bathroom products, and spas for the residential housing market. MAAX offerings are available through plumbing wholesalers, bath, and spa specialty boutiques and home improvement centers. The company currently operates 18 manufacturing facilities and independent distribution centers throughout North America and Europe. MAAX Corporation is a subsidiary of Beauceland Corporation, itself a wholly owned subsidiary of the company. The company's consolidated balance sheet at Aug. 31, 2007, showed $507.5 million in total assets, $604.5 million in total liabilities, and $7.0 million in redeemable preferred stock, resulting in a $104.0 million total shareholders' deficit. MAAX HOLDINGS: Interest Payment Default Cues S&P's Default Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on Quebec-based bathroom fixtures manufacturer MAAX Holdings Inc. and its subsidiary, MAAX Corp., to 'D' from 'CCC-'. At the same time, Standard & Poor's lowered its ratings on MAAX Holdings' senior discount notes and MAAX Corp.'s senior subordinated notes to 'D' from 'CC'. "The downgrade follows the payment default on the Dec. 15, 2007, interest payment on MAAX Corp.'s 9.75% senior discount notes outstanding maturing in 2012," said Standard & Poor's credit analyst Kevin Hibbert. The notes provide for a 30-day grace period, which began Dec. 15, 2007. "The company is now in discussions with its lenders and it is unlikely MAAX will make its interest payments under the notes," Mr. Hibbert added. In addition, the company has stated that it is likely in breach of covenants under the US$175 million credit facility and the $40 million revolver provided by Brookfield Bridge Lending Fund Inc., which would constitute an event of default under the agreement. It's unclear whether a breach has occurred and what cures, if any, the company would seek. MARCAL PAPER: U.S. Trustee Amends Creditors' Committee Members -------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, amended the appointment of the Official Committee of Unsecured Creditors in Marcal Paper Mills Inc.'s chapter 11 case. The Creditors Committee is now composed of: a) James T. Nicholson Ashland Inc. 5200 Blazer Parkway Dublin, OH 43017 Tel: (614) 790-3009 Fax: (614) 790-4054 b) David R. Jury, Esq. United Steelworkers Five Gateway Center, Room 807 Pittsburgh, PA 15222 Tel: (412) 562-2545 Fax: (412) 562-2429 c) Cosimo Tristani Rapid Processing, LLC 860 Humboldt Street Brooklyn, NY 11222 Tel: (718) 349-0500 Fax: (718) 349-8494 d) Craig L. Klein1 Redrock Capital Partners, LLC 475 17TH Street, Suite 544 Denver, CO 80202 Tel: (303) 293-8090 Fax: (303) 293-8089 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Marcal Paper Mills Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- is a privately-held, fourth generation family business. Founded in 1932, it employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The company produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from- home use in hotels, restaurants, hospitals, offices and factories. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. MBIA INC: Denies Claims of Added Risk Exposure on $30.6 Bil. CDOs ----------------------------------------------------------------- MBIA Inc. provided an explanation in response to media and other inquiries received as a result of information the company posted on Dec. 19, 2007, on its Web site relating to its collateralized debt obligations exposure. The company said that the information posted on Dec. 19, 2007, discloses no additional Multi-Sector CDO exposure. The information provides detail on the composition of MBIA's $30.6 billion Multi-Sector CDO exposure that had previously been provided in its Operating Supplement. MBIA discussed its exposure to CDO transactions with inner CDOs during a conference call for investors on Aug. 2, 2007. MBIA said that Standard & Poor's, Moody's and Fitch have confirmed that this information was provided to them and was taken into consideration in their recent ratings analyses. The information was also made available to Warburg Pincus prior to their entering into the previously disclosed Investment Agreement, and that agreement is not affected by this information. According to MBIA, the additional detail being provided on Dec. 20, 2007, describes the collateral composition of MBIA's CDO-Squared transactions for further detail about MBIA's Multi- Sector CDO portfolio. MBIA had not previously detailed these transactions because they contain less than 25% direct U.S. RMBS collateral. A copy of the MBIA's CDO-Squared transactions is downloadable for free at http://ResearchArchives.com/t/s?268e Analysts Shocked The recent disclosure of MBIA on its CDO exposure have caught analysts surprised, Bloomberg News reports, citing Ken Zerbe of Morgan Stanley in New York. Mr. Zerbe told Bloomberg that they were "shocked" when MBIA failed to inform how much risk investors are into in connection with its CDO portfolio. MBIA had dislcosed that it currently guarantees about $8.1 billion CDOs, which have high probability of incurring losses, Blomberg relates. About MBIA Based in Armonk, New York, MBIA Inc. -- http://www.mbia.com/-- is a financial guarantor and a leading provider of fixed- income investment management services. The Company's core business is credit enhancement of municipal bonds and asset-and mortgage- backed transactions in the new issue and secondary markets. The company holds offices in New York, Denver, San Francisco, Paris, London, Madrid, Milan, Sydney and Tokyo. MGM MIRAGE: Earns $183.9 Million in Third Quarter Ended Sept. 30 ---------------------------------------------------------------- MGM MIRAGE reported net income of $183.9 million for the third quarter ended Sept. 30, 2007, compared with net income of $156.3 million for the corresponding period of 2006. Net revenues increased 6% to $1.90 billion, compared with net revenues of $1.80 billion in the same period last year. Excluding Beau Rivage, net revenues were up 2%. Gaming revenues increased 3%, but decreased 3% excluding Beau Rivage. Rooms revenues increased 7% despite having 29,000 less available rooms on the Las Vegas Strip due primarily to room and suite remodel activity at Mandalay Bay and Bellagio. Food and beverage revenues increased 10% as the company's restaurants and nightclubs continue to experience increased volumes and the company continues to invest in new restaurants and nightclubs. Entertainment revenues increased 13% driven by strong demand across the company's portfolio of Cirque du Soleil productions. The company's operating income increased 11% to $464.6 million. Operating income was positively impacted by a full quarter of operations at Beau Rivage, including the Hurricane Katrina insurance recoveries, and negatively impacted by lower profits from condominium sales at the Signature at MGM Grand - $12 million in the 2007 quarter versus $26 million in 2006. In addition, operating income was negatively impacted by higher write-offs, demolition costs and preopening expense - $44 million in the current quarter versus $6 million in 2006. Excluding results at Beau Rivage and the other items above, operating income decreased 10%, due in large part to higher corporate expense. Property EBITDA increased 13% to $705 million; excluding the impact of the above items, Property EBITDA and the Property EBITDA margin were consistent with 2006 results. "Our growth initiatives, including strategic relationships with Dubai World and Kerzner International, reflect our ability to leverage our tremendous assets and creative energy to grow the company," said Terry Lanni, MGM MIRAGE's chairman and chief executive officer. "Our all-new MGM Grand Detroit is the clear market leader right out of the gate. We are well underway in creating the most important Las Vegas development ever, CityCenter, and we believe our MGM Grand Atlantic City project will have a similarly profound impact on the Atlantic City market." "Key volume indicators that we have come to rely on to gauge our Las Vegas business remain strong. These metrics suggest continued growth over the upcoming quarters," said Jim Murren, MGM MIRAGE president and chief operating officer. "We have many opportunities to increase our future profits through initiatives deployed throughout the remainder of this year and into 2008. The opening of our Detroit resort has been a tremendous success and we are only a couple of months away from opening in Macau. Both of these resorts will substantially add to our future cash flows and earnings." Financial Position Third quarter capital investments totaled $767 million, which included $451 million for CityCenter and $140 million for the permanent MGM Grand Detroit resort. Remaining capital expenditures included spending of $61 million on room and suite remodel projects, primarily at Mandalay Bay and Bellagio, expenditures for corporate aircraft of $13 million, and $102 million of other routine capital expenditures on various new and upgraded amenities at the Company's resorts. The proceeds of $1.2 billion from the sale of common stock in October to a subsidiary of Dubai World were used to reduce outstanding borrowings under the company's senior credit facility. Following these payments, the company had approximately $2.0 billion of available borrowings under its senior credit facility. "Our recent strategic transactions will have a profound impact on our financial position and allow us to execute our many growth initiatives," said Dan D'Arrigo, MGM MIRAGE executive vice president and chief financial officer. "Following the transactions with Dubai World, we will have significant borrowing capacity under our senior credit facility and no significant debt maturities in 2008." Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $24.31 billion in total assets, $19.73 billion in total liabilities, and $4.58 billion in total stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $1.13 billion in total current assets available to pay $1.70 billion in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?268a About MGM MIRAGE Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled Company Reporter on Oct. 12, 2007, Standard & Poor's Ratings Services affirmed the 'BB' corporate credit rating on MGM MIRAGE and removed them from CreditWatch, where they were placed with positive implications Aug. 22, 2007. The rating outlook is positive. MINDGENT HEALTHCARE: Involuntary Chapter 11 Case Summary -------------------------------------------------------- Alleged Debtor: Mindgent Healthcare Clinics, L.L.C. 9190 Priority Way Drive, Suite 310 Indianapolis, IN 46240 Case Number: 07-12557 Type of Business: Doing business as Corner Care Clinic, the Debtor provides care for common illnesses at local pharmacies. See http://www.mindgenthealthcareclinics.com/ Involuntary Petition Date: December 19, 2007 Court: Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz III Petitioner's Counsel: Whitney L. Mosby, Esq. Bingham McHale, L.L.P. 10 West Market Street, Suite 2700 Indianapolis, IN 46204 Tel: (317) 968-5469 Fax: (317) 236-9907 Petitioners Claim Amount ----------- ------------ C.P.P.M., Inc. $58,047 Attention: Steve Connor, Vice-President 4300 West 10th Street Indianapolis, IN 46222 The Dodson Group, Inc. $37,379 Attention: David C. Sullivan, Chief Financial Officer 9100 Keystone Crossing, Suite 750 Indianapolis, IN 46240 Leventhal Productions $16,500 Attention: Judy Leventhal 185 North New Ballaas Road St. Louis, MO 63141 MORGAN STANLEY: Fitch Downgrades Ratings on $386.7 Million Certs. ----------------------------------------------------------------- Fitch Ratings has taken actions on Morgan Stanley mortgage pass- through certificates. Affirmations total $3.23 billion and downgrades total $386.7 million. In addition, approximately $96.4 million is placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Series 2005-HE3 -- $103.3 million class A affirmed at 'AAA' (BL: 78.24, LCR: 4.22); -- $37.9 million class M-1 affirmed at 'AA+' (BL: 65.56, LCR: 3.54); -- $34.3 million class M-2 affirmed at 'AA' (BL: 55.17, LCR: 2.98); -- $20.5 million class M-3 affirmed at 'AA' (BL: 48.29, LCR: 2.61); -- $18.4 million class M-4 affirmed at 'AA-' (BL: 43.10, LCR: 2.33); -- $16.9 million class M-5 affirmed at 'A+' (BL: 38.03, LCR: 2.05); -- $16.9 million class M-6 affirmed at 'A' (BL: 32.90, LCR: 1.78); -- $15.3 million class B-1 affirmed at 'A-' (BL: 28.21, LCR: 1.52); -- $13.3 million class B-2 affirmed at 'BBB+' (BL: 24.41, LCR: 1.32); -- $11.2 million class B-3 downgraded to 'BBB-' from 'BBB' (BL: 21.83, LCR: 1.18). Deal Summary -- Originators: WMC (33%), Decision One (33%), Fremont (19%); -- 60+ day Delinquency: 32.38%; -- Realized Losses to date (% of Original Balance): 1.29%; -- Expected Remaining Losses (% of Current Balance): 18.53%; -- Cumulative Expected Losses (% of Original Balance): 7.24%. Series 2005-HE4 -- $149.6 million class A affirmed at 'AAA' (BL: 63.96, LCR: 3.58); -- $31.4 million class M-1 affirmed at 'AA+' (BL: 54.71, LCR: 3.06); -- $29.1 million class M-2 affirmed at 'AA+' (BL: 46.11, LCR: 2.58); -- $17.7 million class M-3 affirmed at 'AA' (BL: 40.62, LCR: 2.27); -- $15.9 million class M-4 affirmed at 'AA-' (BL: 35.94, LCR: 2.01); -- $14.5 million class M-5 affirmed at 'A+' (BL: 31.67, LCR: 1.77); -- $14.1 million class M-6 affirmed at 'A' (BL: 27.51, LCR: 1.54); -- $11.8 million class B-1 downgraded to 'BBB+' from 'A-', and placed on Rating Watch Negative (BL: 24.00, LCR: 1.34); -- $12.2 million class B-2 downgraded to 'BBB-' from 'BBB+', and placed on Rating Watch Negative (BL: 20.55, LCR: 1.15); -- $10 million class B-3 downgraded to 'BB' from 'BBB', and placed on Rating Watch Negative (BL: 18.26, LCR: 1.02). Deal Summary -- Originators: WMC (47%), Decision One (46%), Accredited (7%); -- 60+ day Delinquency: 30.07%; -- Realized Losses to date (% of Original Balance): 1.59%; -- Expected Remaining Losses (% of Current Balance): 17.86%; -- Cumulative Expected Losses (% of Original Balance): 8.20%. Series 2005-HE5 -- $263.1 million class A affirmed at 'AAA' (BL: 62.94, LCR: 3.3); -- $53.5 million class M-1 affirmed at 'AA+' (BL: 53.83, LCR: 2.83); -- $49.8 million class M-2 affirmed at 'AA+' (BL: 45.35, LCR: 2.38); -- $31.2 million class M-3 affirmed at 'AA' (BL: 39.80, LCR: 2.09); -- $26.7 million class M-4 affirmed at 'AA-' (BL: 35.26, LCR: 1.85); -- $24.5 million class M-5 affirmed at 'A+' (BL: 31.12, LCR: 1.63); -- $23 million class M-6 downgraded to 'A-' from 'A' (BL: 27.21, LCR: 1.43); -- $20.8 million class B-1 downgraded to 'BBB' from 'A-' (BL: 23.67, LCR: 1.24); -- $19.3 million class B-2 downgraded to 'BB' from 'BBB+' (BL: 20.56, LCR: 1.08); -- $15.6 million class B-3 downgraded to 'BB' from 'BBB' (BL: 18.52, LCR: 0.97). Deal Summary -- Originators: WMC (36.8%), Decision One (36.1%), New Century (26.9%); -- 60+ day Delinquency: 31.31%; -- Realized Losses to date (% of Original Balance): 1.47%; -- Expected Remaining Losses (% of Current Balance): 19.05%; -- Cumulative Expected Losses (% of Original Balance): 8.94%. Series 2005-HE6 -- $301.3 million class A affirmed at 'AAA' (BL: 50.11, LCR: 3.18); -- $37.7 million class M-1 affirmed at 'AA+' (BL: 42.96, LCR: 2.72); -- $35 million class M-2 affirmed at 'AA+' (BL: 36.31, LCR: 2.3); -- $21.5 million class M-3 affirmed at 'AA' (BL: 32.07, LCR: 2.03); -- $18.3 million class M-4 affirmed at 'AA-' (BL: 28.58, LCR: 1.81); -- $16.7 million class M-5 affirmed at 'A+' (BL: 25.41, LCR: 1.61); -- $16.1 million class M-6 downgraded to 'A-' from 'A' (BL: 22.30, LCR: 1.41); -- $14 million class B-1 downgraded to 'BBB' from 'A-' (BL: 19.53, LCR: 1.24); -- $12.9 million class B-2 downgraded to 'BB' from 'BBB+' (BL: 17.13, LCR: 1.09); -- $11.8 million class B-3 downgraded to 'BB' from 'BBB' (BL: 15.44, LCR: 0.98). Deal Summary -- Originators: New Century (42.3%), Accredited (23.5%), WMC (13.0%), Decision One (13.6%); -- 60+ day Delinquency: 21.58%; -- Realized Losses to date (% of Original Balance): 1.48%; -- Expected Remaining Losses (% of Current Balance): 15.77%; -- Cumulative Expected Losses (% of Original Balance): 9.16%. Series 2005-HE7 -- $414.1 million class A affirmed at 'AAA' (BL: 49.79, LCR: 2.94); -- $49.7 million class M-1 affirmed at 'AA+' (BL: 42.88, LCR: 2.53); -- $45.6 million class M-2 affirmed at 'AA+' (BL: 36.52, LCR: 2.15); -- $28.6 million class M-3 affirmed at 'AA' (BL: 32.40, LCR: 1.91); -- $23.1 million class M-4 affirmed at 'AA-' (BL: 29.18, LCR: 1.72); -- $23.1 million class M-5 downgraded to 'A' from 'A+' (BL: 25.95, LCR: 1.53); -- $20.4 million class M-6 downgraded to 'BBB+' from 'A' (BL: 23.04, LCR: 1.36); -- $20.4 million class B-1 downgraded to 'BBB-' from 'A-' (BL: 20.04, LCR: 1.18); -- $17.7 million class B-2 downgraded to 'BB' from 'BBB+' (BL: 17.67, LCR: 1.04); -- $14.3 million class B-3 downgraded to 'B' from 'BBB' (BL: 13.72, LCR: 0.81). Deal Summary -- Originators: WMC (42.63%), New Century (35.22%), Decision One (22.07%); -- 60+ day Delinquency: 21.37%; -- Realized Losses to date (% of Original Balance): 1.47%; -- Expected Remaining Losses (% of Current Balance): 16.96%; -- Cumulative Expected Losses (% of Original Balance): 10.37%. Series 2005-WMC5 -- $41.3 million class A affirmed at 'AAA' (BL: 94.27, LCR: 5.01); -- $55.4 million class M1 affirmed at 'AA+' (BL: 79.82, LCR: 4.24); -- $47.2 million class M2 affirmed at 'AA' (BL: 66.72, LCR: 3.54); -- $29.2 million class M3 affirmed at 'AA-' (BL: 58.56, LCR: 3.11); -- $27.7 million class M4 affirmed at 'A+' (BL: 50.82, LCR: 2.7); -- $24.7 million class M5 affirmed at 'A' (BL: 43.75, LCR: 2.32); -- $23.2 million class M6 affirmed at 'A-' (BL: 37.29, LCR: 1.98); -- $20.9 million class B1 affirmed at 'BBB+' (BL: 31.44, LCR: 1.67); -- $20.9 million class B2 affirmed at 'BBB' (BL: 25.91, LCR: 1.38); -- $16.4 million class B3 affirmed at 'BBB-' (BL: 22.33, LCR: 1.19). Deal Summary -- Originators: 100% WMC; -- 60+ day Delinquency: 34.80%; -- Realized Losses to date (% of Original Balance): 1.21%; -- Expected Remaining Losses (% of Current Balance): 18.83%; -- Cumulative Expected Losses (% of Original Balance): 5.71%. Series 2005-WMC6 -- $94.3 million class A affirmed at 'AAA' (BL: 79.81, LCR: 4.37); -- $42.9 million class M-1 affirmed at 'AA+' (BL: 67.29, LCR: 3.68); -- $37.6 million class M-2 affirmed at 'AA' (BL: 56.31, LCR: 3.08); -- $25.8 million class M-3 affirmed at 'AA-' (BL: 48.73, LCR: 2.67); -- $19.9 million class M-4 affirmed at 'A+' (BL: 42.86, LCR: 2.34); -- $19.4 million class M-5 affirmed at 'A' (BL: 37.02, LCR: 2.03); -- $16.4 million class M-6 rated 'A-', placed on Rating Watch Negative (BL: 32.19, LCR: 1.76); -- $17.6 million class B-1 rated 'BBB+', placed on Rating Watch Negative (BL: 27.00, LCR: 1.48); -- $16.5 million class B-2 rated 'BBB', placed on Rating Watch Negative (BL: 22.43, LCR: 1.23); -- $11.7 million class B-3 downgraded to 'BB' from 'BBB-', and placed on Rating Watch Negative (BL: 19.77, LCR: 1.08). Deal Summary -- Originators: 100% WMC; -- 60+ day Delinquency: 31.47%; -- Realized Losses to date (% of Original Balance): 1.31%; -- Expected Remaining Losses (% of Current Balance): 18.28%; -- Cumulative Expected Losses (% of Original Balance): 6.61%. Series 2005-3 -- $144.5 million class A affirmed at 'AAA' (BL: 62.67, LCR: 3.08); -- $29 million class M-1 affirmed at 'AA+' (BL: 53.57, LCR: 2.64); -- $26.7 million class M-2 affirmed at 'AA+' (BL: 45.16, LCR: 2.22); -- $18.2 million class M-3 affirmed at 'AA' (BL: 39.41, LCR: 1.94); -- $13.1 million class M-4 affirmed at 'AA-' (BL: 35.24, LCR: 1.73); -- $13.1 million class M-5 affirmed at 'A+' (BL: 31.08, LCR: 1.53); -- $12 million class M-6 downgraded to 'BBB+' from 'A' (BL: 27.25, LCR: 1.34); -- $12 million class B-1 downgraded to 'BBB-' from 'A-' (BL: 23.40, LCR: 1.15); -- $9.6 million class B-2 downgraded to 'BB' from 'BBB+' (BL: 20.42, LCR: 1); -- $10.4 million class B-3 downgraded to 'B' from 'BBB' (BL: 15.49, LCR: 0.76). Deal Summary -- Originators: Wilmington (48%), Meritage (25%), Acoustic (15%), MILA (12%); -- 60+ day Delinquency: 29.55%; -- Realized Losses to date (% of Original Balance): 1.70%; -- Expected Remaining Losses (% of Current Balance): 20.32%; -- Cumulative Expected Losses (% of Original Balance): 9.99%. Series 2005-4 -- $269 million class A affirmed at 'AAA' (BL: 54.65, LCR: 3.09); -- $37.1 million class M-1 affirmed at 'AA+' (BL: 45.84, LCR: 2.6); -- $33.8 million class M-2 affirmed at 'AA+' (BL: 40.33, LCR: 2.28); -- $24.1 million class M-3 affirmed at 'AA' (BL: 35.58, LCR: 2.01); -- $17.8 million class M-4 affirmed at 'AA-' (BL: 32.05, LCR: 1.81); -- $16.9 million class M-5 affirmed at 'A+' (BL: 28.72, LCR: 1.63); -- $15 million class M-6 downgraded to 'A-' from 'A' (BL: 25.72, LCR: 1.46); -- $16.4 million class B-1 downgraded to 'BBB' from 'A-' (BL: 22.37, LCR: 1.27); -- $11.6 million class B-2 downgraded to 'BBB-' from 'BBB+' (BL: 20.14, LCR: 1.14); -- $12.5 million class B-3 downgraded to 'BB' from 'BBB' (BL: 18.27, LCR: 1.03). Deal Summary -- Originators: First NLC Financial Services, LLC (45.6%), Meritage (18.4%); -- 60+ day Delinquency: 25.91%; -- Realized Losses to date (% of Original Balance): 1.31%; -- Expected Remaining Losses (% of Current Balance): 17.66%; -- Cumulative Expected Losses (% of Original Balance): 10.50%. These transactions were placed 'Under Analysis' on Dec. 18, 2007. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. MTI TECHNOLOGY: Court OKs Winthrop as Panel's Insolvency Counsel ---------------------------------------------------------------- The United States Bankruptcy Court for the Central District of California authorized the Official Committee of Unsecured Creditors appointed for MTI Technology Corporation's bankruptcy case to retain Winthrop Couchot Professional Corporation as its general insolvency counsel. As reported in the Troubled Company Reporter on Nov. 29, 2007, Winthrop Couchot, as the Committee's general insolvency counsel, is expected to: a) provide the Committee legal advice with respect to its duties, responsibilities and powers in the Debtor's bankruptcy case; b) assist the Committee in investigating the acts, conduct, assets, liabilities and financial condition of the Debtor and its insiders and affiliates; c) provide the Committee legal advice and representation with respect to the negotiation, confirmation and implementation of a Chapter 11 plan; d) provide the Committee legal advice with respect to the administration of the Debtor's case, the distribution of the Debtor's assets, the prosecution of claims against third parties, and any other matters relevant to the Debtor's case; e) provide the Committee legal advice and representation, if appropriate, with respect to the appointment of a trustee or examiner; and f) provide the Committee legal advice and representation in any legal proceeding, whether adversary or otherwise, involving the interest represented by the Committee, and the performance of other legal services as may be required by the Committee in furtherance of the interests of general unsecured creditors in the Debtor's case. The firm's professionals and their compensation rates are: Attorney Hourly Rate -------- ----------- Marc J. Winthrop, Esq. $565 Robert E. Opera, Esq. $550 Sean A. Okeefe, Esq. $550 Paul J. Couchot, Esq. $525 Richard H. Golubow, Esq. $395 Peter W. Lianides, Esq. $395 Garrick A. Hollander, Esq. $375 Legal Assistants Hourly Rate ---------------- ----------- P.J. Marksbury $190 Legal Assistant Associates $80 - $150 Robert E. Opera, Esq., a shareholder of the firm, assured the Court that the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Opera can be reached at: Robert E. Opera, Esq. Winthrop Couchot Professional Corporation 660 Newport Center Drive, 4th Floor Newprot Beach, CA 92660 Tel: (949) 720-4100 Fax: (949) 720-4111 http://www.winthropcouchot.com/ Headquartered in Tustin, California, M.T.I. Technology Corp. -- http://www.mti.com/-- provides professional services and data storage for mid- to large-sized organizations. In addition, the company owns all of the issued and outstanding share capital of three European subsidiaries: MTI Technology GmbH in Germany, MTI Technology Limited in Scotland and MTI France S.A.S. in France. The company filed for Chapter 11 protection on Oct. 15, 2007 (Bankr. C.D. Calif. Case No. 07-13347). Scott C. Clarkson, Esq., at Clarkson, Gore & Marsella, A.P.L., represents the Debtor. Omni Management Group LLC serve as the Debtor's claim, noticing and balloting agent. The U.S. Trustee for Region 16 have appointed nine creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's case. As of July 7, 2007, the Debtor had total assets of $64,002,000 and total debts of $58,840,000. The Debtor's $5 million postpetition facility from Zinc Holdings LLC will mature on Friday Dec. 21, 2007, as reported in the Troubled Company Reporter on Nov. 20, 2007. MTI TECHNOLOGY: Sells European Assets to Copper for $7.2 Million ---------------------------------------------------------------- The Honorable Erithe A. Smith of the United States Bankruptcy Court for the Central District of California authorized MTI Technology Corporation to sell its European operating subsidiaries to Copper Holdings LLC for $7,275,000, free and clear of all liens, claims and interests. As previously reported, the Debtor has reached a definitive agreement dated Oct. 15, 2007, with Zinc Holdings LLC, as the stalking horse bidder, to acquire the Debtor's European operating subsidiaries for approximately $5.5 million cash at closing. The Debtor says that the proceeds from the sale will be paid to its unsecured creditors. Its inability to continue its ongoing operations mandate a sale of its assets, according to the Debtor. The Debtor have agreed to pay Zinc Holdings $175,000 break-up fee, and expense reimbursement of up to $150,000. Headquartered in Tustin, California, M.T.I. Technology Corp. -- http://www.mti.com/-- provides professional services and data storage for mid- to large-sized organizations. In addition, the company owns all of the issued and outstanding share capital of three European subsidiaries: MTI Technology GmbH in Germany, MTI Technology Limited in Scotland and MTI France S.A.S. in France. The company filed for Chapter 11 protection on Oct. 15, 2007 (Bankr. C.D. Calif. Case No. 07-13347). Scott C. Clarkson, Esq., at Clarkson, Gore & Marsella, A.P.L., represents the Debtor. Omni Management Group LLC serve as the Debtor's claim, noticing and balloting agent. The U.S. Trustee for Region 16 have appointed nine creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's case. As of July 7, 2007, the Debtor had total assets of $64,002,000 and total debts of $58,840,000. The Debtor's $5 million postpetition facility from Zinc Holdings LLC will mature on Dec. 21, 2007, as reported in the Troubled Company Reporter on Nov. 20, 2007. NASDAQ STOCK: Holders Okay Issuance of 60,561,515 Common Stock -------------------------------------------------------------- Holders of The Nasdaq Stock Market Inc.'s voting securities have approved the issuance of 60,561,515 shares of NASDAQ Common Stock in connection with its transaction with OMX AB and Borse Dubai Limited. Additionally, shareholders approved an amendment to NASDAQ's Restated Certificate of Incorporation to change its name to "The NASDAQ OMX Group Inc." upon completion of its acquisition of OMX. "This vote is another important milestone as we move toward the completion of a transaction that will be transformational for NASDAQ," Bob Greifeld, president and chief executive officer of NASDAQ, said. Pursuant to the Transactions, Borse Dubai will conduct an offer for all of the outstanding shares of OMX, and once complete, will sell the OMX Shares acquired in the Borse Dubai Offer or otherwise owned by Borse Dubai to NASDAQ in exchange for: (i) up to SEK 12,582,952,392 in cash; and (ii) 60,561,515 shares of Nasdaq Common Stock. As required by NASDAQ's certificate of incorporation, Borse Dubai's voting rights in respect of the Nasdaq Common Stock it holds will be limited to a maximum of 5% of the company's fully diluted outstanding share capital. Headquartered in New York City, The Nasdaq Stock Market Inc. (Nasdaq: NDAQ) -- http://www.nasdaq.com/-- is an electronic equity securities market in the United States with about 3,200 companies. * * * As reported in the Troubled Company Reporter on Sept. 24, 2007, Moody's Investors Service placed the Ba3 corporate family rating of Nasdaq Stock Market Inc. on review for upgrade. On Sept. 20, 2007, Standard & Poor's Rating Services assigned BB long-term foreign and local issuer credit ratings to Nasdaq Stock Market Inc. NATIONAL RV: Taps Omni Management as Claims and Noticing Agent -------------------------------------------------------------- National R.V. Holdings Inc. and its debtor-affiliate, National R.V. Inc., ask the United States Bankruptcy Court for the Central District of California for permission to employ Omni Management Group LLC as their claims and administrator and noticing agent. Omni Management will: a) prepare and serve required notices in these chapter 11 cases, including: -- claims bar date; -- objections to claims; -- hearings on a disclosure statement and confirmation of achapter 11 plan; and -- other miscellaneous notices as the Debtors or the Court may deem necessary or appropriate for an orderly administration of these chapter 11 cases; b) within ten business days after the service of a particular notice, file with the clerk's office an affidavit of service that includes: -- copy of the notice served; -- alphabetical list of persons on whom the notice was served, along with their addresses; and -- the date and manner of service; c) maintain copies of all proofs of claim and proofs of interest filed in these cases; d) maintain official claims registers in these cases by docketing all proofs of claim and proofs of interest in a claims database that includes these information for each such claim or interest asserted: -- name and address of the claimant or interest holder and any agent thereof; -- date that the proof of claim or proof of interest was received by the firm and the Court; -- claim number assigned to the proof of claim or proof of interest; and -- asserted amount and classification of the claim; e) implement necessary security measures to ensure the completeness and integrity of the claims registers; f) Transmit to the Clerk's Office a copy of the claims registers as requested by the Clerk's Office; g) maintain a current mailing list for all entities that have filed proofs of claim or proofs of interest and make such list available upon request to the Clerk's Office or any party in interest; h) provide access to the public for examination of copies of the proofs of claim or proofs of interest filed in these cases without charge during regular business hours; i) create and maintain a website to disseminate case information including proofs of claim or interest, proof of claim forms, claims registers, case documents, Court and professional contact information and all other information deemed appropriate by the Court and/or the Debtor; j) record all transfers of claims pursuant to Bankruptcy Rule 3001(e) and provide notice of such transfers as required by Bankruptcy Rule 3001(e); k) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; l) provide temporary employees to process claims, as necessary; m) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and n) provide such other claims processing, noticing and related administrative services as may be requested from time to time by the Debtors. In addition to the foregoing and to the extent so requested, Omni will assist the Debtors with, among other things, prepare: a) schedules, and any amendments thereto; b) maintenance of the Debtors' master creditor list; c) mailing and tabulation of ballots for the purpose of voting to accept or reject a chapter 11 plan; and d) the Debtors' monthly operating reports. The firm charges between $35 and $285 per hour for services rendered. Rates are adjusted annually on January 2 of each year, and are subject to increase up to 10% per annum. The Debtors tell the Court that the firm requires a $20,000 deposit. Brian K. Osborne, a member of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Osborne can be reached at: Brian K. Osborne Omni Management Group, LLC 16501 Ventura Blvd., Suite 440 Encino, California 91436 Tel: (818) 906-8300 Fax: (818) 783-2737 http://www.claimsmanager.com About National R.V. Holdings Inc. Headquartered in Perris, California, National R.V. Holdings Inc. (Pink Sheets: NRVH) -- http://www.nrvh.com/-- through its wholly owned subsidiary, National RV Inc., produces motorized recreational vehicles. National RV designs, manufactures and markets Class A gas and diesel motorhomes under model names Surf Side, Sea Breeze, Dolphin, Tropi-Cal, Pacifica and Tradewinds. The Companies filed for Chapter 11 protection on Nov. 30, 2007 (Bankr. C.D. Calif. Lead Case No. 07-17937). David Guess, Esq., at Klee Tuchin Bogdanoff & Stern LLP, represents the Debtors in their restructuring efforts. The Debtors selected OMNI Management Group LLC as their claim, notice and balloting agent. The U.S. Trustee for Region 16 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, it listed total assets of $54,442,000 and total debts of $30,128,000. NATIONAL RV: Wants to Access Wells Fargo's Cash Collateral ---------------------------------------------------------- National R.V. Holdings Inc. and its debtor-affiliate, National R.V. Inc., ask the Honorable Peter H. Carroll of the United States Bankruptcy for the Central District of California to access Wells Fargo's cash collateral. The Debtors tell the Court that they intend to use the cash collateral to fund payroll, security services, utility deposits and other essential items. The Debtors say that they have no access to cash, other than cash collateral, to satisfy their immediate and outstanding obligations. Secured Lender The Debtors say that Wells Fargo is their principal prepetition secure creditor. The Debtor further say that they entered into the prepetition credit agreement with UPS Capital Corp., as agent and Wells Fargo, as a lender. UPS Capital, the Debtor adds, subsequently assigned all of its rights, title and interest in the prepitition loan documents to Wells Fargo. Wells Fargo is the agent and the sole lender of the Debtors to date. Under the prepetition agreement, the Debtors have obtained a revolving line of credit originally in the amount of $25 million, and now in the amount of $15 million inclusive of a $7.5 million letter of credit sub-facility. Additionally, Wells Fargo is substantially oversecured. It currently holds approximately $7.8 million in restricted cash, according to the Debtors. As adequate protection, the Debtors grant in favor of Wells Fargo, among other things: i) replacement lien in subsequentlt generated collateral of the same type as that in which Wells Fargo held a security interest prepetition, including, without limitation, any deposits made with any utilities after the Debtors' bankruptcy filing; ii) lien on the Debtors' interest in the Kemlite litigation in an amount equal to $260,000; and iii) administrative priority claim having the priority specified in Section 507(b) of the Bankurptcy Code. About National R.V. Holdings Inc. Headquartered in Perris, California, National R.V. Holdings Inc. (Pink Sheets: NRVH) -- http://www.nrvh.com/-- through its wholly owned subsidiary, National RV Inc., produces motorized recreational vehicles. National RV designs, manufactures and markets Class A gas and diesel motorhomes under model names Surf Side, Sea Breeze, Dolphin, Tropi-Cal, Pacifica and Tradewinds. The Companies filed for Chapter 11 protection on Nov. 30, 2007 (Bankr. C.D. Calif. Lead Case No. 07-17937). David Guess, Esq., at Klee Tuchin Bogdanoff & Stern LLP, represents the Debtors in their restructuring efforts. The Debtors selected OMNI Management Group LLC as their claim, notice and balloting agent. The U.S. Trustee for Region 16 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, it listed total assets of $54,442,000 and total debts of $30,128,000. NAVISTAR INT'L: Inks Pact with GM on Medium Duty Truck Business --------------------------------------------------------------- International Truck and Engine Corporation, the principal operating subsidiary of Navistar International Corporation, and General Motors Corp. have entered into a non-binding memorandum of understanding under which Navistar would purchase certain assets, intellectual property and distribution rights for GM's medium-duty truck business. As proposed, Navistar would acquire GM's medium-duty truck business, which includes assets and intellectual property rights to manufacture GMC and Chevrolet brand vehicles in the class 4-8 gross vehicle weight range. It also includes purchase of the related service parts business. Navistar would sell a competitive line of Chevrolet and GMC vehicles and service parts through GM's proprietary dealer network in the United States and Canada. The agreement is another step in GM's plan to focus on designing, manufacturing and selling cars and light trucks globally. The deal would leverage Navistar's strengths in commercial trucks and engines, and advance its strategy to build scale and reduce costs. "Navistar's expertise in building International(R) brand commercial trucks and its track record in the medium-duty segment makes them an excellent choice to acquire and continue growing the business. We intend to work closely with Navistar to make this transition seamless to our dealers and customers," Troy Clarke, president of GM North America, said. "This is another example of how we're strategically growing our business for trucks, engines and parts, building scale and reducing costs," Daniel C. Ustian, chairman, president and CEO, Navistar International Corporation, said. "We are proud to incorporate the GM truck brands into our portfolio, and will utilize the scale to build on the success of both the International and GM product lines and their respective distribution networks." Navistar would add the GMC(R) TopKick and Chevrole(R) Kodiak truck brands to its growing portfolio of brands, which currently includes International(R) brand trucks and tractors, IC(R) brand buses, Workhorse(R) brand chassis for motor homes and step vans, and MaxxForce(R) brand engines. When a deal is definitively concluded, production of the vehicles would move from GM's plant in Flint, Michigan, to a Navistar facility to be named. GM would retain ownership of its Flint plant and continue to build other products at the facility. GM will continue its medium-duty truck relationship with Isuzu to market W-Series trucks through GM's medium-duty dealer network. The deal is expected to close in 2008 subject to completion of satisfactory due diligence, the negotiation of a definitive purchase agreement, customary regulatory clearance and board approval. Upon closing, transition of the business could take several months to conclude. About GM 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. About International Truck and Engine International Truck and Engine Corporation, a wholly owned subsidiary of Navistar International Corporation, produces medium trucks, heavy trucks, severe service vehicles, MaxxForce brand diesel engines, parts and service. International and its affiliates sell their products, parts and services through a network of nearly 1,000 dealer outlets in the United States, Canada, Brazil and Mexico and from more than 60 dealers in 90 countries throughout the world. About Navistar International Headquartered in Warrenville, Illinois, Navistar International Corporation (Other OTC: NAVZ) -- http://www.navistar.com/-- is a holding company whose wholly owned subsidiaries produce International(R) brand commercial trucks, MaxxForce brand diesel engines, IC brand school and commercial buses, and Workhorse brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another wholly owned subsidiary offers financing services. * * * As reported in the Troubled Company Reporter on Sept. 11, 2007, Standard & Poor's Ratings Services said that its 'BB-' corporate credit ratings on North American truck and diesel engine producer Navistar International Corp. and subsidiary Navistar Financial Corp. remain on CreditWatch with negative implications, where they were placed on Jan. 17, 2006. NEWMARKET CORP: Moody's Lifts Rating on $150 Mil. Notes to Ba3 -------------------------------------------------------------- Moody's upgraded NewMarket Corporation's corporate family rating and probability of default rating to Ba2 from Ba3, and revised the rating on its $150 million senior unsecured notes due 2016 to Ba3 from B1. The upgrade reflects the improvement in the company's credit profile and strong operating results for its rating category. The outlook for NewMarket's long-term ratings is stable. These summarizes the ratings activity: * Ratings upgraded: NewMarket Corporation -- Corporate family rating: to Ba2 from Ba3 -- Probability of default rating: to Ba2 from Ba3 -- $150mm guaranteed senior unsecured notes due 2016 -- Ba3 (LGD4, 61%) from B1 (LGD4, 64%) The ratings upgrade reflects the improved credit metrics, the decline in leverage and strong operating performance of the company for its rating category. NewMarket's Debt to EBITDA ratio has declined from 3.6x for 2002 to 2.1x for the LTM ended Sept. 30, 2007, as the company has paid down debt with free cash flow and EBITDA has grown. The company will take on debt through a construction loan established in August 2007 to finance its real estate development project, Foundry Park I, however the additional debt is expected to be offset in the future by cash flow from an office building lease. In June 2007, the company announced it had successfully resolved arbitration related to its tetraethyl lead international marketing agreements with Innospec Inc., resulting in NewMarket receiving a one-time $28 million cash payment and the return to the company of $12 million used to fund working capital. NewMarket now has little exposure to TEL, and the shrinking worldwide market for TEL will have less impact on NewMarket's profitability in the future. During 2007, NewMarket has been successful in producing strong cash flows, despite rising raw material costs and some pressure on its EBITDA margins. The stable outlook reflects Moody's expectation that NewMarket will maintain EBITDA margins, continue to generate positive retained cash flow and will not take on significant leverage to fund acquisitions. Additionally, the stable outlook reflects the good liquidity, which is a function of the cash position, strong flows and undrawn revolving credit facility. NewMarket, through its Afton subsidiary, develops, manufactures and markets petroleum additives. Petroleum additives include: lubricant additives used in engine oils, transmission fluids, gear oils, hydraulic oils and turbine oils to enhance wear protection and prevent deposits; and fuel additives that improve the performance of fuels. NewMarket had revenues of $1.3 billion for the LTM ended Sept. 30, 2007. NORTEL NETWORKS: Sues Vonage Holdings for Patent Infringement ------------------------------------------------------------- Nortel Networks Corp. sued Vonage Holdings Corp. alleging infringement on 12 patents covering technology used in managing telephone data, Jeff St.Onge and Amy Thomson of Bloomberg News report. According to Bloomberg, Nortel's lawsuit came after Vonage sued Nortel's U.S. unit in August seeking to invalidate three of the patents, arguing that the patents shouldn't have been issued by the U.S. Patent and Trademark Office. Nortel denied the allegations and claimed that Vonage is violating the three patents and nine others, Bloomberg says. The Delaware case is Vonage Holdings Corp. v. Nortel Networks Inc., 07CV507, U.S. District Court, Delaware (Wilmington). About Vonage Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with over 1.4 million subscriber lines as of February 8, 2006. Utilizing its voice over Internet protocol technology platform, the company offers feature-rich, low-cost communications services with a call quality comparable to traditional telephone services. While customers in the United States represent over 95% of its subscriber lines, Vonage continues to expand internationally, having launched its service in Canada in November 2004, and in the United Kingdom in May 2005. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. * * * Nortel Networks Corp. still carries Moody's Investors Service 'B3' Senior Unsecured Debt rating which was placed on March 22, 2007. NWT URANIUM: Says Azimut's Default Notice is Without Merit ---------------------------------------------------------- NWT Uranium Corp. said it believes the notice of default provided by Azimut Exploration Inc. with respect to the option agreements covering the North Rae and Daniel Lake uranium properties in Quebec are without merit. NWT further believes that the notice of default is part of a strategy aimed at derailing the business combination proposed between NWT and Nu-Mex Uranium Corp., which was detailed in a press release dated Nov. 19, 2007. On Dec. 12, 2007, Azimut submitted an unsolicited expression of interest to acquire NWT, which was subsequently rejected. This unsolicited expression of interest was announced by NWT on Dec. 17, 2007. "NWT and its contractors have conducted themselves in an exemplary fashion while carrying out exploration of the North Rae and Daniel Lake properties through difficult labor and weather conditions in a remote location. In nearly four months of field work, NWT as operator has advanced the project, covering 305,000 acres (1,235 square kilometers), from airborne surveys to drill testing," said Marek J. Kreczmer, President and CEO of NWT Uranium. "The allegations made by Azimut are without merit and we intend to provide ample documentation to Azimut to support our position." In its unsolicited expression of interest, Azimut was prepared to offer 0.1475 common shares of Azimut for each NWT share. After a comprehensive evaluation of the Azimut offer and in consultation with its financial advisors, an independent committee of NWT's board of directors concluded that the terms of the proposed offer were unlikely to result in a transaction that is more favorable to NWT's shareholders from a financial point of view than the existing letter agreement with Nu-Mex. In accordance with the terms of NWT's existing agreement with Nu-Mex, NWT informed Azimut shortly after 1:00 p.m. PST, on Dec. 17, 2007, that it was unable to enter into negotiations with respect to the proposed transaction with Azimut. Less than four hours later, NWT received the notice of default from Azimut. It is NWT's intent to respond to Azimut's concerns promptly and with assistance from legal counsel. Azimut Notice of Default As reported in the Troubled Company Reporter on Dec. 19, 2007, Azimut Exploration Inc. has delivered a notice of Default to NWT Uranium Corporation regarding a number of NWT's specific obligations that have not been complied with pursuant to the terms of the North Rae and Daniel Lake property option agreements. Azimut holds 100% of the North Rae and Daniel Lake properties, and NWT holds an option to earn an initial 50% interest therein over a 5-year period and a second option to earn an additional 15% interest. NWT is the operator on both properties. About Azimut Exploration Azimut Exploration Inc. is a mineral exploration company using cutting-edge targeting methodologies to discover major ore deposits. Azimut has 20 active option agreements representing an aggregate work commitment of $65 million from partners on uranium, gold and nickel properties in Quebec. About Nu-Mex Nu-Mex Uranium Corp. (OTCBB: NUMX) -- http://www.nu- mexuranium.com/ -- is an international uranium mining company with corporate offices in London, England, and operational offices in New Mexico, USA. Its foundational assets are located in the southwest United States. The company is focused on the development of in-ground uranium resources that can be brought to near-term production. About NWT Uranium NWT Uranium Corporation, (TSXV: NWT; OTCBB: NWURF) -- http://www.nwturanium.com/-- formerly Northwestern Mineral Ventures Inc. is engaged in acquiring, exploring and developing uranium bearing mineral properties located in Canada and Niger. The company's properties are at the exploratory stage and thus non-producing. Its exploration activities consist in exploration and drilling of its properties to further assess the mineral potential and to develop more detailed exploration programs. The company has a portfolio of properties around the world, including a 38.5% stake in Niger Uranium Ltd.; a binding Letter of Intent to acquire up to 65% interest in the North Rae Uranium Project in the Ungava Bay region in northern Quebec, Canada; an option to acquire up to 65% interest in the Daniel Lake Uranium Project; and an option to earn up to 75% ownership of the Waterbury Project. NWT URANIUM: Inks Arrangement Deal with Nu-Mex on Schedule ---------------------------------------------------------- NWT Uranium Corp. and Nu-Mex Uranium Corp. on Dec. 20, 2007, as scheduled, have entered into an arrangement agreement pursuant to which Nu-Mex will acquire 100% of the securities of NWT through a court-approved plan of arrangement. The board of directors of NWT, based in part on the recommendation of the independent committee of directors, has unanimously recommended that NWT shareholders vote in favor of the arrangement. The NWT board has also received an opinion from its financial advisor, Evans & Evans Inc., that the consideration to be received by NWT shareholders is fair from a financial point of view. The acquisition will be completed by way of a court-approved plan of arrangement whereby each NWT common share will be exchanged for 0.40 of a Nu-Mex common share. Outstanding options and warrants to acquire common shares of NWT will be exchanged for analogous options and warrants to acquire common shares of Nu-Mex at the same exchange ratio. There are currently 35,625,000 Nu-Mex common shares outstanding and 106,031,342 NWT common shares outstanding. Should the proposed arrangement be completed and Nu-Mex acquires 100% of the NWT common shares, current Nu-Mex shareholders would own approximately 46% of Nu-Mex and current NWT shareholders would own approximately 54% of Nu-Mex. The arrangement agreement includes mutual customary non- solicitation covenants on NWT and Nu-Mex but provides each party with the ability to respond to unsolicited proposals in accordance with the terms of the arrangement agreement. In the event that the arrangement agreement is terminated and either party accepts a superior proposal, the arrangement agreement imposes a termination fee of cash equal to the greater of: (i) $5,000,000; and (ii) 2% of the market capitalization of NWT. The completion of the arrangement is subject to a number of customary conditions precedent, including that the arrangement be approved by 66-2/3% of the votes cast by NWT shareholders present in person or by proxy at the special meeting, and the approval of the arrangement by the Superior Court of Justice of Ontario. The proposed transaction is also subject to Nu-Mex arranging a financing at a minimum price of $4.00 per common share for gross proceeds of not less than $25,000,000. In addition, the arrangement is subject to common shares of Nu-Mex to be issued pursuant to the arrangement being listed on the Toronto Stock Exchange or the TSX Venture Exchange. The arrangement agreement provides that a special meeting of NWT shareholders to approve the arrangement be held as soon as reasonably practicable, and in any event, no later than April 28, 2008. About Azimut Exploration Azimut Exploration Inc. is a mineral exploration company using cutting-edge targeting methodologies to discover major ore deposits. Azimut has 20 active option agreements representing an aggregate work commitment of $65 million from partners on uranium, gold and nickel properties in Quebec. About Nu-Mex Nu-Mex Uranium Corp. (OTCBB: NUMX) -- http://www.nu- mexuranium.com/ -- is an international uranium mining company with corporate offices in London, England, and operational offices in New Mexico, USA. Its foundational assets are located in the southwest United States. The company is focused on the development of in-ground uranium resources that can be brought to near-term production. About NWT Uranium NWT Uranium Corporation, (TSXV: NWT; OTCBB: NWURF) -- http://www.nwturanium.com/-- formerly Northwestern Mineral Ventures Inc. is engaged in acquiring, exploring and developing uranium bearing mineral properties located in Canada and Niger. The company's properties are at the exploratory stage and thus non-producing. Its exploration activities consist in exploration and drilling of its properties to further assess the mineral potential and to develop more detailed exploration programs. The company has a portfolio of properties around the world, including a 38.5% stake in Niger Uranium Ltd.; a binding Letter of Intent to acquire up to 65% interest in the North Rae Uranium Project in the Ungava Bay region in northern Quebec, Canada; an option to acquire up to 65% interest in the Daniel Lake Uranium Project; and an option to earn up to 75% ownership of the Waterbury Project. PAIKO RIDGE: Case Summary & 13 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Paiko Ridge Partners, L.L.C. c/o Charles Zaloumis 2670 Deerwood Drive San Ramon, CA 94583 Bankruptcy Case No.: 07-01341 Chapter 11 Petition Date: December 19, 2007 Court: District of Hawaii (Honolulu) Judge: Robert J. Faris Debtor's Counsel: Jerrold K. Guben, Esq. Reinwald, O'Connor & Playdon 733 Bishop Street, 24th Floor Honolulu, HI 96813 Tel: (808) 524-8350 Fax: (808) 531-8628 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 13 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Charles Zaioumis $800,000 2670 Deerwood Drive San Ramon, CA 94583 Harv Eker $350,000 1641 Lonsdale Avenue, Suite 609 North Vancouver, BC V7M 215 Canada Michael Dorrance $250,000 768 Tunbridge Road Danville, CA 94526 Alan Ada $200,000 Buck Buchanan $195,000 Conrad Schott $175,000 Gregory Fish $100,000 Preston Wright, M.D. $75,000 Robert Matsumoto, Esq. $25,000 Dan Smith $20,000 Henry Amado $15,000 George Van Buren, Esq. $7,000 Sheldon Zanc, Esq. $5,000 PERFORMANCE TRANS: Committee Taps Blank Rome as Bankr. Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors for the Performance Transportation Services Inc. and its debtor-affiliates' Chapter 11 cases, seeks authority from the U.S. Bankruptcy Court for the Western District of New York to employ Blank Rome LLP as its counsel nunc pro tunc to Nov. 29, 2007. Robert A. Coco, the Committee chairperson, says that Blank Rome is a recognized law firm with extensive experience and expertise in bankruptcy and reorganization proceedings. The Committee needs Blank Rome to perform legal services for the Committee that are necessary or appropriate in connection with the Debtors' chapter 11 cases. The committee tells the Court that Blank Rome will be paid on an hourly basis in accordance with the firm's ordinary and customary hourly rates: Professional Rate ------------ ---- Marc E. Richards, Esq. $650 Paul A. Friedman, Esq. $625 Raymond M. Patella, Esq. $405 Melissa S. Vongtama, Esq. $345 Partners and Counsel $380 - $745 Associates $105 - $280 Marc E. Richards, Esq., a partner at Blank Rome LLP, in New York, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and as required by Section 327(a) of the Bankruptcy Code. Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The Court confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their retructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. (Performance Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PERFORMANCE TRANS: Court Denies Asset Sale's Bidding Procedures --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York denied Performance Transportation Services Inc. and its debtor- affiliates request for approval of bidding procedures, at the Dec. 3, 2007, hearing. As reported on the Troubled Company Reporter on Dec. 4, 2007, The Debtors sought permission from the Court to approve bidding procedures and terms of an auction for the sale of substantially all their assets, well as certain bid protections to Allied Systems Holdings Inc. The Court stated that if the Debtors and Allied Systems Holdings Inc. filed by December 11, an executed asset purchase agreement, the Debtors' bidding procedures could be revived and heard on December 13. Allied did not proceed with the December 13 hearing. Allied, through Robert A. Klyman, Esq., at Latham & Watkins LLP, has notified the Court that it would no longer negotiate, execute, file and serve an asset purchase agreement. Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The Court confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their retructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. (Performance Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PERFORMANCE TRANS: Section 341(a) Meeting Set for December 27 ------------------------------------------------------------- The U.S. Trustee for Region 2 will convene a meeting of Performance Transportation Services Inc. and its debtor- affiliates's creditors on Dec. 27, 2007, 1:00 p.m., at the Office of the U.S. Trustee at 42 Delaware Avenue, Suite 110 in Buffalo, New York. This Meeting of Creditors is 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 the Debtors about the company's financial affairs and operations that would be of interest to the general body of creditors. Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The Court confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their retructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. (Performance Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PHOTOGRAPHIC SERVICES: Case Summary & 18 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Photographic Services Inc. dba My Photographer Post Office Box 99486 Troy, MI 48099 Bankruptcy Case No.: 07-65705 Type of Business: The Debtor provide photograhpy services. see: http://myphotographer.net/ Chapter 11 Petition Date: December 18, 2007 Court: Eastern District of Michigan (Detroit) Judge: Phillip J. Shefferly Debtor's Counsel: Thomas R. Morris, Esq. Silverman & Morris, P.L.L.C. 7115 Orchard Lake Road, Suite 500 West Bloomfield, MI 48322 Tel: (248) 539-1330 Fax: (248) 539-1355 http://www.silvermanmorris.com/ Estimated Assets: $50,000 to $100,000 Estimated Debts: $1 million to $10 million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Curb Apeal lease $135,000 1527 Georgtown Drive Bloomberg Hills, MI 48304 HHT Devco LLC rent $131,231 Box 64159 Baltimore, MD 212664 State of Michigan tax $54,955 DepartmentTreasury Dept. 77003 Detroit, MI 48277,0003 Hardwood Framies Inc. supplies $20,796 Internal Revenue Service tax $20,626 Oakland Mall Ltd. rent $15,219 XO Communications Services services $7,878 Inc. Macomb Mall LLC rent $6,489 City of Westland taxes $4,800 Certified Management rent $2,670 Nebs supplies $2,267 Xerox Corporation lease $2,009 City of Troy tax $2,481 Lasercom LLC printing $1,139 Accident Fund Insurance installment $1,046 City of Novi Treasurer's taxes $945 Office City of Sterling Heights $804 Oakland Mall Merchants $720 PRESTIGE BRANDS: S&P Holds Ratings with Negative Outlook -------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Irvington, New York-based Prestige Brands Inc. to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B+' corporate credit rating. "The revised outlook reflects the company's tight financial covenant cushion under its bank facility and the company's sluggish organic sales and earnings growth in recent quarters," said Standard & Poor's credit analyst Patrick Jeffrey. "Should Prestige Brands' liquidity be significantly impacted if it were to violate its bank covenants or continued weaker operating performance, we could lower the ratings." The company continues to maintain a total debt to EBITDA ratio in the low-4x area and continues to generate positive free cash flow, both of which currently support the existing ratings. These ratings reflect the company's participation in the highly competitive consumer products industry, where it competes with much larger companies. The ratings also reflect Prestige Brands' soft organic sales and earnings trends, lack of international diversity in its product lines, and its high leverage. PRIORITY PRIMARY: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Priority Primary Care, P.C P.O. Box 729 Duluth, GA 30096 Bankruptcy Case No.: 07-81358 Type of Business: The Debtor provides medical services. Chapter 11 Petition Date: December 19, 2007 Court: Northern District of Georgia (Atlanta) Judge: Robert Brizendine Debtor's Counsel: Paul Reece Marr, Esq. 300 Galleria Parkway, Northwest, Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $100 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service payroll withholding $1,700,000 P.O. Box 21126 taxes, interest and Philadelphia, PA 19114-0326 penalty A4 Health Systems account payable $84,000 Allscripts 5501 Dillard Drive Cary, NC 27518-9233 Prime Health Locums, L.L.C. account payable $53,635 2300 Lakeview Parkway Suite 700 Alpharetta, GA 30004 Merck account payable $42,116 Digirad Corp. account payable $35,911 Porter & Schwartz, P.A. account payable $35,599 Blue Medical Supply, Inc. account payable $31,790 S. Nathaniel De Veaux, Esq. claim under $22,670 terminated premises lease Georgia Department of Revenue payroll withholding $8,000 taxes, interest and penalty Emory Healthcare account payable $7,900 Gwinnett County Tax Commission property tax, $3,800 interest and penalty Unlimited Transaction account payable $3,000 Emdeon Business Services account payable $2,127 Sunbelt Office Products account payable $900 Shred-X account payable $734 Attorney Phillip R. Sauer account payable $501 Meadows & Ohly, L.L.C. landlord unknown Solid Rock Financial, L.L.C. landlord unknown PROTECTIVE FINANCE: Fitch Assigns Low-B Ratings on Six Classes -------------------------------------------------------------- Fitch Ratings has assigned these ratings to Protective Finance Corporation REMIC Commercial Mortgage Pass-Through Certificates, series 2007-PL: -- $218,335,000 Class A-1 'AAA'; -- $152,306,000 Class A-2 'AAA'; -- $113,129,000 Class A-3 'AAA'; -- $132,870,000 Class A-4 'AAA'; -- $94,557,000 Class A-1A 'AAA'; -- $1,015,997,122 Class IO 'AAA'(notional amount and interest only); -- $101,600,000 Class A-M 'AAA'; -- $102,870,000 Class A-J 'AAA'; -- $5,080,000 Class B 'AA+'; -- $8,890,000 Class C 'AA'; -- $6,350,000 Class D 'AA-'; -- $7,620,000 Class E 'A+'; -- $6,350,000 Class F 'A'; -- $8,890,000 Class G 'A-'; -- $7,620,000 Class H 'BBB+'; -- $7,620,000 Class J 'BBB'; -- $8,890,000 Class K 'BBB-'. -- $5,080,000 Class L 'BB+'; -- $2,540,000 Class M 'BB'; -- $2,540,000 Class N 'BB-'; -- $2,540,000 Class O 'B+'; -- $3,810,000 Class P 'B'; -- $2,540,000 Class Q 'B-'. The $13,970,122 Class S was not rated by Fitch. All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 199 fixed or floating rate loans having an aggregate principal balance of approximately $1,015,997,122, as of the cutoff date. PRUDENTIAL AMERICANA: Jones Vargas Approved as Local Counsel ------------------------------------------------------------ Americana Holdings LLC, dba Prudential Americana Group Realtors(R), and its debtor affiliates obtained authority from the U.S. Bankruptcy Court for the District of Nevada and employ Jones Vargas as their local counsel. Jones Vargas will serve as associate to Nevada counsel and will be responsible for all documents and other papers issued out of the Court. The firm is also responsible to transmit copies of all documents and other papers so served to the admitted-out-of-state counsel of record and to keep such counsel informed as to the status of the case. The documents submitted to the Court do not disclose the firm's billing rate. To the best of the Debtors' knowledge, the firm holds no interest adverse to the Debtors' estates and is "disinterested" as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. The firm can be reached at: Janet L. Chubb, Esq. Jones Vargas 100 West Liberty Street, 12th Floor P.O. Box 280 Reno, NV 89504-0281 Tel: (775) 786-5000 Las Vegas-based Americana Holdings LLC, dba Prudential Americana Group Realtors(R), -- http://americanagroup.net/-- is owned by Stark 2004 Inc., a Nevada corporation. Until Nov. 5, 2007, the ownership of Holdings was divided between Stark 2004 Inc. (1%) and Stark 2000 LLC, a Nevada limited liability company (99%). Stark 2000's ownership interest in Holdings was conveyed to Stark 2004 to streamline the ownership and enable more certain tax treatment on account of the bankruptcy cases. Holdings owns 100% of each of: (i) Americana; (ii) A-Title, (iii) Americana MJV 2006 LLC; and (iv) Remembrance LLC. Chapter 11 petitions have not been filed by the latter two companies. Remembrance is a defunct company that will be dissolved under state law. A-Title LLC was incorporated on Nov. 8, 2001, and 100% owned by Holdings. A-Title owns 37.5% of Equity Title LLC. It is not the managing member, and holds only a passive equity position in Equity Title. As co-maker of certain secured notes, it has filed a Chapter 11 bankruptcy petition with the other entities that are co-makers of the notes. Americana LLC is a party to a certain Real Estate Brokerage Franchise Agreement dated March 24, 1999, as amended, between The Prudential Real Estate Affiliates Inc. as franchisor and Americana as franchisee. Americana is 100% owned by Holdings. Americana is the operating entity of the Debtor group, and also owns 100% of each of: (i) Referral; and (ii) SPO Payroll LLC, a company that is defunct and will be dissolved under state law. American Eagle Referral Service LLC is 100% owned by Americana and acts as its own brokerage and hires inactive agents and words to procure referred clients from these agents. These clients are referred into Americana LLC to facilitate a real estate transaction and a referral fee is paid to Referral for this business. Referral subsequently has an agreement with the agents for a percentage of the referral compensation that is paid. A-Title, Americana, Americana Holdings, and Referral filed for chapter 11 bankruptcy on Nov. 27, 2007 (Bankr. D. Nev. Lead Case No. 07-17844) with A-Title as lead-debtor. Rob Charles, Esq., and Susan M. Freeman, Esq., at Lewis and Roca LLP represent the Debtor in their restructuring efforts. When the Debtors filed for bankruptcy, they listed assets and liabilities between $1 million to $100 million. PRUDENTIAL AMERICANA: Wants to Hire Murray as Valuation Consultant ------------------------------------------------------------------ Americana Holdings LLC, dba Prudential Americana Group Realtors(R) and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Nevada for permission to employ Murray Consulting Inc. as their valuation consultant. The Debtors relate that they need valuation consultation and potentially expect testimony as they work toward a plan of reorganization. The Debtors want to employ Murray as consultant since it has considerable experience in the matter. The professional services of Murray will include valuation services as requested by the Debtors. The Debtors have paid Murray $5,000 retainer. Documents submitted to the Court do not disclose the firm's hourly rates. The Debtors assure the Court that Murray does not hold or represent any interest adverse to the Debtor or their estates. The firm can be reached at: Stephen H. Murray, President & CEO Murray Consulting Inc. 6898 S. University Blvd., Suite 200, Littleton, CO 80122 Tel: (3030 741-1000 Fax: (303) 741-1070 Las Vegas-based Americana Holdings LLC, dba Prudential Americana Group Realtors(R), -- http://americanagroup.net/-- is owned by Stark 2004 Inc., a Nevada corporation. Until Nov. 5, 2007, the ownership of Holdings was divided between Stark 2004 Inc. (1%) and Stark 2000 LLC, a Nevada limited liability company (99%). Stark 2000's ownership interest in Holdings was conveyed to Stark 2004 to streamline the ownership and enable more certain tax treatment on account of the bankruptcy cases. Holdings owns 100% of each of: (i) Americana; (ii) A-Title, (iii) Americana MJV 2006 LLC; and (iv) Remembrance LLC. Chapter 11 petitions have not been filed by the latter two companies. Remembrance is a defunct company that will be dissolved under state law. A-Title LLC was incorporated on Nov. 8, 2001, and 100% owned by Holdings. A-Title owns 37.5% of Equity Title LLC. It is not the managing member, and holds only a passive equity position in Equity Title. As co-maker of certain secured notes, it has filed a Chapter 11 bankruptcy petition with the other entities that are co-makers of the notes. Americana LLC is a party to a certain Real Estate Brokerage Franchise Agreement dated March 24, 1999, as amended, between The Prudential Real Estate Affiliates Inc. as franchisor and Americana as franchisee. Americana is 100% owned by Holdings. Americana is the operating entity of the Debtor group, and also owns 100% of each of: (i) Referral; and (ii) SPO Payroll LLC, a company that is defunct and will be dissolved under state law. American Eagle Referral Service LLC is 100% owned by Americana and acts as its own brokerage and hires inactive agents and words to procure referred clients from these agents. These clients are referred into Americana LLC to facilitate a real estate transaction and a referral fee is paid to Referral for this business. Referral subsequently has an agreement with the agents for a percentage of the referral compensation that is paid. A-Title, Americana, Americana Holdings, and Referral filed for chapter 11 bankruptcy on Nov. 27, 2007 (Bankr. D. Nev. Lead Case No. 07-17844) with A-Title as lead-debtor. Rob Charles, Esq., and Susan M. Freeman, Esq., at Lewis and Roca LLP represent the Debtor in their restructuring efforts. When the Debtors filed for bankruptcy, they listed assets and liabilities between $1 million to $100 million. QUALITY DISTRIBUTION: Unit Completes $50 Million Notes' Offering ---------------------------------------------------------------- Quality Distribution LLC, a subsidiary of Quality Distribution Inc. and its subsidiary, QD Capital Corporation has consummated its acquisition of Boasso America Corporation, a private placement offering of $50 million of Senior Floating Rate Notes due 2012, Series B and a new senior secured asset-based loan revolving facility with a maturity of five and one half years, and that it has repaid all outstanding indebtedness under its previously existing credit facility. "Establishing our new ABL Facility, and completing our $50 million Notes offering during this turbulent market, provides a strong testament to the strength of our business and our ability to generate cash flow with our asset-light business model," Gary Enzor, chief executive officer of the company, stated. "Completing the financing enabled us to close the Boasso acquisition as anticipated. Boasso, which has grown its revenues at a double-digit pace the last several years, positions us to serve global growth markets and provide an increased service offering to our customers." "Those offerings include rail transloading, trucking, cleaning and depot services (maintenance, repair and storage) to facilitate international container shipments," Mr. Enzor added. "As the first step in our expansion plan, Boasso president Scott Giroir and his team will manage the opening of a new container facility in Newark, New Jersey in early 2008. This facility will allow Boasso to extend its geographic reach into this important chemical import/export market area. We are excited about this acquisition which, in addition to its high growth potential, is both positive from a cash flow and earnings perspective on day one." The Notes bear interest at a rate equal to three-month LIBOR plus 4.5%, reset on a quarterly basis. The initial interest rate on the notes is 9.72% per annum. Concurrently with the consummation of the Notes offering, the new ABL Facility became effective and QDI completed the Boasso acquisition. The ABL Facility consists of a $195 million current asset tranche with an initial rate of LIBOR plus 2% and a $30 million fixed asset tranche with an initial rate of LIBOR plus 2.25%. Total availability under these facilities after giving effect to the Boasso acquisition and QDI's outstanding letter of credit commitments is approximately $60 million. The proceeds of the ABL Facility were used, together with the proceeds from the Notes offering, to finance a portion of the Boasso acquisition, to repay all outstanding indebtedness under the company's previously existing credit facility and, going forward, for working capital needs and general corporate purposes, including permitted acquisitions. The company acquired all of the outstanding capital stock of Boasso for total consideration of approximately $58.9 million, subject to final working capital adjustments. About Quality Distribution Inc. Headquartered in Tampa, Florida, Quality Distribution Inc., through its subsidiaries, Quality Carriers Inc. and Boasso America Corporation, and through its affiliates and owner-operators, provides bulk transportation and related services. QDI also provides tank cleaning services to the bulk transportation industry through its QualaWash(R) facilities. * * * As reported in the Troubled Company Reporter on Dec. 13, 2007, Standard & Poor's Ratings Services affirmed its 'B-' long-term corporate credit rating on Quality Distribution Inc. and removed the rating from CreditWatch, where it was placed with developing implications on Aug. 24, 2007. The outlook is positive. QUEBECOR WORLD: Moody's Junks Corporate Family Rating ----------------------------------------------------- Moody's Investors Service downgraded Quebecor World Inc.'s corporate family rating by two notches to Caa2. The company's debt instruments and those of related companies, Quebecor World Capital Corporation and Quebecor World Capital ULC, were also downgraded and the related ratings outlooks were changed to negative. QWI's speculative grade liquidity rating remains at SGL-4, indicating poor liquidity. The rating action concludes a review initiated on November 23rd, and reflects increased default risk as the company looks to renegotiate bank credit facility arrangements in advance of potential financial covenant defaults that could occur when year- end compliance is tested. The company's ability to manage the situation has been adversely impacted by cancellation of a previously announced sale of the company's European operations. This complicates an already difficult situation, and in light of the tight time frame, increases execution risks. In addition, without the benefit of sales proceeds from the cancelled European transaction, it is not clear whether the company may require more than mere financial covenant adjustments. However, even including the relatively weak European operations, Moody's expects the company to be modestly cash flow positive during 2008. Accordingly, the revised ratings' levels reflect the impact of liquidity related risks (rather than mid-to-long term business prospects). Over the recent past, QWI has depended heavily on third party financing to augment cash flow from operations. This has created significant reliance on the company's bank credit facility and has strained both the CFR and SGL ratings. Consequently, until such time as QWI can validate its restructuring activities by way of significant cash flow self-sufficiency, the close linkage between the SGL and CFR ratings will continue to prevail, and over the near-term, liquidity related milestones will trigger ratings activity and will determine ratings outcomes. Since resolution of the current situation depends on events that the company cannot control, the ratings outlook is negative. * Downgrades: - Issuer: Quebecor World, Inc. -- Corporate Family Rating, Downgraded to Caa2 from B3 -- Probability of Default Rating, Downgraded to Caa2 from B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 (LGD4, 67) from Caa1 (LGD4, 66) - Issuer: Quebecor World Capital Corporation -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 (LGD4, 67) from Caa1 (LGD4, 66) - Issuer: Quebecor World Capital ULC -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 (LGD4, 67) from Caa1 (LGD4, 66) * Outlook Actions: - Issuer: Quebecor World, Inc. -- Outlook, Changed To Negative From Rating Under Review - Issuer: Quebecor World Capital Corporation -- Outlook, Changed To Negative From Rating Under Review - Issuer: Quebecor World Capital ULC -- Outlook, Changed To Negative From Rating Under Review Headquartered in Montreal, Quebec, Canada, Quebecor World Inc. is one of the world's largest commercial printers. With an approximate 36% economic and 85% voting interest, QWI's major shareholder is Quebecor Inc. a publicly traded company that also owns approximately 54.7% of Quebecor Media Inc., a privately held leading Canadian media holding company. RELIANT PHARMACEUTICALS: Moody's Withdraws All Ratings ------------------------------------------------------ Moody's Investors Service withdrew all ratings of Reliant Pharmaceuticals, Inc. The rating action follows the close of the acquisition of Reliant by GlaxoSmithKline plc, previously announced on Nov. 21, 2007. Based on change of control provisions within Reliant's credit agreement, Moody's understands that Reliant's term loan has been repaid and that its revolving credit agreement has been terminated. * Ratings withdrawn: -- Corporate Family Rating, B2 -- Probability of Default Rating, B2 -- Senior Secured Term Loan due 2012, B2 (LGD3, 48%) -- Senior Secured Delayed Draw Term Loan due 2012, (B2, LGD3, 48%) Located in Liberty Corner, New Jersey, Reliant Pharmaceuticals is a branded pharmaceutical company with integrated sales, marketing and development expertise. RESIDENTIAL CAPITAL: Reports Final Results for $750MM Tender Offer ------------------------------------------------------------------ Residential Capital, LLC disclosed the final results for its cash tender offer for up to $750 million aggregate principal amount of its debt securities. The tender offer expired at 12:00 midnight EST on Dec. 19, 2007. The terms and conditions of the tender offer were described in detail in the Offer to Purchase dated Nov. 21, 2007, and the related Letter of Transmittal, as amended. The notes enumerated identifies the principal amounts of each series of notes validly tendered and accepted for purchase pursuant to the tender offer. The amounts of each series of notes accepted for purchase were determined based on the aggregate principal amount of each series of notes validly tendered and not validly withdrawn before the expiration time, in accordance with the priorities identified in the "Acceptance Priority Level" and subject to the maximum tender offer amount of $750 million. Based on the aggregate principal amount of notes tendered on or before the expiration time and the terms of the tender offer, ResCap will purchase all of the tendered notes. The applicable total consideration for the notes accepted for purchase, plus accrued and unpaid interest, will be paid by ResCap on Dec. 20, 2007. a) Security: Floating Rate Notes Due June 9, 2008(1) CUSIP Number: 76114EAA0 ISIN Number: US76114EAA01 Principal Amount Outstanding Prior to the Settlement of the Tender Offer: $1,250,000,000 Acceptance Priority Level: 1 Aggregate Principal Amount Tendered and Accepted for Payment: $51,290,000 b) Security: Floating Rate Notes Due Nov. 21, 2008(1) CUSIP Number: 76113BAL3 ISIN Number: US76113BAL36 Principal Amount Outstanding Prior to the Settlement of the Tender Offer: $500,000,000 Acceptance Priority Level: 2 Aggregate Principal Amount Tendered and Accepted for Payment: $30,152,000 c) Security: 6.125% Notes Due Nov. 21, 2008(1) CUSIP Number: 76113BAK5 ISIN Number: US76113BAK52 Principal Amount Outstanding Prior to the Settlement of the Tender Offer: $750,000,000 Acceptance Priority Level: 3 Aggregate Principal Amount Tendered and Accepted for Payment: $65,986,000 d) Security: Subor. Floating Rate Notes Due April 17, 2009(1) CUSIP Number: 76113BAN9 (Rule 144A), U76134AD4 (Regulation S) ISIN No.: US76113BAN91 (Rule 144A), USU76134AD49 (Regulation S) Principal Amount Outstanding Prior to the Settlement of the Tender Offer: $1,000,000,000 Acceptance Priority Level: 4 Aggregate Principal Amount Tendered and Accepted for Payment: $234,944,000, $6,735,000 (1) Listed in the Luxembourg Stock Exchange Banc of America Securities LLC and Citi were the dealer managers for the tender offer. Global Bondholder Services Corporation was the information agent and depositary. Deutsche Bank Luxembourg S.A. was 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. RICHARD WAGNER: Case Summary & Seven Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Richard A. Wagner, Sr. Jane M. Wagner 1153 South 2nd Street Louisville, KY 40203 Bankruptcy Case No.: 07-34570 Chapter 11 Petition Date: December 19, 2007 Court: Western District of Kentucky (Louisville) Debtor's Counsel: Neil Charles Bordy, Esq. Seiller, Waterman, L.L.C. 2200 Meidinger Tower 462 South 4th Street Louisville, KY 40202 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ National City $16,767 P.O. Box 856176 Louisville, KY 40285-6176 Jefferson County Sheriffs Property tax 1312 S $2,038 Office 2nd P.O. Box 70300 Louisville, KY 40270-3000 Property Tax 1331 S $1,725 Brook Property tax 1211 S $1,663 2nd Property Tax 1153 S $1,153 Lowes Business Account $2,905 P.O. Box 530970 Atlanta, GA 30353-0970 Home Depot Credit Services $2,286 Capital One $2,066 Menards $1,920 Michelle D. McBride Property tax 2421 N $892 8th Street St. Charles, MO ROBERT BISHOP: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Robert Scott Bishop dba R.S.B. Construction Teresa Ann Bishop 4930 Jupiter Hills Idaho Falls, ID 83401 Bankruptcy Case No.: 07-41068 Type of Business: The Debtor constructs single-family houses. Chapter 11 Petition Date: December 19, 2007 Court: District of Idaho (Pocatello) Judge: Jim D. Pappas Debtor's Counsel: Robert J. Maynes, Esq. P.O. Box 3005 Idaho Falls, ID 83403-3005 Tel: (208) 552-6442 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ G.C.C., L.L.C. deficiency/alter ego $2,354,947 410 Memorial Drive, Suite 206 Idaho Falls, ID 83402 Zion's Bank promissory note $488,117 1235 South Utah Avenue Idaho Falls, ID 83402 deficiency $162,431 $46,000 Cambridge Development Co. deficiency/alter ego $454,546 Paul Fife 700 South Woodruff Avenue Idaho Falls, ID 83401 Ron & Angie Martinez indemnity claim $215,867 Scenic Falls Credit Union deficiency; value of $140,784 security: $442,014 Bank of Idaho $97,919 J.&R. Plumbing & Heating Co., guaranty $71,172 Inc. Ryan Precision Cabinets, Inc. guaranty $43,337 Bank of Commerce deficiency/guaranty $34,492 Advanced Electrical Services guaranty $33,056 Stucco Boys, L.L.C. guaranty $32,910 American Express guaranty $31,955 Ramrk Plumbing guaranty $23,011 Central Heating & Air guaranty $22,714 H.S.B.C. Business Solutions guaranty $20,697 Card Member Services $15,522 ROCKFORD PRODUCTS: Court Converts Case to Chap. 7 Liquidation ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois converted Rockford Products Corp.'s Chapter 11 case into a Chapter 7 liquidation proceeding. As reported in the Troubled Company Reporter on Dec. 10, 2007, the Debtor have sold most of its assets in September and November and the sale proceeds all went to secured creditors. The Debtor intended to liquidate its "minimal assets" under chapter 7. Rockford Products Corporation, -- http://www.rockfordproducts.com/ and http://www.rockfordinternational.com/-- originally formed in 1929, manufactures, sources and distributes high quality, cold formed steel components, fasteners and other related products to Tier 1 and 2 suppliers to automobile manufacturers, the automotive aftermarket and non-automotive customers. Most of Rockford Products' manufacturing and distribution operations are located in Rockford, Illinois, where Rockford Products leases three facilities with a combined area of 988,000 square feet. Rockford Products currently has 516 employees. Annual revenues for Rockford Products amounted to around $100 million in fiscal 2006. The Debtor and its debtor-affiliate, Rockford Products Global Services Inc., filed Chapter 11 bankruptcy protection on July 25, 2007 (Bankr. N.D. Ill. Case No. 07-71768 and 07-71769). Thomas J. Augspurger, Esq. at LeBoeuf, Lamb, Greene & MacRae LLP represents the Debtors in their restructuring efforts. BMC Group act as the Debtors' claims, noticing, and balloting agent. Lawyers at Greenberg Traurig LLP serve as counsel to the Official Committee of Unsecured Creditors. The Debtors schedules disclose total assets of $49,002,753 and total liabilities of $40,438,278. ROO GROUP: Appoints Kaleil Isaza Tuzman as Chairman and CEO ----------------------------------------------------------- ROO Group Inc. has entered into an executive management agreement with KIT Capital pursuant to which it has agreed to appoint Kaleil Isaza Tuzman as chairman and chief executive officer commencing on Jan. 9, 2008. Mr. Isaza Tuzman will succeed Robert Petty, who will retain the office of vice-chairman of the board of directors and founder. Mr. Isaza Tuzman, 36, is the president and chief operating officer of JumpTV Inc. where he is responsible for managing the company's day-to-day operations including business development, sales, marketing, network operations and product development. He will be stepping down from his operating position at JumpTV on or before Jan. 8, 2008, but will remain on the board of that company. ROO also disclosed that four independent members of the company's board of directors -- Simon Bax, Stephen Palley, Scott Ackerman and Doug Chertok -- have resigned. The company's board of directors is expected to appoint Mr. Isaza Tuzman as a director and the chairman of the board. Upon Mr. Isaza Tuzman's appointment, the board will consist of three directors which will include current board members Robert Petty and Robin Smyth, executive director. In accordance with the terms of an executive management agreement, Mr. Isaza Tuzman will have the right to appoint up to four new independent board members to fill vacancies on the board, subject to shareholder approval. Mr. Isaza Tuzman, is also investing in the company through an affiliated entity. Mr. Isaza Tuzman has been brought on to rationalize the existing business and position ROO to become the leader in IPTV infrastructure services-through both organic growth and strategic acquisition. "We are very pleased to welcome Kaleil as our new CEO," said Robert Petty, chairman of ROO. "Kaleil brings the experience and insight needed to lead us through this next stage of growth. He has a proven record of helping companies achieve their fullest potential and we are confident that his deep knowledge of our sector, operational discipline and leadership skills will enable us to generate value for our shareholders." "ROO is at an inflection point in its development," Mr. Isaza Tuzman stated. "The massive growth in the demand for high-value, IP video content, coupled with the need for leading edge platform provisioning puts this company in a very enviable position. I believe that with greater emphasis on exclusive content, TV broadcaster relationships and the best quality distribution tools, ROO will become the leading player in the provisioning of video over the Internet." "In my view, a focused B2B strategy is what is needed to build a profitable company in the sector," Mr. Isaza Tuzman added. ROO's commitment to this path -- coupled with our shared vision of potential industry consolidation -- has been critical to my decision to invest in and manage the company." Under new management, the company plans to: -- leverage expertise in international media to expand client and partner base; -- reduce costs and implement cost control policies company- wide; -- achieve profitability quickly as possible; -- assess and prioritize product development initiatives; -- assess corporate branding; -- assess and execute strategic acquisitions consistent with the IPTV platform provisioning strategy, including the development of live-streaming and mobile distribution capabilities. As part of the strategic realignment, ROO also has completed a recent reduction of 21% of its workforce. This decision reflects the substantial completion of ROO's platform and automated distribution tools, which have made the company more efficient and reduced staffing needs. "ROO has now entered a new phase of development," Robert Petty, chairman of ROO, said. "We have substantially automated our operations, allowing us to function as a leaner, more effective company." "I would like to thank our independent board members for their contributions to our organization," Mr. Petty concluded. "As a result of their guidance, we are now a stronger, more efficient company." As part of the executive management agreement, KIT Capital Ltd., an entity controlled by Kaleil Isaza Tuzman, has been granted the right to purchase up to 51% of the preferred class of shares in the company at $0.38 per share. KIT Capital has the option to invest up to $5 million in common shares of the company at $0.16 per share, a 15% premium to the Dec. 18, 2007, closing price. About ROO Group Headquartered in New York, ROO Group Inc. (OTC BB: RGRP) -- http://www.roo.com/-- is a provider of digital media solutions and advercasting technology that enables the activation, marketing and distribution of digital media video content over the Internet and emerging broadcasting platforms such as set top boxes and mobile communication devices. ROO was founded in 2001 and went public in 2003. ROO has over 100 employees with worldwide operations in New York, Los Angeles, London and Australia. As reported in the Troubled Company Reporter on Sept. 10, 2007 ROO incurred a net loss of approximately $7.4 million in the second quarter of 2007, including $1.2 million of non-cash related items. This compares to a net loss of $3.2 million for three months ended June 30, 2006, including $700,000 of non-cash related items. Going Concern Doubt Moore Stephens PC expressed substantial doubt about ROO Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses and negative cash flows from operations. RYLAND GROUP: Moody's Cuts Ratings to Ba1 with Negative Outlook --------------------------------------------------------------- Moody's Investors Service lowered the ratings of The Ryland Group, Inc., including its corporate family rating and the ratings on the various issues of senior unsecured notes to Ba1 from Baa3. The ratings were taken off review for downgrade where they had been placed on Oct. 31, 2007, and the outlook is negative. The downgrades and negative outlook reflect these considerations: 1) Moody's does not see a sector recovery beginning before well into 2009 at the earliest, with a housing recovery likely to be listless at first and protracted, thus prolonging Ryland's underperformance on key financial metrics versus prior expectations. 2) Covenant compliance in 2008 will be challenging. While the company did succeed in obtaining elimination of its interest coverage covenant, the trade-off was a reduction of its debt leverage covenant to 57.5%, from 60%, with further tightening to become effective if interest coverage were to fall below a threshold level, which Moody's expects to occur in 2008. Combined with additional land impairment and option abandonment charges, which Moody's expects to continue throughout 2008, the currently adequate debt leverage cushion may erode substantially and quickly. 3) Although Ryland has been able to reduce actual inventory levels (i.e., reported inventory levels that are adjusted to reflect land impairment and option abandonment charges), the pace of this reduction has lagged that of some of its peers as well as Moody's expectations and, as a result, has essentially blocked robust and sustainable cash flow generation to date. Given the fiercely competitive markets in which Ryland operates, the elevated levels of both new and existing housing inventory, Moody's expectations of continued home price weakness in 2008 and on into 2009, and high cancellation rates, Moody's is concerned that actual inventory reduction and cash flow generation may remain sluggish in the coming year. 4) Ryland's bottom line profits will remain under heavy pressure in 2008, given Moody's expectation that land impairments and option abandonments will continue at a brisk pace. Moody's expects investment grade companies, even in cyclical industries, eventually to return to profitability, even with charge-offs. 5) Liquidity may be adversely impacted if the current buyer of nearly all of Ryland-originated mortgage loans either changes its criteria or is unwilling or unable to continue funding at the same pace as before. In either case, Ryland may have to inject additional equity into its mortgage subsidiary and/or try to obtain an adequately-sized mortgage warehouse line. Going forward, the outlook could stabilize if Ryland were able to boost the pace of its inventory reduction and sustainable cash flow generation and use the cash flow to build liquidity and reduce debt. The outlook and ratings could be further stressed if cash flow generation were to turn negative for a twelve month period, covenant compliance became problematic, and/or the company were to incur a sizable loss even before taking impairment and option abandonment charges. * The ratings changes are: -- Corporate family rating lowered to Ba1 from Baa3 -- Senior unsecured notes lowered to Ba1 (LGD4, 60%) from Baa3 Headquartered in Calabasas, California and founded in 1967, The Ryland Group, Inc. is one of the nation's leading builders of single family homes, currently operating in 28 markets across the United States, with homebuilding revenues and consolidated net income for the trailing 12 months ended Sept. 30, 2007 of approximately $3.5 billion and ($44) million, respectively. SAGE CREEK: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Sage Creek Ranch, L.L.C. 369 Santa Ana San Francisco, CA 94127 Tel: (415) 244-8235 Bankruptcy Case No.: 07-31657 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: December 20, 2007 Court: Northern District of California (San Francisco) Debtor's Counsel: John S. Morken, Sr., Esq. 760 Market Street, Suite 938 San Francisco, CA 94102 Tel: (415) 391-6140 Estimated Assets: $1 Million to $100 Million Estimated Debts: Less than $50,000 The Debtor did not file a list of its 20 largest unsecured creditors. SAIL: Fitch Junks Ratings on Three Certificate Classes ------------------------------------------------------ Fitch Ratings has taken these rating actions on 5 SAIL, mortgage pass-through certificate. Affirmations total $2.46 billion and downgrades total $671.3 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: SAIL 2005-02 -- $178.8 million class A affirmed at 'AAA' (BL: 68.44, LCR: 6.71); -- $59.1 million class M1 affirmed at 'AA+' (BL: 55.25, LCR: 5.42); -- $54.0 million class M2 affirmed at 'AA' (BL: 41.55, LCR: 4.07); -- $27.0 million class M3 affirmed at 'AA-' (BL: 36.66, LCR: 3.59); -- $24.0 million class M4 affirmed at 'A+' (BL: 17.89, LCR: 1.75); -- $23.0 million class M5 affirmed at 'A' (BL: 15.72, LCR: 1.54); -- $15.0 million class M6 affirmed at 'A-' (BL: 14.26, LCR: 1.40) -- $17.0 million class M7 downgraded to 'BBB' from 'BBB+' (BL: 12.55, LCR: 1.23); -- $15.0 million class M8 downgraded to 'BBB-' from 'BBB' (BL: 11.40, LCR: 1.12). Summary -- Originators: (51.61% BNC Mortgage, 21.55% Finance America); -- 60+ day Delinquency: 25.84%; -- Realized Losses to date (% of Original Balance): 1.12%; -- Expected Remaining Losses (% of Current Balance): 10.20%; -- Cumulative Expected Losses (% of Original Balance): 3.39%. SAIL 2005-03 -- $319 million class A affirmed at 'AAA' (BL: 60.48, LCR: 4.90); -- $52.9 million class M1 affirmed at 'AA+' (BL: 52.55, LCR: 4.25); -- $76.6 million class M2 affirmed at 'AA' (BL: 40.62, LCR: 3.29); -- $41.8 million class M3 downgraded to 'A' from 'AA-' (BL: 19.59, LCR: 1.59); -- $33.4 million class M4 downgraded to 'A-' from 'A+' (BL: 17.35, LCR: 1.40); -- $30.6 million class M5 downgraded to 'BBB' from 'A' (BL: 15.24, LCR: 1.23); -- $25.1 million class M6 downgraded to 'BB+' from 'A-' (BL: 13.47, LCR: 1.09); -- $22.2 million class M7 downgraded to 'BB' from 'BBB+' (BL: 11.95, LCR: 0.97); -- $20.9 million class M8 downgraded to 'BB-' from 'BBB' (BL: 11.01, LCR: 0.89). Summary -- Originators: (35.20% Option One, 32.10% BNC, 21.60% Finance America); -- 60+ day Delinquency: 30.12%; -- Realized Losses to date (% of Original Balance): 1.40%; -- Expected Remaining Losses (% of Current Balance): 12.35%; -- Cumulative Expected Losses (% of Original Balance): 4.35%. SAIL 2005-04 -- $254.3 million class A affirmed at 'AAA' (BL: 64.91, LCR: 5.43) -- $67.1 million class M1 affirmed at 'AA+' (BL: 53.58, LCR: 4.48) -- $57.3 million class M2 affirmed at 'AA+' (BL: 42.55, LCR: 3.56) -- $34.6 million class M3 affirmed at 'AA' (BL: 37.57, LCR: 3.14) -- $32.4 million class M4 affirmed at 'AA-' (BL: 28.12, LCR: 2.35) -- $31.3 million class M5 downgraded to 'A-' from 'A+' (BL: 17.35, LCR: 1.45) -- $23.8 million class M6 downgraded to 'BBB' from 'A' (BL: 15.25, LCR: 1.28) -- $23.8 million class M7 downgraded to 'BBB-' from 'A-' (BL: 13.15, LCR: 1.10) -- $14.1 million class M8 downgraded to 'BB' from 'BBB+' (BL: 11.90, LCR: 1.00) -- $21.6 million class M9 downgraded to 'B' from 'BBB' (BL: 10.10, LCR: 0.85) Summary -- Originators: (39.30% BNC, 23.20% Option One, 20.30% Finance America, 14.70% Aurora); -- 60+ day Delinquency: 27.09%; -- Realized Losses to date (% of Original Balance): 1.32%; -- Expected Remaining Losses (% of Current Balance): 11.95%; -- Cumulative Expected Losses (% of Original Balance): 4.58%. SAIL 2005-05 -- $359.2 million class A affirmed at 'AAA' (BL: 60.40, LCR: 4.73); -- $37.4 million class M1 affirmed at 'AA+' (BL: 49.47, LCR: 3.87); -- $68.6 million class M2 affirmed at 'AA' (BL: 40.04, LCR: 3.13); -- $44.9 million class M3 affirmed at 'AA-' (BL: 34.15, LCR: 2.67); -- $37.4 million class M4 affirmed at 'A+' (BL: 29.19, LCR: 2.28); -- $29.9 million class M5 downgraded to 'BBB+' from 'A' (BL: 16.93, LCR: 1.32); -- $29.9 million class M6 downgraded to 'BBB-' from 'A-' (BL: 14.80, LCR: 1.16); -- $27.4 million class M7 downgraded to 'BB' from 'BBB+' (BL: 12.85, LCR: 1.01); -- $18.7 million class M8 downgraded to 'BB-' from 'BBB' (BL: 11.38, LCR: 0.89); -- $24.9 million class M9 downgraded to 'B' from 'BBB-' (BL: 9.84, LCR: 0.77). Summary -- Originators: (27.23% BNC, 12.80% Option One); -- 60+ day Delinquency: 27.50%; -- Realized Losses to date (% of Original Balance): 1.11%; -- Expected Remaining Losses (% of Current Balance): 12.78%; -- Cumulative Expected Losses (% of Original Balance): 5.01%. SAIL 2005-10 -- $1364.5 million class A affirmed at 'AAA' (BL: 41.54, LCR: 2.43); -- $60.6 million class M1 affirmed at 'AA+' (BL: 34.65, LCR: 2.02); -- $48.1 million class M2 downgraded to 'A+' from 'AA' (BL: 29.10, LCR: 1.70); -- $33.2 million class M3 downgraded to 'A-' from 'AA-' (BL: 25.25, LCR: 1.47); -- $24.9 million class M4 downgraded to 'BBB+' from 'A+' (BL: 22.32, LCR: 1.3); -- $24.9 million class M5 downgraded to 'BBB-' from 'A' (BL: 19.48, LCR: 1.14); -- $19.1 million class M6 downgraded to 'BB' from 'A-' (BL: 17.15, LCR: 1.00); -- $16.6 million class M7 downgraded to 'B' from 'BBB+' (BL: 14.99, LCR: 0.88); -- $12.4 million class M8 downgraded to 'B' from 'BBB' (BL: 13.36, LCR: 0.78); -- $12.4 million class M9 downgraded to 'C/DR5' from 'BBB-' (BL: 11.66, LCR: 0.68); -- $16.6 million class B1 downgraded to 'C/DR5' from 'BBB-' (BL: 9.56, LCR: 0.56), removed from Rating Watch Negative; -- $11.6 million class B2 downgraded to 'C/DR6' from 'BBB-' (BL: 8.24, LCR: 0.48), removed from Rating Watch Negative. Summary -- Originators: (58.80% BNC, 19.80% AIG Federal Savings Bank); -- 60+ day Delinquency: 24.41%; -- Realized Losses to date (% of Original Balance): 1.59%; -- Expected Remaining Losses (% of Current Balance): 17.12%; -- Cumulative Expected Losses (% of Original Balance): 10.53%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. SAKS INC: Moody's Holds All Ratings with Positive Outlook --------------------------------------------------------- Moody's Investors Service affirmed all ratings of Saks, Inc., including its corporate family rating of B2, and the ratings of its senior unsecured long term debt at B3. The outlook remains positive. * Ratings affirmed: -- Corporate family rating B2 -- 7% Global notes due 12/01/2013 B3 (LGD5, 71.6%) -- 7.5% Bonds due 12/01/2010 B3 (LGD5, 71.6%) -- 2% Convertible notes due3/15/2024 B3 (LGD5, 71.6%) -- 8.25% notes due 11/15/2008 B3 (LGD5, 71.6%) -- 7.375% Bonds due 2/15/2019 B3 (LGD5, 71.6%) -- 9.875% Notes due 10/01/2011 B3 (LGD5, 71.6%) -- Probability of default B2 Saks' B2 corporate family rating reflects the company's position in the luxury retail segment. The rating is also supported by the company's recently demonstrated success in merchandizing as reflected in its high comparable store sales, 14.4%, 13.2%, and 11.4% for quarters one through three, respectively. Saks is benefiting from its store remodeling program and focused inventory investments as evidenced by the above mentioned comparable store sales. The ratings are constrained by the company's ongoing high leverage. The company paid two dividends over $500 million each in the second and fourth quarters of the fiscal year ended February 3, 2007, while paying down approximately $100 million of debt. The ratings are also constrained by the company's continuing poor operating margins, its strained cash flow and the very high seasonality of cash flow from operations. Mr. Ed Henderson, Senior Analyst said, "Saks continues to improve the operations and has basically completed the corporate office restructuring. Therefore, the outlook remains positive." Saks Incorporated, headquartered in New York, New York, operates 54 Saks Fifth Avenue luxury department stores, 49 Off Fifth off- price stores and 87 Club Libby Lu specialty stores. Previously, the company operated Saks Department Store Group which was sold to Belk, Inc. in July 2005, Northern Department Store Group which was sold to The Bon-Ton Stores Inc. in March 2006, and Parisian which was sold to Belk in October 2006. SASCO: Fitch Affirms 'BB+' Ratings on Two Certificate Classes ------------------------------------------------------------- Fitch Ratings has taken these rating actions on 5 SASCO mortgage pass-through certificates. Affirmations total $833.1 million and downgrades total $9.68 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: SASCO 2005-NC1 -- $81.9 million class A affirmed at 'AAA' (BL: 62.61, LCR: 7.63); -- $22.1 million class M-1 affirmed at 'AA+' (BL: 49.99, LCR: 6.09); -- $12.8 million class M-2 affirmed at 'AA+' (BL: 42.52, LCR: 5.18); -- $12.8 million class M-3 affirmed at 'AA' (BL: 33.83, LCR: 4.12); -- $16.4 million class M-4 affirmed at 'A+' (BL: 17.00, LCR: 2.07); -- $4.9 million class M-5 affirmed at 'A' (BL: 15.59, LCR: 1.90); -- $7.1 million class M-6 affirmed at 'A-' (BL: 13.58, LCR: 1.65); -- $7.1 million class M-7 affirmed at 'BBB' (BL: 11.26, LCR: 1.37); -- $7.1 million class M-8 affirmed at 'BBB-' (BL: 9.25, LCR: 1.13). Summary -- Originators: (100% New Century); -- 60+ day Delinquency: 19.48%; -- Realized Losses to date (% of Original Balance): 1.05%; -- Expected Remaining Losses (% of Current Balance): 8.21%; -- Cumulative Expected Losses (% of Original Balance): 3.20%. SASCO 2005-NC2 -- $121.5 million class A affirmed at 'AAA' (BL: 64.45, LCR: 7.56); -- $7.7 million class M-2 affirmed at 'AA+' (BL: 51.49, LCR: 6.04); -- $24.2 million class M-3 affirmed at 'AA+' (BL: 41.72, LCR: 4.89); -- $16.9 million class M-4 affirmed at 'AA' (BL: 34.24, LCR: 4.02); -- $14.5 million class M-5 affirmed at 'AA' (BL: 19.29, LCR: 2.26); -- $13.5 million class M-6 affirmed at 'A+' (BL: 16.76, LCR: 1.97); -- $9.6 million class M-7 affirmed at 'A' (BL: 14.91, LCR: 1.75); -- $9.6 million class M-8 affirmed at 'A-' (BL: 13.02, LCR: 1.53); -- $9.6 million class M-9 affirmed at 'BBB+' (BL: 11.05, LCR: 1.30); -- $9.6 million class M-10 downgraded to 'BBB-' from 'BBB' (BL: 9.45 , LCR: 1.11). Summary -- Originators: (100% New Century); -- 60+ day Delinquency: 18.56%; -- Realized Losses to date (% of Original Balance): 0.97%; -- Expected Remaining Losses (% of Current Balance): 8.53%; -- Cumulative Expected Losses (% of Original Balance): 3.39%. SASCO 2005-RMS1 -- $43.2 million class A affirmed at 'AAA' (BL: 66.04, LCR: 6.82). Summary -- Originators: (76.60% Equifirst, 23.00% Wilmington); -- 60+ day Delinquency: 22.68%; -- Realized Losses to date (% of Original Balance): 1.01%; -- Expected Remaining Losses (% of Current Balance): 9.68%; -- Cumulative Expected Losses (% of Original Balance): 3.33%. SASCO 2005-WF1 -- $88.1 million class A affirmed at 'AAA' (BL: 68.96, LCR: 11.32); -- $44.6 million class M1 affirmed at 'AA+' (BL: 48.30, LCR: 7.93); -- $30.9 million class M2 affirmed at 'AA' (BL: 22.01, LCR: 3.61); -- $9.8 million class M3 affirmed at 'AA-' (BL: 19.76, LCR: 3.24); -- $12.6 million class M4 affirmed at 'A+' (BL: 16.83, LCR: 2.76); -- $8.9 million class M5 affirmed at 'A' (BL: 14.86, LCR: 2.44); -- $7.9 million class M6 affirmed at 'A-' (BL: 13.11, LCR: 2.15); -- $7.5 million class M7 affirmed at 'BBB+' (BL: 11.48, LCR: 1.88); -- $4.6 million class M8 affirmed at 'BBB' (BL: 10.42, LCR: 1.71); -- $9.3 million class M9 affirmed at 'BBB-' (BL: 8.39, LCR: 1.38); -- $7.5 million class B1 affirmed at 'BB+' (BL: 7.63, LCR: 1.25). Summary -- Originators: (100% Wells Fargo); -- 60+ day Delinquency: 16.35%; -- Realized Losses to date (% of Original Balance): 0.55%; -- Expected Remaining Losses (% of Current Balance): 6.09%; -- Cumulative Expected Losses (% of Original Balance): 2.12%. SASCO 2005-WF2 -- $53 million class A affirmed at 'AAA' (BL: 73.46, LCR: 11.04); -- $29.1 million class M1 affirmed at 'AA+' (BL: 56.16, LCR: 8.44); -- $18.1 million class M2 affirmed at 'AA' (BL: 24.48, LCR: 3.68); -- $11 million class M3 affirmed at 'AA-' (BL: 21.21, LCR: 3.19); -- $9.3 million class M4 affirmed at 'A+' (BL: 17.27, LCR: 2.60); -- $9.7 million class M5 affirmed at 'A' (BL: 14.52, LCR: 2.18); -- $7.3 million class M6 affirmed at 'A-' (BL: 12.38, LCR: 1.86); -- $6.7 million class M7 affirmed at 'BBB+' (BL: 10.38, LCR: 1.56); -- $4 million class M8 affirmed at 'BBB' (BL: 9.18, LCR: 1.38); -- $4 million class M9 affirmed at 'BBB-' (BL: 8.22, LCR: 1.24); -- $4.6 million class B1 affirmed at 'BB+' (BL: 7.44, LCR: 1.12). Summary -- Originators: (100% Wells Fargo); -- 60+ day Delinquency: 19.58%; -- Realized Losses to date (% of Original Balance): 0.56%; -- Expected Remaining Losses (% of Current Balance): 6.65%; -- Cumulative Expected Losses (% of Original Balance): 2.23%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. SAXON ASSET: Fitch Chips Rating on $12.6MM Certs. to B from BBB- ---------------------------------------------------------------- Fitch Ratings has taken these rating actions on Saxon Asset Securities Trust's mortgage pass-through certificates. Affirmations total $292.8 million and downgrades total $59.8 million. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Series 2005-3 -- $174.5 million class A affirmed at 'AAA' (BL: 55.58, LCR: 5.59); -- $34.2 million class M-1 affirmed at 'AA+' (BL: 46.72, LCR: 4.70); -- $31.5 million class M-2 affirmed at 'AA' (BL: 38.64, LCR: 3.88); -- $20.7 million class M-3 affirmed at 'AA-' (BL: 33.24, LCR: 3.34); -- $16.2 million class M-4 affirmed at 'A+' (BL: 18.55, LCR: 1.86); -- $15.7 million class M-5 affirmed at 'A' (BL: 15.85, LCR: 1.59); -- $13 million class M-6 downgraded to 'BBB+' from 'A-' (BL: 13.71, LCR: 1.38); -- $14.4 million class B-1 downgraded to 'BBB-' from 'BBB+' (BL: 11.58, LCR: 1.16); -- $9.9 million class B-2 downgraded to 'BB' from 'BBB' (BL: 10.56, LCR: 1.06); -- $9.9 million class B-3 downgraded to 'BB' from 'BBB-' (BL: 9.74, LCR: 0.98); -- $12.6 million class B-4 downgraded to 'B' from 'BBB-' (BL: 8.69, LCR: 0.87). Deal Summary -- Originators: 100% Saxon Mortgage Inc.; -- 60+ day Delinquency: 18.78%; -- Realized Losses to date (% of Original Balance): 0.46%; -- Expected Remaining Losses (% of Current Balance): 9.95%; -- Cumulative Expected Losses (% of Original Balance): 4.60%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. SEE WHY GERARD: Hearing on Comedy Works Feud Set for February 1 --------------------------------------------------------------- The Hon. Robert E. Littlefield Jr. of the U.S. Bankruptcy Court for the Northern District of New York has set a hearing on Feb. 1, 2008, to resolve a dispute between See Why Gerard LLC and The Comedy Works, The Business Review reports citing See Why Gerard counsel Richard Weiskopf, Esq. The feud arose when Comedy Works owner Tom Nicchi refused to vacate DeWitt Clinton, an 11-story apartment at Albany owned by See Why Gerard, Business Review relates. See Why Gerard intends to turn the DeWitt property into a hotel, which it acquired at a $5.3 million in April 2006, Business Review notes. However, Mr. Nicchi said he holds a five-year lease deal with DeWitt's former owner that matures in December next year and has shelled out at least $500,000 in renovation expenses, Business Review reveals. See Why Gerard had asked the Court to reject the lease of Comedy Works saying that its $3,000 monthly rate is not enough for the its occupied space of 6,000 square feet, Business Review relates. Mary C. Kenney, Esq., and Steve Waite, Esq., of Waite & Associates represent Comedy Works. Brooklyn, New York-based See Why Gerard LLC is a real estate holding and development company. It filed for chapter 11 bankruptcy on Nov. 14, 2007 (Bankr. N.D. NY Case No. 07-13113). Richard H. Weiskopf, Esq., at O'Connell & Aronowitz represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $4,817,000 and total debts $5,296,273. SOMERSET MEDICAL: Declining Liquidity Cue Moody's to Cut Rating --------------------------------------------------------------- Moody's Investors Service has downgraded to Ba2 from Ba1 the rating assigned to Somerset Medical Center's outstanding $81.3 million of Series 2003 bonds and approximately $29.1 million of Series 1994 bonds outstanding (underlying rating, FGIC insured). The outlook is revised to negative from stable. The rating downgrade and outlook revision reflects deteriorating financial performance, an overleveraged and challenged balance sheet with declining liquidity and an inability to meet budgeted expectations. Also outstanding are approximately $21.3 million of Capital Asset Loan bonds issued by the Authority which are not rated. * Legal Security: First mortgage on the medical center physical plant; Gross revenues pledge; Debt Service Reserve Fund. * Interest Rate Derivatives: On July 1, 2004, the Medical Center entered into a transaction involving its Series A Bonds which involved a third-party financial institution and the use of several derivative instruments. As part of the transaction, the Medical Center called the outstanding amount of the Series A Bonds on July 1, 2004 (the first optional call date) and sold them to an unrelated third- party financial institution. The Medical Center entered into Agreements with a financial institution under which the Medical Center receives the fixed rate on the Series A Bonds (ranging from 4.6% to 5.2% at Dec. 31, 2005, with and average rate of 5.17%) and pays a variable rate equal to the BMA Index plus 50 basis points (at Dec. 31, 2005) effectively resulting in a conversion of the Series A from a fixed rate to a variable rate. This Agreement also includes a total return payment at termination equal to any gain (paid by the financial institution) or loss (paid by the Medical Center) in the value of the Series A Bonds. In 2003, the Medical Center entered into an interest rate swap agreement with a forward effective date of July 1, 2004 and a notional amount of $30,040,000. Under the terms of the interest rate swap agreement, the Medical Center will pay a fixed interest payment of 3.5925% and will receive a variable interest payment from the swap counter-party of 67% of LIBOR plus 52 basis points. The swap expires on July 1, 2011. Strengths * Favorable geographic location and demographics in affluent Somerset County contribute to its dominant inpatient market share as the only hospital in the County * A modern and attractive physical plant that has been fully upgraded and should require modest routine capital investment through the intermediate term. Service enhancements have been made to the oncology program (new cancer center opened during 2006), sleep center program (largest program in tri-state area), wound care (including hyperbaric treatment), dedicated stroke unit, addition of intensivists to staff, and expansion of inpatient behavioral health service. * Cancer center is now tracking according to plans and sleep center generates a healthy margin, supplementing losses from acute service lines. * Elective angioplasty provided in a pilot program complements an active cardiac catheterization program. CON submitted to continue service. * Renegotiated managed care contracts included sizable rate increases that bring contracts to market rates over time. * Potential sale of its cancer center would enable SMC to repay $15 million of debt and replenish balance sheet. Decision to be made in early 2008. * Expected sale or closure of Muhlenberg Hospital, located in the secondary service area, during 2008 should provide for additional needed volume to SMC. Credentialing applications from current Muhlenberg physicians have increased. Challenges * Inability to take advantage of its attractive location and position as the only hospital in Somerset County. Strategic initiatives and service line enhancements have been slow to demonstrate results that favorably impact bottom line performance. Competitive ambulatory centers opening in its market that are impacting financial performance. * Inability to meet annual budget due to annual extraordinary and unanticipated factors. * Inpatient volume decline of 3% in FY2007 offsets the improved revenue generated from renegotiated managed care contracts. Outpatient surgical volume has declined by 12% in 2007 following the opening of a competing same day surgery center located nearby and surgeons who have chosen to be out of network. * Historically inconsistent and modest operating performance and cashflow have significantly deteriorated in the current fiscal year with operating loss of $6.5 million through 3Q07. Cashflow has not sufficiently increased to offset debt service requirements and MADS coverage is very weak. * Leveraged balance sheet highlighted by modest and declining days of cash on hand (45 days at Sept. 30, 2007) and significant debt load, which increased by $15 million for a new cancer center during 2007. Cash covenant of 50 days is not expected to be met in 2007; consultant hired and waiver being sought. * Weak debt service coverage below 2.0 times and double digit debt-to-cashflow margins. Not expecting to meet MADS test for FY 2007. Recent Developments/Reports Financial performance has materially declined in the current fiscal year after hovering near break-even in FY 2006 and prior years. Through nine months, SMC is recording an operating deficit of $6.4 million (excludes investment income) which compares unfavorably to the $408 thousand loss realized for the comparable period in fiscal 2006. Some of the loss may be attributed to $1 million in additional third-party reserves taken during the year that may be reversed into revenue upon further review during the auditing process; however management acknowledges that the year's results were disappointing on many fronts. Volume is down materially on both an inpatient admissions (2.99% decline) and same day surgical volume (12.3% decline) compared to the prior year contributing to the 37% decline in cashflow through nine months 2007. Volume has always been a critical issue for SMC given the high capital structure of the facility and the leveraged balance sheet it must support. Moody's and management expected better financial results in FY 2007 as a result of growth in clinical programs, physician development and the opening of emergency room that would sufficiently offset the impact of a new ambulatory surgery center that opened nearby. Emergency room visits were up but did not translate into admissions as more of the volume was non-acute and ambulatory and did not ultimately require hospitalization. The volume declines were not offset by the double digit rate increases that went into effect during 2007 from United/Oxford, Aetna and Blue Cross. Surgical volume has also been impacted by SMC's surgeons, choosing to remain out of network during the year. Outpatient volumes will be impacted beginning in early 2008 when another same day surgery center opens that is owned by SMC's neurosurgeons and orthopedists. Volume declines as a result of that facility's opening can be expected from the southern part of the service area which management expects to impact providers in New Brunswick more than at SMC due to the proximity to that facility. The expected closure or sale of Muhlenberg Regional Medical Center should be beneficial to SMC. Already, applications to join its staff have increased from current Muhlenberg physicians. While SMC does not expect to gain the bulk of MRMC's 9,500 admissions, it can be expected that some volume will be shifted to SMC during the year. SMC also owns the ambulance service that operates in MRMC's primary market which should result in increased transports from that service area to SMC. Moody's believes that SMC will be hard pressed to meet its debt service coverage ratio by year end especially since debt service associated with the new cancer center increases annual debt service by more than $1 million. The cancer center is recording a modest operating loss, largely due to equipment delays that pushed back the opening when expenses were already in place. A critical factor to Moody's rating downgrade is the deterioration in SMC's liquidity position. Balance sheet measures have been weakening over the last two years, with cash declining in the current fiscal year to $27.8 from $32.8 million (including Foundation) at FYE 2006 due to the operating performance, causing cash days to decline materially from 59.7 days to 45.9. As a result, management does not expect to meet its 50 days cash on hand covenant at year end. Cash-to-debt has declined to 20.8% through nine months from 23.2% at FYE 2006 when including the new cancer center debt. The weakening balance sheet and coverage ratios are reflected in the negative outlook which suggests that further deterioration in credit quality is possible over the intermediate term if the current trend of declining liquidity continues. Interest in its cancer center and the potential to sell the facility will be pursued in early 2008. Early indications suggest that a sale of that facility could repay the $15 million of debt used to finance it and provide additional cash to be maintained on the balance sheet. Completion of this transaction would be an important factor to maintaining the rating. Outlook The negative outlook is based on our belief that the weakening balance sheet and underperforming financial position provide potential for further rating downgrade if initiatives are not implemented to stabilize the organization within the short term. What could change the rating--Up Significant reduction in debt, buildup of cash to more satisfactory levels, and trend of improved operating performance, evidence that fundamental credit strengths are materializing in revenue growth. What could change the rating--Down Further reduction from currently modest coverage levels, rate covenant violations, further reduction in cash, additional debt, loss of market share. Key Indicators * Assumptions & Adjustments: -- Based on financial statements for Somerset Health Care Corporation and Subsidiaries -- First number reflects audit year ended December 31, 2006 -- Second number reflects interim nine months (annualized) ended December 31, 2007 -- Investment returns normalized at 6% unless otherwise noted * Inpatient admissions: 16,419; 15,947 * Total operating revenues: $212.2 million: $224.7 million * Moody's-adjusted net revenue available for debt service: $20.5 million; $11.9 million * Total debt outstanding: $141.7 million; $137.7 million * Maximum annual debt service (MADS): $12.250 million; $13.189 million * MADS Coverage with reported investment income: 1.49 times; 0.93 times * Moody's-adjusted MADS Coverage with normalized investment income: 1.68 times; 0.91 times * Debt-to-cash flow: 10.15 times; 27.33 times * Days cash on hand: 59.7 days; 45.9 days * Cash-to-debt: 23.2%; 20.2% * Operating margin: -0.4%; -3.8% * Operating cash flow margin: 8.5%; 4.6% * Rated Debt (debt outstanding as of December 31, 2006): -- Series 2006 (cancer center), $15 million outstanding, Ba1 rating -- Series 2003, $81.39 million outstanding, Ba1 rating -- Series A (1994), $28.19 million outstanding, FGIC insured (current financial strength rating is Aaa -on watch for possible downgrade), underlying, Ba1 underlying rating * Contacts: -- Issuer: Mr. Ken Bateman, Chief Executive Officer, 908-685- 2805 -- Issuer: Mr. James DeRosa, Assistant Vice President of Finance, 908-685-2807 SOUTHERN STATES: S&P Holds B+ Ratings with Stable Outlook --------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Richmond, Virginia-based Southern States Cooperative Inc. to stable from negative. At the same time, Standard & Poor's affirmed its ratings on Southern States, including the 'B+' long- term corporate credit rating and other ratings on the company. "The outlook revision reflects the improvement in credit protection measures," said Standard & Poor's credit analyst Ms. Jayne M. Ross. "In addition, we expect more favorable industry dynamics in the agricultural sector to continue for the next several years, which should benefit Southern States." The ratings on privately held Southern States reflect the inherent cyclical nature and seasonality of the cooperative's agricultural- based businesses, low-margins, fairly high debt levels, and modest discretionary cash flow. These factors are somewhat mitigated by the cooperative's position as a leading regional supply cooperative on the east coast of the U.S., and a modest debt maturity schedule. The cooperative has good niche positions in crop inputs, feed, farm, and home supplies, and petroleum products in its core 10- state southern territory (about 85% of total sales occur in this region), which provides some geographic diversity. These products are distributed through Southern States' retail division, through other cooperatives that Southern States manages, and through a network of wholesale customers. STRUCTURED ASSET: Fitch Cuts Rating on Class B5 Certs. to B- ------------------------------------------------------------ Fitch Ratings has taken rating actions on these Structured Asset Securities Corporation 2003-AL1 mortgage pass-through certificates: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 downgraded to 'BBB-' from 'BBB'; -- Class B4 downgraded to 'B' from 'BB', and placed on Rating Watch Negative; -- Class B5 downgraded to 'B-/DR1' from 'B', and removed from Rating Watch Negative. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $163.8 million in outstanding certificates. The downgrades reflect deterioration in the relationship between CE and expected losses, and affect approximately $24.42 million in outstanding certificates. In addition, approximately $8.19 million is placed on Rating Watch Negative. The pool factor (current collateral balance as percentage of original) is approximately 43%, and the transaction is 56 months seasoned. The amount of delinquencies in the 60+ buckets (inclusive of Real Estate Owned, Foreclosure, and Bankruptcy) is approximately 4.25%, and cumulative losses are approximately 3.39% of the original balance. SUFFIELD CLO: Fitch Lowers Rating on $14.7MM Notes to B from BB --------------------------------------------------------------- Fitch Ratings downgrades 3 classes of notes issued by Suffield CLO, Limited and affirms 6 classes. These actions are the result of Fitch's review process, and are effective immediately: -- $87,159,532 class I notes affirmed at 'AAA' -- $53,000,000 class II notes affirmed at 'AA+'; -- $42,000,000 class III- A notes affirmed at 'A'; -- $15,000,000 class III- B notes affirmed at 'A'; -- $35,000,000 class IV notes affirmed at 'BBB+'; -- $6,000,000 class V- A notes downgraded to 'BB' from 'BBB'; -- $15,000,000 class V- B notes downgraded to 'BB' from 'BBB'; -- $20,000,000 class K combo notes affirmed at 'BBB+' -- $14,700,000 class L combo notes downgraded to 'B/DR2' from 'BB'. Suffield is a collateralized loan obligation managed by David L. Babson & Co. which closed Sept. 13, 2000. Suffield is composed of primarily leveraged loans with the ability to have up to 10% of the portfolio in high-yield bonds. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the cumulative default rates associated with the current ratings of the note liabilities. Since the last review on Aug. 11, 2006 the class I notes have paid down approximately 75.8%. Structurally, the class II notes are protected by the senior coverage tests and the class III notes are protected by the class III/IV coverage tests. According to the most recent (Sept. 19, 2007) trustee report, the senior overcollateralization test has improved to 148.6% from 133.2% at the time of the first available trustee report dated June 20, 2001. During this same time period, the class III/IV OC test has declined somewhat to 108.6% from 109.2%. Overall however, the classes II and III notes have increased levels of credit enhancement since the transaction closed. According to the Sept. 19 trustee report, the Fitch weighted average rating factor has remained in the 'B+' range. The weighted average spread and weighted average coupon tests have declined since the last review and continue to fail. According to the Sept. 19, 2007 trustee report, the WAS is 2.25%, failing its covenanted level of 2.35%, and the WAC is 9.72%, failing its covenant of 10.15%. Although Suffield exited its reinvestment period in September 2005, Fitch estimates that the transaction still maintains a weighted average maturity of the performing portfolio of approximately 4.5 years. This is the result of the ability of the asset manager to reinvest both proceeds from sales and from unscheduled amortizations so long as they remain in compliance with all collateral quality tests and in compliance with the maximum cumulative maturity profile test. In the case that they are already failing any covenants, they must maintain or improve those tests. The asset manager has the ability to sell credit risk or credit improved securities, in their sole discretion, after the reinvestment period. Structurally, the payments to the class V notes are subordinate to the senior coverage tests and the class III/IV coverage tests in both the interest and principal waterfalls. The class V notes are protected by a class V OC test in the interest waterfall only. If breached, interest proceeds would be diverted to pay down the class V notes. According to the Sept. 19, 2007 trustee report the class V OC test is 102.3%, with a trigger of 100.0%, as compared to 104.9% on the first trustee report dated June 20, 2001. This decrease represents the decline in the credit enhancement to the class V notes that has incurred since inception and can be attributed to realized losses in the portfolio since inception. The class K combo notes are rated to a return of their original investment only and are composed of 75% class V-A notes and 25% preference shares. To date, they have received proceeds that make up approximately 68% of their original investment. The class L combo notes are rated to a yield of 8.4% on their original investment. A combination of a generally low interest rate environment since inception and a declining excess spread available to the preference shares in recent years has affected the notes' ability to achieve a relatively high 8.4% yield hurdle. The class L combo notes are comprised of approximately 14% class III-A notes, 68% class IV notes, and 18% preferred shares. As a result, they receive a combination of floating-rate coupon payments and preferred share dividends toward interest. The class L combo notes have not been able to achieve a current coupon of 8.4% in any payment period, with the exception of September 2001. The rating of the participation notes addressed the receipt of the stated balance of principal by the legal final maturity date and an internal rate of return on the original investment of 6%. The participation notes have met the rating requirement achieving greater than a 6% IRR and thus are considered to be paid in full. The rating of the preferred shares addressed the return of the original investment only. The preference shares have received proceeds in an amount greater than their original investment and as such are considered to be paid in full. The ratings of the classes I and II notes address the likelihood that investors will receive full and timely payments of interest on scheduled interest payment dates, as well as the stated balance of principal by the legal final maturity date. The ratings of the classes III-A, III-B, IV, V-A and V-B notes address the likelihood that investors receive ultimate and compensating interest payments, as well as the stated balance of principal by the legal final maturity date. The rating of the class K combination securities addresses the likelihood that investors will receive the stated balance of principal on the final payment date. The rating of the class L combination securities addresses the likelihood that investors will receive the stated balance of principal on the final payment date, as well as a yield of 8.4% on the original investment. SUNRIDGE LAND: Case Summary & Five Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sunridge Land Co., L.L.C. 22605 97th Avenue South Kent, WA 98031 Bankruptcy Case No.: 07-16102 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: December 19, 2007 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Cynthia A. Kuno, Esq. Crocker, Kuno, Ostrovsky, L.L.C. 720 Olive Way, Suite 1000 Seattle, WA 98101 Tel: (206) 624-9894 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ James/Debra Gauthier Loans $255,606 22605 97th Avenue South Kent, WA 98031 Bentley/Anja Shafer Loan $160,000 P.O. Box 1121 Orting, WA 98360 Enviro-Mont Consulting Services $2,475 Attention: Saiid Sabestani 1341 Lawndale Drive Twin Falls, ID 83301 A.&B. Irrigation District Irrigation $1,007 construction Lot 3171022, Lot OT78, 910LESSPAR19102 2 David L. Walker Loan $79 SYNOVA HEALTHCARE: Files for Bankruptcy in Delaware --------------------------------------------------- Synova Healthcare Group, Inc. and its four U.S. subsidiaries have filed voluntary petitions to reorganize under Chapter 11 of the Bankruptcy Code. Synova is seeking to operate its business as a debtor-in-possession pursuant to the Bankruptcy Code. Under the Bankruptcy Code, Synova is prohibited from paying pre- petition obligations until a plan of reorganization has been approved by creditors and the bankruptcy court. This prohibition applies to all of Synova's pre- petition obligations, including obligations to holders of its senior convertible promissory notes. The company's decision to reorganize under Chapter 11 was made primarily to address Synova's liquidity and capital resources issues, which left Synova unable to continue to effectively operate its business of developing, distributing, marketing and selling innovative over-the-counter women's healthcare products. Synova has historically relied upon equity and debt capital to fund its ongoing operations, and its current inability to locate and obtain such capital severely depleted its cash and other capital resources. The Chapter 11 petitions were filed in the U.S. Bankruptcy Court in the District of Delaware. About Synova Healthcare Headquartered in Media, Pennsylvania, Synova Healthcare Group, Inc. -- http://www.synovahealthcare.com/-- through its subsidiaries, is focused on the development, distribution, marketing and sale of women's healthcare products related to contraception, vaginal health, menopause management, fertility planning, obstetrics and personal care. Synova markets and sells products under the brand names Today(R) and Fem-V(R). A case summary of the company's voluntary petition was published in the Troubled Company Reporter on Dec. 19, 2007. TEKNI-PLEX INC: Obtains February 14 Waiver from Citicorp & GECC --------------------------------------------------------------- Tekni-Plex Inc. has entered into a waiver agreement with Citicorp USA Inc. as administrative agent and General Electric Capital Corporation as syndication agent, waiving certain defaults that may exist under a credit agreement dated as of June 10, 2005, as amended, for the duration of the waiver period, the company said in a regulatory filing with the Securities and Exchange Commission. According to the filing, the waiver includes certain defaults that may exist due to the failure of the company to make the interest payment under the indenture for the company's 12-3/4% Senior Subordinated Notes due 2010. The waiver period commenced on Dec. 17, 2007, and goes through Feb. 14, 2008. The waiver period will terminate: -- upon the occurrence of any event of default that is not otherwise waived pursuant to the Waiver; -- on or after Jan. 17, 2008, if: (A) any cash flow forecast required to be delivered pursuant to the waiver shows the total U.S. liquidity of Tekni-Plex and its domestic subsidiaries falling below the amount specified in the waiver; or (B) available credit is less than $5 million at any time; -- upon one business day's notice by the agent, if an uncured default under the waiver exists; or -- upon one business day's notice by the agent, on or after Jan. 17, 2008, if the company has not entered into a waiver or forbearance agreement in respect of the indenture acceptable to the agent in its sole discretion. Tekni-Plex said it intends to begin negotiations shortly with its bondholders regarding a potential restructuring of the company's debt with the objective of developing a capital structure that will better support its long-term objectives. The company has engaged Rothschild Inc. as its financial advisor in connection with its consideration of various strategic alternatives. Headquartered in Coppell, Texas, Tekni-Plex Inc. -- http://www.tekni-plex.com/-- manufactures packaging, packaging products and materials as well as tubing products. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Standard & Poor's Ratings Services lowered its rating on Tekni- Plex Inc.'s $315 million 12-3/4% senior subordinated notes due 2010 to 'D' from 'C' and its corporate credit rating to 'D' from 'CCC-'. S&P lowered the ratings on the $150 million 10 7/8% first-lien senior secured notes due 2012 to 'CC' from 'CCC-'. S&P placed the ratings on the senior secured notes due 2012 and the $275 million second-lien senior secured notes due 2013 on CreditWatch with negative implications. At Sept. 28, 2007, Tekni- Plex had total debt outstanding of about $866 million. TEKNI-PLEX INC: James A. Mesterharm to Lead Restructuring Efforts ----------------------------------------------------------------- Tekni-Plex Inc. disclosed in a regulatory filing with the U.S Securities and Exchange Commission that it has appointed James A. Mesterharm -- turnaround specialist of AP Services LLC and a managing director at AlixPartners LLP -- as the chief restructuring officer of Tekni-Plex. Mr. Mesterharm will work with Tekni-Plex's senior management team as it implements a series of initiatives aimed at maintaining the company's near-term liquidity and strengthening its financial performance. Mr. Mesterharm will remain a managing director of AlixPartners while serving as Tekni-Plex's chief restructuring officer. Mr. Mesterharm, age 39, has significant expertise in cost reduction plan development and implementation, cash management, crisis management, capital structure refinancing, and business plan development for acquisition and restructuring purposes, and has been a managing director of AlixPartners since 2001. He has served as Chief Operating Officer of a leading plastic bag manufacturer (from April 2007 to September 2007), restructuring advisor to Silicon Graphics Inc. (from May 2005 to September 2006) and Safety-Kleen (June 2000 to January 2004), and Chief Restructuring Officer of Parmalat USA (from May 2004 to April 2005). Prior to joining AlixPartners, Mr. Mesterharm was a Manager in the Financial Advisory Services practice of Ernst & Young. On Dec. 17, 2007, Tekni-Plex entered into a letter agreement with APS, to provide the services of Mr. Mesterharm as chief restructuring officer of Tekni-Plex and other APS personnel. Under the terms of the CRO Agreement, and assuming certain levels of staffing from APS, APS will receive a monthly fee of $400,000 from Tekni-Plex, credited against the $400,000 retainer paid by Tekni-Plex at the time of the engagement, plus reasonable out-of-pocket expenses in connection with the services provided. The CRO Agreement also provides for a completion fee, payable in certain circumstances, of $1,750,000. According to Tekni-Plex, Mr. Mesterharm will not receive any compensation directly from the company and will not participate in any of the company's employee benefit plans; he will, however, be entitled to indemnification under the provisions of the company's by-Laws. Also on Dec. 17, Tekni-Plex said that John S. Geer has resigned from the company's board of directors. The resignation was not the result of any disagreement with the company on any matter relating to the company's operations, policies or practices, Tekni-Plex explained. Headquartered in Coppell, Texas, Tekni-Plex Inc. -- http://www.tekni-plex.com/-- manufactures packaging, packaging products and materials as well as tubing products. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Standard & Poor's Ratings Services lowered its rating on Tekni- Plex Inc.'s $315 million 12-3/4% senior subordinated notes due 2010 to 'D' from 'C' and its corporate credit rating to 'D' from 'CCC-'. S&P lowered the ratings on the $150 million 10 7/8% first-lien senior secured notes due 2012 to 'CC' from 'CCC-'. S&P placed the ratings on the senior secured notes due 2012 and the $275 million second-lien senior secured notes due 2013 on CreditWatch with negative implications. At Sept. 28, 2007, Tekni- Plex had total debt outstanding of about $866 million. TEKNI-PLEX INC: Sept. 28 Balance Sheet Upside-Down by $370.2 Mil. ----------------------------------------------------------------- Tekni-Plex Inc.'s consolidated balance sheet at Sept. 28, 2007, showed $614.5 million in total assets and $984.7 million in total liabilities, resulting in a $370.2 million total stockholders' deficit. The company reported a net loss of $25.0 million on net sales of $171.2 million for the first quarter ended Sept. 28, 2007, compared with a net loss of $14.9 million on net sales of $172.0 million in the same period ended Sept. 29, 2006. Net sales in the Tubing Products Segment decreased to $30.3 million in fiscal 2008 from $38.6 million in fiscal 2007, while net sales in the Packaging Segment increased to to $100.7 million in the most recent period from $93.1 million in the comparable period of fiscal 2007. Cost of goods sold increased slightly to $151.8 million in fiscal 2008 from $145.0 million in fiscal 2007. Expressed as a percentage of net sales, cost of goods sold increased to 88.6% in the current period compared to 84.3% mainly due to the increase in raw material costs. Gross profit decreased to $19.5 million in the first quarter of fiscal 2008 compared to $26.9 million in the first quarter of fiscal 2007. Operating profit decreased to $3.8 million in fiscal 2008 from $11.0 million in fiscal 2007. Interest expense increased to $26.5 million in fiscal 2008 from $24.2 million in fiscal 2007 due to average higher debt balances. Liquidity and Capital Resources For the quarter ended Sept. 28, 2007, net cash generated in operating activities was $27.2 million compared to $38.5 million of cash generated in operating activities in the first quarter of the prior year. The $11.3 million decrease was due primarily to the decline in earnings. As of Nov. 13, 2007, the company had an outstanding balance of $39.0 million under its $75.0 million asset backed credit facility with availability under this facility reduced by $10.8 million of letters of credit related to its workmen's compensation insurance programs. Working capital at Sept. 28, 2007, was $153.0 million compared to $183.5 million at June 29, 2007. The $30.5 million decrease was primarily due to operating losses. Balance Sheet Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 28, 2007, are available for free at http://researcharchives.com/t/s?283 About Tekni-Plex Inc. Headquartered in Coppell, Texas, Tekni-Plex Inc. -- http://www.tekni-lex.com/-- is a global, diversified manufacturer of packaging, products, and materials for the healthcare, consumer and food packaging industries. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Standard & Poor's Ratings Services lowered its rating on Tekni-Plex Inc.'s $315 million 12-3/4% senior subordinated notes due 2010 to 'D' from 'C' and its corporate credit rating to 'D' from 'CCC-'. S&P lowered the ratings on the $150 million 10 7/8% first-lien senior secured notes due 2012 to 'CC' from 'CCC-'. TERADYNE INC: Inks $325 Mil. Buyout Deal with Nextest Systems ------------------------------------------------------------- Teradyne Inc. and Nextest Systems Corp. have signed a definitive agreement under which Teradyne will acquire Nextest for an aggregate purchase price of approximately $325 million in cash. Under terms of the agreement approved by both boards of directors, Teradyne will pay $20 per share in cash for all the outstanding shares of Nextest. This includes the fair value of fully vested employee equity instruments and transaction costs. As a result of the acquisition, Teradyne will expand its market into the flash memory test segment, estimated to be more than $700 million in 2006. Of Nextest's $95.8 million in revenue in calendar year 2006, flash memory tester sales totaled about $80 million. The acquisition is expected to be slightly dilutive to 2008 GAAP earnings per share and slightly accretive to 2008 non-GAAP earnings per share after excluding the purchase accounting impacts. "Joining Teradyne puts the market presence and superior reputation of the premier ATE provider behind all that we have accomplished," Robin Adler, CEO of Nextest, said. "Teradyne's rich experience as a technology innovator along with their strong customer relationships, will greatly accelerate our mission to lower test costs and to grow our business. We are very excited about the impact, potential and opportunity this combination provides to our employees, our stockholders, and most importantly, our customers." "Nextest brings us a solid flash memory test product line, plus a very capable development and technical support organization," Michael Bradley, president and CEO of Teradyne, said. "Their growing presence in the flash memory test market provides a strong addition to our System-On-Chip product offerings. This is one of the few business combinations in the test market where customers get products that are so complementary. Nextest's Magnum product line will be backed by Teradyne's global customer support team and will give us a powerful growth engine in the coming years." The acquisition is subject to customary closing conditions, including the tender of at least a majority of the shares of Nextest common stock, the receipt of clearance under the Hart- Scott-Rodino Antitrust Improvements Act and the absence of a material adverse change with respect to Nextest. Upon closing, which is expected in the first quarter of 2008, Nextest will be run as a business unit within Teradyne's Semiconductor Test Division. The tender offer statement and the solicitation/recommendation statement will be made available to Nextest security holders at no expense by mailing requests to: Nextest Systems Corporation 875 Embedded Way San Jose, CA 95138 About Nextest Systems Corp. Headquartered in San Jose, California, Nextest Systems Corp. (NASDAQ:NEXT) -- http://www.nextest.com/-- is a designer and manufacturer of automatic test equipment for Flash memory and System-On-Chip semiconductors. Nextest's products address the demand from manufacturers for ATE with increased throughput, functionality and reliability, while reducing time to market and cost of test. Nextest has shipped over 1,900 systems to more than 70 semiconductor companies worldwide. About Teradyne Inc. Headquartered in North Reading, Massachussetts, Teradyne Inc. (NYSE: TER) -- http://www.teradyne.com/-- is a supplier of Automatic Test Equipment used to test complex electronics used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defense industries. Teradyne employs about 3,600 people worldwide. * * * Teradyne Inc. still carries S&P's "B+" long term foreign issuer credit and long term local issuer credit ratings which was placed on Dec. 13, 2002. TQS INC: Obtains Protection from Creditors Under Canada's CCAA -------------------------------------------------------------- TQS Inc. obtained an order by Quebec Superior Court under the Companies' Creditors Arrangement Act with a view to protecting TQS and its subsidiaries from claims by creditors and allow it to reorganize its operations. Issued for a period of 30 days, the order also applies to subsidiaries and to TQS' parent, 3947424 Canada Inc. In October 2007, the Board of Directors of TQS engaged CIBC World Markets to advise on and assess strategic options to strengthen the TQS network in the face of financial difficulties. At a meeting on Dec. 17, 2007, after considering CIBC World Markets' report and discussing its assessment and recommendations, the Board of Directors of TQS concluded that it was in the best interest of TQS, its employees and creditors to request court protection. Under the order, RSM Richter Inc. has been appointed as monitor by Mr. Justice Journet of the Quebec Superior Court. His mandate is to support the applicants, under Court supervision, in preparing a creditors arrangement plan. Combination of Circumstances Beyond its Control TQS' position in the Quebec Francophone over-the-air television market deteriorated markedly in spite of the measures and investments initiated by the Company over the last several months. The gradual loss of advertising revenue to specialty TV networks and content accessible over the Internet, combined with increased production costs, the Canadian Radio-television and Telecommunications Commission's refusal to grant general interest television networks the same ability to charge subscriber fees for signal distribution as the speciality television networks, the programming strategy of Societe Radio-Canada's, which acts like a commercial player rather than a publicly-owned television broadcaster and SRC's notice of disaffiliation in Saguenay, Sherbrooke and Trois-Rivieres after a 50-year partnership all contributed to the decision by TQS' Board of Directors. "TQS is a victim of circumstances beyond its control," Louis Audet, President and Chief Executive Officer of COGECO Inc. and Chairman of TQS' Board of Directors, declared. "However, other people besides ourselves-all TQS' shareholders-have the required levers to bring about at a lasting solution. We are hopeful that they will seize the opportunity to make the necessary adjustments to save Francophone general interest television." TQS' mission remains relevant in the Quebec Francophone television market with approximately 12% market share very close to SRC's. The support of all TQS contributors, which include the equivalent of 649 full time employees as well as its many announcers, producers and artists, will be needed to pull through this unfortunate moment. "We've done all we could. We were forced to make a decision that was difficult-but necessary. Now, it's up to others to see this stage in TQS' life as an opportunity and to take up the torch before the end of the initial order on Jan. 17, 2008," Mr. Audet concluded, who also indicated that all TQS operations would be maintained until further notice. About TQS TQS Inc. is a Francophone general interest television broadcaster with more than 600 employees and over a hundred freelance TV artists and skilled technicians. With five of its own stations (Montreal, Quebec City, Saguenay, Sherbrooke, Trois-Rivieres) and four affiliates (Gatineau - Ottawa, Val-d'Or - Rouyn-Noranda, Rimouski and Riviere-du-Loup) the network covers all of Quebec. TQS also operates its own production house, Les Productions Point- Final. TRIBUNE COMPANY: Completes Merger Transaction with Tribune ESOP --------------------------------------------------------------- Tribune Company has completed its going-private transaction by merging with an acquisition subsidiary of the Tribune Employee Stock Ownership Plan. Effective immediately, Sam Zell, who financed the transaction, assumes the roles of chairman of the board and chief executive officer. "We have a tremendous opportunity to take the great brands of Tribune Company, and the enormous talent within the company, to a new level," Mr. Zell said. "Tribune, along with the newspaper industry, has been mired in its monopolistic origins, and we intend to create a fresh, entrepreneurial culture that is fast and nimble, and which rewards innovation. Our goal is to provide a sustainable, relevant product for our customers and communities." Under the terms of the merger agreement, all of the company's publicly held shares of common stock, except for those owned by the Tribune ESOP and shares held by shareholders who validly exercise appraisal rights, will be cashed out at $34 per share. Shareholders approved the transaction at a special meeting held on Aug. 21, 2007. The company's common stock ceased trading on the New York Stock Exchange at market close on Dec. 20, 2007. On April 2, 2007, Tribune disclosed its intention to become a private company, owned 100% by the Tribune ESOP. EGI-TRB, an entity run by Mr. Zell, made an initial investment of $250 million in Tribune, and Mr. Zell was named to the company's board of directors in May. As part of the going-private transaction, EGI-TRB increased its investment to $315 million by purchasing a note and a warrant to acquire up to 40% of the company's common equity on a fully diluted basis. About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, New York), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. Newsday is a subsidiary of Tribune Co. is a daily newspaper, serving Long Island through its print editions, Newsday.com, and niche publications such as Distinction and LI Parents & Children. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Moody's Investors Service downgraded Tribune Company's corporate family and probability of default ratings to B3 from B1 and ratings on the existing debt instruments. Standard & Poor's Ratings Services assigned its 'B-' rating to Tribune Co.'s proposed $1.6 billion senior unsecured bridge loan, and placed the rating on CreditWatch with negative implications. TRIBUNE CO: Dennis FitzSimons Leaves After Going Private Deal ------------------------------------------------------------- Dennis FitzSimons will step down as chairman and chief executive officer immediately after the Tribune Company completes its going- private transaction. Mr. FitzSimons will leave the company at the end of the year. "I am proud to have been part of Tribune for more than 25 years," Mr. FitzSimons said. "The company's greatest strength has always been the talent and dedication of its 20,000 employees. I thank them for their commitment to serving our readers, viewers, listeners and advertisers." On April 2, 2007, Tribune disclosed its intention to become a private company, owned 100% by the Tribune Employee Stock Ownership Plan. At that time, Sam Zell made an initial investment of $250 million in the company. He joined Tribune's board of directors in May. When the transaction closes, his investment in Tribune will increase to $315 million and he will become chairman of the board. "Sam Zell is an entrepreneur with a phenomenal track record," Mr. FitzSimons added. "He has made a significant investment in Tribune that indicates his strong belief in the value of the company's media assets. It was Sam's creativity, personal commitment and investment that made this transaction possible." "Dennis FitzSimons has provided Tribune with outstanding leadership through a challenging environment,"Mr. Zell said. "He helped build the company into one of the nation's premier media businesses, and has been instrumental in guiding Tribune to the closing of this historic transaction. I wish him much success in the next phase of his career." Board and Management Changes Contingent upon board approval, Tribune's board will have a total of eight directors, chaired by Mr. Zell. The company expects to add these directors: -- Jeffrey S. Berg, 60, chairman and chief executive officer of International Creative Management Inc. He serves on the board of visitors at the UCLA Anderson School of Management, and on the board of directors of Oracle Corporation. He is also on the London School of Economics' Court of Governors. -- Brian L. Greenspun, 61, chairman and chief executive officer of The Greenspun Corporation, and president and editor of the Las Vegas Sun. He is a member of the board of trustees of the Brookings Institution in Washington, D.C. and a member of the International Advisory Council of the Saban Center for Middle East Policy in Washington. Mr. Greenspun also serves on the University of Nevada President's Community Advisory Board. The Greenspun family has made a significant investment in Tribune Company. -- William C. Pate, 44, chief investment officer of Equity Group Investments LLC. Mr. Pate serves on the boards of Covanta Holding Corporation and Exterran Holdings Inc. He is a nominee of Mr. Zell's affiliate agreement with Tribune Company. -- Maggie Wilderotter, 52, chairman and chief executive officer of Citizens Communications. Ms. Wilderotter has 30 years of experience in the communications industry, and serves on the board of directors of Yahoo! and Xerox Corporation, well as the boards for a number of non- profit organizations. -- Frank E. Wood, 65, chief executive officer of Secret Communications LLC, a venture capital company in Cincinnati. Mr. Wood, a former lawyer, spent 33 years in the radio broadcasting business. He is chairman of the board of 8e6 Technologies, an internet filtering company, and serves on the board of Chemed Corporation and C Bank, a new business bank. William A. Osborn and Betsy D. Holden each have been re-elected to serve on Tribune's board. -- Ms. Holden, 52, joined Tribune Company's board in 2002. She is a senior advisor to McKinsey & Company and the former president of global marketing and category development at Kraft Foods Inc. She also serves on the board of Western Union Company. -- Osborn, 60, joined Tribune Company's board in 2001. He is chairman and chief executive officer and a director of Northern Trust Corporation and its principal subsidiary, The Northern Trust Company. In addition, he serves on the board of Caterpillar Inc. Tribune's executive management team, led by Mr. Zell, adds Randy Michaels as executive vice president and chief executive officer of Interactive and Broadcasting, and Gerald A. Spector as executive vice president and chief administrative officer. -- Mr. Michaels, 55, was formerly CEO of Local TV LLC, a company that acquired television stations formerly owned by New York Times Company. He has more than 37 years in media, including his role as president and chief executive officer at Jacor, which merged with Clear Channel Communications in 1999. As CEO, Mr. Michaels grew Clear Channel from 425 to 1200 stations in just three years. -- Mr. Spector, 61, served as executive vice president and chief operating officer of Equity Residential. Prior to that role, he was COO of Equity Group Investments. Mr. Spector has more than 35 years of experience in bringing various financial and real estate companies within Mr. Zell's organization to operational excellence. He remains on the board of trustees of Equity Residential as vice chairman. About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, New York), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. Newsday is a subsidiary of Tribune Co. is a daily newspaper, serving Long Island through its print editions, Newsday.com, and niche publications such as Distinction and LI Parents & Children. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Moody's Investors Service downgraded Tribune Company's corporate family and probability of default ratings to B3 from B1 and ratings on the existing debt instruments. Standard & Poor's Ratings Services assigned its 'B-' rating to Tribune Co.'s proposed $1.6 billion senior unsecured bridge loan, and placed the rating on CreditWatch with negative implications. TRIBUNE CO: Pays $15 Million Under Circulation Issue Settlement --------------------------------------------------------------- Tribune Company will pay $15 million, on behalf of Newsday, its subsidiary, and Hoy, to the Department of Justice as part of an agreement to accept responsibility for the circulation problems caused by several former Newsday and Hoy employees. Newsday and Hoy reached an agreement with the office of the U.S. Attorney for the Eastern District of New York that will bring to a close one of the final chapters related to the 2004 circulation misstatements at both newspapers. In agreeing not to prosecute Newsday or Hoy, the agreement reached with the DOJ cites the companies' "commitment to full cooperation" with the appropriate government agencies and "numerous remedial actions" taken by current management, including setting aside $90 million for restitution payments to affected advertisers. "When these issues came to light in 2004, Tribune, Newsday and Hoy took full responsibility and swift action," Timothy P. Knight, Newsday publisher, president and CEO, said. "Over the past few years, we have made comprehensive changes in controls, systems, customer relations, policies and our management team to prevent this from occurring again." Tribune and Newsday has taken remedial actions including: -- termination of all employees involved with the circulation misstatements; -- hiring of new circulation personnel -- from leadership to field staff; -- instituting a mandatory employee code of conduct and a zero-tolerance policy for violations; -- implementing 24/7 ethics hotline to report fraud or abuse -- conducting mandatory employee ethics training; -- installing a new DISCUS circulation system to manage all circulation data; and -- increasing focus on customer communication and service "Newsday is stronger today and we're happy to be able to put this issue behind us and put our complete focus on serving valued readers and advertisers," Mr. Knight added. About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, New York), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. Newsday is a subsidiary of Tribune Co. is a daily newspaper, serving Long Island through its print editions, Newsday.com, and niche publications such as Distinction and LI Parents & Children. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Moody's Investors Service downgraded Tribune Company's corporate family and probability of default ratings to B3 from B1 and ratings on the existing debt instruments. Standard & Poor's Ratings Services assigned its 'B-' rating to Tribune Co.'s proposed $1.6 billion senior unsecured bridge loan, and placed the rating on CreditWatch with negative implications. TRIBUNE CO: November 2007 Revenues Down 3.3% to $413 Million ------------------------------------------------------------ Tribune Company has reported its summary of revenues and newspaper advertising volume for period 11, ended Nov. 25, 2007. Consolidated revenues for the period were $413 million, down 3.3 percent from last year's $428 million. Consolidated operating expenses were 5.0 percent lower than period 11 last year. Publishing revenues in November were $309 million compared with $321 million last year, down 3.5 percent. Advertising revenues decreased 4.9 percent to $244 million, compared with $257 million in November 2006. Advertising revenues benefited from the shift in the Thanksgiving holiday week from period 12 in 2006 to period 11 this year. Tribune also disclosed that its: * retail advertising revenues increased 7.3% with the largest increases in the specialty merchandise, department stores, apparel/fashion and electronics categories. Preprint revenues, which are principally included in retail, were up 18.5% for the period. * national advertising revenues increased 1.9% , with the largest increases in the movies, auto, financial and telecom/wireless categories, partially offset by a decrease in the transportation category. * classified advertising revenues decreased 26.2%. Real estate fell 39.8% percent the most significant declines in Chicago, the Florida markets, and Los Angeles. Help wanted declined 28.4% and automotive decreased 7.6%. Interactive revenues, which are primarily included in classified, were $21 million, up 7.8% percent, due to growth in most categories. Circulation revenues were down 4.6 percent due to single-copy declines and continued selective discounting in home delivery. Publishing operating expenses in November were down 5.2 percent primarily due to lower newsprint and ink, compensation, promotion and other cash expenses. Broadcasting and entertainment group revenues in November were $104 million, down 2.6 percent, due to decreases in television group revenue, partially offset by increases in radio/entertainment revenues. Television revenues fell 4.8 percent due to the absence of political advertising, partially offset by strength in several categories including retail, corporate, health, food/packaged goods, telecom and restaurant/fast food. Broadcasting and entertainment group operating expenses in November declined by 2.7 percent primarily due to lower compensation and other cash expenses. Consolidated equity income was $11 million in November, up from $8 million in the prior year period. Tribune expects to complete its disposition of the Chicago Cubs, Wrigley Field and related real estate, and its interest in Comcast SportsNet Chicago in the first half of 2008. It plans to use the proceeds to repay existing debt. TROPICANA ENT: Wants to Sell Atlantic City and Indiana Casinos -------------------------------------------------------------- Tropicana Entertainment LLC said Tuesday that it is attempting to reach an agreement with its lenders that will allow for an orderly sale of the Tropicana Resort and Casino in Atlantic City and Casino Aztar in Evansville, Indiana. In addition, the company made its scheduled semi-annual interest payment on its 9-5/8% senior subordinated notes due Tuesday. The proceeds from the sales of the two properties, along with those from the sale of the company's casino in Vicksburg, Mississippi, which is under contract with Nevada Gold & Casinos Inc., are expected to be sufficient to pay Tropicana's outstanding senior debt. Any remaining proceeds will be reinvested in the company's business. The company has engaged an independent investment bank to act as its financial advisor in connection with its continuing negotiations with its lenders to obtain a forbearance with respect to the decision by the New Jersey Casino Control Commission to deny the company's gaming license renewal application for its Atlantic City casino. "In short order, we have developed a plan to address recent challenges by selling our properties in Atlantic City, Evansville and Vicksburg in an orderly manner, retiring our Senior Credit Facility and positioning ourselves for long-term growth with what we hope will be a stronger balance sheet," said William J. Yung, Chief Executive Officer and President of Tropicana Entertainment. "We intend to continue to work cooperatively with lenders and regulators to implement a plan that will serve the best interests of our debt holders and our company." 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. * * * As reported in the Troubled Company Reporter on Dec. 18, 2007, Moody's Investors Service downgraded Tropicana Entertainment's corporate family rating to Caa1 from B2 reflecting the decision by the New Jersey Casino Control Commission to deny the company's gaming license renewal application. Moody's also downgraded Tropicana Las Vegas Resort & Casino LLC's corporate family rating to B3 from B2 because if an event occurs under the senior credit facilities and the lenders accelerate, it will also cause an event of default under the Trop Las Vegas term loan. TWEETER HOME: Wants Removal Period Extended to May 8 ---------------------------------------------------- Tweeter Home Entertainment Group, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend, until May 8, 2008, the period within which they may remove any actions pending on the date of bankruptcy, or 30 days after the entry of an order terminating the automatic stay with respect to any particular action sought to be removed. The Debtors' removal period expires on the later of Jan. 7, 2008, or 30 days after a stay Order. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom, LLP, in Wilmington, Delaware, tells the Court that the Debtors are parties to numerous judicial and administrative proceedings currently pending in various courts and administrative agencies. The actions, he explains, include discrimination, workers compensation, and product liability claims. In addition, since the Debtors have been focused primarily on: a) finalizing a proposed plan of liquidation following the July 13 closing of the sale of substantially all of their assets to Tweeter Newco, LLC; b) determining their remaining assets and liabilities; and c) fulfilling their obligations as debtors-in-possession, the Debtors have not completed their review of the actions to determine whether any actions should be removed, or if appropriate, transferred to a district court, Mr. Galardi states. Mr. Galardi asserts that the requested extension affords the Debtors sufficient opportunity to make fully informed decisions regarding the removal of the actions, thereby protecting the Debtors' valuable right to adjudicate lawsuits pursuant to Section 1452. The Court will convene a hearing on Jan. 7, 2008, at 3:00 p.m., to consider the Debtors' request. By application of Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedures of the U.S. Bankruptcy Court for the District of Delaware, the Debtors' removal period is automatically extended through the conclusion of that hearing. About Tweeter Home Based in Canton, Mass., Tweeter Home Entertainment Group Inc. -- http://www.tweeter.com/-- retails mid-to high-end audio and video consumer electronics products. Tweeter and seven of its affiliates filed for chapter 11 Protection on June 11, 2007 (Bankr. D. Del. Case Nos. 07-10787 through 07-10796). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., and Sarah E. Pierce, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represent the Debtors. Kurtzman Carson Consultants LLC acts as the Debtors' claims and noticing agent. As of Dec. 21, 2006, Tweeter had total assets of $258,573,353 and total debts of $190,417,285. The Court gave the Debtors until Feb. 6, 2008 to file a plan of reorganization. Bruce Grohsgal, Esq., William P. Weintraub, Esq., and Rachel Lowy Werkheiser, Esq., at Pachulski Stang Ziehl & Jones LLP; and Scott L. Hazan, Esq., Lorenzo Marinuzzi, Esq., and Todd M. Goren, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors. The Debtors' exclusive period to file a chapter 11 plan expires on Feb. 6, 2008. (Tweeter Bankruptcy News, Issue No. 15, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7 TYCO INTERNATIONAL: Judge Awards $460 Million to Three Law Firms ---------------------------------------------------------------- Three law firms representing plaintiffs in a securities class- action lawsuit against Tyco International Ltd. and its auditor PricewaterhouseCoopers LLP received a $460 million fee award from federal judge Paul Barbodoro in New Hampshire, Nathan Koppel of The Wall Street Journal reports. The firms, according to WSJ, are Grant & Eisenhofer PA, Milberg Weiss LLP, and Schiffrin, Barroway, Topaz & Kessler LLP. In addition, WSJ says, Judge Barbodoro approved Tyco's $3.2 billion settlement payment with regards to the lawsuit. The class action suit, WSJ relates, alleged that the company committed securities fraud by improperly accounting for acquisitions and manipulating quarterly results. As reported in the Troubled Company Reporter on May 18, 2007, funding for the settlement includes any recovery Tyco may have from its claims against former key officers who were charged with securities fraud and conspiracy. Tyco also agreed to give shareholders the right to pursue, and benefit from, the company's claims of accounting malpractice against its former auditor. Based in Pembroke, Bermuda, Tyco International Ltd. (NYSE: TYC) (BSX: TYC) -- http://www.tyco.com/-- provides vital products and services to customers in four business segments: Electronics, Fire & Security, Healthcare, and Engineered Products & Services. With 2006 revenue of $41 billion, Tyco employs approximately 240,000 people worldwide. Effective June 29, 2007, Tyco International Ltd. completed the spin-offs of Covidien and Tyco Electronics, formerly its Healthcare and Electronics businesses, respectively, into separate, publicly traded companies in the form of a distribution to Tyco shareholders. Notice of Default from BoNY In its annual report for the year ended Sept. 28, 2007, Tyco said that on Nov. 8, 2007, The Bank of New York delivered to the company a notice of events of default. The notice claims that the actions taken by the company in connection with its separation into three public entities constitute events of default under the indentures. TYCO INTERNATIONAL: Paying $0.15 Per Share Dividend on Feb. 1 ------------------------------------------------------------- The Board of Directors of Tyco International Ltd. has declared a regular quarterly cash dividend of $0.15 per common share. The dividend is payable on Feb. 1, 2008, to shareholders of record as of Jan. 3, 2008. Based in Pembroke, Bermuda, Tyco International Ltd. (NYSE: TYC) (BSX: TYC) -- http://www.tyco.com/-- provides vital products and services to customers in four business segments: Electronics, Fire & Security, Healthcare, and Engineered Products & Services. With 2006 revenue of $41 billion, Tyco employs approximately 240,000 people worldwide. Effective June 29, 2007, Tyco International Ltd. completed the spin-offs of Covidien and Tyco Electronics, formerly its Healthcare and Electronics businesses, respectively, into separate, publicly traded companies in the form of a distribution to Tyco shareholders. Notice of Default from BoNY In its annual report for the year ended Sept. 28, 2007, Tyco said that on Nov. 8, 2007, The Bank of New York delivered to the company a notice of events of default. The notice claims that the actions taken by the company in connection with its separation into three public entities constitute events of default under the indentures. UNITED RENTALS: Balks at Judge's Decree to Forgo Summary Judgment ----------------------------------------------------------------- United Rentals, Inc. issued a statement regarding the decision by Delaware Court of Chancery Chancellor William B. Chandler III to proceed with a trial in the litigation that United Rentals initiated on Nov. 19, 2007 against RAM Holdings, Inc. and RAM Acquisition Corp. The lawsuit seeks to compel the RAM entities (which are acquisition vehicles formed by Stephen Feinberg's Cerberus Capital Management, L.P.) to complete their purchase of United Rentals. In a letter decision issued this afternoon, Chancellor Chandler wrote, "I have concluded that while the question is exceedingly close, summary judgment is not an effective vehicle for deciding the contract issues in dispute in this case." United Rentals said: "We look forward to making a compelling case at the upcoming trial. While we believed the case could be decided through summary judgment, we respect Chancellor Chandler's decision to give a matter of this magnitude a full trial before issuing his ruling. The trial presents an important opportunity to establish that the merger agreement should be enforced as written." United Rentals added that it has fulfilled all of its obligations under the merger agreement with the RAM entities and stands ready to complete the merger transaction on the agreed-upon terms. About United Rentals United Rentals Inc. -- http://www.unitedrentals.com/-- (NYSE: URI) is an equipment rental company with an integrated network of over 690 rental locations in 48 states, 10 Canadian provinces and one location in Mexico. The company's approximately 11,500 employees serve construction and industrial customers, utilities, municipalities, homeowners and others. The company offers for rent over 20,000 classes of rental equipment with a total original cost of $4.3 billion. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Standard & Poor's Ratings Services said that its 'BB-' corporate credit ratings on United Rentals Inc. and its wholly owned subsidiary United Rentals Inc. remain on CreditWatch with negative implications. VISIPHOR CORP: Completes CDN$500MM Priv. Offering of 8% Notes ------------------------------------------------------------- Visiphor Corporation has received Toronto Stock Exchange approval and has closed a CDN$500,000 private placement with Quorum Investment Pool Limited Partnership of an 8% convertible secured debenture maturing over a 5 year period. The debenture will be convertible into common shares of the issuer at the conversion price of CDN$0.10 per common share. QIP has agreed to a CDN$0.15 conversion price on performance targets mutually agreed upon by Visiphor and QIP. The proceeds will be used for general working capital. Quorum Funding Corporation 1 LP., a related party to QIP, will receive a 3% transaction fee payable in cash. Headquartered in Vancouver, Visiphor Corp. (OTC BB: VISRF.OB) (CDNX: VIS.V) -- http://www.visiphor.com/-- sells software products and services that deliver practical, rapidly deployable solutions that integrate business processes and databases. The company's solutions focus on disparate process and data management problems that exist in numerous verticals spanning government, energy, law enforcement, security, health care and financial services. Going Concern Doubt Grant Thornton LLP raised substantial doubt about Visiphor Corp.'s ability to continue as a going concern after auditing the company's financial statements for the period ending Dec. 31, 2006. The audotors pointed to the company's incurred a loss from operations of CDN$6,678,371 and deficiency in operating cash flow of CDN$2,602,248. In addition, the company incurred significant operating losses and net utilization of cash in operations in all prior periods. VONAGE HOLDINGS: Facing Nortel's Lawsuit for Patent Infringement ---------------------------------------------------------------- A lawsuit against Vonage Holdings Corp. has been filed by Nortel Networks Corp. alleging that Vonage is infringing 12 patents covering technology used in managing telephone data, Jeff St.Onge and Amy Thomson of Bloomberg News report. According to Bloomberg, Nortel's lawsuit came after Vonage sued Nortel's U.S. unit in August seeking to invalidate three of the patents, arguing that the patents shouldn't have been issued by the U.S. Patent and Trademark Office. Nortel denied the allegations and claimed that Vonage is violating the three patents and nine others, Bloomberg says. The Delaware case is Vonage Holdings Corp. v. Nortel Networks Inc., 07CV507, U.S. District Court, Delaware (Wilmington). About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. About Vonage Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with over 1.4 million subscriber lines as of February 8, 2006. Utilizing its voice over Internet protocol technology platform, the company offers feature-rich, low-cost communications services with a call quality comparable to traditional telephone services. While customers in the United States represent over 95% of its subscriber lines, Vonage continues to expand internationally, having launched its service in Canada in November 2004, and in the United Kingdom in May 2005. * * * As reported in the Troubled Company Reporter on Nov. 16, 2007, Vonage Holdings Corp.'s consolidated balance sheet at Sept. 30, 2007, showed $665.8 million in total assets and $728.7 million in total liabilities, resulting in a $62.9 million total shareholders' deficit. WESTERN POWER: Oct. 31 Balance Sheet Upside-Down by $10.5 Million ----------------------------------------------------------------- Western Power & Equipment Corp.'s consolidated balance sheet at Oct. 31, 2007, showed $43.0 million in total assets and $53.5 million in total liabilities, resulting in a $10.5 million total stockholders' deficit. At Oct. 31, 2007, the company's consolidated balance sheet also showed strained liquidity with $29.3 million in total current assets available to pay $51.4 million in total current liabilities. The company reported a net loss of $2.9 million on net revenues of $19.5 million for the first quarter ended Oct. 31, 2007, compared with a net loss of $769,000 on net revenues of $23.6 million in the corresponding period ended Oct. 31, 2006. For the three-month period ended Oct. 31, 2007, equipment sales and rentals decreased by $3.8 million and product sales decreased by $758,000 while mining sales increased by $443,000. Sales in all of locations declined in the first quarter as compared to the prior year's first quarter, with the exception of the company's Buena Park, California location, which had an increase of $1.9 million as a result of several large sweeper sales to municipalities. The company had an operating loss for the three months ended Oct. 31, 2007, of $674,000 compared to operating income of $85,000 for the three months ended Oct. 31, 2006, reflecting a decrease in margin percentages in equipment sales and added costs related to increased production activities of the company's mining operation. Interest expense for the three months ended Oct. 31, 2007, of $2.5 million was up from $1.3 million in the prior year comparative period. As a result of the company being in technical default of their convertible debt agreement, the company expensed the remainder of the debt discount (related to warrants issued with the convertible debt transaction in June 2005) and deferred debt issuance costs during the quarter ended Oct. 31, 2007. The loss for the three-month period ended Oct. 31, 2007, also includes a gain of $250,000 related to the issuance of the 5% ownership interest in the company's subsidiary, Arizona Pacific Materials, LLC related to the June 2007 default waiver. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 31, 2007, are available for free at http://researcharchives.com/t/s?267f Going Concern Doubt Marcum & Kliegman LLP, in New York, expressed substantial doubt about Western Power & Equipment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended July 31, 2007 and 2006. The auditing firm reported that the company continues to incur operating losses and is in default with its convertible debt agreement. A revised due date of Oct. 15, 2007, was negotiated to pay the entire loan balance. The company did not make the required full loan repayment on Oct. 15, 2007, and continues to be in default with the debt agreement. Management is currently in discussions to refinance the debt but there is no assurance it will succeed in these refinancing efforts. About Western Power Based in Vancouver, Washington, Western Power & Equipment Corp. (OTC BB: WPEC) -- http://www.wpec.com/-- is engaged in the sale, rental, and servicing of light, medium-sized, and heavy construction, agricultural, and industrial equipment, parts, and related products which are manufactured by Case Corporation and certain other manufacturers and operates a mining company in Arizona. Products sold, rented, and serviced include backhoes, excavators, crawler dozers, skid steer loaders, forklifts, compactors, log loaders, trenchers, street sweepers, sewer vacuums, and mobile highway signs. The company maintains two distinct segments which include Western Power & Equipment Corp., the equipment dealership and Arizona Pacific Materials LLC, a mining operation. WICKES INC: Judge Black Confirms Joint Amended Chapter 11 Plan -------------------------------------------------------------- The Honorable Bruce W. Black of the United States Bankruptcy Court for the Northern District of Illinois confirmed Wickes Inc. and the Official Committee of Unsecured Creditors' Joint Amended Chapter 11 Plan of Reorganization. Overview of the Plan As reported in the Troubled Company Reporter on Sept. 11, 2007, the Plan provides for the liquidation of the Debtor's remaining assets, including, the prosecution of causes of action and distribution of the net proceeds to creditors according to priority under the Bankruptcy Code. On the effective date, the Plan contemplates that the property of the Debtor will vest in the liquidating trust, and the liquidating trustee will administer and liquidate the Debtor's remaining assets, and prosecute and settle litigation claims. The Debtor and Committee tell the Court that substantially all of the Debtor's operating assets have been sold. Treatment of Claims Under the Plan, Administrative and Priority Claims will be paid in full. Holders of Secured Claims, totaling $2,100,000, will expect to recover 100% of their allowed claims. After the effective date, each holder will receive, either: a. cash equal to the unpaid portion of the allowed claim; b. other treatment, which the Debtor and liquidating trustee have agreed upon writing; or c. the return of the holder's collateral. Other Priority Claims, totaling $10,376, will be paid in full and will expect to recover 100% of their claims. Holders of Convenience Claims, totaling $2,415,456 including amounts owed to holders who have reduced their claims to $5,000, will expect to recover 15% of their claims. General Unsecured Claims, totaling between $37,000,000 and $46,500,000, will expect to recover 10%, plus additional net recoveries from litigation claims. Holders of Equity Interests and Tort Claims will not receive any distribution under the Plan. A full-text copy of the Disclosure Statement is available for a fee at: http://ResearchArchives.com/t/s?23b8 Headquartered in Vernon Hills, Illinois, Wickes Inc. -- http://www.wickes.com/-- is a retailer and manufacturer of building materials, catering to residential and commercial building professionals, repairs and remodeling contractors and project do-it-yourself consumers. Wickes, Inc., and GLC Division, Inc., filed for chapter 11 protection on January 20, 2004 (Bankr. N.D. Ill. Case No. 04-02221). The Court dismissed GLC's case on Feb. 17, 2005. Richard M. Bendix Jr., Esq., at Schwartz, Cooper, Greenberger & Krauss and Steven J. Christenholz, Esq., David N. Missner, Esq., and Deborah M. Gutfeld, Esq., at DLA Piper Rudnick Gray Cary US LLP represent the Debtors in their restructuring efforts. The Debtors have selected BMC Group Inc. as their claims, noticing and balloting agent. Sonnenschein Nath & Rosenthal LLP serves as counsel for the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $155,453,000 in total assets and $168,199,000 in total debts. WOO CORP: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Woo Corp., Inc. 208 Stonecliff Court Stone Mountain, GA 30083 Bankruptcy Case No.: 07-22700 Type of Business: Doing business as Rabbittown Car Wash, the Debtor provides car wash services. Chapter 11 Petition Date: December 19, 2007 Court: Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtor's Counsel: William C. Burn, Esq. 25 Atlanta Street, Suite F Marietta, GA 30060 Tel: (770) 427-3992 Fax: (770) 425-0601 Total Assets: $1,359,500 Total Debts: $912,458 The Debtor did not file a list of its 20 largest unsecured creditors. XYTRANS INC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Xytrans, Inc. 5422 Carrier Drive, Suite 201 Orlando, FL 32819 Bankruptcy Case No.: 07-06664 Type of Business: The Debtor is a millimeter wave technology provider for the military, homeland security, and commercial markets. See http://www.xytrans.com/ Chapter 11 Petition Date: December 20, 2007 Court: Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: Scott A. Stichter, Esq. Stichter, Riedel, Blain & Prosser, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Northrop Grumman $435,000 Systems Corp.-S.T. P.O. Box 601040 Los Angeles, CA 90060 Dan Ammar $278,229 7054 Horizon Circle Windermere, FL 34786 Sandy Bay Machine $134,554 31 Poole's Lane Rockport, MA 01966 M/A-C.O.M. $62,460 Arnall Golden Gregory $53,281 Allen, Dyer, Dopplett $49,635 Modular Components National $44,815 Boston Financial $38,226 Bulova Technologies $32,447 Arrow Electronics $28,000 Entegee, Inc. $27,489 Gigacom $25,967 Electro Rent Corp. $25,507 KForce, Inc. $25,120 Sand Lake West $18,997 Price Printed Circuits $12,409 Dielectric Laboratories $11,985 Dr. Kimon Anemogiannis $8,375 Polese $8,292 Triad Personnel Services $7,527 * Fitch Performs Review on Rated Cash U.S. Real Estate CDOs ----------------------------------------------------------- In light of industry concerns regarding the stability of ratings for the CDO sector, Derivative Fitch recently conducted a review of its rated cash U.S. commercial real estate CDOs. As part of its review, Fitch identified transactions categorized as first loss transactions as the ones most likely to experience negative rating migration. Fitch currently rates 113 CRE CDOs and ReREMICs with a current rated balance of approximately $54.4 billion. This universe can be classified into three subcategories based on collateral composition: first loss CRE CUSIP CDOs/ReREMICs, non-first loss CRE CDOs, and CREL CDOs. Those deals which include the most junior CMBS bonds are referred to as first loss CRE CUSIP CDOs/ReREMICs; CDOs of predominantly investment grade CMBS, REITs and other rated bonds are referred to as non-first loss CRE CUSIP CDOs; and transactions that consist of more than 50% unrated commercial real estate loans are referred to as CREL CDOs. Fitch currently maintains ratings on 35 first loss CUSIP CDOs totaling $15.6 billion of rated bonds; 43 non-first loss CUSIP CDOs totaling $17.9 billion of rated bonds; and 35 CREL CDOs totaling $20.9 billion of rated bonds. Fitch Performs Sector Review of First Loss CRE CDOs/ReREMICs: A sector review of first loss transactions was prompted by Fitch's anticipation of increased defaults and losses on the loans within the underlying CMBS transactions. CMBS transactions generally contain a sequential pay structure where losses are applied in reverse sequential order. The most junior class of bonds, the first loss bond, absorbs losses before other rated bonds in a respective transaction. The first loss CRE CDO/ReREMIC transactions, in general, contain concentrations of the entire stack of non-investment grade bonds from CMBS transactions in which the asset manager, typically the CMBS B-Piece buyer, invests.. Fitch expects that most unrated first loss bonds will experience complete losses over time, as many of these tranches have a class size that ranges from 1% to 2%. Fitch is refining its methodology for reviewing and rating these transactions to better reflect Fitch's reduced expectation of their performance. For its sector review, Fitch has broadened its universe of deals classified as first loss CUSIP CRE CDOs to include transactions whose underlying CMBS bonds at time of CDO closing were more than 15% rated below 'B-', or had a concentration of CMBS bonds that were more than 25% below 'BB'. As noted in the spreadsheet, several of these deals at issuance did not contain any non-rated first loss bonds (although some now may be first loss due to realized losses). CUSIP CRE CDOs with a concentration of non- rated first loss bonds are expected to be the most at risk of impairment. Upon completion of the sector review, Derivative Fitch will take any necessary rating actions and issue a report detailing the updated methodology. Performance of Non First Loss CUSIP CDOs Dependent on CMBS Rating Migration: Non-first loss or mezzanine CRE CUSIP CDOs will be watched closely as well, but are much more dependent on actual rating migration at this time. These transactions have benefited the most from US CMBS' strong performance track record. For these CRE CDOs, upgrades to-date have been due to the positive rating migration of their underlying CMBS assets. The defeasance of the underlying loans in CMBS pools has been the largest contributing factor to the upgrades that have occurred in the CMBS sector. As mentioned in Fitch's CMBS outlook, the CRE sector is expected to continue to have stable fundamentals in 2008. However, fewer loans will defease over the next year, resulting in fewer upgrades of CMBS bonds. Also, upcoming maturities in 2008 will face increased refinance risk due to lack of available capital which will result in some adverse selection. Properties that have not yet stabilized will have the most difficulty refinancing. Fitch expects more extensions and modifications as loans near their maturities. While fewer upgrades are expected on CMBS bonds in the coming year, Fitch's CMBS stress testing shows that investment grade rated bonds are not expected to be impacted by the lack of available credit, even if a 25% systemic property value decline occurs. U.S. CREL CDOs Can Withstand Systemic Market Value Declines: Similar assumptions utilized in stress testing performed on Fitch's CMBS rated portfolio were applied to Derivative Fitch's rated portfolio of CREL CDOs. Fitch observed that CREL CDOs which exhibited the most stress under a systemic market value decline scenario were those CRE CDOs concentrated in highly leveraged, subordinate debt. Higher leveraged positions will experience more refinance risk, while their subordinate positions may result in 100% loss severity, particularly if they are thin tranches of a property's overall debt stack. Although CREL CDOs concentrated with whole loans fared the best, they are not immune to the current market stress. As reported in Fitch's CREL CDO loan delinquency press releases, whole loans are expected to experience higher delinquencies albeit with lower loss severities. Fitch anticipates that more loans will be extended and/or modified in the coming year. The stress testing applied by Fitch is designed to mimic sudden systemic property value declines to all the properties securing the loans within a transaction. It then tests the effect of the hypothetical loan losses on the respective CDO capital structure. The loan losses were derived by comparing the stressed value to the outstanding mortgage balance. To the extent the value was less than the total outstanding debt, any losses reduced the CDO's available collateral balance. Recoveries after losses were assumed to pay down the most senior bonds, which is standard practice for impaired assets within CREL CDOs. Fitch also gave benefit to any excess spread generated by remaining assets as coverage tests were breached. The stress testing consisted of two systemic market value decline scenarios. The first stress uses Fitch Stressed Net Cash Flow and Fitch's stressed property specific capitalization rates which average 9% compared to the average market cap rates of 6.5% to determine stressed values. This stress approximates a 25% market value decline. All investment grade bonds passed this scenario. The second test applied an additional 15% decline in value resulting in a total 40% decline in value. Fitch views this second stress as corresponding to a 'AA' stress. Each transaction's capital structure was tested to assess whether the 'AAA' and 'AA' rated bonds survived this stress. Similar to CMBS' results, no deals had impaired classes rated above the 'A' category under this scenario. As a result of the stress testing, Fitch has determined from its stress testing that the ratings on CREL CDOs are appropriate and no rating actions are planned at this time. However, Fitch relies on updated information to monitor the deals. To the extent information is dated, conservative assumptions will be made, which could trigger rating actions for certain CREL CDOs. Fitch anticipates there will be a distinct tiering of asset managers and their respective CREL CDOs in the coming year. Fitch believes that those managers who can provide updated information on their deals are actively surveilling their assets and can proactively manage potentially troubled assets before the loans default. One of the advantages of a CDO is that it allows managers greater flexibility to modify and extend loans before they actually experience a default. In addition, those managers with better liquidity in-place, can also support their deals by purchasing impaired assets out of the deal at par. Furthermore, although Fitch has concerns with the amount of leverage on these loans, CREL CDOs are rated to withstand some negative collateral performance. Fitch will be applying these stress test scenarios in both its new issue and surveillance reviews of CREL CDOs going forward. An updated CREL CDO methodology report will be published within the next month describing the stress tests. Additionally, Fitch will continue to monitor all CREL CDOs by reviewing monthly loan delinquency and watchlist reports and performing periodic surveillance reviews. Summary - First Loss Transactions are at Most Risk: In conclusion, the performance of Fitch's rated CRE CDOs will vary in 2008. First loss CDOs/ReREMICs are at most risk of impairment. This transaction type represents 29% by rated balance of all Fitch-rated CRE CDOs. The performance of non-first loss or mezzanine transactions (33% of Fitch-rated CRE CDOs) is dependent on the actual rating migration of the underlying CMBS transactions. US CMBS is anticipated to have stable ratings for 2008. Fitch's stress testing of the CREL CDOs (38%) showed that, based on current information, the investment grade tranches of these transactions can withstand a 25% commercial real estate market value decline. Updated information is of utmost importance in monitoring CREL CDO transactions and Fitch anticipates a tiering of asset managers and transactions based on the asset manager's ability to actively analyze and proactively manage its loan portfolio. Fitch will publish a report on the first loss transaction sector review in the near future. * Notice of Liquidation and Termination Cue S&P to Cut Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 17 classes of notes from three collateralized debt obligation transactions following notifications from the trustees of the controlling noteholders' intent to liquidate the collateral and terminate the CDOs. The three CDOs and their related notice information are: -- Tricadia CDO 2007-8 Ltd., a CDO of SF CDOs, for which a notice dated Dec. 14, 2007, has been received stating that a majority of the controlling noteholders and the credit default swap counterparty are directing the trustee to proceed with the liquidation of the collateral supporting the notes. This notice followed a previous notice declaring an event of default as of Nov. 20, 2007, under section 5.1(h) of the indenture. -- TABS 2007-7 Ltd., a mezzanine SF CDO of asset-backed securities, for which a notice dated Dec. 14, 2007, has been received stating that a majority of the controlling class is directing the trustee to proceed with the liquidation of the collateral supporting the notes. This notice followed a previous notice declaring an EOD as of Nov. 9, 2007, under section 5.1(h) of the indenture. -- TABS 2006-5 Ltd., a mezzanine SF CDO of ABS, for which a notice dated Dec. 12, 2007, has been received stating that a majority of the controlling class is directing the trustee to proceed with the liquidation of the collateral supporting the notes. This notice followed a previous notice declaring an EOD as of Nov. 1, 2007, under section 5.1(h) of the indenture. These rating actions reflect Standard & Poor's opinion regarding the impact on the transactions of a potential liquidation of the collateral at the current depressed market prices. The controlling class' election to liquidate the collateral at this time may result in losses for all classes of notes. Therefore, these rating actions are more severe than would be justified based solely on the credit deterioration of the underlying collateral. Through Dec. 17, 2007, Standard & Poor's had received EOD notices for 50 U.S. CDO of ABS and CDO of SF CDO transactions originated in 2006 and 2007. To date, including the three transactions below, six of these CDOs have followed their EOD notices with notices of their intent to liquidate. TABS 2006-5, TABS 2007-7, and Tricadia 2007-8 are managed by Tricadia CDO Management LLC. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions (including CreditWatch placements) as appropriate given the performance of the underlying collateral, the credit enhancement afforded by each CDO structure, and the priority of payments specified in each transaction's legal documentation. S&P will base subsequent rating actions on cash flow and hybrid CDO transactions that have experienced EODs due to the failure of an overcollateralization-based EOD trigger on our analysis of the cash flow impact of post-EOD actions taken by the controlling noteholders for the transaction. Downgrades and CreditWatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- TABS 2006-5 A-1S BB/Watch Neg AAA/Watch Neg TABS 2006-5 A-1J CCC-/Watch Neg BBB-/Watch Neg TRICADIA CDO 2007-8 A-1VF BB/Watch Neg AAA TRICADIA CDO 2007-8 A-X CCC-/Watch Neg AAA/Watch Neg TRICADIA CDO 2007-8 A-2 CCC-/Watch Neg AAA/Watch Neg TRICADIA CDO 2007-8 B CCC-/Watch Neg AA/Watch Neg TRICADIA CDO 2007-8 C CC A/Watch Neg TRICADIA CDO 2007-8 D CC BBB/Watch Neg TRICADIA CDO 2007-8 E CC BBB-/Watch Neg TRICADIA CDO 2007-8 F CC BB/Watch Neg TABS 2007-7 A-1S BB/Watch Neg AAA/Watch Neg TABS 2007-7 A-1J CCC-/Watch Neg AA+/Watch Neg TABS 2007-7 A-2 CCC-/Watch Neg BBB/Watch Neg TABS 2007-7 A-3 CC BB-/Watch Neg TABS 2007-7 B-1 CC B/Watch Neg TABS 2007-7 B-2 CC CCC/Watch Neg TABS 2007-7 X CCC-/Watch Neg AA/Watch Neg Other Ratings Outstanding Transaction Class Rating ----------- ----- ------ TABS 2007-7 B3 CC TABS 2007-7 C CC TABS 2007-7 Sub notes CC TABS 2006-5 A2 CC TABS 2006-5 A3 CC TABS 2006-5 B1 CC TABS 2006-5 B2 CC TABS 2006-5 B3 CC TABS 2006-5 C CC TABS 2006-5 Sub notes CC * S&P Cuts Ratings on 1,292 Classes of Mortgage-Backed Securities ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 1,292 classes of U.S. residential mortgage-backed securities backed by U.S. first-lien Alternative A mortgage collateral issued during 2005 and 2006. These classes are from 381 transactions. In the aggregate, the affected classes represent approximately $7.06 billion of original par amount, which is 1.02% of the $694.3 billion original par amount of U.S. first-lien Alt-A mortgage collateral rated by Standard & Poor's in 2005 and 2006. The current balance of the certificates with lowered ratings is $6.9 billion. It's important to note that we adjusted the former base amount of $675.9 billion because we re-categorized 55 prime pools as Alt-A in our surveillance systems. These pools represent approximately $18 billion in securities. The Alt-A transactions are collateralized by negative amortization (payment option ARMs), short-reset hybrid ARMs (2/28 and 3/27) and fixed-rate and longer-dated hybrid ARM loans. By collateral type, rating actions were: Alt-A Type 2/28 & 3/27 Hybrid Ratings Cut Ratings Cut Dollars Cut ----------- ----------- ----------- 420 32.46% $2,262,000,000 Billion Dollar rated Percentage of rated Percentage of total ('05/'06) by type Alt-A rated -------------------- ------------------- ------------------- $69,650,000,000 3.25% 0.33% Alt-A Type Neg Am Ratings Cut Ratings Cut Dollars Cut ----------- ----------- ----------- 121 9.37% $1,106,000,000 Billion Dollar rated Percentage of rated Percentage of total ('05/'06) by type Alt-A rated -------------------- ------------------- ------------------- $229,280,000,000 0.478% 0.16% Alt-A Type Fixed & hybrid (fixed period > 3 years) Ratings Cut Ratings Cut Dollars Cut ----------- ----------- ----------- 751 58.17% $3,609,000,000 Billion Dollar rated Percentage of rated Percentage of total ('05/'06) by type Alt-A rated -------------------- ------------------- ------------------- $395,340,000,000 0.93% 0.53% Standard & Poor's also affirmed its ratings on securities issued from the same period, representing $548.54 billion original par value of U.S. RMBS backed by first-lien Alt-A mortgage loan collateral. Alt-A loans are first-lien residential mortgages that generally conform to traditional "prime" credit guidelines. However, the loan-to-value ratio, loan documentation, occupancy status, property type, or other factors cause these loans not to qualify under standard underwriting programs for prime jumbo and prime quality conforming loans. These rating actions resolve 507 outstanding CreditWatch actions taken since Dec. 8, 2006, 484 of which were taken on Nov. 9 2007. S&P affirmed 113 of these ratings and removed them from CreditWatch negative. S&P lowered the other 394 ratings. Impact on CDOs, ABCP, and SIVs Standard & Poor's is also reviewing its rated collateralized debt obligation transactions with exposure to these U.S. RMBS classes. Where appropriate, S&P will take action on the affected CDO classes within the next several days. Standard & Poor's has completed its global review of all its rated asset-backed commercial paper conduits with exposure to these U.S. RMBS classes and confirms that the ratings on these ABCP conduits are not adversely affected by these rating actions. Standard & Poor's has reviewed all rated structured investment vehicle and SIV-lite structures with regard to exposure to these U.S. RMBS classes. This review showed that there is no exposure to the affected U.S. RMBS classes in any SIV or SIV-lite and are therefore not adversely affected by these rating actions. Rating changes were distributed throughout the rating spectrum with one rating lowered to 'A' form 'AAA'. Rating actions were taken predominately on the 'BBB' or lower rating categories (63.15%). The resulting ratings associated with the downgraded classes, as a percentage of the total $6.9 billion in downgraded securities, are as following: Rating No. of Total Category Actions Orig. cert bal. actions by bal. -------- ------- --------------- --------------- AAA 1 $13,365,328 0.19% AA+ 13 $181,730,231 2.63% AA 69 $750,022,480 10.87% AA- 26 $154,201,820 2.24% A+ 56 $299,391,106 4.34% A 112 $757,623,026 10.99% A- 83 $364,523,911 5.29% BBB+ 88 $417,789,132 6.06% BBB 159 $810,198,176 11.75% BBB- 132 $594,888,551 8.63% BB+ 54 $237,995,777 3.45% BB 234 $1,185,541,483 17.19% BB- 11 $29,937,566 0.43% B 246 $1,079,572,984 15.65% B- 7 $15,615,482 0.23% CCC 1 $4,457,674 0.06% Total 1,292 $6,896,854,728 100.0% These rating actions incorporate our most recent economic assumptions, and reflect our expectation of further defaults and losses on the underlying mortgage loans and the consequent reduction of credit support from current and projected losses. Our projections are based on our surveillance assumptions that we published on Aug. 7, 2007. The ratings on the Alt-A transactions from the issuers listed below were most affected by the downgrades, and represent approximately 81.76% of the actions taken. Most of these issuers were among the top 10 issuers of Alt-A securitizations during 2005 and 2006. Top 10 Dollar Amounts Of Downgraded Securities By Issuer Issuer Amount Percentage ------ ------ ---------- Countrywide $1,560,936,735 22.63% Bear Stearns $1,092,349,160 15.84% Lehman Bros. $659,280,753 9.56% IndyMac $648,563,508 9.40% Goldman Sachs $353,045,429 5.12% Deutsche $321,422,738 4.66% Greenwich $286,438,173 4.15% Nomura $272,677,355 3.95% RFC $224,050,276 3.25% Morgan Stanley $219,840,187 3.19% Total downgraded amount 81.76% Factors Driving Rating Actions Mortgage Pool Performance The lowered ratings reflect pool performance as of the November 2007 distribution date and the delinquency pipelines in these mortgage loan pools. Although most of these pools have incurred low cumulative losses to date, the projected credit support for the affected classes is no longer sufficient in Standard and Poor's view to support the previous ratings. Some of these transactions have higher-than-expected foreclosure and real estate owned amounts, with sums that exceed current available credit support amounts, which includes, where applicable, the O/C amounts. Additionally, in many cases, the stressed losses may outpace excess interest and erode credit support, causing O/C levels to fall below their targets. These actions reflect a persistent rise in the level of delinquencies among the Alt-A mortgage loans supporting these transactions. As of the November 2007 distribution, total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) for the 2005 transactions with ratings lowered exceed those of Alt-A transactions with ratings affirmed by 92% and 130%, respectively. At the same time, total and severe delinquencies for the 2006 transactions with ratings lowered exceed those with ratings affirmed by 64% and 103%, respectively. Total delinquencies for all Alt-A transactions issued during 2005 have increased 37.3% to 8.62%, and total delinquencies for all Alt-A transactions issued during 2006 have increased 62.1% to 11.64% since July 2007. Over the same period, severe delinquencies have increased 52.4% to 4.8% for transactions issued during 2005 and to 63.3% to 6.61% for transactions issued during 2006. The following data shows the trending decline in credit quality for Alt-A transactions by three relevant groupings. ALT-A Deals Downgraded 2005 Vintage 2006 Vintage ------------ ------------ Delinq. Cum Delinq. Cum Date Total 90+ loss Date Total 90+ loss ---- ------ --- ---- ---- ------- --- ---- Nov 13.29 7.49% 0.15% Nov 15.37 9.82% 0.09% Oct 12.32 6.58% 0.12% Oct 14.27 8.38% 0.06% Sept 10.53 5.78% 0.09% Sept 12.17 7.45% 0.04% Aug 9.51 5.00% 0.07% Aug 10.93 6.20% 0.03% July 8.72 4.44% 0.06% July 9.81 5.23% 0.02% ALT-A Deals Without Downgrades 2005 Vintage 2006 Vintage ------------ ------------ Delinq. Cum Delinq. Cum Date Total 90+ loss Date Total 90+ loss ---- ------ --- ---- ---- ------ --- ---- Nov 6.94 3.24% 0.04% Nov 9.38 4.85% 0.05% Oct 6.79 2.98% 0.04% Oct 9.08 4.09% 0.05% Sept 5.55 2.57% 0.03% Sept 7.39 3.39% 0.04% Aug 5.26 2.26% 0.02% Aug 6.47 2.69% 0.03% July 4.93 1.96% 0.02% July 5.70 2.09% 0.02% All ALT-A Deals 2005 Vintage 2006 Vintage ------------ ------------ Delinq. Cum Delinq. Cum Date Total 90+ loss Date Total 90+ loss ---- ------ --- ---- ---- ------ --- ---- Nov 8.62 4.80% 0.11% Nov 11.64 6.61% 0.08% Oct 8.34 4.31% 0.09% Oct 10.71 5.59% 0.05% Sept 7.04 3.84% 0.08% Sept 8.96 4.85% 0.04% Aug 6.67 3.48% 0.06% Aug 7.99 4.06% 0.03% July 6.28 3.15% 0.05% July 7.18 3.42% 0.02% Realized cumulative losses within U.S. RMBS transactions backed by Alt-A mortgage loans issued during this period have remained relatively low to date. The 2005 and 2006 transactions affected by these actions have experienced losses of 15 basis points and 9 bps to date, respectively, as compared with those with affirmed ratings, which have experienced losses of 4 bps and 5 bps, respectively. Economic Factors Standard & Poor's expects that home prices in the U.S. housing market will continue to decline. Weakness in the property markets is evidenced by rising loss severities reported by servicers, with little prospect for improvement in the near term. Additional property value declines are expected. Standard & Poor's currently projects that property values will decline 11% on average from peak to trough and will begin to recover in late 2008, with the peak having occurred in the spring of 2006. The continued decline in home prices will apply additional stress to the affected Alt-A transactions. Additionally, foreclosures will cause increased losses, and many borrowers will face the inability to refinance or sell their homes to meet debt obligations. As lenders have tightened underwriting guidelines, fewer refinance options may be available to these borrowers, especially if their LTV and combined loan-to-value ratios have risen in the wake of declining home values. Additional Surveillance Assumptions In reviewing these transactions, S&P employed the first-lien Alt-A surveillance assumptions S&P announced on Aug. 7, 2007, adjusted for our more negative views on home prices, delays in liquidating REO assets, and the impact of interest rate resets and loan modifications. S&P maintains a 25% loss severity for the Alt-A collateral issued during the first quarter 2005 through the third quarter 2005 with short resets (less than or equal to three years) only. The increased loss severity for the remaining periods of issuance reflects Standard & Poor's most recent projections for house price declines. Therefore, S&P assumes loss severities for these transactions: Loss Severities Quarter Transaction Closed -------------------------- Q1'05-Q3'05 Q4'05 - Q4'06 ----------- ------------- Alt-A 2/28 & 3-27 ARM 25% 28% Alt-A short reset 32% 35% Alt-A Neg Am 30% 33% Standard and Poor's has not changed its assumptions for how delinquent loans will progress through the delinquency pipeline toward liquidation. To capture its view on the recognition of loss in our analysis, S&P employed collateral-specific loss curves that stressed losses through the next 36 months of the life of the transactions. S&P projected forward a delinquency pipeline using a fixed or subprime historical default curve for fixed-rate and longer-dated hybrid ARMs and short-reset hybrid ARMs, respectively. S&P used more recent negative amortization data for the negative amortization curves. In the aforementioned article, S&P notes that the expected losses for the entire 2005 and 2006 vintages that result from applying the curves range from 1.85% to 2.55% and 3.35% to 4.42%, respectively. Its current view is that many of the losses for the 2006 transactions will more likely be toward the higher end of the range for the 2006 vintage, based on higher delinquencies and lower home price appreciation. During this review, S&P analyzed all of the classes backed by Alt- A mortgage loan collateral rated during 2005 and 2006. The outstanding classes issued during this period that are not included in this release demonstrated sufficient levels of protection for the current ratings. Therefore, S&P is affirming its ratings on these classes. * S&P Puts Ratings of 74 Tranches on CreditWatch Negative --------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 74 tranches from 15 U.S. cash flow and hybrid collateralized debt obligations of asset-backed securities on CreditWatch with negative implications following the downgrade of 1,292 classes of U.S. residential mortgage-backed securities backed by U.S. first- lien Alternative A mortgage collateral. The 381 downgraded RMBS Alt-A transactions were issued during 2005 and 2006. The CDO tranches with ratings placed on CreditWatch negative have a total issuance amount of $5.18 billion, and all are from CDOs of ABS collateralized by structured finance securities, including U.S. RMBS. The affected CDO transactions were all issued in 2006 or 2007. Four of the affected CDO transactions are high-grade SF CDOs of ABS collateralized at origination primarily by 'AAA', 'AA', and some 'A' rated tranches of RMBS and other SF securities. The other 11 CDOs are mezzanine SF CDOs of ABS collateralized by 'A' and 'BBB' rated tranches of RMBS and other SF securities. For the mezzanine SF CDOs with ratings on CreditWatch, the exposure to the downgraded Alt-A mortgage collateral ranges from 5.39% to 29.7% of the total portfolio collateral held by the CDO, while the corresponding exposure for the high-grade SF CDOs ranges from 2.03% to 8.7% of the total collateral. Standard & Poor's is continuing its review of cash flow and hybrid CDO transactions with exposure to downgraded RMBS and will take action on the CDO ratings where appropriate. CDO Ratings Placed on CreditWatch Negative Rating ------ Transaction Tranche To From ----------- ------- -- ---- Brigantine High Grade Fndg B AA/Watch Neg AA Brigantine High Grade Fndg C A/Watch Neg A Brigantine High Grade Fndg D BBB/Watch Neg BBB Brigantine High Grade Fndg Income nts BB+/Watch Neg BB+ Caldecott CDO 1 A-2 AAA/Watch Neg AAA Caldecott CDO 1 A-3 AA-/Watch Neg AA- Caldecott CDO 1 B A-/Watch Neg A- Caldecott CDO 1 C BB+/Watch Neg BB+ Caldecott CDO 1 D B-/Watch Neg B- Caldecott CDO 1 E CCC+/Watch Neg CCC+ Caldecott CDO 1 F CCC/Watch Neg CCC Grand Avenue CDO II A-3 AAA/Watch Neg AAA Grand Avenue CDO II B AA/Watch Neg AA Grand Avenue CDO II C A-/Watch Neg A- Grand Avenue CDO II D BBB/Watch Neg BBB Ischus Mezzanine CDO IV A-3 AAA/Watch Neg AAA Ischus Mezzanine CDO IV B AA/Watch Neg AA Ischus Mezzanine CDO IV C A/Watch Neg A Nautilus RMBS CDO III A-1J AAA/Watch Neg AAA Nautilus RMBS CDO III A-2 AA/Watch Neg AA Nautilus RMBS CDO III A-3F A/Watch Neg A Nautilus RMBS CDO III A-3V A/Watch Neg A Nautilus RMBS CDO III B BBB/Watch Neg BBB Nautilus RMBS CDO III C B/Watch Neg BB Nautilus RMBS CDO IV B-F BBB/Watch Neg BBB Nautilus RMBS CDO IV B-V BBB/Watch Neg BBB Nautilus RMBS CDO IV C-F BB/Watch Neg BB Nautilus RMBS CDO IV C-V BB/Watch Neg BB Pine Mountain CDO II A AAA/Watch Neg AAA Sharps CDO I A-1 AAA/Watch Neg AAA Sharps CDO I A-2 AAA/Watch Neg AAA Sharps CDO I B AA/Watch Neg AA Sharps CDO I C A/Watch Neg A Sharps CDO I D BBB/Watch Neg BBB Sharps CDO I E BB/Watch Neg BB Sharps CDO II A-2 AAA/Watch Neg AAA Sharps CDO II A-3 AAA/Watch Neg AAA Sharps CDO II B AA/Watch Neg AA Sharps CDO II C A/Watch Neg A Sharps CDO II D-1 BBB+/Watch Neg BBB+ Sharps CDO II D-2 BBB-/Watch Neg BBB- Silver Marlin CDO I B AA/Watch Neg AA Silver Marlin CDO I C AA-/Watch Neg AA- Silver Marlin CDO I D A/Watch Neg A Silver Marlin CDO I E A-/Watch Neg A- Silver Marlin CDO I F BBB/Watch Neg BBB Sorin CDO V A2 AA/Watch Neg AA Sorin CDO V A3 A/Watch Neg A Sorin CDO V B BBB/Watch Neg BBB Sorin CDO V C BB/Watch Neg BB Sorin CDO VI A-2L AA/Watch Neg AA Sorin CDO VI A-3L A/Watch Neg A Sorin CDO VI B-1L BBB/Watch Neg BBB Sorin CDO VI B-2L BB+/Watch Neg BB+ South Coast Funding IX A2 AAA/Watch Neg AAA South Coast Funding IX B A/Watch Neg A South Coast Funding IX C BB/Watch Neg BB South Coast Funding IX D B-/Watch Neg B- South Coast Funding IX E CCC+/Watch Neg CCC+ South Coast Funding IX F CCC/Watch Neg CCC Stack 2006-1 II AAA/Watch Neg AAA Stack 2006-1 III AA/Watch Neg AA Stack 2006-1 IV A+/Watch Neg A+ Stack 2006-1 V A-/Watch Neg A- Stack 2006-1 VI BB+/Watch Neg BB+ Stack 2006-1 VII BB/Watch Neg BB West Coast Funding I A-1a AAA/Watch Neg AAA West Coast Funding I A-1b AAA/Watch Neg AAA West Coast Funding I A-1v AAA/Watch Neg AAA West Coast Funding I A-2 AAA/Watch Neg AAA West Coast Funding I A-3 AAA/Watch Neg AAA West Coast Funding I B AA/Watch Neg AA West Coast Funding I C A/Watch Neg A West Coast Funding I D BBB/Watch Neg BBB * BOOK REVIEW: How to Measure Managerial Performance ---------------------------------------------------- Author: Richard S. Sloma Publisher: Beard Books Paperback: 272 pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1893122646/internetbankrupt How to Measure Managerial Performance by Richard S. Sloma is a valuable reference tool. This practical handbook provides new insights into enterprising management techniques. This book is a compendium of principles and techniques to improve and measure managerial performance in a number of areas important to the successful operation of a business. Rigorous application of the concepts of this instructive book will enable an organization to perform at several levels higher in efficiency and effectiveness. ********* 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, Philline P. Reluya, 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 ***