/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/071227.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, December 27, 2007, Vol. 11, No. 305 Headlines ACTUANT CORP: Earns $27.4 Million in First Quarter Ended Nov. 30 AIRCRAFT INDEBTEDNESS: Fitch Withdraws Ratings on Three Certs. ALCATEL-LUCENT SA: Sells 49.9% Draka Comteq Stake for EUR209 Mil. ALDEAVISION SOLUTIONS: Court Approves Plan of Arrangement AMERICAN TRANS: Fitch Withdraws Ratings on Two Certificates AMERIQUAL GROUP: S&P Lowers Rating to B with Negative Outlook AMRESCO RESIDENTIAL: S&P Junks Rating on Class M2 Security ANN-LEE CONSTRUCTION: Case Conversion Hearing Deferred to Feb. 5 APOGEE TECHNOLOGY: Gets AMEX Common Stock Delisting Notice AREI NEWHALL 10: Voluntary Chapter 11 Case Summary ARMITAGE ABS: Moody's Junks Ratings on Three Classes of Notes ARROW ELECTRONICS: Expands Distribution Agreement with Delta ASPEN FUNDING: Moody's Reviews Ba2 Rating on $10 Mil. Notes BANC OF AMERICA: Fitch Affirms Low-B Ratings on 14 Certificates BEAR STEARNS: Barclays Seeks Damages for Fraud and Conspiracy BEAR STEARNS: Federal Regulators Probe Into Funds' Insiders BILLING SERVICES: Moody's Withdraws Ratings on $105 Mil. Loan BIOPURE CORP: Closing Bid Price Falls Below Nasdaq's Criteria BIO-RAD LABS: Earns $28 Million in Third Quarter Ended Sept. 30 BLACKBOARD INC: S&P Holds B+ Rating with Positive Outlook BULLITT ELDERCARE: Case Summary & Five Largest Unsecured Creditors CALPINE CORP: Issues Warrants as Part of Plan of Reorganization CANTERN CORP: Case Summary & Largest Unsecured Creditor CARBIZ INC: Begins Buy Here-Pay Here Operations in Oklahoma CARROLS CORP: Moody's Maintains B2 Corporate Family Rating CENTEX 2002: Fitch Junks Two Classes of 2002-C Certificates CHIQUITA BRANDS: Discloses Rule 10b5-1 Stock Trading Plan CHRYSLER LLC: CEO Expresses Confidence in Operations and Finances CINRAM INT'L: Weak Operation Prompts Moody's to Hold B1 Ratings CITIGROUP: Fitch Junks Rating on $3.8 Mil. Class B-7 Note CITIGROUP MORTGAGE: Fitch Junks Ratings on Four Certificates CLAYMONT STEEL: Buyer Evraz Group Launches Cash Tender Offer COFFEYVILLE RESOURCES: S&P Upgrades Rating to B from CCC+ CONSECO INC: Unit Recaptures $50 Mil. of Life Insurance Premium CONSTELLATION COPPER: Delays Filing of Third Quarter Financials CONTINENTAL AIRLINES: Fitch Holds Low-B Ratings on Five Certs. CORRECTIONS CORP: Secures New $450 Mil. Revolving Debt Facility CREDIT-BASED ASSET: Fitch Cuts Ratings on Certs. Totaling $44MM CREDIT SUISSE: Fitch Puts B+ Rating on $29.3 Mil. Class H Cert. CRYSTAL COVE: Moody's Puts Ba2 Rating on $20.3M Notes Under Review CUMMINS INC: Urges Shareholders to Reject Mini-Tender Offer DANA CORP: Court Confirms Plan of Reorganization DELTA FINANCIAL: Common Stock To Be Delisted from Nasdaq Tomorrow DERCO INC: Case Summary & 20 Largest Unsecured Creditors DOMTAR INC: Completes First Phase of Offers to Buy Notes DORAL FINANCIAL: S&P Holds CreditWatch Placement of "B" Rating EMPIRE RESORTS: Sept. 30 Balance Sheet Upside-Down by $13.4 Mil. ENCORE ACQUISITION: Board Okays $445 Million 2008 Capital Budget ENCORE RECEIVABLES: Delinquency Cues S&P to Cut Rating on Notes FAMILY FIRST: Ends Business by Year-End; Won't for File Bankruptcy FEDDERS CORP: Can Hire Roux Associates as Environmental Consultant FEDDERS CORP: Court OKs Devonshire Realty as Real Estate Broker FEDDERS CORPORATION: Court Sets March 4, 2008 as Claims Bar Date FEDERATIVE REPUBLIC OF BRAZIL: S&P Maintains Low-B Ratings FGX INT'L: Company's Request Prompts S&P to Withdraw B Ratings FIRST FRANKLIN: Fitch Cuts Ratings on $6.7 Mil. Cert. to BB FIRST FRANKLIN: Realized Losses Cues S&P to Downgrade Ratings FIRST MAGNUS: To Sell 40 Construction Loans to Summit for $4.6MM FIRST MAGNUS: Court Designates Examiner for 17 Flagstaff Loans FIRST MORTGAGE: Moody's Downgrades Ratings from A2 TO Ba2 FORD MOTOR: Continues Pay Hikes for White-Collared Workers in 2008 EVRAZ GROUP: Launches Cash Tender Offer to Purchase Claymont Steel GEMSTONE CDO: Moody's Reviews Ba2 Rating on $6.1 Mil. Notes GEMSTONE CDO: Moody's Reviews Ba2 Rating on $7.5 Mil. Notes GEMSTONE CDO: Moody's Reviews Ba2 Rating on $6 Mil. Notes GENERAL MOTORS: Resumes Pay Hikes for Salaried Employees in 2008 GENERAL MOTORS: Sells 1 Million Vehicles in China in One Year GMAC LLC: Moody's Cuts Senior Unsecured Debt Rating to Ba3 GREENBRIAR CLO: Moody's Assigns Ba2 Rating on $40 Mil. Notes IDAHO HEALTH: S&P Cuts Rating on Revenue Bonds to BB from BBB- IMAX CORP: Limited Liquidity Cues S&P to Affirm CCC+ Rating IMC HOME: Delinquent Loans Prompt S&P to Cut Ratings to B INDUSTRIAS UNIDAS: S&P Holds B Ratings with Negative Outlook INTERFACE INC: Earns $8.6 Million in Third Quarter Ended Sept. 30 IZATYS GROUP: Case Summary & Four Largest Unsecured Creditors JP MORGAN MORTGAGE: Fitch Puts BB Rating on $18 Mil. Certs. JP MORGAN MORTGAGE: Fitch Holds Low-B Ratings on Three Certs. KNIGHTSBRIDGE CLO: Moody's Puts Ba2 Rating on $22 Mil. Notes KNOLLWOOD CDO: Moody's Lowers Rating on $16.5 Mil. Notes to Ba3 LEVITT AND SONS: Submits DIP Financing Term Sheet with Wachovia LEVITT AND SONS: Courts Okays Use of Cash on Hand Until Jan. 9 LEVITT AND SONS: Panel Asks Court to Reconsider Abandonment Orders LIBERTY MEDIA: Fitch Maintains BB Ratings with Stable Outlook LONG BEACH MORTGAGE: Fitch Junks Rating on $37.5 Mil. Notes MAAX HOLDINGS: Caa3 Senior Note Rating Cut by Moody's to Ca MAGNA ENT: Inks Pacts to Sell Excess Real Estate for $28.7 Mil. MBIA INC: Company Rating Outlook Changed to Negative by Moody's MERCURY CDO: Moody's Cuts Rating on $17 Mil. Notes to Ba2 MKP CBO: Moody's Cuts Baa3 Rating on $5 Mil. Note to B1 MOBILE MINI: Earns $12.7 Million in Third Quarter Ended Sept. 30 MORGAN STANLEY: Fitch Junks Ratings on Eight Certificates MORGAN STANLEY: Delinquencies Cue Fitch to Downgrade Ratings MOSAIC CO: Will Prepay $150 Mil. of Term Loans on December 31 NATIONAL RV: Court Approves Use of Well Fargo's Cash Collateral NATIONAL RV: Taps O'Melveny & Myers as Special Litigation Counsel NEW CENTURY: Fitch Junks Rating on $37 Mil. Class M-1 Cert. NEW CENTURY: Exclusive Plan Filing Period Expires Tomorrow NEW CENTURY: More Than $32 Billion in Claims Filed Through Aug. 31 NEW JERSEY EDUCATIONAL: S&P Holds BB+ Rating on 1998B Bonds NEWPAGE CORP: Closes Purchase of Stora Enso's North American Biz NEWPARK RESOURCES: Secures New $225 Mil. Secured Debt Facility NY RACING: Creditors Balk at Confirmation of Reorganization Plan NY RACING: Says Plan of Reorganization Gets 97% "Yes" Votes OCEANVIEW CBO: Moody's Cuts Ratings on Two Notes from Caa3 to C OMEGA HEALTHCARE: S&P Holds BB Senior Unsecured Debt Rating ON SEMICONDUCTOR: Moody's Affirms Ba3 Credit Facility Rating PACIFIC COAST : Moody's Reviews Caa3 Rating on $96 Mil. Notes PERFORMANCE TRANS: CIT Group Balks at Imperial Cap.'s Retention PERFORMANCE TRANS: Court Approves Jones Day as Bankr. Counsel PIER 1: Posts $10 Million Net Loss in Third Quarter Ended Dec. 1 PINE RIVER: Files Amended Combined Plan & Disclosure Statement PINNACLE POINT: Moody's Junks Ratings on Two Classes of Notes POPE & TALBOT: U.S. Trustee Sets Jan. 8 Sec. 341 Creditors Meeting POPE & TALBOT: Courts Extends Deadline to File Schedules POPE & TALBOT: Courts Approve Cross-Border Insolvency Protocol QUEBECOR MEDIA: Earns CDN$84.8 Million in Third Quarter QUINTILES TRANSNATIONAL: S&P Holds BB- Corporate Credit Rating RED VISTAS: Case Summary & Four Largest Unsecured Creditors RITCHIE MULTI-STRATEGY: Involuntary Chapter 11 Case Summary RITE AID: Posts $84.8 Million Net Loss in 3rd Qtr. Ended Dec. 1 RIVER NORTH: Moody's Cuts Rating on $14.25 Million Notes to B3 SACO MORTGAGE: Fitch Cuts Ratings on Four Certs. to Low-B SINCLAIR BROADCAST: S&P Affirms BB- Rating with Stable Outlook SIRICOMM INC: Files Chapter 11 Petition in Missouri SIRICOMM INC: Case Summary & 20 Largest Unsecured Creditors SPANSION INC: Amends Merger Agreement with Saifun Semiconductors STRUCTURED ASSET: Fitch Junks Ratings on 21 Certificates STRUCTURED ASSET: S&P Cuts Rating on Class B Certificates to "D" SURETY CAPITAL: Files for Bankruptcy to Pursue Sale of Asset SURETY CAPITAL: Case Summary & 20 Largest Unsecured Creditors SYMPHONY CLO: Moody's Puts Ba2 Rating on $12.24 Mil. Notes SYNIVERSE TECHNOLOGIES: Completes BSG Wireless Acquisition TEKNI-PLEX INC: Moody's Cuts Corporate Rating to Caa3 from Caa1 TEMBEC INC: Considers Conversion of $1.2 Billion Debt to Equity TENNECO INC: Completes Realignment of Some Foreign Subsidiaries TEXAS STUDENT: S&P Lowers 2001A Bonds' Rating to BB- from BB TISHMAN SPEYER: S&P Maintains BB- Corporate Credit Rating TRUMP ENTERTAINMENT: Secures $500 Mil. Mortgage Credit Facility TSG INC: Judge Cornish Confirms Chapter 11 Liquidation Plan UBS MORTGAGE: Fitch Puts BB+ Rating on Class B Certificates UBS MORTGAGE: Fitch Puts Low-B Ratings on Two Certificates VESTA INSURANCE: Florida Select Files Plan of Liquidation VONAGE HOLDINGS: Settles AT&T Patent Dispute; Agrees to Pay $39MM WAMU ASSET: Fitch Assigns Low-B Ratings on Four Certificates * FTI Consulting Promotes Ten Exec. to Senior Managing Director * Squire Sanders Enhances Restructuring and Insolvency Team * William Yoo Joins Fried Frank-Asia's Real Estate Equity Team * S&P Cuts Ratings on 88 Tranches 20 U.S. Cash Flow and CDOs * S&P Downgrades 14 Tranches' Ratings from 10 U.S. CDOs * Chapter 11 Cases with Assets & Liabilities Below $1,000,00 ********* ACTUANT CORP: Earns $27.4 Million in First Quarter Ended Nov. 30 ---------------------------------------------------------------- Actuant Corporation reported first quarter fiscal 2008 net earnings of $27.4 million compared to prior year net earnings of $25.1 million. Fiscal 2008 first quarter results include a $5.5 million charge covering a portion of the company's European Electrical restructuring, versus $100,000 in the first quarter of fiscal 2007. For the first quarter ended Nov. 30, 2007, the company's net sales increased 21% to $415 million from $343 million in the prior year, reflecting the combination of core growth, business acquisitions and the weaker U.S. dollar. Excluding the impact of foreign currency rate changes (5%) and acquisitions (13%), core sales growth was 3%. Both the Industrial and Engineered Products segments generated double-digit core sales growth. Robert Arzbaecher, President and CEO of Actuant commented, "Actuant is off to a solid start in fiscal 2008 with core sales growth slightly ahead of expectations and excellent conversion to earnings. Robust Industrial segment sales as well as continued strength in the European truck market had a favorable impact on our core sales growth in the quarter. These results reinforce the benefits of Actuant's end market, geographic and customer diversification. Excluding restructuring charges, first quarter EPS increased 27% from last year, driven by higher sales, the benefit of acquisitions and margin expansion. We were especially pleased with the breadth of the year-over-year EBITDA margin increase as all of our business segments contributed to the improvement." Excluding European Electrical restructuring charges, operating margins in the first quarter improved 90 basis points, to 13.6% from 12.7% in the prior year. Higher gross profit margins as well as controlled selling, administrative and engineering spending were the primary drivers. The gross profit margin expansion reflects higher volume, favorable sales mix and the Company's continuous improvement initiatives including Lean Enterprise Across Discipline. Financial Position Net debt at Nov. 30, 2007, was $505 million (total debt of $574 million less $69 million of cash), an increase of $30 million from the beginning of the quarter. Strong cash flow in the quarter was used to fund the $47 million investment in TK Simplex as well as $9 million of capital expenditures. Actuant's first quarter cash flow was impacted by seasonal trends including working capital growth and the payment of prior year employee incentive compensation. Outlook The company also announced that it has increased its full year sales and earnings guidance and provided guidance for the second quarter of fiscal 2008. Mr. Arzbaecher stated, "We expect second quarter sales and EPS to be lower than the first quarter due to normal seasonality, but do anticipate year-over-year growth. Excluding future acquisition activity and European Electrical restructuring charges, we are projecting second quarter sales and EPS to be in the range of $385 - $395 million, and $0.39-0.42 per share, respectively." Mr. Arzbaecher continued "Our full year fiscal 2008 sales and earnings outlook, excluding future acquisitions and European Electrical restructuring charges, is being increased to reflect actual first quarter results, the weaker U.S. dollar and current business conditions. Our increased guidance is for sales and EPS in the range of $1.625-1.660 billion and $1.95-2.05 per share, respectively. This translates to 13-18% EPS growth over the $1.73 fiscal 2007 EPS, excluding 2007 tax gains and European Electrical restructuring charges. We are pleased with our first quarter performance and remain committed to delivering outstanding customer and shareholder value." About Actuant Corp. Headquartered in Glendale, Wisconsin, Actuant Corp. (NYSE:ATU) -- http://www.actuant.com/-- is a diversified industrial company with operations in more than 30 countries, including Australia, Brazil, China, Hong Kong, Italy, Japan, Taiwan, United Kingdom and South Korea. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools and supplies. The company employs a workforce of approximately 6,000 worldwide. * * * Standard & Poor's Ratings Services assigned its 'BB-' rating to Actuant Corp.'s proposed $250 million senior unsecured notes due 2017 on June 2007. Rating still hold to date. AIRCRAFT INDEBTEDNESS: Fitch Withdraws Ratings on Three Certs. -------------------------------------------------------------- Fitch Ratings has withdrawn the ratings on the Aircraft Indebtedness Repackaging Trust 1997-1 securities listed due to a lack of sufficient information to maintain the ratings. AIR Trust 1997-1 -- Class A certificates 'B'; -- Class B certificates 'CCC'; -- Class C certificates 'CC'. ALCATEL-LUCENT SA: Sells 49.9% Draka Comteq Stake for EUR209 Mil. ----------------------------------------------------------------- Alcatel-Lucent S.A. has reached an agreement with Draka Holding N.V. to sell its 49.9% share in Draka Comteq B.V. against payment of an aggregate cash purchase price of EUR209 million. Under this transaction, Draka acquires full ownership of Draka Comteq. Draka Comteq B.V. is a leader in the field of optical fibre and optical fibre cable, created on July 1, 2004 by combining the worldwide optical fibre and communication cable activities of Draka and Alcatel-Lucent. Since the initial establishment of the joint venture, Draka Comteq has been controlled by Draka and its results have been consolidated in full in the Draka consolidated financial statements. It is expected that the transaction completed by the end of 2007. About Alcatel-Lucent Headquartered in Paris, France, Alcatel-Lucent S.A. -- http://www.alcatel-lucent.com/-- provides solutions that enable service providers, enterprises and governments worldwide to deliver voice, data and video communication services to end users. Alcatel-Lucent maintains operations in 130 countries, including, Austria, Germany, Hungary, Italy, Netherlands, Ireland, Canada, United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Peru, Venezuela, Indonesia, Australia, Brunei and Cambodia. * * * As reported in the TCR-Europe Nov. 9, 2007, Moody's Investors Service downgraded to Ba3 from Ba2 the Corporate Family Rating of Alcatel-Lucent. The ratings for senior debt of the group were equally lowered to Ba3 from Ba2 and the trust preferred notes of Lucent Technologies Capital Trust I have been downgraded to B2 from B1. At the same time, Moody's affirmed its Not-Prime rating for short-term debt of Alcatel-Lucent. Moody's said the outlook for the ratings is stable. Alcatel-Lucent's Long-Term Corporate Credit rating and Senior Unsecured Debt carry Standard & Poor's Ratings Services' BB rating. Its Short-Term Corporate Credit rating stands at B. ALDEAVISION SOLUTIONS: Court Approves Plan of Arrangement --------------------------------------------------------- AldeaVision Solutions Inc. has obtained approval from the Quebec Superior Court of its plan of arrangement and reorganization under the Companies' Creditors Arrangement Act (Canada) and the Canada Business Corporations Act (Canada). The plan will affect the company's shareholders, debenture holders and its secured creditor. Given the prior approval of the plan by the debenture holders and the secured creditor, the Court ordered no stay of proceedings and no court appointed monitor. The plan does not affect the other creditors of the company and its day-to- day business will continue undisturbed. As reported in the Troubled Company Reporter on Dec. 21, 2007, the plan sanctioned includes, among others, these transactions which are scheduled to close on or about Jan. 15, 2008: -- 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 Regional et Cooperatif 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. The Court Order issued on Dec. 20, 2007, has the effect of revoking the reporting issuer status of the company in all Canadian jurisdictions where it currently had status. The order also cancels any cease-trade orders issued by any Canadian securities regulatory authorities on the securities of the company. 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). AMERICAN TRANS: Fitch Withdraws Ratings on Two Certificates ----------------------------------------------------------- Fitch Ratings has withdrawn the ratings on the American Trans Air 1996-1 Pass Through Trusts securities listed due to a lack of sufficient information to maintain the ratings. American Trans Air 1996-1 Pass Through Trusts -- Class A pass-through certificates 'BB-'; -- Class B pass-through certificates 'B-'. AMERIQUAL GROUP: S&P Lowers Rating to B with Negative Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on AmeriQual Group LLC, including the corporate credit rating, to 'B' from 'B+'. The outlook is negative. "The downgrade reflects declining earnings and deteriorating credit protection measures resulting from lower military sales," said Standard & Poor's credit analyst Mr. Christopher DeNicolo. Revenues declined 20% in the first nine months of 2007 because of lower demand for AmeriQual's main military ration products, "Meal, Ready-to-Eat," as well as lower sales of the firm's civil ration, aPack. A higher proportion of less profitable commercial sales and lower prices under the most recent MRE contract has resulted in a decline in operating margin to less than 10% for the 12 months ending Sept. 30, 2007, from around 15% in the year-earlier period. These factors have resulted in a significant deterioration in credit protection measures, with funds from operations to debt now below 5%, down from 15%, and debt to EBITDA above 7x, up from 3.5x. The ratings on AmeriQual reflect its very weak credit protection measures, limited product diversity, and modest revenue base, offset somewhat by its position as a leading provider of field rations to the U.S. military (about 70% of sales). In addition, the company manufactures "shelf-stable" food products for leading branded food companies and emergency rations for nonmilitary use (30%). S&P could lower the rating further if higher sales and earnings from commercial contracts and new military products do not result in improving credit protection measures in 2008. Although less likely in the near term, S&P could revise the outlook to stable if faster-than-expected earnings growth results in debt to EBITDA below 6x and FFO to debt above 15%. AMRESCO RESIDENTIAL: S&P Junks Rating on Class M2 Security ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of mortgage-backed securities from AMRESCO Residential Securities Corp. Mortgage Loan Trust 1999-1. S&P downgraded class M1 to 'BBB' from 'AA' and downgraded class M2 to 'CCC' from 'A'. In addition, S&P affirmed its 'AAA' rating on class A. The downgrades reflect realized losses that have exceeded monthly excess interest cash flow, thereby reducing overcollateralization (O/C) to $384,214 versus a target amount of $1,065,000. There are sizeable loan amounts that are severely delinquent (90-plus-days, foreclosures, and REOs), which suggests that the unfavorable performance trends are likely to continue. Severe delinquencies amount to $4.569 million, which is 27.88% of the current pool balance. This is only a 9.5% improvement from December 2006's level of $5.051 million in severe delinquencies. As of the November 2007 remittance report, cumulative realized losses were $24,215,621, which is 11.37% of the original pool balance. The affirmation reflects a level of credit support that is sufficient to maintain the current rating. Subordination, O/C, and excess interest cash flow provide credit support for these transactions. At issuance, the mortgage collateral backing the AMRESCO certificates consisted of 15- to 30-year, fixed- and adjustable-rate, subprime loans secured by first liens on owner-occupied, single-family detached residential properties. Ratings Lowered AMRESCO Residential Securities Corp. Mortgage Loan Trust 1999-1 Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 1999-1 M1 BBB AA 1999-1 M2 CCC A Rating Affirmed AMRESCO Residential Securities Corp. Mortgage Loan Trust 1999-1 Mortgage pass-through certificates Series Class Rating ------ ----- ------ 1999-1 A AAA ANN-LEE CONSTRUCTION: Case Conversion Hearing Deferred to Feb. 5 ---------------------------------------------------------------- The Honorable Jeffery A. Deller of the United Sates Bankruptcy Court for the Western District of Pennsylvania deferred the hearing to consider approval of Ann-Lee Construction and Supply Company Inc.'s request to convert its Chapter 11 bankruptcy case into a Chapter 7 liquidation proceeding to Feb. 5, 2008, at 10:00 a.m. The hearing will be held at U.S. Steel Tower, 54th Floor, p04 Courtroom D in Pittsburgh. Judge Jeffery previously set the case conversion hearing on Dec. 12, 2007. In its request, the Debtor told the Court that they have incurred additional losses from Jan. 11, 2007, to Aug. 17, 2007, and as a result, it was unable to meet its debts as they come due. The Debtor further said that it was unable to file a viable Chapter 11 plan and disclosure statement within the required time set by the Court. The Debtor's exclusive plan filing period expired on Sept. 19, 2007. Based in Saltsburg, Pennsylvania, Ann-Lee Construction and Supply Company, Inc. offers construction consulting & management services. The company filed for Chapter 11 protection on Jan. 11, 2007 (Bankr. W.D. Pa. Case No. 07-20226). Michael J. Henny, Esq. and Joseph V. Luvara, Esq. represent the Debtor in its restructuring efforts. Kirk B. Burkley, Esq., at Bernstein Law Firm PC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. APOGEE TECHNOLOGY: Gets AMEX Common Stock Delisting Notice ---------------------------------------------------------- The American Stock Exchange's Listing Qualifications Panel has notified Apogee Technology Inc. that the Panel has upheld the decision to cease the continued listing of the company's common stock and to initiate delisting proceedings. The company said it is working on an orderly transition from the Amex to the OTC Bulletin Board(R) and/or the Pink Sheets(C) LLC. There will be no interruption in the trading of its common stock during the transition, which is expected to be completed prior to year-end. The Amex will suspend trading in the company's common stock in accordance with Section 1204(d) of the Amex Company Guide and will file an application with the Securities and Exchange Commission to strike the company's common stock from listing and registration on the Amex in accordance with the timing and procedures set forth in Sections 1205(g), 1206(d) and/or Section 1206(e) of the company Guide. "We have been very pleased with our experience on the American Stock Exchange," Herbert Stein, Apogee's chairman and CEO, said. "However, we believe that raising sufficient equity funds at this time, to meet the Amex shareholder equity listing requirements, exceeds our near term capital needs and would result in unnecessary shareholder dilution. Our planned transition to the OTCBB will provide liquidity and marketability for our stock while allowing us to execute a funding strategy that we believe will best serve our business and shareholders' interests." About Apogee Technology Based in Norwood, Massachussetts, Apogee Technology Inc. (AMEX: ATA) -- http://www.apogeemems.com/-- designs and develops intradermal and dermal drug delivery systems while it further develops and markets sensor solutions based upon the company's proprietary nanotechnology and Micro-Electromechanical Systems and drug delivery technologies. Going concern Doubt As reported in the Troubled Company Reporter on April 11, 2007, Miller Wachman LLP raised substantial doubt about Apogee Technology Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses and negative cash flows from operations. For the years ended Dec. 31, 2006, and 2005, the company incurred a net loss of $3 million. It reported total revenues of $1.9 million for 2006 and total revenues of $5.2 million for 2005. AREI NEWHALL 10: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: A.R.E.I. Newhall 10, L.L.C. 2272 East Richmond Avenue Fresno, CA 93720 Bankruptcy Case No.: 07-15156 Chapter 11 Petition Date: December 25, 2007 Court: Central District Of California (San Fernando Valley) Debtor's Counsel: D. Justin Harelik, Esq. 11870 Santa Monica Boulevard, Suite 106-531 Los Angeles, CA 90025 Tel: (310) 592-9494 Total Assets: $661,932 Total Debts: $24,000,0000 The Debtor did not file a list of its largest unsecured creditors. ARMITAGE ABS: Moody's Junks Ratings on Three Classes of Notes ------------------------------------------------------------- Moody's Investors Service downgraded the ratings of five classes of notes and left on review for possible further downgrade ratings of two classes of notes issued by Armitage ABS CDO, Ltd. The notes affected by this rating action are: Class Description: $1,950,000,000 Class A-1M Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $450,000,000 Class A-1Q Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $245,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $200,000,000 Class A-3 Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $72,000,000 Class A-4 Floating Rate Senior Secured Notes Due 2047 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ca Class Description: $30,000,000 Class B Floating Rate Subordinate Secured Deferrable Notes Due 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $27,000,000 Class C Floating Rate Junior Subordinate Secured Deferrable Notes Due 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca The rating actions reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Dec. 3, 2007, as reported by the Trustee, of an event of default caused by a failure of the Class A Overcollateralization Ratio to equal or exceed 97.5%, as required under Section 5.1(i) of the Indenture dated March 29, 2007. Armitage ABS CDO, Ltd is a collateralized debt obligation backed primarily by a portfolio of RMBS and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Class A Overcollateralization Ratio failed to meet the required level. As provided in Article 5 of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the Class A-1M, Class A-1Q, Class A-2 and the Class A-3 Notes remain on review for possible downgrade pending the receipt of definitive information. ARROW ELECTRONICS: Expands Distribution Agreement with Delta ------------------------------------------------------------ The North American Components business of Arrow Electronics Inc. has expanded its distribution agreement with Delta Electronics Inc., provider of switching power supplies, to include Delta's Delphi Series of standard DC/DC converters. Offering up to 700 watts of power in a single unit, the Delphi DC/DC converters provide high efficiency and high-density power for the commercial, industrial and military markets. "The expanded agreement between Delta, one of the world's largest power manufacturers, and Arrow, one of the largest power-supply distributors, enables customers to access products and services from a world-class team," said Arrow Electronics vice president of marketing for passives, electromechanical and connector products, Mike Calabria. "Delta will compliment Arrow's industry-leading power-supply line card and strong market presence." "We are pleased to expand our association with Arrow to include DC/DC converters. Our customers will benefit from the support and program expertise Arrow provides," said Delta Electronics senior vice president of sales, Graham Hunter. About Delta Electronics, Inc. Delta Group -- http://www.deltaww.com/-- is the world's largest provider of switching power supplies and a major source for power management solutions, components, visual displays, industrial automation, networking products, and renewable energy. Established in 1971, Delta Group has sales offices worldwide and manufacturing plants in Taiwan, Thailand, China, Mexico and Europe. As a global leader in power electronics, Delta is committed to environment protection and has implemented green, lead-free production and recycling and waste management programs for many years. Delta's mission continues to be: "To provide innovative energy-saving products for a better quality of life." About Arrow Electronics Headquartered in Melville, New York, Arrow Electronics Inc. -- http://www.arrow.com/-- provides products, services and solutions to industrial and commercial users of electronic components and computer products. Arrow serves as a supply channel partner for nearly 600 suppliers and more than 130,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of over 270 locations in 53 countries and territories. The company operates in France, Spain, Portugal, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Norway, Sweden, Italy, Germany, Austria, Switzerland, Belgium, the Netherlands, United Kingdom, Argentina, Brazil, Mexico, Australia, China, Hong Kong, Korea, Philippines and Singapore. * * * Arrow Electronics senior subordinated stock continues to carry Moody's Investors Service's Ba1 rating. The company's senior preferred stock is rated at Ba2. ASPEN FUNDING: Moody's Reviews Ba2 Rating on $10 Mil. Notes ----------------------------------------------------------- Moody's Investor Services placed on review for possible downgrade these notes issued by Aspen Funding I, Ltd.: * Class Description: $12,000,000 Class A-2L Floating Rate Notes due 2037 -- Prior Rating: A1 -- Current Rating: A1, on review for possible downgrade * Class Description: $10,000,000 Class A-3L Floating Rate Notes due 2037 -- Prior Rating: Ba2 -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists of structured finance securities. BANC OF AMERICA: Fitch Affirms Low-B Ratings on 14 Certificates --------------------------------------------------------------- Fitch has affirmed these Banc of America Commercial Mortgage Inc., series 2005-1 commercial mortgage pass-through certificates: -- $215.0 million class A-1A at 'AAA'; -- $117.2 million class A-2 at 'AAA'; -- $555.2 million class A-3 at 'AAA'; -- $343.1 million class A-4 at 'AAA'; -- $134.0 million class A-SB at 'AAA'; -- $381.2 million class A-5 at 'AAA'; -- $168.3 million class A-J at 'AAA'; -- Interest-only class XW at 'AAA'; -- $61.0 million class B at 'AA'; -- $20.3 million class C at 'AA-'; -- $43.5 million class D at 'A'; -- $20.3 million class E at 'A-'; -- $26.1 million class F at 'BBB+'; -- $20.3 million class G at 'BBB'; -- $34.8 million class H at 'BBB-'; -- $5.8 million class J at 'BB+'; -- $8.7 million class K at 'BB'; -- $8.7 million class L at 'BB-'; -- $2.9 million class M at 'B+'; -- $5.8 million class N at 'B'; -- $11.6 million class O at 'B-'; -- $5.0 million class FM-A at 'BBB+'; -- $2.5 million class FM-B at 'BBB'; -- $8.8 million class FM-C at 'BBB'; -- $22.6 million class FM-D at 'BBB-'; -- $2.1 million class SM-A at 'BB+'; -- $2.1 million class SM-B at 'BB+'; -- $6.4 million class SM-C at 'BB'; -- $2.6 million class SM-D at 'BB-'; -- $2.0 million class SM-E at 'BB-'; -- $4.9 million class SM-F at 'B+'; -- $4.2 million class SM-G at 'B'; -- $5.5 million class SM-H at 'B-'; Fitch does not rate the SM-J, LM, and P classes. The rating affirmations reflect the transaction's stable performance since issuance. As of the November 2007 distribution date, the pool's aggregate collateral balance has been reduced approximately 4.8% to $2.3 billion from $2.4 billion at issuance. There are currently no delinquent or specially serviced loans in the deal. Six loans (24.6%) maintain their investment grade shadow ratings by Fitch based on their stable performance. Fashion Show Mall (8.0%) is a 1,671,769 sf regional mall located in Las Vegas, Nevada. June 2007 occupancy remained stable at 77.0% compared to 76.1% at issuance. Despite the large vacancy, the property continues to perform well. The loan matures on Jan. 1, 2008. The Servicer has received notice of the borrower's intent to payoff the loan prior to maturity. Southdale Mall (6.5%) is a 1,335,023 sf regional mall located in Edina, Minnessota. June 2007 occupancy declined to 77.0% compared to 83.3% at origination. The property has shown declines in base rent and recoveries since issuance as well. Fitch will continue to closely monitor the loan. Zurich Towers (3.5%) is an 807,624 sf office property located Schaumburg, IL. As of YE 2006, the property remains 100% occupied. All three American Express Buildings as of YE 2006 remain 100% occupied. BEAR STEARNS: Barclays Seeks Damages for Fraud and Conspiracy ------------------------------------------------------------- Barclays Bank PLC has filed a complaint in the U.S. District Court for the Southern District of New York to seek damages against Bear Stearns Asset Management Inc., Ralph Cioffi, Matthew Tannin, Bear Stearns, & Co. Inc., and The Bear Stearns Companies Inc. for alleged fraud, conspiracy, breach of fiduciary duties and promissory estoppel. According to the Complaint, London-based Barclays is the sole participating shareholder in Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., which has been liquidating under the Cayman Islands Companies Law since July 2007. Barclays says the Complaint arises from "one of the most high profile and shocking hedge fund failures in the last decade." Barclays accuses that BSAM and the senior executives have long known that the Enhanced Fund and its associated assets were worth far less than their stated values in the early months of 2007 and were at great risk of further losses. BSAM allegedly concealed the Funds' failing net asset value from Barclays and investors in related feeder funds for as long as possible, instead of revealing the drop in value in, and the increased risk to, the Enhanced Fund, instead of taking immediate and effective corrective action to correct the probe, asserts Lawrence Byrne, Esq., at Linklaters, LLP, in New York, Barclays' counsel. The cover-up and failure to respond in accordance with BSAM's fiduciary duties to Barclays only caused greater losses and a more spectacular collapse of the Enhanced Fund, Mr. Byrne further alleges. Mr. Byrne says Barclays entered into the transaction involving the Enhanced Fund and invested about $400,000,000 in the structure after extensive negotiations with BSAM and the senior executives who held themselves as having a proprietary, extraordinarily sensitive and effective risk management system and as having special access to pricing information and marketing expertise that would benefit Barclays. BSAM promised to operate the Enhanced Fund with full transparency on performance and on pricing to Barclays, Mr. Byrne adds. Furthermore, BSAM and Barclays negotiated detailed investment restrictions, including by asset class and rating requirements, with which BSAM agreed to comply for Barclay's benefit. "In all these respects, [BSAM] entered intentionally into a relationship in which Barclays placed trust and confidence in them," Mr. Byrne states. According to Mr. Byrne, BSAM and the senior executives deceived Barclays through a series of misrepresentations to: (1) secure Barclays' provision of its initial leverage for and financial stake in the enhanced fund structure; (2) secure a significant increase in Barclays' economic commitment to the structure in March 2007; and (3) deceive Barclays and keep it in the structure with ongoing positive reports about the Enhanced Fund's performance, even into mid-June 2007, until Barclays' losses had snow- balled. BSAM failed to employ its purported and promised superior risk management system and the asserted expert pricing and hedging techniques to protect Barclays' exposure as leverage counterparty and sole participating shareholder in the Enhanced Fund, Mr. Byrne adds. BSAM and the senior executives also failed to exercise the duties of care they particularly owed to Barclays in their actions as the Enhanced Fund's investment manager, and they failed in their specific fiduciary duties to deal candidly and fairly with Barclays. Mr. Byrne also alleges that Bear Stearns and BSAM used the Enhanced Fund as a place to unload excessively risky or troubled assets -- subprime-related CDOs -- that could not be sold to other investors at the prices paid by the Enhanced Fund. Mr. Byrne notes that, at the very end of May 2007, BSAM caused the Enhanced Fund to buy large portions, with a price totaling almost $500,000,000, of the six riskiest classes of securities in a deal that BSAM managed. Accordingly, Barclays asks the District Court to award it with punitive and compensatory damages in an amount to be determined at trial. Barclays also seek payment of pre-judgment interest at the maximum rate allowable by law, and reimbursement of attorneys' fees and expenses. The Wall Street Journal related that Barclay's lawsuit comes after months of failed settlement talks with BSAM. Bear Stearns, in a statement obtained by The Financial Times, said that Barclay's lawsuit is unjustified and without merit. "While we do not like to see investors or counterparties lose money, we believe this lawsuit is an attempt by Barclays to avoid taking responsibility for its own actions," Reuters quoted a Bear Stearns spokesman as saying. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BEAR STEARNS: Federal Regulators Probe Into Funds' Insiders ----------------------------------------------------------- The U.S. Securities and Exchange Commission and the Attorney General's office in the Eastern District of New York are looking into an allegation that some Bear Stearns insiders associated with the two Cayman Islands-based hedge funds that collapsed in July 2007 may have been pulling their personal money out of the investment vehicles in early 2007 when the subprime market was in turmoil, The New York Times relates, citing BusinessWeek. The Wall Street Journal subsequently reported that Ralph Cioffi, a fund manager at Bear Stearns Asset Management, Inc., the collapsed hedge fund's investment manager, transferred about $2,000,000 of his $6,000,000 investment in the Cayman Islands based hedge funds into another Bear-managed fund, the Bear Stearns Structured Risk Partners fund. Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credit Enhanced Leverage Master Fund, Ltd., which once controlled nearly $35,000,000,000 in collateralized debt obligations related to the U.S. subprime mortgage market, liquidated their assets in July after incurring a combined $1,600,000,000 loss when the subprime market collapsed. The Journal, citing people familiar with the probe, relates that investigators have been reaching out to investors in the Funds, seeking information about the comments the funds' managers made during the spring with regard to the issue of redemptions, as well as the funds' exposure to the subprime mortgage market. The Journal further relates that in an investor conference call in April, Mr. Cioffi and a fellow fund manager were telling investors that the amount of money the investors were attempting to withdraw was lower than the amount of new money coming in. "The consistent theme was that the investor redemptions were a lot less than the fresh investments," the Journal quotes Ross Intelisano, a lawyer representing investors who have lost approximately $80,000,000 when the Funds collapsed. Scott Berman, an attorney who specializes in hedge fund litigation, told BusinessWeek that not all insider redemptions are improper, saying that, ". . . insiders could have economic reasons for pulling money out of a fund, and often the offering documents for a fund will give managers some latitute on the issue of when they can withdraw their own money." The issue of redemptions has been a point of frustration for investors in the Funds, the Journal says. Investors began submitting redemption notices in February, when the first signs of trouble began to emerge in the subprime housing market but they were told that the earliest they could redeem their money was at the end of June, the Journal says, citing the funds' internal guidelines. The June 30 redemption deadline, however, was too late for most investors, as the Funds' managers began barring them from pulling money out the funds in early June, the Journal relates. Lawyers for the funds' top managers, Cioffi and Matthew Tannin, either declined to comment on the investigation or did not return phone calls seeking comment, the Journal says. A Bear spokesman also did not return a telephone call and an e-mail seeking comment. John Nestor, an SEC spokesman, says, "It's our policy to neither confirm nor deny investigations," the Journal relates. A spokesman for the Eastern District of New York U.S. Attorney Benton Campbell declined to comment. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BILLING SERVICES: Moody's Withdraws Ratings on $105 Mil. Loan ------------------------------------------------------------- Moody's Investors Service withdrew the B1 rating on Billing Services Group North America, Inc.'s proposed $15 million senior secured revolver following a change in the nature and amount of the company's refinancing. On June 29, 2007, Moody's had assigned a B1 first lien debt rating to the company's proposed $127.5 million credit facility, expected to be comprised of a $112.5 million term loan and a $15 million revolver. The credit facility executed on Dec. 19, 2007 contained a $112.5 million term loan only. Consequently, Moody's withdrew the rating on the proposed revolver while affirming the B1 rating on the $112.5 million term loan, the B1 Corporate Family Rating and the B1 Probability of Default Rating. Moody's also withdrew the ratings on the company's former credit facility that was repaid as part of the refinancing and completion of the sale of the European wireless business to Syniverse Technologies, Inc. The ratings outlook remains stable. Despite the reduction in external liquidity resulting from no longer maintaining a revolver, Moody's affirmed BSG's B1 Corporate Family Rating. Liquidity is expected to be adequate post- transaction. Moody's expects the company to maintain a minimum cash balance of $15 million and projects cash flow from operations over the next four quarters to exceed capital expenditures, dividends and required term loan amortization. Moody's withdrew these ratings (assessments) of Billing Services Group North America, Inc.: -- $15 million senior secured revolver due 2013, rated B1 (LGD3, 45%) -- $94.5 million ($105 million original) first lien term loan due 2012, rated Ba3 (LGD 3, 39%) -- $15 million first lien revolver due 2011, rated Ba3 (LGD 3, 39%) -- $40 million second lien term loan due 2013, rated B3 (LGD 5, 89%) Moody's withdrew these ratings (assessments) of BSG Clearing Solutions GmbH: -- $105 million ($110 million original) first lien term loan due 2012, rated Ba3 (LGD 3, 39%) -- $15 million first lien revolver due 2011, rated Ba3 (LGD 3, 39%) Moody's affirmed these ratings (assessments) of Billing Services Group North America, Inc.: -- $112.5 million senior secured term loan due 2014, rated B1 (LGD 3, 44% - revised from 45%) -- Corporate Family Rating, rated B1 -- Probability of Default Rating, rated B1 Billing Services Group North America, Inc. is a leading provider of clearing, settlement, payment and financial risk management solutions to communication service providers in the United States. Headquartered in San Antonio, Texas, BSG's revenues for the twelve months ended Sept. 30, 2007 were approximately $131 million. BIOPURE CORP: Closing Bid Price Falls Below Nasdaq's Criteria ------------------------------------------------------------- Biopure Corporation received notice from The Nasdaq Stock Market that its closing bid price had fallen and remained below $1 for 30 consecutive business days. As a result, Biopure is out of compliance with Nasdaq's $1 minimum bid price requirement for continued listing set forth in Marketplace Rule 4310(c)(4). This notification has no effect on the listing of the company's common stock at this time. The company, in accordance with Marketplace Rule 4310 (c)(8)(D), has 180 calendar days or until June 11, 2008, to regain compliance by having the bid price of its common stock close at $1.00 per share or more for at least 10 consecutive business days. If the company does not regain compliance by June 11, 2008, Nasdaq will determine whether the company meets the initial listing criteria stated in Marketplace Rule 4310 (c), except for the bid price requirement. If it meets the initial listing criteria, Biopure expects to be granted an additional 180 calendar day compliance period. If Biopure does not demonstrate compliance within the compliance period, it will be issued a delisting letter. According to the letter, if Biopure is deemed not eligible for an additional compliance period, Nasdaq will provide written notification that the securities will be delisted. About Biopure Corporation Headquartered in Cambridge, Massachussetts, Biopure Corporation (NasdaqCM: BPUR) -- http://www.biopure.com/-- develops, manufactures and markets pharmaceuticals, called oxygen therapeutics, that are intravenously administered to deliver oxygen to the body's tissues. The company is developing Hemopure for a potential indication in cardiovascular ischemia, in addition to supporting the U.S. Navy's government-funded efforts to develop a potential out-of-hospital trauma indication. Biopure's veterinary product Oxyglobin(R) is indicated for the treatment of anemia in dogs. Going Concern Doubt Ernst & Young, in Boston, Massachusetts, expressed substantial doubt about Biopure Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Oct. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and lack of sufficient funds to sustain its operations through the end of fiscal 2007. BIO-RAD LABS: Earns $28 Million in Third Quarter Ended Sept. 30 --------------------------------------------------------------- Bio-Rad Laboratories Inc. reported net income of $28.0 million for the third quarter ended Sept. 30, 2007, compared to net income of $23.2 million reported for the same period in 2006. Third-quarter net income in 2006 benefited from a pre-tax investment gain of $4.7 million. Third-quarter gross margin was 55.4% compared to 54.7% in the third quarter last year. Third-quarter revenues were $339.7 million in 2007, up 11.5% compared to $304.8 million reported for the same period in 2006. These results were driven by continued growth across product areas in both the Life Science and Clinical Diagnostics segments. On a currency-neutral basis, revenues increased 8.0% compared to the same period last year. Year-to-date revenues grew by 7.6% to $1.0 billion compared to the first three quarters in 2006. Normalizing for the impact of currency effects, growth was 3.8%. Year-to-date net income for 2007 was $80.6 million compared to $86.6 million in the same period last year. Year-to-date results for the first three quarters in 2006 was favorably impacted by one-time additional revenue of $11.7 million resulting from a licensing settlement agreement reached with bioMerieux as well as the aforementioned pre-tax investment gain of $4.7 million. Year-to-date gross margin was 55.7% compared to 56.6% in the same period in 2006. "We are pleased with the company's performance during the quarter and encouraged by the success of new products," said Norman Schwartz, Bio-Rad president and chief executive officer. "As we wrap up the year, we will continue to focus on our ongoing businesses and work to integrate the recently acquired DiaMed into Bio-Rad's organization." In the beginning of the fourth quarter of 2007, Bio-Rad completed the purchase of 77.7% of Switzerland-based DiaMed Holding AG for approximately $409 million in cash. DiaMed develops, manufactures, and markets a complete line of reagents and instruments used in blood typing and screening and has annual sales of approximately $200 million. DiaMed's results will be included in the company's consolidated financial statements beginning in the fourth quarter of 2007. At Sept. 30, 2007, the company's consolidated balance sheet showed $1.71 billion in total assets, $766.1 million in total liabilities, and $946.3 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2693 About Bio-Rad Based in Hercules, California, Bio-Rad Laboratories Inc. (AMEX: BIO and BIOb) -- http://www.bio-rad.com/-- manufactures and distributes a broad range of products for the life science research and clinical diagnostics markets. Founded in 1952, Bio- Rad serves more than 85,000 research and industry customers worldwide through its global network of operations. The company employs over 6,300 people globally and had revenues of nearly $1.3 billion in 2006. * * * To date, Bio-Rad Laboratories Inc. still carries Moody's Investors Service 'Ba2' long term corporate family rating and 'Ba3' senior subordinated debt rating. Outlook is stable. BLACKBOARD INC: S&P Holds B+ Rating with Positive Outlook --------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Washington, District of Columbia-based Blackboard Inc. to positive from stable, following continued positive operating trends. The ratings on the company, including the 'B+' corporate credit rating, were affirmed. "The rating on Blackboard reflects the company's narrow business profile, fragmented and competitive market place, and rapid growth," said Standard & Poor's credit analyst Mr. David Tsui. These factors partly are offset by a strengthening position in a growing niche software market and a significant base of recurring business. Blackboard's target market primarily is the 6,400 North American higher education institutions, and secondarily, K-12 institutions and international educational institutions. Blackboard has a leading position in the niche course management software market. While the company benefits from high renewal rates, and moderately high switching costs, the market is highly fragmented, and entry from resource-intensive competitors or open-source software could be a risk. Blackboard's operating profile is supported by a substantial base of recurring revenues and by strong new license growth. Approximately 72% of the company's revenues are from recurring software licenses, hosting, and support contracts. Blackboard had renewal rates of 90% in recent years, despite a 4% increase in annual license fees. Revenue in the quarter ended September 2007 reached $62 million, a 22% increase over the prior year, driven by good adoption of enterprise products and application service provider hosting services to global academic institutions. BULLITT ELDERCARE: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Bullitt Eldercare, L.L.C. 520 Woodlake Drive Mt. Washington, KY 40047 Bankruptcy Case No.: 07-34610 Chapter 11 Petition Date: December 21, 2007 Court: Western District of Kentucky (Louisville) Judge: Thomas H. Fulton Debtor's Counsel: Henry K. Jarrett, III, Esq. Suite 10 North, First Trust Centre 200 South Fifth Street Louisville, KY 40202 Tel: 584-1374 Fax: 585-4009 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's Five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ P.B.I. Bank, Inc. $3,200,000 2500 Eastpoint Parkway Louisville, KY 40223 Jim Floyd $232,000 103 Remington Drive Bardstown, KY 40004 Leasing One Corp. $120,896 P.O. Box 309 Frankfort, KY 40602 Woodlake Partners, L.L.C. $69,543 Duplicator Sales $1,673 CALPINE CORP: Issues Warrants as Part of Plan of Reorganization --------------------------------------------------------------- As part of its Sixth Amended Joint Plan of Reorganization, Calpine Corporation will issue warrants to purchase approximately 50 million shares of its new common stock, or about 10% of the common stock to be issued pursuant to the plan, to holders of its currently outstanding common stock. Each warrant will represent the right to purchase a single share of Calpine's new common stock. The exercise price per share has not yet been determined, but it is expected to be based on a stipulated reorganized equity value of $11.942 billion. For illustrative purposes, assuming the issuance of 500 million shares on the effective date, the exercise price would be $23.88 per share. The expiration date of the warrants will be Aug. 25, 2008 or the date that is six months after the effective date of the Plan, which ever is later. No fractional warrants will be issued and no cash in lieu of fractional warrants will be distributed. The warrants will be transferable, but they will not be listed on any exchange. The specific number of warrants to be issued, the exercise price and expiration date have not yet been determined. In addition, the exercise price, when issued, is intended to be "out-of-the- money," although the extent to which it is or is not "out-of-the- money" will depend on the market price of the new Calpine common stock, which can not be known at this time. There can be no assurance that the warrants will be "in-the-money" at any time prior to their expiration date. The currently outstanding shares of common stock will be cancelled on the effective date of the Plan and will no longer represent an interest in Calpine Corporation. 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 began Dec. 17, 2007, and was adjourned to Dec. 19, 2007. (Calpine Bankruptcy News; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CANTERN CORP: Case Summary & Largest Unsecured Creditor ------------------------------------------------------- Debtor: Cantern Corp. 1070 Horizon Ridge Parkway, Suite 100 Henderson, NV 89012 Bankruptcy Case No.: 07-18630 Chapter 11 Petition Date: December 21, 2007 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Bonnie Jean Boyce, Esq. Albright, Stoddard, Warnick & Albright 801 South Rancho Drive, Suite D-4 Las Vegas, NV 89106 Tel: (702) 384-7111 Total Assets: $16,000,155 Total Debts: $9,793,898 Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Clark County Treasurer real property $24,584 P.O. Box 551220 taxes 500 S. Grand Central Parkway Las Vegas, NV 89155-1220 Bracewell & Giuliani legal fees $20,000 Marcus Marsden legal fees $18,000 Mark Holland legal fees $13,625 Sheef & Stone legal fees $13,000 Bank of Texas indenture trustee $10,000 services Michelene Bledsoe unknown $7,200 Julie Martinez assigned loan from $5,000 Simms Simms Financial loan $5,000 Mortuary Financial loan $5,000 Barack Ferrazzano, et al legal fees $4,933 Tim Raso director's fees $4,800 Payne, Smith & Jones accounting services $3,057 Delaware Secretary of State tax $2,311 Surety Bank office rent $1,050 Cullen Turner clerical services $680 Moseley & Moseley legal fees $526 Securities Transfer Co. stock handling $450 services CARBIZ INC: Begins Buy Here-Pay Here Operations in Oklahoma ----------------------------------------------------------- CarBiz Inc. has received a dealer license for the state of Oklahoma. CarBiz has begun full operations at four Oklahoma locations in Tulsa, Midwest City, Muskogee, and Oklahoma City. CarBiz has expanded its Buy Here - Pay Here business in the US after an acquisition last month. The deal included 26 dealerships in seven Midwestern states including Illinois, Indiana, Nebraska, Iowa, Kentucky, Oklahoma and Ohio. The two remaining states to receive a dealer license are Oklahoma and Nebraska. Headquartered in Sarasota, Florida, CarBiz Inc. (OTC BB: CBZFF.OB) -- http://www.carbiz.com/-- owns and operates a chain of "buy- here pay-here" dealerships through its CarBiz Auto Credit division. The company is also a provider of software, training and consulting solutions to the United States automotive industry. CarBiz's suite of business solutions includes dealer software products focused on the "buy-here pay-here," sub-prime finance and automotive accounting markets. Capitalizing on expertise developed over 10 years of providing software and consulting services to "buy-here pay-here" businesses across the United States, CarBiz entered the market in 2004 with a location in Palmetto, Florida. CarBiz has added two more credit centers since - in Tampa and St. Petersburg - and recently acquired a large regional chain in the Midwest, bringing the total number of dealerships to 26 in eight states. Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 20, 2007, Christopher, Smith, Leonard, Bristow & Stanell P.A., in Sarasota, Florida, expressed substantial doubt about Carbiz Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Jan. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. CARROLS CORP: Moody's Maintains B2 Corporate Family Rating ---------------------------------------------------------- Moody's Investors Service affirmed the B2 corporate family rating of Carrol's Corporation. In addition, Moody's raised the rating on the company's $180 million guaranteed senior subordinated notes to B3 / 75% / LGD-5 from Caa1 / 79% / LGD-5. The outlook is stable. The B2 corporate family rating reflects Carrol's relatively high leverage, modest coverage, and marginal free cash flow generation. The ratings are supported by Carrol's brand diversification, its position as the largest Burger King franchisee, the improvement in same store sales at its company owned Burger King restaurants, and the continued trend of positive same store sales at Pollo Tropical and Taco Cabana. However, the ratings also recognize the recent softness in same store sales at Taco Cabana. The upgrade of the company's senior subordinated rating to B3 from Caa1 reflects the reduction in the amount of senior secured debt in the company's overall liability structure. Carrols Corporation owns, operates, and franchises quick service and quick casual restaurant concepts, primarily in the United States, specifically Burger King, Taco Cabana, and Pollo Tropical. For the twelve months ended Sept. 30, 2007, the company reported consolidated revenues of approximately $781 million and operating income of about $55 million. Carrol's is the largest franchisee of Burger King restaurants in the U.S. domestic market with 325 units. Taco Cabana and Pollo Tropical are Hispanic concepts in the fast casual segment of the restaurant industry. As of Sept. 30, 2007, Carrol's owned 147 Taco Cabana restaurants and franchised 2, in addition to owning 83 Pollo Tropical units and 27 franchised units. For the full year 2006, Burger King, Taco Cabana, and Pollo Tropical, represented approximately 49%, 30% and 20% of total revenues and 25%, 39% and 36% of operating income. CENTEX 2002: Fitch Junks Two Classes of 2002-C Certificates ----------------------------------------------------------- Fitch has taken rating action on these Centex 2002-C mortgage pass-through certificates: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B-1 downgraded to 'CCC/DR1' from 'BB'; -- Class B-2 downgraded to 'C/DR4' from 'B-/DR1'. The affirmations reflect a stable relationship between credit enhancement and expected losses, and affect approximately $64.46 million in outstanding certificates. The downgrades reflect deterioration in the relationship between CE and expected losses, and affect approximately $9.53 million in outstanding certificates. The pool factor (current collateral balance as a percentage of original) is approximately 13%, and the transaction 63 months seasoned. The amount of loans in the 60+ delinquency buckets (inclusive of Real Estate Owned, Foreclosure, and Bankruptcy) is approximately 17.90%, and cumulative losses range are approximately 4.27%. CHIQUITA BRANDS: Discloses Rule 10b5-1 Stock Trading Plan --------------------------------------------------------- Chiquita Brands International Inc. reported that one of its executive officers has adopted a prearranged stock-trading plan in accordance with guidelines specified by Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Rule 10b5-1 allows plans to be established that permit corporate executives to prearrange sales of company securities at a time when they are not aware of any material non-public information. Such plans typically involve a plan to sell shares over a set period of time. These pre-arranged planned trades will be executed at a specified later date, as set forth in the plan, without further action or oversight by the executive officer. A plan can provide for sales of stock on a particular date or at a particular price or a combination of both of these factors, along with others. The rules allow corporate executives to diversify their investment portfolios and avoid concerns about initializing stock transactions while possibly in possession of material non-public information. Manuel Rodriguez, senior vice president, government and international affairs, and corporate responsibility officer, has adopted a plan under Rule 10b5-1 which is in accordance with company's stock ownership guidelines and provides for the sale of portions of his holdings over time, as part of his financial planning for the benefit of his family. Shares sold pursuant to the plan will be disclosed publicly through Form 144 filings and Form 4 filings as required by the SEC. Cincinnati, Ohio-based Chiquita Brands International, Inc. (NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes fresh food products including bananas and nutritious blends of green salads. The company markets its products under the Chiquita(R) and Fresh Express(R) premium brands and other related trademarks. Chiquita employs approximately 25,000 people operating in more than 70 countries worldwide, including Belgium, Columbia, Germany, Panama, Philippines, among others. * * * In May 2007, Moody's Investors Service Ratings affirmed these ratings on Chiquita Brands International Inc.: corporate family rating at B3; probability of default rating at B3; $250 million 7.5% senior unsecured notes due 2014 at Caa2(LGD5, 89%); and $225 million 8.875% senior unsecured notes due 2015 at Caa2 (LGD5, 89%). Moody's changed the rating outlook for Chiquita Brands to negative from stable. CHRYSLER LLC: CEO Expresses Confidence in Operations and Finances ----------------------------------------------------------------- "There have been several recent media reports that have painted an inaccurate picture of Chrysler LLC's current financial position, Robert Nardelli, Chrysler LLC's Chairman and CEO, said. "Therefore, the management of Chrysler and our parent company, Cerberus Capital Management, L.P., felt it imperative to correct the record since such misinterpretations and misperceptions are misleading and could leave the wrong impression in the minds of investors and other interested parties. "First and foremost, it is important to note that Chrysler is not only meeting, but, in many cases, exceeding its financial targets heading into 2008. "Importantly, Chrysler has ample liquidity. We are fully funded with working capital to meet our present and future needs and objectives. We are doing what any other prudent company is doing during this challenging economic environment. We are trying to instill a sense of urgency throughout the workforce, putting our capital to work effectively and efficiently, streamlining inventory, improving current products and developing new and innovative vehicles. Our dealer body is quite pleased that our inventory of vehicles was down another 4% in November. "In a 13-hour meeting this week with the Cerberus board of directors, Cerberus praised and was highly complimentary of Chrysler's progress to date and unanimously approved our 2008 plan. We have a solid strategic direction to return the company to long-term profitability. We are on target and have the unwavering support of Cerberus, as well as our other key partner, Daimler AG. "Cerberus met with its investors on Dec. 20, 2007, to share the progress that has been made and to convey to these investors that the company was meeting -- and in many cases -- exceeding its targets. The report was well received. "Like many companies in today's uncertain economic environment, Chrysler is moving aggressively to improve its business. We recognized in advance the increasingly competitive vehicle market heading into 2008. With that, we have been moving aggressively to make our company leaner. The steps we are taking include previously announced volume-related reductions at several North American assembly and powertrain plants and the elimination of four products from our lineup, which is very customary in the auto industry. "However, we are very excited about the new products coming in 2008. These include the legendary Dodge Ram pickup truck, the Dodge Journey crossover, the relaunch of the historic Dodge Challenger -- which has already generated 8,851 customer orders -- and two, all-new, large hybrid SUVs, the Chrysler Aspen and the Dodge Durango, demonstrating our support for the environment and more fuel-efficient vehicles. "For our current vehicle line-up we have already approved more than 260 line item improvements to enhance our products -- most for the 2008 calendar year. "The recently completed national labor agreement with the United Auto Workers -- which includes the establishment of an independent retiree health care trust -- provides a framework to improve the long-term competitiveness of the company. "Since August and the first day of the new company, the management team has been working to improve Chrysler's working capital, disposing of non-core (or non-earning) assets and reinvesting this cash into product development, new technology and new innovations for our customers." Mr. Nardelli's statement can be attributed to Mark Neporent, Chief Operating Officer and General Counsel of Cerberus Capital Management L.P.: "We remain extremely enthusiastic about our investment in Chrysler. Our underwriting assumed, and fully planned, that Chrysler would incur losses in the near term. Under the leadership of Bob Nardelli, Tom LaSorda and Jim Press, Chrysler is already on track to exceed its multi-year restructuring and recovery plan on virtually all key metrics. We met with the management team this week and fully endorse their strategic direction and their plan to meet the challenges of the current environment. We are confident that Bob, Jim and Tom are taking the right steps to bring Chrysler to profitability. Our mutual resolve to restore Chrysler to its leadership position as an iconic brand is unwavering." About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. The outlook is negative. CINRAM INT'L: Weak Operation Prompts Moody's to Hold B1 Ratings --------------------------------------------------------------- Moody's affirmed the B1 Corporate Family rating and B1 Senior Secured debt rating of Cinram International Inc. The rating action follows the company's recent weaker than expected operating results, which has caused Moody's to significantly reduce expectations for Cinram's future profitability. The rating has nonetheless been affirmed as Moody's believes Cinram's decision to eliminate all distribution payments to unit holders should enable the company to generate meaningful levels of free cash flow and maintain key credit metrics appropriate for its current rating. The long term ratings reflect a B2 probability of default and loss given default assessment of LGD 3, 30% for the senior secured credit facility. The outlook remains stable. Ratings affirmed: -- Corporate family rating at B1; -- Probability of default rating at B2; -- Senior Secured Bank Credit Facility at B1 (LGD3, 30%); The B1 corporate family rating primarily reflects Cinram's significant business risks as an independent manufacturer and distributor of DVD's to a few major movie studios, with which Moody's believes its negotiating scope to be limited. The rating considers that Cinram has considerable exposure to pricing pressures and declines in DVD/CD unit volumes with only a finite ability to reduce costs. The combination of these factors has recently led to a significant deterioration in operating performance. Moody's believes a continuation of this trend is likely through the next year as recent price reductions are fully absorbed and growth in high definition DVD's remains modest. The rating however also recognizes that the company's market position is strong, its relationships with the major movie studios are established and contractual, and management is taking important measures to diversify its risk exposure into new areas such as logistics. Furthermore, the rating considers Moody's expectation that the company will be able to generate significant free cash flow following the elimination of its distributions to unit holders. This is likely to provide Cinram with the ability to reduce its leverage beginning in the latter part of 2008 even as modest operating income pressures persist. Finally, the rating reflects the company's lack of a defined target capital structure and corresponding uncertainty to what extent Cinram may apply its meaningful levels of free cash flow towards permanent debt reduction. The outlook continues to be stable, as Moody's believes margin pressures may remain ongoing through the next year, offset by the company's ability to generate significant amounts of free cash flow. Cinram International Inc. is one of the world's largest manufacturers and distributors of DVD's, with headquarters in Toronto, Ontario, Canada. CITIGROUP: Fitch Junks Rating on $3.8 Mil. Class B-7 Note --------------------------------------------------------- Fitch Ratings has taken these rating actions on two Citigroup transactions. Affirmations total $619.2 million and downgrades total $41.1 million. In addition, $8.2 million was placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with these rating actions: Series 2005-CB4 -- $120.6 million class A affirmed at 'AAA' (BL: 52.07, LCR: 4.93); -- $15.9 million class M-1 affirmed at 'AA+' (BL: 44.36, LCR: 4.20); -- $14.7 million class M-2 affirmed at 'AA' (BL: 37.56, LCR: 3.56); -- $6.3 million class M-3 affirmed at 'AA' (BL: 34.62, LCR: 3.28); -- $10.4 million class M-4 affirmed at 'AA-' (BL: 29.79, LCR: 2.82); -- $7.3 million class M-5 affirmed at 'A+' (BL: 26.38, LCR: 2.50); -- $5.8 million class M-6 affirmed at 'A' (BL: 23.61, LCR: 2.24); -- $7.3 million class B-1 affirmed at 'A-' (BL: 20.06, LCR: 1.90); -- $5.5 million class B-2 affirmed at 'BBB+' (BL: 14.87, LCR: 1.41); -- $5.5 million class B-3 affirmed at 'BBB' (BL: 13.33, LCR: 1.26); -- $4.5 million class B-4 affirmed at 'BBB-' (BL: 12.06, LCR: 1.14); -- $5 million class B-5 downgraded to 'BB' from 'BB+' (BL 10.31, LCR: 0.98); -- $5 million class B-6 downgraded to 'B' from 'BB+' (BL: 8.69, LCR: 0.82); -- $3.8 million class B-7 downgraded to 'C/DR4' from 'BB'. Deal Summary -- Originators: G1: Wilmington Finance Inc. 35.59%, Lime Financial 27.86% G2: New Century 53.26%, Wilmington Finance 27.00% -- 60+ day Delinquency: 14.48%; -- Realized Losses to date (% of Original Balance): 0.95%; -- Expected Remaining Losses (% of Current Balance): 10.55%; -- Cumulative Expected Losses (% of Original Balance): 5.65%. Series 2005-CB8 -- $291.7 million class A affirmed at 'AAA' (BL: 44.32, LCR: 3.67); -- $24.6 million class M-1 affirmed at 'AA+' (BL: 38.62, LCR: 3.2); -- $24.2 million class M-2 affirmed at 'AA+' (BL: 33.38, LCR: 2.77); -- $17.2 million class M-3 affirmed at 'AA' (BL: 29.63, LCR: 2.46); -- $12.7 million class M-4 affirmed at 'AA-' (BL: 26.84, LCR: 2.22); -- $12.3 million class M-5 affirmed at 'A+' (BL: 24.14, LCR: 2.00); -- $10.6 million class M-6 affirmed at 'A+' (BL: 21.72, LCR: 1.8); -- $11.9 million class B-1 affirmed at 'A' (BL: 18.89, LCR: 1.57); -- $9 million class B-2 affirmed at 'A-' (BL: 16.84, LCR: 1.40); -- $8.6 million class B-3 downgraded to 'BBB' from 'BBB+' (BL: 15.14, LCR: 1.25); -- $10.2 million class B-4 downgraded to 'BBB-' from 'BBB' (BL: 13.45, LCR: 1.11); -- $8.2 million class B-5 downgraded to 'BB' from 'BBB-' (BL: 11.08, LCR: 0.92), placed on Rating Watch Negative. Deal Summary -- Originators: New Century (40.83%), Ameriquest (24.01%); -- 60+ day Delinquency: 14.51%; -- Realized Losses to date (% of Original Balance): 0.88%; -- Expected Remaining Losses (% of Current Balance): 12.07%; -- Cumulative Expected Losses (% of Original Balance): 7.72%. CITIGROUP MORTGAGE: Fitch Junks Ratings on Four Certificates ------------------------------------------------------------ Fitch Ratings has taken these rating actions on three Citigroup Mortgage Loan Trust, Inc. mortgage pass-through certificate transactions. Affirmations total $927.3 million and downgrades total $185.8 million. Break Loss percentages and Loss Coverage Ratios for each class are included with these rating actions: Series 2005-HE3 -- $249.3 million class A affirmed at 'AAA' (BL: 63.04, LCR: 2.88); -- $55.6 million class M-1 affirmed at 'AA+' (BL: 53.02, LCR: 2.42); -- $51.9 million class M-2 affirmed at 'AA' (BL: 44.63, LCR: 2.04); -- $34.8 million class M-3 affirmed at 'AA' (BL: 38.80, LCR: 1.77); -- $25.2 million class M-4 affirmed at 'AA-' (BL: 34.55, LCR: 1.58); -- $24.4 million class M-5 downgraded to 'BBB+' from 'A+' (BL: 30.41, LCR: 1.39); -- $22.2 million class M-6 downgraded to 'BBB' from 'A' (BL: 26.58, LCR: 1.21); -- $22.2 million class M-7 downgraded to 'BB' from 'A-' (BL: 22.63, LCR: 1.03); -- $17.8 million class M-8 downgraded to 'B' from 'BBB+' (BL: 19.45, LCR: 0.89); -- $14.1 million class M-9 downgraded to 'B' from 'BBB' (BL: 16.83, LCR: 0.77); -- $14.1 million class M-10 downgraded to 'C/DR5' from 'BBB-'; -- $12.6 million class M-11 downgraded to 'C/DR5' from 'BB+'; -- $20.0 million class M-12 downgraded to 'C/DR5' from 'BB'. Deal Summary -- Originators: Various; -- 60+ day Delinquency: 32.07%; -- Realized Losses to date (% of Original Balance): 1.64%; -- Expected Remaining Losses (% of Current Balance): 21.92%; -- Cumulative Expected Losses (% of Original Balance): 10.23%. Series 2005-OPT3 -- $63.1 million class A affirmed at 'AAA' (BL: 81.71, LCR: 6.25); -- $41.2 million class M-1 affirmed at 'AA+' (BL: 66.44, LCR: 5.08); -- $29.6 million class M-2 affirmed at 'AA' (BL: 55.40, LCR: 4.24); -- $17.6 million class M-3 affirmed at 'AA' (BL: 48.80, LCR: 3.73); -- $16.6 million class M-4 affirmed at 'A+' (BL: 42.53, LCR: 3.25); -- $15.3 million class M-5 affirmed at 'A' (BL: 36.46, LCR: 2.79); -- $13.9 million class M-6 affirmed at 'A' (BL: 31.27, LCR: 2.39); -- $12.9 million class M-7 affirmed at 'A-' (BL: 26.31, LCR: 2.01); -- $11.1 million class M-8 affirmed at 'BBB+' (BL: 22.16, LCR: 1.70); -- $7.4 million class M-9 affirmed at 'BBB' (BL: 19.42, LCR: 1.49); -- $6.0 million class M-10 downgraded to 'BB' from 'BBB-' (BL: 12.84, LCR: 0.98); -- $9.2 million class M-11 downgraded to 'C/DR4' from 'BB+'. Deal Summary -- Originators: 100% Option One Mortgage Corp.; -- 60+ day Delinquency: 28.61%; -- Realized Losses to date (% of Original Balance): 0.49%; -- Expected Remaining Losses (% of Current Balance): 13.07%; -- Cumulative Expected Losses (% of Original Balance): 4.28%. Series 2005-OPT4 -- $103.1 million class A affirmed at 'AAA' (BL: 73.47, LCR: 5.86); -- $34.9 million class M-1 affirmed at 'AA+' (BL: 62.42, LCR: 4.98); -- $31.1 million class M-2 affirmed at 'AA+' (BL: 52.52, LCR: 4.19); -- $18.4 million class M-3 affirmed at 'AA' (BL: 46.60, LCR: 3.72); -- $16.5 million class M-4 affirmed at 'AA-' (BL: 41.26, LCR: 3.29); -- $14.5 million class M-5 affirmed at 'A+' (BL: 35.99, LCR: 2.87); -- $14.5 million class M-6 affirmed at 'A' (BL: 31.37, LCR: 2.50); -- $12.1 million class M-7 affirmed at 'A-' (BL: 27.28, LCR: 2.18); -- $10.6 million class M-8 affirmed at 'BBB+' (BL: 23.68, LCR: 1.89); -- $7.7 million class M-9 affirmed at 'BBB' (BL: 21.02, LCR: 1.68); -- $7.2 million class M-10 affirmed at 'BBB' (BL: 18.55, LCR: 1.48); -- $9.7 million class M-11 affirmed at 'BBB-' (BL: 15.34, LCR: 1.22); -- $13.1 million class M-12 downgraded to 'B' from 'BB+' (BL: 11.12, LCR: 0.89); -- $9.7 million class M-13 downgraded to 'C/DR5' from 'BB' and removed from Rating Watch Negative. Deal Summary -- Originators: 100% Option One Mortgage Corp.; -- 60+ day Delinquency: 27.32%; -- Realized Losses to date (% of Original Balance): 0.69%; -- Expected Remaining Losses (% of Current Balance): 12.53%; -- Cumulative Expected Losses (% of Original Balance): 4.76%. CLAYMONT STEEL: Buyer Evraz Group Launches Cash Tender Offer ------------------------------------------------------------ Evraz Group S.A., through its wholly owned subsidiary Titan Acquisition Sub Inc., is commencing a cash tender offer to purchase all outstanding shares of common stock of Claymont Steel Holdings Inc. The tender offer is being made pursuant to a definitive agreement among Evraz, Titan Acquisition Sub, Inc. and Claymont Steel dated Dec. 9, 2007. Upon the successful closing of the tender offer, Claymont Steel stockholders will receive $23.50 in cash for each share of Claymont Steel common stock tendered in the offer, less any applicable stock transfer taxes and withholding taxes. Following the purchase of shares in the tender offer, Claymont Steel will become a subsidiary of Evraz. Evraz will file with the Securities and Exchange Commission a tender offer statement on Schedule TO setting forth in detail the terms of the tender offer. Claymont Steel will file with the Commission a solicitation/recommendation statement on Schedule 14D-9 setting forth in detail, among other things, the recommendation of Claymont Steel's board of directors that Claymont Steel stockholders accept the tender offer and tender their shares in the tender offer. Claymont Steel's board of directors has unanimously concluded that the merger agreement and the transactions contemplated thereby (including the tender offer and the merger) are advisable and are fair to and in the best interests of Claymont Steel and Claymont Steel's stockholders. The tender offer will expire at 12:00 midnight on Jan. 16, 2008, unless extended in accordance with the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission. The offer will be subject to customary conditions, including anti-trust clearance and the acquisition by Evraz of a majority of Claymont Steel's shares on a fully diluted basis. ABN AMRO Incorporated is acting as exclusive financial advisor to Evraz and will be the dealer-manager for the tender offer. Jefferies & Company, Inc. is acting as lead financial advisor to Claymont Steel in the transaction, and both Jefferies & Company, Inc. and Western Reserve Partners LLC delivered fairness opinions to Claymont Steel's board of directors. Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Evraz, and Morgan, Lewis & Bockius LLP is acting as legal counsel to Claymont Steel. About Evraz Headquartered in Luxembourg, Evraz Group S.A. (LSE:EVR) -- http://www.evraz.com/-- manufactures and distributes steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. It operates three steel mills in Russia, one mill in the Sverdlovsk region and two mills in the Kemerovo region. About Claymont Steel Headquartered in Claymont, Delaware, Claymont Steel Inc. -- http://www.claymontsteel.com/-- fka CitiSteel USA Inc., mills carbon steel plate. It services all major plate markets including service centers, bridge fabricators, railcar manufacturers, heavy construction machinery and material handling equipment, mining equipment, storage tanks, pressure vessel, and shipbuilding. It produces somewhere near 400,000 tons per year. The company sells its products to clients in Canada and the US. Previously a subsidiary of CITIC Group, Claymont Steel (as CitiSteel USA) was acquired by H.I.G. Capital, a private equity and venture capital investment firm in 2005. H.I.G. formed Claymont Steel Holdings in 2006 with the intent to take the company public. * * * As reported in the Troubled Company Reporter on Dec. 12, 2007, Moody's Investors Service placed all of its ratings, including its 'B' corporate credit rating, on Claymont Steel Inc. on CreditWatch with positive implications following the announcement that Evraz Group S.A., through its wholly owned subsidiary Titan Acquisition Sub, Inc., has entered into a definitive agreement under which Evraz will acquire Claymont Steel for $23.50 per share, for an aggregate purchase price of approximately $565 million, including debt. If Claymont's debt is retired as a result of the transaction, its ratings will be withdrawn. COFFEYVILLE RESOURCES: S&P Upgrades Rating to B from CCC+ --------------------------------------------------------- Standard & Poor's Ratings Services upgraded Kansas-based refiner Coffeyville Resources LLC to 'B' from 'CCC+'. At the same time, Standard & Poor's revised the senior secured credit facilities ratings to 'BB-' (two notches above the corporate credit rating) from 'B-' and recovery ratings to '1' from '2', indicating its expectation for a full recovery of principal in a payment default. In addition, Standard & Poor's removed the ratings from CreditWatch with positive implications. The outlook is stable. The upgrade follows about four months of stable operations at the refinery after the effects of the June 2007 flood, as well as significant debt paydown with proceeds of the October 2007 IPO. CONSECO INC: Unit Recaptures $50 Mil. of Life Insurance Premium --------------------------------------------------------------- Conseco Inc. received all required regulatory approvals and has completed the transaction under which its Colonial Penn Life Insurance Company subsidiary recaptured a block of approximately $50 million of traditional life insurance premium in force that had been ceded in 2002 to Reassure America Life Insurance Company, an affiliate of Swiss Reinsurance Company. In the transaction, which has an effective date of Oct. 1, 2007, Colonial Penn paid REALIC a recapture fee of $63 million. Colonial Penn recaptured 100% of the liability for the future benefits ceded, and will recognize profits from the block as they emerge over time. Colonial Penn already administers the policies that were recaptured. Conseco said it expects the transaction to be accretive to earnings and return-on-equity. It said that the transaction is part of the company's commitment to invest in the growth of Conseco's higher-return core businesses and distribution channels. About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * Moody's Investors Service placed Conseco Inc.'s bank loan debt rating at 'Ba3' and its senior unsecured debt rating at 'B1' in March 2006. The ratings still hold to date with a negative outlook. CONSTELLATION COPPER: Delays Filing of Third Quarter Financials --------------------------------------------------------------- Constellation Copper Corporation would not be filing its third quarter unaudited financial statements by the required filing date under applicable Canadian securities laws. The company also provided an update in accordance with CSA Staff Notice 57-301 Failing to File Financial Statements on Time - Management Cease Trade Orders. In accordance with Appendix B of CSA Policy 57-301: 1. The company advises that, other than as disclosed in the press statement dated Dec. 19, 2007, there is no material change in the information contained in the Notice of Default dated Nov. 9, 2007, and the Default Status Reports dated Nov. 23, 2007 and Dec. 7, 2007. 2. The company expects to file its interim financial statements for its third quarter ended Sept. 30, 2007 and Management Discussion & Analysis related thereto on or before Jan. 14, 2008, as originally contemplated. 3. The company advises that there are no other financial statements that are not expected to be filed within the time period set out by the security regulatory authorities. 4. The company advises that there is no other material information concerning the affairs of the company that has not been disclosed. 5. The company intends to satisfy the provisions of CSA 57- 301 Appendix B Default Status Reports on a bi-weekly basis long as it remains in default of the financial statement filing requirement. About Constellation Copper Constellation Copper Corporation (CCU: TSX) -- http://www.constellationcopper.com/-- evaluates and develops mineral properties in the United States and Mexico. The company holds its properties primarily through three of its wholly owned subsidiaries, Lisbon Valley Mining Co. LLC, Minera Terrazas S.A. de C.V. and San Javier del Cobre S.A. de C.V. LVMC operates the Lisbon Valley copper mine, which comprises three main deposits: Sentinel, Centennial and GTO, plus the Cashin satellite deposit, with reserves and resources totalling +50 million tons and grading an average 0.48% copper. Minera Terrazas holds the company's interest in the Terrazas zinc-copper project located in north- central Mexico. The property has a total resource of 90 million tonnes grading 1.37% zinc and 0.32% copper in two adjacent deposits. San Javier del Cobre S.A. de C.V. holds the company's interest in the San Javier copper property located in northwestern Mexico. CONTINENTAL AIRLINES: Fitch Holds Low-B Ratings on Five Certs. -------------------------------------------------------------- Fitch Ratings has taken these rating actions on these enhanced equipment trust certificate transactions backed by payments from Continental Airlines: Continental Airlines, FEATS Series 2000 -- Class A downgraded to 'BBB+' from 'A-'; -- Class B affirmed at 'B+'. Aircraft Indebtedness Repackaging (AIR) Trust 1998-1 -- Class A affirmed at 'BB'; -- Class B affirmed at 'B'. Aircraft Indebtedness Repackaging (AIR) Trust 1998-2 -- Class A affirmed at 'BB'; -- Class B affirmed at 'B'. EETCs are hybrid corporate-structured debt obligations in which payments on the notes are effectively supported by the underlying corporate entity, while structured elements of the transaction provide protection to investors in the event of issuer default. As such, Fitch's ratings on EETC transactions begin with the underlying Issuer Default Rating of the issuing entity and are adjusted upward depending on the structural enhancements in place. As of Dec. 14, 2007, Fitch affirmed Continental Airlines' 'B-' IDR with a Stable Outlook. The downgrade on the FEATS series 2000 class A tranche reflects Fitch's concern surrounding the value of certain collateral supporting that transaction, specifically the 767-224ER aircraft. As value deterioration on those aircraft is expected to outpace class A amortization in the coming years, class A leverage may increase moderately. CORRECTIONS CORP: Secures New $450 Mil. Revolving Debt Facility --------------------------------------------------------------- Corrections Corporation of America has entered into a new $450 million senior secured revolving credit facility, arranged by Banc of America Securities LLC and Wachovia Capital Markets LLC. Bank of America, N.A. will serve as administrative agent under the New Revolving Credit Facility. The New Revolving Credit Facility replaces CCA's previous $250 million senior secured revolving credit facility. The New Revolving Credit Facility will be utilized to fund development projects in anticipation of increasing demand by existing and potential new customers, well as for working capital, capital expenditures and general corporate purposes. The New Revolving Credit Facility will have an aggregate principal capacity of $450 million, including up to $100 million for letters of credit, and matures in December 2012. Terms of the New Revolving Credit Facility are substantially similar to those of the previous facility. At CCA's option, interest on outstanding borrowings will be based on either a base rate plus a margin ranging from 0.00% to 0.50% or a London Interbank Offered Rate plus a margin ranging from 0.75% to 1.50%. The applicable margins are subject to adjustments based on CCA's leverage ratio. Based on CCA's current leverage ratio, loans under the New Revolving Credit Facility would currently bear interest at the base rate plus a margin of 0.00% or at LIBOR plus a margin of 0.75%. CCA has no outstanding borrowings under the New Revolving Credit Facility, however the company has $34.9 million in letters of credit outstanding. "We are pleased to disclose the completion of our new credit facility in the current market environment, which reflects the strength of our corporate credit, well as our ability to cultivate strong banking relationships," Todd Mullenger, executive vice president and chief financial officer, commented. "This increased capacity combined with future cash generated from operations will provide us the liquidity and flexibility to meet future bed capacity demand from our customers and for other general corporate purposes." About Corrections Corporation of America Based in Nashville, Tennesee, Corrections Corporation of America (NYSE: CXW)-- http://www.correctionscorp.com/-- is the owner and operator of privatized correctional and detention facilities. The company is a prison operator in the United States, behind the federal government and three states. The company operates 65 facilities, including 41 company-owned facilities, with a total design capacity of approximately 76,000 beds in 19 states and the District of Columbia. The company specializes in owning, operating and managing prisons and other correctional facilities and providing inmate residential and prisoner transportation services for governmental agencies. * * * Corrections Corp. of America carries Standard & Poor's Ratings Services' BB senior unsecured debt ratings with a stable outlook. CREDIT-BASED ASSET: Fitch Cuts Ratings on Certs. Totaling $44MM --------------------------------------------------------------- Fitch Ratings has taken rating actions on these 3 Credit-Based Asset Servicing & Securitization transactions. Affirmations total $587.7 million and downgrades total $44 million. In addition, $4.9 million was placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions: Series 2005-CB5 -- $129.8 million class A affirmed at 'AAA' (BL: 46.12, LCR: 3.73); -- $13.1 million class M-1 affirmed at 'AA+' (BL: 39.61, LCR: 3.21); -- $12 million class M-2 affirmed at 'AA' (BL: 33.78, LCR: 2.73); -- $8.1 million class M-3 affirmed at 'AA-' (BL: 29.83, LCR: 2.41); -- $6 million class M-4 affirmed at 'A+' (BL: 26.90, LCR: 2.18); -- $6.2 million class M-5 affirmed at 'A' (BL: 23.87, LCR: 1.93); -- $5.6 million class M-6 affirmed at 'A-' (BL: 21.12, LCR: 1.71); -- $5.6 million class B-1 affirmed at 'BBB+' (BL: 18.31, LCR: 1.48); -- $3.8 million class B-2 affirmed at 'BBB+' (BL: 16.41, LCR: 1.33); -- $3.6 million class B-3 downgraded to 'BBB-' from 'BBB' (BL: 14.74, LCR: 1.19); -- $4 million class B-4 downgraded to 'BB' from 'BBB-' (BL: 11.80, LCR: 0.95); -- $4.3 million class B-5 downgraded to 'B' from 'BB+' (BL: 10.77, LCR: 0.87). Deal Summary -- Originators: G1: First NLC Financial Services 64.18%, Wilmington Finance Inc. 16.73%; G2: NC Capital Corporation 48.92%, Wilmington Finance 27.96%, First NLC 15.07%; -- 60+ day Delinquency: 16.65%; -- Realized Losses to date (% of Original Balance): 0.96%; -- Expected Remaining Losses (% of Current Balance): 12.36%; -- Cumulative Expected Losses (% of Original Balance): 7.06%. Series 2005-CB6 -- $132.3 million class A affirmed at 'AAA' (BL: 55.57, LCR: 3.45); -- $15.9 million class M-1 affirmed at 'AA+' (BL: 47.72, LCR: 2.96); -- $15.9 million class M-2 affirmed at 'AA+' (BL: 41.10, LCR: 2.55); -- $11.2 million class M-3 affirmed at 'AA+' (BL: 36.37, LCR: 2.26); -- $8.4 million class M-4 affirmed at 'AA' (BL: 32.79, LCR: 2.04); -- $8.2 million class M-5 affirmed at 'AA-' (BL: 29.32, LCR: 1.82); -- $6.9 million class M-6 affirmed at 'A+' (BL: 26.33, LCR: 1.64); -- $7.9 million class B-1 downgraded to 'A-' from 'A' (BL: 22.83, LCR: 1.42); -- $5.7 million class B-2 downgraded to 'BBB' from 'A-' (BL: 20.36, LCR: 1.26); -- $5.7 million class B-3 downgraded to 'BBB-' from 'BBB+' (BL: 17.97, LCR: 1.12); -- $7.2 million class B-4 downgraded to 'BB' from 'BBB' (BL: 15.37, LCR: 0.95); -- $5.2 million class B-5 downgraded to 'B' from 'BBB-' (BL: 13.66, LCR: 0.85). Deal Summary --O riginators: Wilmington Finance Inc. (22.15%), First NLC (19.45%), Lime Financial Services (19.13%), Millennium Funding (15.24%); -- 60+ day Delinquency: 23.17%; -- Realized Losses to date (% of Original Balance): 1.30%; -- Expected Remaining Losses (% of Current Balance): 16.10%; -- Cumulative Expected Losses (% of Original Balance): 9.08%. Series 2005-CB7 -- $114.7 million class A affirmed at 'AAA' (BL: 58.27, LCR: 4.26); -- $14.1 million class M-1 affirmed at 'AA+' (BL: 50.17, LCR: 3.66); -- $14.1 million class M-2 affirmed at 'AA+' (BL: 44.10, LCR: 3.22); -- $9.7 million class M-3 affirmed at 'AA+' (BL: 39.49, LCR: 2.88); -- $7.6 million class M-4 affirmed at 'AA' (BL: 35.89, LCR: 2.62); -- $7.6 million class M-5 affirmed at 'AA-' (BL: 32.30, LCR: 2.36); -- $6.3 million class M-6 affirmed at 'A+' (BL: 29.29, LCR: 2.14); -- $6.7 million class B-1 affirmed at 'A' (BL: 26.00, LCR: 1.90); -- $5.4 million class B-2 affirmed at 'A-' (BL: 23.39, LCR: 1.71); -- $4.9 million class B-3 affirmed at 'BBB+' (BL: 21.15, LCR: 1.54); -- $6.3 million class B-4 affirmed at 'BBB' (BL: 18.75, LCR: 1.37); -- $4.9 million class B-5 rated 'BBB-' (BL: 16.97, LCR: 1.24), placed on Rating Watch Negative. Deal Summary -- Originators: Wilmington Finance Inc. (31.4%), First NLC (18.15%), Lime Financial Services (15.44%); -- 60+ day Delinquency: 17.27%; -- Realized Losses to date (% of Original Balance): 1.29%; -- Expected Remaining Losses (% of Current Balance): 13.69%; -- Cumulative Expected Losses (% of Original Balance): 8.03%. CREDIT SUISSE: Fitch Puts B+ Rating on $29.3 Mil. Class H Cert. --------------------------------------------------------------- Fitch Ratings affirms Credit Suisse First Boston Mortgage Securities Corp. commercial mortgage pass-through certificates, series 1997-C2: -- $183.9 million class A-3 at 'AAA'; -- Interest-only class A-X at 'AAA'; -- $95.3 million class B at 'AAA'; -- $80.6 million class C at 'AAA'; -- $95.3 million class D at 'AAA'. -- $73.3 million class F at 'AA+'; -- $14.7 million class G at "A+'; -- $29.3 million class H at 'B+'. $14.7 million class I remains at 'CCC/DR2'. Fitch does not rate the $25.7 million class E or the $1.4 million class J certificates. Classes A-1, A-2, A-3, and B have paid in full. Although credit enhancement has increased since Fitch's last review, four loans (9.2%) have been identified as Fitch loans of concern, including specially serviced loans and loans with declining performance. As of the December 2007 distribution date, the pool's aggregate balance has been reduced 82.3%, to $259.7 million from $1.47 billion at issuance. There are 49 non-defeased loans remaining in the pool, down from the original 185 loans. Currently, four loans (8.6%) are in special servicing. The largest specially serviced loan (4.7%) is secured by a 224,888- square foot industrial property in Belmont, California. The loan was transferred to the special servicer as a result of a receiver being appointed over the Borrower and collateral property due to a conflict between the owners. The special servicer is working with the borrower to resolve the issue. The second largest specially serviced loan (1.5%) is secured by three motels, two of which are located in Kentucky and one in Corapolis, Pennsylvania. The loan is over 30 days delinquent. The special servicer is negotiating a workout strategy with the borrower. Two loans (2.3%) are specially serviced due to the bankruptcy of Bally's Inc. Bally's reorganization plan was confirmed on Oct. 1, 2007 and the loans are expected to return to the master servicer. Of the 49 remaining non-defeased loans in the pool, 13 of them (80.8%) have ARD dates ranging from 2007 to 2015. As of the November 2007 remittance, 5 loans (7.7%) have run past their anticipated repayment date. The master servicer has indicated that these loans are working to refinance in early 2008. CRYSTAL COVE: Moody's Puts Ba2 Rating on $20.3M Notes Under Review ------------------------------------------------------------------ Moody's Investors Service placed these notes issued by Crystal Cove CDO, Ltd. on review for possible downgrade: * Class Description: $70,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $39,700,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade * Class Description: $19,500,000 Class C-1 Mezzanine Secured Deferrable Floating Rate Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade * Class Description: $1,500,000 Class C-2 Mezzanine Secured Deferrable Fixed Rate Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade * Class Description: $4,000,000 Class C-1 Combination Securities Due 2039 -- Prior Rating: Baa3 -- Current Rating: Baa3, on review for possible downgrade * Class Description: $20,300,000 Preference Shares -- Prior Rating: Ba2 -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. CUMMINS INC: Urges Shareholders to Reject Mini-Tender Offer ----------------------------------------------------------- Cummins Inc. has been notified of an unsolicited mini-tender offer by TRC Capital Corp. of Toronto for TRC to purchase up to 1,000,000 shares of Cummins' stock at a price of $115 per share in cash. This represents a 2.7% discount below Cummins' closing price on Dec. 11, the day prior to the date of the offer, and a 6% discount below Cummins' closing price on Dec. 14, 2007. Cummins is in no way associated with TRC, this mini-tender offer or the offer documentation. Cummins does not endorse TRC's unsolicited mini-tender offer and recommends that stockholders not tender their shares in response to this offer. CMI urges investors to obtain current market quotes on Cummins' stock, consult with their financial advisors and exercise caution in examining the mini-tender offer, which represents less than 1% of the Cummins' shares outstanding. Shareholders should be aware that this mini-tender offer is highly conditional. The conditions allow TRC to change the terms of its offer -- such as the price offered per share -- in the event of various occurrences, including a stock split. As a reminder, CMI announced a two-for-one stock split, effective Jan. 2, 2008, for shareholders of record on Dec. 21, 2007. The U.S. Securities and Exchange Commission has issued an investor alert regarding mini-tender offers, noting that some bidders make such offers at below market prices hoping they will catch investors off guard if the investors do not compare the offer price to the current market price. The SEC advises that mini-tender offers -- those offers made for less than 5 percent of a company's stock -- typically do not provide the same disclosure and procedural protections that larger, traditional tender offers provide. The SEC's mini-tender offer tips may be found at http://www.sec.gov/investor/pubs/minitend.htm Cummins' shareholders who have already tendered are advised that they may withdraw their shares by providing the written notice described in the TRC Capital offering documents prior to the expiration of the offer currently scheduled for 12:01 a.m. (EST) on Jan. 11, 2008. About Cummins Headquartered in Columbus, Indiana, Cummins Inc. (NYSE: CMI) -- http://www.cummins.com/-- designs, manufactures, distributes and services engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Cummins has Latin-American operations, particularly in Venezuela, Brazil, Peru, Colombia, and Argentina. Its operations in the Asia-Pacific are found in China, Japan and Korea. Its also has facilities in Europe, particularly in the United Kingdom. * * * Cummins' Junior Convertible Subordinated Debentures carry Fitch's 'BB' rating with a stable outlook. Moody's Investors Service raised Cummins' convertible preferred stock rating to Ba1 from Ba2 and withdrew the company's SGL-1 Speculative Grade Liquidity rating and its Ba1 Corporate Family Rating. DANA CORP: Court Confirms Plan of Reorganization ------------------------------------------------ The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York has signed an order confirming Dana Corporation's Plan of Reorganization. The action paves the way for Dana's emergence from Chapter 11 reorganization, which it expects to occur in January 2008, after the closing of the company's $2 billion exit financing facility and satisfaction of other customary closing conditions. "This is a significant milestone for Dana and all of its constituents," Dana Chairman and CEO Mike Burns said. "The approved plan provides a solid foundation for the new Dana. We now look forward to emerging as a focused, solvent company that is positioned to take advantage of its considerable strengths and compete successfully in its global markets." Dana entered Chapter 11 reorganization on March 3, 2006. During the ensuing 21 months, the company and its constituents identified, agreed upon, and won court approval for approximately $440 million to $475 million in annual cost savings and revenue improvement. These annual savings were derived primarily from enhancing its product profitability, optimizing its manufacturing footprint, reducing labor costs and benefit changes, eliminating ongoing obligations for retiree health and welfare costs, and achieving further reductions in administrative expenses. "From the outset of this process, we said that fundamental -- not incremental -- change was critical to Dana's future success," Mr. Burns said. "I am pleased to say that we have achieved this goal due in large part to the enormous efforts of our resilient employees around the world and the talented team of advisers who have helped bring us to this point. Similarly, we are grateful for the support and partnership demonstrated by many other constituents involved in this very complex process, including our customers, suppliers, and members of the communities in which Dana people live and work." About Dana Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Aug. 31, 2007, the Debtors listed US$6,878,000,000 in total assets and $7,551,000,000 in total debts resulting in a total shareholders' deficit of $673,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. The Court has set Dec. 10, 2007, to consider confirmation of the Plan. (Dana Corporation Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA FINANCIAL: Common Stock To Be Delisted from Nasdaq Tomorrow ----------------------------------------------------------------- Delta Financial Corporation said last week that it received a notice from The Nasdaq Stock Market indicating that the company's common stock will be delisted from Nasdaq at the opening of business on Dec. 28, 2007. The company does not intend to appeal the determination. The Nasdaq Staff Determination Letter received on Dec. 18, 2007, indicated that as a result of the company's having filed for protection under chapter 11 of the U.S. Bankruptcy Code, the Nasdaq Staff has determined that the company's securities will be delisted from the Nasdaq Global Market. 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 Dec. 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. DERCO INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Derco, Inc. 888 Brannan Street, Suite 137 San Francisco, CA 94103 Bankruptcy Case No.: 07-31675 Type of Business: Founded in 1939 by Krikor Der Abrahamian, who specialized in trading diamonds and colored gemstones, the Debtor manufactures and retails diamonds and jewelry in the U.S. See http://www.dercodiamonds.com/ Chapter 11 Petition Date: December 26, 2007 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Iain A. Macdonald, Esq. 2 Embarcadero Center, Suite 1670 San Francisco, CA 94111-3930 Tel: (415) 362-0449 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Madro Kaprealian $8,492,362 310 West Santa Inez Avenue Hillsborough, CA 94010 Eurostar Diamond Traders $1,239,068 Hovenierstaart 53 (Box 79) B-2018 Antwerpen Ousher Lerner $759,527 27 West 47th Street Hillsborough, CA 94010 Olympic Diamond Corp. $607,307 580 Fifth Avenue, Suite 1200 New York, NY 10036 Eurostar Diamond Traders $506,345 Hovenierstaat 53 (Box 79) B-2018 Antwerpen Koder Co. $449,827 Bourj Hammound, Centre Hadidian 7th Floor Beirut Etessami Bros. Corp. $395,862 10 West 46th Street, Suite 1803 New York, NY 10036 E.F.D. Diamonds, Ltd. $320,768 Maccabi Building 22nd Floor, Suite 2238 F.I.B.I. Fine Diamond $317,500 Manufacturers 6 East 45th Street, 19th Floor New York, NY 10017 Arslanian Freres inventory $294,184 Hoveniersstraat 30 2018 Antwerpen K.G.K. Diamonds, L.L.C. $277,859 36 West 44th Street, 13th Floor New York, NY 10036 W.F. Diamonds, Inc. $222,309 Daniel K $216,453 Waldman Diamond Co. $216,132 Eclipse Jewelry Corp. $213,882 Eurostar Belgium, Inc. $210,323 Sachrida Styling $152,769 E.F.D. (U.S.A.), Inc. $139,232 H. Pinashi, Inc. $118,455 Adir, Ltd. inventory $117,136 DOMTAR INC: Completes First Phase of Offers to Buy Notes -------------------------------------------------------- Domtar Inc., a subsidiary of Domtar Corporation, has completed the first phase of its offers to purchase for cash any and all of its outstanding Canadian dollar denominated 10% Debentures due 2011 and 10.85% Debentures due 2017, after the Early Consent Deadline on Dec. 17, 2007. The depositary, Computershare Investor Services Inc., has advised Domtar Inc. that CDN$79,795,000 aggregate principal amount of the 10% Debentures representing approximately 97.31% of those outstanding, and CDN$74,352,000 aggregate principal amount of the 10.85% Debentures representing approximately 99.25% of those outstanding were validly tendered and not withdrawn prior to the Early Consent Deadline. The company accepted for purchase and payment all of such validly tendered Debentures. As a result, the supplements to the respective Indentures governing the Debentures reflecting the requested amendments thereto were also entered into. 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 currently scheduled to be 5:00 pm, Montreal time, on Jan. 3, 2008, unless extended or earlier terminated, will receive the Purchase Price, 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 Final Settlement Date on those Debentures accepted for payment pursuant to the Offers. Scotia Capital has been retained by Domtar Inc. 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. DORAL FINANCIAL: S&P Holds CreditWatch Placement of "B" Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'B' long-term counterparty credit rating on Doral Financial Corp. remains on CreditWatch Positive, where it was placed July 20, 2007. The initial placement followed Doral's announcement that it had completed the sale of its common stock to Doral Holdings Delaware LLC, a newly formed entity, and repaid in full $625 million in senior notes. "We think the completed recapitalization has resolved the company's near-term liquidity issues and substantially improved its capital position," said Standard & Poor's credit analyst Mr. Robert Hansen. Furthermore, S&P expects the recapitalization to have a positive impact on the company's reputation among depositors and borrowers, which S&P believes had been tarnished by previous accounting and liquidity issues. However, although S&P views the recapitalization positively, S&P remains concerned by the company's significant deterioration in credit quality amid a challenging economic environment in Puerto Rico. S&P's CreditWatch Positive reflects its belief that management has become more focused on executing its business strategy since completing its recapitalization. In assessing the potential for an upgrade, S&P will assess further the credit quality of the company's loan portfolio, management's business strategy, various accounting issues, and the company's ability to return to profitability. S&P expects to resolve the CreditWatch within 60 days and anticipate that the counterparty credit rating would increase by no more than one notch to 'B+'. EMPIRE RESORTS: Sept. 30 Balance Sheet Upside-Down by $13.4 Mil. ---------------------------------------------------------------- Empire Resorts Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $69.4 million in total assets and $82.8 million in total liabilities, resulting in a $13.4 million total stockholders' deficit. The company posted a net loss for the third quarter of $2.5 million, compared with a net loss of $197,000 in 2006. Net revenue for the third quarter was $22.5 million, down 22% from the $28.7 million reported in the third quarter of 2006. Revenue from racing declined by approximately $2.1 million, or 49%, reflecting the impact of lower allocations from OTB facilities, while revenue from the company's video gaming machine business declined by approximately $3.9 million, or 17%, primarily due to changes in the competitive environment. The company's operating loss for the quarter was $771,000 versus operating income of $1.8 million in the prior-year period. EBITDA was a loss of $464,000 for the quarter compared with positive EBITDA of $2.1 million in the third quarter of 2006. For the first nine months of fiscal 2007, Empire reported net revenue of $60.3 million, versus $77.1 million in the same period last year. EBITDA was a loss of $4.6 million for the period, as compared with positive EBITDA of $3.8 million in 2006. Empire's net loss for the first nine months of 2007 was $10.8 million, versus a net loss of $3.2 million last year. "While we continued to see the impact of heightened regional competition this quarter, our Monticello operations are starting to show some positive results from expanded marketing initiatives and benefited from stronger seasonal demand," commented David Hanlon, chief executive officer and president. "In addition, we were pleased to see recent steps taken in Washington, including hearings before Congress, with regard to the Department of the Interior's delays approving off-reservation applications. While no immediate resolution is forthcoming, we are encouraged by these events, and by the 'Motion to Compel' lawsuit recently filed by the St. Regis Mohawks, which serve to focus attention on the issues. We are prepared to assist and take any measures necessary to bring this to a conclusion as expeditiously as possible." 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?2698 About Empire Resorts Headquartered in Monticello, New York, Empire Resorts Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- operates the Monticello Gaming & Raceway and is involved in the development of other legal gaming venues. Empire's facility now features over 1,500 video gaming machines and amenities including a 350-seat buffet and live entertainment. Empire is also working to develop a "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills and beyond. ENCORE ACQUISITION: Board Okays $445 Million 2008 Capital Budget ---------------------------------------------------------------- Encore Acquisition Company's Board of Directors has approved a capital budget for 2008 of $445 million related to its drilling and development program. This budget will allow the Company to meet its goal of an estimated organic growth rate of six to eight percent for 2008 (fourth quarter 2007 compared to fourth quarter 2008). In addition, the Board authorized the repurchase of up to $50 million of the Company's common stock. The shares may be repurchased from time to time in the open market or through privately negotiated transactions. The repurchase program is subject to business and market conditions, and may be suspended or discontinued at any time. The Company has begun executing a hedge plan composed of swaps in the second half of 2008 and costless collars for all of 2008 at current market oil prices to gain confidence that both the budget and stock buyback can be accomplished within discretionary cash flow. The Company's strategy for 2008 is to continue to focus on efficient production and reserve growth while maintaining investments within cash flow. The regional breakdown is expected to be: -- Rockies $164 million -- West Texas $140 million -- Mid-Continent $102 million -- New Mexico $39 million The $445 million of capital is expected to be invested in these categories: -- Drilling $347 million -- Improved Oil Recovery, Workovers $67 million -- Land, Seismic and Other $31 million The Company has four operating regions where it can use its expertise in improved oil recovery, horizontal drilling, and tight sands gas development to increase production and reserves. The budget leverages off the Company's 2007 development success with increased activity in all four regions. The activity in the Company's different plays is expected to be: a) In the Rockies, the rig count will grow from one rig to three and one-half rigs in 2008 due to good results in the Bakken and Madison plays and drilling in the Cedar Creek Anticline. The Company will also focus on improved oil recovery projects at the Cedar Creek Anticline, the Bell Creek field, the Big Horn Basin and the Williston Basin properties purchased in April of 2007. b) In the fields covered by the ExxonMobil West Texas joint venture, the Company expects to operate three deep rigs targeting the Devonian in the Midland Basin and one deep rig targeting the Ellenburger, Strawn, and Devonian zones in the Val Verde Basin. One shallow rig will be drilling the Wolfcamp zone in the Val Verde Basin. This level of activity is similar to 2007 levels but will be lower risk as the Company moves from commitment wells to infield development wells. c) In the Mid-Continent, the Company expects to operate one rig in its Travis Peak play in East Texas. In addition, the Company will participate in a high level of non-operated activity in the Elm Grove field in North Louisiana and in the horizontal development of the Cleveland formation in the Anadarko Basin of Oklahoma. d) In its New Mexico region, the Company is increasing from one rig in 2007 to two rigs in its Morrow/Atoka play as a result of significant production growth. "We are pleased with the $445 million budget," Jon S. Brumley, President and Chief Executive Officer of Encore Acquisition Company, commented. "It is larger than 2007, but since we are able to leverage off of our success in 2007, this 2008 budget is actually lower risk. Another important aspect of this budget is that it is less than our discretionary cash flow. Even though Encore has much more capital opportunity than the $445 million budget would imply, this budget will allow us to use the excess cash flow to repurchase shares and pay down debt at current price levels. At the same time, we will be able to invest the capital in an efficient and manageable manner. Encore looks forward to completing our reserve report in January of 2008 and sharing the results from the 2007 acquisition program and our development program with you at that time. We are pleased with how 2007 is wrapping up. With the divestiture of our deep Oklahoma gas properties, we have been able to refocus on our core competency of long-life oil field enhancement. At current oil and gas prices, that move has paid off. We are lower risk, lower decline, and higher margin." About Encore Headquartered in Fort Worth, Texas, Encore Acquisition Company (NYSE:EAC) -- http://www.encoreacq.com/-- is an independent energy company engaged in the acquisition, development and exploitation of North American oil and natural gas reserves. Organized in 1998, Encore's oil and natural gas reserves are in four core areas: the Cedar Creek Anticline of Montana and North Dakota; the Permian Basin of West Texas and Southeastern New Mexico; the Mid Continent area, which includes the Arkoma and Anadarko Basins of Oklahoma, the North Louisiana Salt Basin, the East Texas Basin and the Barnett Shale; and the Rocky Mountains. * * * Moody's Investors Service confirmed Encore Acquisition Co.'s Ba3 corporate family rating, Ba3 probability of default rating, and B1 senior subordinated note rating on June 2007. ENCORE RECEIVABLES: Delinquency Cues S&P to Cut Rating on Notes --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes of asset-backed notes issued by three Encore Receivables Trust transactions. In addition, S&P affirmed its ratings on the remaining classes from these transactions, one additional Encore Receivables Trust transaction, and Encore Credit Corp.'s series 2003-1 (see list). The downgrades reflect transactions with significant levels of severely delinquent loans (90-plus-days, foreclosures, and REOs). Realized losses for the transactions remain low, relative to overall delinquency levels, resulting in delinquency pipelines that have sharply increased over the past six months. The rising delinquency pipelines suggest that the unfavorable performance trends are likely to accelerate. The transactions with lowered ratings have severe delinquency levels as follows (series: severe delinquency amount {$}, % change since May 2007, % of current pool balance, multiple of O/C): -- 2005-1: $63.639 million, 39.9%, 20.75%, 3.06x; -- 2005-2: $71.745 million, 31.6%, 19.09%, 4.27x; and -- 2005-3: $65.082 million, 69.9%, 19.14%, 2.22x. As of the November 2007 remittance report, cumulative realized losses for the downgraded deals were as follows (series: realized loss {$}, % of original pool balance): -- 2005-1: $11,660,142, 0.73%; -- 2005-2: $11,245,434, 0.80%; and -- 2005-3: $4,312,551, 0.42%. The affirmations reflect both current and projected credit support percentages that meet or exceed the loss coverage levels for the current ratings. A combination of subordination, excess interest, and O/C provide credit support for these transactions. Additionally, series 2003-1 benefits from loan-level primary mortgage insurance policies issued by Mortgage Guaranty Insurance Corp. (MGIC) on 64.69% of the loans with original loan-to-value ratios exceeding 80%. These mortgage insurance policies were acquired by the trust fund for the benefit of the holders of the certificates to cover losses down to 60% of the value of the related mortgage property. The underlying collateral for this transaction consists of mostly fixed- and adjustable-rate, 30-year mortgages on one- to four-family homes. Ratings Lowered Encore Credit Receivables Trust Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2005-1 M-8 BB BBB 2005-1 B B BBB- 2005-2 M-8 BB BBB+ 2005-2 B B BBB- 2005-3 M-8 BB+ BBB+ 2005-3 B B+ BB Ratings Affirmed Encore Credit Receivables Trust Asset-backed certificates Series Class Rating ------ ----- ------ 2005-1 2-A-3 AAA 2005-1 M-1 AA+ 2005-1 M-2 AA 2005-1 M-3 AA- 2005-1 M-4 A+ 2005-1 M-5 A 2005-1 M-6 A- 2005-1 M-7 BBB+ 2005-2 1-A, 2-A-4 AAA 2005-2 M-1 AA+ 2005-2 M-2, M-3, M-4 AA 2005-2 M-5 AA- 2005-2 M-6 A 2005-2 M-7 A- 2005-3 1-A, 2-A-2, 2-A-3 AAA 2005-3 M-1, M-2 AA+ 2005-3 M-3 AA 2005-3 M-4 AA- 2005-3 M-5 A+ 2005-3 M-6 A 2005-3 M-7 A- 2005-4 1-A, 2-A-3, 2-A-4 AAA 2005-4 M-1 AA+ 2005-4 M-2, M-3 AA 2005-4 M-4, M-5 A+ 2005-4 M-6 A 2005-4 M-7 BBB+ 2005-4 M-8, M-9, M-10 BB 2005-4 M-11 B 2005-4 M-12 CCC Encore Credit Corp. Asset-backed certificates Series Class Rating ------ ----- ------ 2003-1 M1 AA 2003-1 M2 A FAMILY FIRST: Ends Business by Year-End; Won't for File Bankruptcy ------------------------------------------------------------------ In its Web site, Family First Mortgage Corp. said: "It is with tremendous sadness that after great consideration Family First Mortgage Corp. has made the decision to exit the mortgage lending business and cease operations. We will be ending operations on Dec. 31, 2007." "It has been our privilege to work with what we believe to be some of the best people in the mortgage industry, including our branch managers, branch personnel and corporate staff. We are greatly saddened by the affect this has on our loyal and hard-working employees." Family First Mortgage Corp. said late last week that it had laid off most of its staff including those at its head office in Palm Coast, Barry Flynn of the Daytona Beach Journal Online News reports. President Gregory L. Hill told Dayton Beach Journal that the closure and lay offs were a result of the "real estate slump." Mr. Hill added that there is no need for the company to file for chapter 11 bankruptcy but will continue operations until the year ends, Daytona Beach Journal says. Palm Coast, Florida-based Family First Mortgage Corp. -- http://www.familyfirstmortgage.com/-- has over 275 branch locations throughout the country and a full staff of highly qualified individuals with years of experience. FEDDERS CORP: Can Hire Roux Associates as Environmental Consultant ------------------------------------------------------------------ Fedders Corp. and its debtor-affiliates obtained authority from the United States Bankruptcy Court for the District of Delaware to employ Roux Associates as environmental consultant, nunc pro tunc to Nov. 15, 2007. As reported in the Troubled Company Reporter on Dec. 10, 2007, the Debtors told the Court that Roux Associates will provide environmental consulation and management services in connection with the Debtors' investigation and potential remediation of the 990 and 1040 properties located at Spruce Street in Trenton, New Jersey. Specifically, Roux Associates will: a) with respect to the 1040 property: -- draft a preliminary assestment report which identifies potential areas of concern; -- install permanet monitoring wells to be used for sampling ground water; -- conduct a BEE to determine the potential need for further ecological evaluation activities; and -- prepare letter report summarizing Roux Associates' investigation to determine whether additional remediation activitiees are required. b) with respect to the 990 property: -- draft a preliminary assestment report which identifies potential areas of concern; -- conduct additional soil and ground water sampling based on the findings of the PA report; -- perform vapor intrusion investigation; -- perform baseline ecological evaluation to determine the need for further evaluation activities; -- conduct ground water sampling from existing monitoring weels; -- prepare site investigation/remedial investigation report for submission to New Jersey Department of Environmental Protection concerning compliance with its soil and ground water standards; -- dispose sampled ground water and excess soil cutting; -- conduct site meeting with NJDEP to discuss remedial alternatives consdered by the Debtors; -- evaluate remedial alternative; and -- prepare revised remedial action work plan for submission to NJDEP for approval of the proposed site remediation. The firm's professionals bill between $60 and $275 per hour for this engagement. To the best of the Debtors' knowledge the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Court. Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The U.S. Trustee for region 3 has appointed an Official Committee of Unsecured Creditors on this case. When the Debtors filed for protection from its creditors, it listed total assets of US$186,300,000 and total debts of US$322,000,000. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. FEDDERS CORP: Court OKs Devonshire Realty as Real Estate Broker --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware gave Fedders Corp. and its debtor-affiliates permission to employ Devonshire Realty Ltd. dba Coldwell Banker Commercial Devonshire Realty as their real estate broker. As reported in the Troubled Company Reporter on Dec. 4, 2007, Devonshire Realty will: a) prepare and develop marketing materials for potential prospects interested in purchasing the property; b) develop, update and review with the Debtors on an ongoing basis a list of parties that indicated interest in purchasing the property; c) assist in evaluating proposals received regarding the sale of property; d) assist with the negotiation of the terms of purchase and sale agreements with proposed purchasers of the property; and e) perform any and all other real estate broker services related to the sale of property. The Debtors told the Court that the firm will be paid from proceeds of the sale of property and will not be required to file any fee application with the Court. The Debtors said that the firm will be paid under the terms of a listing agreement of the broker commission. Arthur J. Thoma, Jr., a broker at the firm, assured the Court that his firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The U.S. Trustee for region 3 has appointed an Official Committee of Unsecured Creditors in this case. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. FEDDERS CORPORATION: Court Sets March 4, 2008 as Claims Bar Date ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware established March 4, 2008, at 4:00 p.m., as the period in which creditors of Fedders Corp. and its debtor-affiliates must file their proofs of claim. As reported in the Troubled Company Reporter on Dec. 5, 2007, the Debtors reminded each entity who asserts a claim against the Debtors to file an original, written proof of claim which substantially conforms with the official proof of claim form. Proofs of claim are to be sent to: Fedders North America Inc. c/o Logan & Company Inc. 546 Valley Road Upper Montclair, NJ 07043 Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq. of Saul, Ewing, Remick & Saul LLP represents the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The U.S. Trustee for region 3 has appointed an Official Committee of Unsecured Creditors on this case. When the Debtors filed for protection from its creditors, it listed total assets of US$186,300,000 and total debts of US$322,000,000. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. FEDERATIVE REPUBLIC OF BRAZIL: S&P Maintains Low-B Ratings ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' long-term foreign, 'BBB' long-term local, 'B' short-term foreign, and 'A-3 short-term local currency sovereign credit ratings on the Federative Republic of Brazil, following a week of mixed success on the fiscal front. The outlook on the ratings is positive. Standard & Poor's also affirmed its 'brAAA' national scale credit rating, 'BBB' transfer and convertibility assessment, and 3 recovery rating on the republic. Standard & Poor's also published an article entitled "Loss Of CPMF Is A SetbackBut Not A DerailmentFor Brazil's Credit Prospects," which outlines the challenges facing Brazil following the Dec. 13, 2007, defeat of the Contribui�ao Provis�ria sobre Movimenta�ao Financeira, a financial transaction tax. The government voted to extend the Desvincula�ao de Receitas da Uniao, a measure reducing revenue earmarking, after failing to do the same for CPMF, which represents 1.6% of GDP. According to Standard & Poor's credit analyst Ms. Lisa Schineller, the affirmation rests in part on the government's recommitment to maintain a 3.8% of GDP primary (noninterest) surplus for the nonfinancial public sector. "Any rating reflects a combination of strengths and weaknesses, and CPMF is not, in and of itself, critical for Brazil's rating," said Ms. Schineller. "However, the same cannot be said for a firm policy commitment to reduce the ratio of debt to GDP over time, improve the composition of debt, and reduce fiscal vulnerabilities," she added. Ms. Schineller explained that how the government adjusts its fiscal stance given this negative shock will play an important role in shaping its creditworthiness. At this time, Standard & Poor's assumes that the "no change in the primary surplus target" commitment by the government will see the lost CPMF revenue compensated for by some combination of expenditure compression/cuts, modest tax adjustments, and revised revenue projections associated robust economic growth. "Any weakening of Brazil's fiscal commitment is particularly risky, given other recent global- and Brazil-specific developments; as the environment has changed, positive momentum is likely to slow and the cost of policy complacency rise," Ms. Schineller noted. "Although the events of this past week represent a setback, pressure on the ratings will remain on the upside as long as the government carries through with its commitment to its fiscal targets and its broader economic program benefits the country's economic and external dynamics" she concluded. FGX INT'L: Company's Request Prompts S&P to Withdraw B Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B' corporate credit rating on FGX International Inc. per the company's request. The 'B+' bank loan and '2' recovery ratings were also withdrawn. The company completed its IPO and refinanced these rated bank facilities. FIRST FRANKLIN: Fitch Cuts Ratings on $6.7 Mil. Cert. to BB ----------------------------------------------------------- Fitch Ratings has taken these rating actions on First Franklin mortgage pass-through certificates. Affirmations total $1.8 billion and downgrades total $9.8 million. Break Loss percentages and Loss Coverage Ratios for each class is included with these rating actions: Series 2005-FF7 -- $181.4 million class A affirmed at 'AAA' (BL: 60.01, LCR: 5.44); -- $32.6 million class M-1 affirmed at 'AA+' (BL: 51.19, LCR: 4.64); -- $29.9 million class M-2 affirmed at 'AA+' (BL: 43.06, LCR: 3.90); -- $18.3 million class M-3 affirmed at 'AA' (BL: 36.71, LCR: 3.33); -- $16 million class M-4 affirmed at 'AA-' (BL: 32.94, LCR: 2.98); -- $14.7 million class M-5 affirmed at 'A+' (BL: 29.18, LCR: 2.64); -- $13.4 million class M-6 affirmed at 'A' (BL: 25.53, LCR: 2.31); -- $12 million class M-7 affirmed at 'A-' (BL: 22.10, LCR: 2.00); -- $10.7 million class M-8 affirmed at 'BBB+' (BL: 17.08, LCR: 1.55); -- $9.3 million class M-9 affirmed at 'BBB' (BL: 14.83, LCR: 1.34); -- $6.7 million class M-10 affirmed at 'BBB' (BL: 13.24, LCR: 1.20); -- $6.7 million class M-11 downgraded to 'BB' from 'BBB-' (BL: 11.77, LCR: 1.07); -- $3.1 million class M-12 downgraded to 'BB' from 'BB+' (BL: 11.31, LCR: 1.02). Deal Summary -- Originators: 100% First Franklin; -- 60+ day Delinquency: 24.14%; -- Realized Losses to date (% of Original Balance): 0.85%; -- Expected Remaining Losses (% of Current Balance): 11.04%; -- Cumulative Expected Losses (% of Original Balance): 5.40%. Series 2005-FF9 -- $658.7 million class A affirmed at 'AAA' (BL: 37.11, LCR: 5.17); -- $77.6 million class M1 affirmed at 'AA+' (BL: 27.51, LCR: 3.83); -- $39.2 million class M2 affirmed at 'AA' (BL: 22.33, LCR: 3.11); -- $25.5 million class M3 affirmed at 'AA-' (BL: 20.03, LCR: 2.79); -- $26.4 million class M4 affirmed at 'A+' (BL: 17.18, LCR: 2.39); -- $24.7 million class M5 affirmed at 'A' (BL: 14.43, LCR: 2.01); -- $13.6 million class M6 affirmed at 'A-' (BL: 11.48, LCR: 1.60); -- $12.7 million class M7 affirmed at 'BBB+' (BL: 10.13, LCR: 1.41). Deal Summary -- Originators: 100% First Franklin; -- 60+ day Delinquency: 20.01%; -- Realized Losses to date (% of Original Balance): 0.54%; -- Expected Remaining Losses (% of Current Balance): 7.18%; -- Cumulative Expected Losses (% of Original Balance): 4.49%. Series 2005-FF10 -- $639.2 million class A affirmed at 'AAA' (BL: 28.92, LCR: 3.31); Deal Summary -- Originators: 100% First Franklin; -- 60+ day Delinquency: 18.79%; -- Realized Losses to date (% of Original Balance): 0.60%; -- Expected Remaining Losses (% of Current Balance): 8.73%; -- Cumulative Expected Losses (% of Original Balance): 5.79%. FIRST FRANKLIN: Realized Losses Cues S&P to Downgrade Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on seven classes of asset-backed certificates issued by three First Franklin Mortgage Loan Trust transactions and removed one of the lowered ratings from CreditWatch with negative implications. The ratings on two classes remain on CreditWatch negative. Furthermore, S&P affirmed its ratings on the remaining classes from these series. The downgrades reflect realized losses that have exceeded monthly excess interest cash flow, thereby reducing overcollateralization (O/C). As a result, O/C for the downgraded transactions has fallen to these levels (series: O/C amount {$}, % of target, O/C target): -- 2003-FF4: $933,318, 15.7%, $5,944,934; -- 2004-FF3: $1,428,994, 17.9%, $7,981,281; and -- 2004-FF10: $1,051,733, 21.5%, $4,882,076. S&P's loss projections indicate that the current performance trends may further compromise credit support for the downgraded classes. The transactions with lowered ratings have sizeable loan amounts that are severely delinquent (90-plus-days, foreclosures, and REOs), which suggests that the unfavorable performance trends are likely to continue. The severe delinquencies relative to O/C are (series: severe delinquency amount {$}, % of current pool balance, multiple of O/C): -- 2003-FF4: $10.895 million, 14.91%, 11.7x; -- 2004-FF3: $28.999 million, 15.44%, 20.3x; and -- 2004-FF10: $57.556 million, 18.83%, 54.7x. As of the November 2007 remittance report, cumulative realized losses for the downgraded deals were (series: realized losses {$}, % of original pool balance): -- 2003-FF4: $11,518,891, 0.96%; -- 2004-FF3: $19,967,431, 1.25%; and -- 2004-FF10: $11,173,388, 0.80%. S&P removed its rating on class M-5 from series 2004-FF10 from CreditWatch because it was lowered to 'CCC'. The affirmations reflect both current and projected credit support percentages that meet or exceed the loss coverage levels for the current ratings. Subordination, O/C, and excess interest cash flow provide credit support for these transactions. Additionally, series 2004-FF10 benefits from a loan-level primary mortgage insurance policy issued by PMI Mortgage Insurance Co. covering 21.08% of loans with original loan-to-value ratios in excess of 80%. The PMI policy will protect against losses due to default under each PMI mortgage loan in an amount equal to a percentage of the principal balance equal to 100% minus a fraction equal to 60% over the original LTV ratio of the related PMI loan. The collateral for these series consists of a pool of fixed- and adjustable-rate, fully amortizing, and balloon payment mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered First Franklin Mortgage Loan Trust Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-FF4 M-2 B+ BB 2003-FF4 M-4 CCC B- 2004-FF3 M-3 BB A 2004-FF3 M-4 B+ BBB+ 2004-FF3 B-1 B- BB 2004-FF3 B-2 CCC B Rating Lowered and Removed form CreditWatch First Franklin Mortgage Loan Trust Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2004-FF10 M-5 CCC B/Watch Neg Ratings Remaining on CreditWatch Negative First Franklin Mortgage Loan Trust Asset-backed certificates Series Class Rating ------ ----- ------ 2004-FF10 M-3 BB/Watch Neg 2004-FF10 M-4 B+/Watch Neg Ratings Affirmed First Franklin Mortgage Loan Trust Asset-backed certificates Series Class Rating ------ ----- ------ 2003-FF4 M-1 AA 2003-FF4 M-3 B 2003-FF4 M-5, M-6 CCC 2004-FF3 M-1 AA+ 2004-FF3 M-2 A+ 2004-FF3 B-3 CCC 2004-FF10 A-2, A-3 AAA 2004-FF10 M-1 AA 2004-FF10 M-2 A 2004-FF10 M-6, M-7A, M-7F CCC FIRST MAGNUS: To Sell 40 Construction Loans to Summit for $4.6MM ---------------------------------------------------------------- First Magnus Financial Corporation seeks the U.S. Bankruptcy Court for the District of Arizona's authority to sell constructions loans for $4,600,000 to Summit Investment Management LLC, or to a party providing the highest bid for the property at an auction. First Magnus intends to sell about 40 construction loans, with an aggregated commitment amount of $22,432,783, and total unfunded commitment of $5,693,933. A list of the loans is available for free at: http://ResearchArchives.com/t/s?2699 First Magnus is attempting to sell the construction loans as part of its ongoing efforts to liquidate the assets of the estate for the benefit of creditors. Since the bankruptcy filing, the Debtor marketed the construction loans extensively and solicited bids for the assets. The Debtor believes that the $4,600,000 offer by Summit is currently the highest and best offer for the construction loans. Todd A. Burgess, Esq., at Greenberg Traurig, P.A. in Miami, Florida, says that the sale of loans to Summit Investment will be subject to competitive bidding to maximize the loans' realizable value. The Debtor proposed, among others, that parties interested in bidding for the loans must submit a written offer and a refundable bid deposit for $50,000 to MCA Financial Group, Ltd., and financial information required by the Debtor by no later than 4:00 p.m. (Arizona time) on Jan. 3, 2008. Any bidder that has submitted a bid deposit before the sale hearing may participate through calls. In addition, the Debtor proposed that at the sale hearing, the Court will begin the auction with Summit Investment's offer of $4,600,000 on the terms stated in the purchase agreement. The Debtor proposed that the initial overbid for the loans must be at least $250,000 higher than the opening bid, and succeeding bids must be in cash increments of $50,000 over the prior bid. The Debtor will return all bid deposits to the bidders, excluding the one submitted by the bidder who has made the highest offer, within a day after the hearing, according to Mr. Burgess. "If the highest bidder fails to close the sale in accordance with the terms of the agreement, his deposit will be forfeited and retained by the Debtor's estate as compensatory damages," Mr. Burgess notes. He adds that the bidder who has made the next highest offer will have 10 days after receiving notice from the Debtor to complete the transaction or its deposit will be forfeited. The Debtor also seeks the Court's permission to reimburse Summit Investment less than $200,000 or pay for the expenses it may incur from the conduct of the sale. "If Summit Investment is not the successful bidder and does not later complete the sale as the back-up bidder, it will be entitled to recover from the sale proceeds to any other purchaser less than $200,000 or its out-of-pocket expenses," Mr. Burgess states. "If Summit Investment is the successful bidder, and the sale does not close for any reason other than the material breach by Summit Investment, it will be entitled to an immediate cash payment of the expenses." Any amount due and payable to Summit Investment will be treated as an allowed administrative expense claim under Section 503 of the Bankruptcy Code and be paid in cash or readily available funds within three days of the date due, according to Mr. Burgess. Debtor Wants Bourn Partners as Broker The Debtor further seeks the Court's approval to employ, under under Sections 327 and 330 of the Bankruptcy Code, Bourn Partners LLC, as broker in connection with the sale. "If a qualified bidder procured by Bourn Partners offers a price at or above $4,850,000, the Debtor requests that the employment of Bourn Partners and payment of a 3% sales commission be approved by the Court and paid at closing from the sale proceeds," Mr. Burgess says. He adds, however, that no commission will be paid if no qualified bidder procured by the company submits a bid equal to or higher than the amount. Fair and Reasonable Offer Mr. Burgess says Summit Investment's offer is reasonable and represents fair market value for the construction loans, given the deterioration in the loans' value. "Completion of the underlying homes is roughly 50% and that the construction ceased over six months ago, with no current funding available for the projects," Mr. Burgess explains. The Debtor estimated that the fund needed to complete the construction will exceed $5,700,000. 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). FIRST MAGNUS: Court Designates Examiner for 17 Flagstaff Loans -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona granted the request filed by First Magnus Financial Corporation's creditors James M. McInerney, Mark Sukenik, Brian and Rhonda Swan, Judy and Larry Burkley, Kimberly Swan, Robert Walcher, Sean West, Richard and Stephanie White, Greg Chigas, and John C. Stueber for Merrill Lynch Bank USA to: (a) designate a representative to appear and be examined under oath regarding the Debtor's 17 loans secured by real properties in the Flagstaff Ranch Development, in Flagstaff, Arizona; and (b) produce complete file for each of the loan, including the loan origination and servicing files, and documents of (i) any transfer, assignment or other conveyance of interest in the loans to Merrill Lynch; (ii) any transfer, assignment or other conveyance of the company's interest in the loans to other person or entity; (iii) any servicing or other agreements between the company and other party regarding the loans; and (iv) documents evidencing any agreement between the company, Vincent W. Goett, Masters Developments Properties LLC or any other entity in the Flagstaff Ranch Development regarding the loans. The Court ruled that "the examination and production of documents will be conducted at a place, date and time as may be specified in a subpoena served by the creditors under Rule 9016 of the Federal Rules of Bankruptcy Procedures." The Flagstaff Ranch Creditors filed the request to obtain clarification who between the Debtor and Merrill Lynch is responsible for their loans, or when that responsibility has been transferred. Both companies issued a statement about the assignment and sale of loans to Merrill Lynch, however, they did not produce documents supporting their statement. Masters Builders Program Violative According to the Flagstaff Ranch creditors, the loans were an integral part of a Masters Builders Program investment offered to the Creditors by the Debtor, Mr. Goett, Masters Developments, Masters Homes and others acting in concert with Mr. Goett. The Flagstaff Ranch Creditors were informed that the Debtor was actively working with the other parties to make the loans and make the program available to them. Representing the Flagstaff Ranch creditors, Gregory W. Falls, Esq., at Mohr, Hackett, Pederson, Blakley & Randolph, P.C., in Phoenix, Arizona, related that the Creditors were investing with the Debtor and Mr. Goett in a common enterprise, expecting that they would make a profit solely through the efforts of the involved parties. "It is the understanding of the creditors that the Masters Builders Program was offered to a large number of investors and potential investors, and that each offering had almost identical components and terms," Mr. Falls said. He noted that there was never a registration of the offerings. During their investigation, the creditors learned that the loans were part of what they considered as a "ponzi" scheme. "The Debtor, Mr. Goett and others brought new borrowers into the loan programs so that the company did not have to write down or write off then existing and delinquent loans it made to Mr. Goett and others," Mr. Falls said. He added that the Debtor did not also have to reflect the losses on the financial statements of those for whom it was servicing the loans or on its own financial statements. The Masters Builders Program documentation provides that the construction of the residences on the lots was to be effectuated by either Masters Developments or Masters Homes. "The Debtor, as an active participant knew or should have known that neither Masters Developments nor Masters Homes at any time had a contractor's license as required and issued by the Arizona Registrar of Contractors," Mr. Falls noted. He added that the Debtor is also responsible for repayment of loan advancements to the creditors since the Debtor actively assisted in directing loan payments to unlicensed contractors with whom its other creditors did not have a written contract. According to Mr. Falls, material misrepresentations and omissions were also made in connection with the sale of the loans and investment contracts under the Masters Builders Program to the creditors and that the contracts are subject to rescission. "The Masters Builders Program documents themselves are violative of Arizona Department of Real Estate Regulations, including the lack of compliance with Rule R4-28-804(A)," Mr. Falls pointed out. He added that this gives the creditors reason to rescind the program and the loan component. Misleading Appraisals According to Mr. Falls, the Debtor also furnished the Flagstaff Ranch Creditors inaccurate appraisals of the lots made by Joseph's Appraisal Group to convince the creditors to proceed with loan closings. "Unknown to the creditors, the Flagstaff Ranch Golf Club was in bankruptcy at the time of the loan closings," Mr. Falls noted. "The clubhouse had no furniture, and many of its amenities had not been completed or remained unavailable for use by the creditors." Mr. Falls said the appraiser used Forest Highlands and Pine Canyon's comparable sales in arriving at as-built appraisal amounts, notwithstanding the relative lack of attractiveness of the Golf Club. The Flagstaff Ranch Creditors alleged that the Debtor, the Masters Developments and other involved parties are aware of the appraisals' inaccuracy, however, they did not inform the creditors about the problem. The Debtor, Mr. Falls related, informed the Flagstaff Ranch Creditors that after the construction of residences on their lots is completed, the residences would be sold and would generate a substantial profit for the creditors. "It was in part based on the Debtor's representations that it would not misapply loan proceeds and that there were more than sufficient amounts in the loans to pay for all costs of construction until its completion," Mr. Falls said. He noted that the representations made by the Debtor for the Flagstaff Ranch Creditors to commit to the loans was in part driven by the excessive fees it received on each loan. The Flagstaff Ranch Creditors, however, learned that the Debtor made loan proceeds available to the involved parties and that the monies were not used to provide labor and materials for the enhancement of the residences. So far, the creditors have not signed documents permitting the Debtor to disburse any loan funds to the parties or authorized the Debtor to disburse loan proceeds without their written approval. Mr. Falls asserted that the Debtor breached the loan agreements with the creditors. "The increased loan interest resulting from it caused interest charged and paid to the Debtor on the loans to be usurious, resulting in all charges in the nature of interest subject to a return to the creditors by the Debtor," Mr. Falls pointed out. He added that for certain of the loans, the Debtor failed or refused to disburse funds when required, constituting yet other material breaches of the loan documents. According to Mr. Falls, further discovery is required to fully support the Flagstaff Ranch Creditors' claims against the Debtor as well as potential claims against the other parties. 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). FIRST MORTGAGE: Moody's Downgrades Ratings from A2 TO Ba2 --------------------------------------------------------- Moody's Investors Service downgraded to Ba2 from A2 the rating on the Bessemer Non-Profit Development Corporation's First Mortgage Housing Revenue Bonds (Bessemer Housing Authority Section 8 Assistance Elderly Project), Series 1996A and B (Jesse Lanier Manor). The affirmation is based on a decline in debt service coverage resulting from increased operating expenses. Jesse Lanier Manor is a 120-unit apartment complex for the elderly and handicapped located in Bessemer, Alabama. Strengths * Fully funded debt service reserve fund as of Dec. 19, 2007 * A high occupancy rate of 97% as of July 2007 with 9 names on the waitlist * Relatively short time until bond maturity on Oct. 1, 2012 Challenges * Debt service coverage has declined to 0.99x as of the Dec, 31, 2005 audit and 0.88x as of the Dec. 31, 2006 audit; the decline in coverage was driven by a significant increase in utility expenses. As a result, the trustee has tapped the project's surplus fund in order to cover operating expenses for the project; A HUD Real Estate Assessment Center score of 74b as of November 2006; * Rents for one bedroom apartments are 99% of HUD's fair market rent and rents for two bedroom apartments are 110% of FMR making an increase in contract rents unlikely. Outlook The outlook on the bonds has been revised to negative due to the steady decline in debt service coverage and the potential for taps to the debt service reserve once the surplus fund is depleted. In the event of a debt service tap, the bonds would likely experience another multi-notch downgrade. Key Statistics -- Current Occupancy: 97% -- HAP Contract Expiration: 11/13/2012 -- Bond Maturity: 10/1/2012 -- Debt Service Coverage: 0.88x For the twelve months ended Sept. 30, 2007 the company reported revenues of approximately $773 million. FORD MOTOR: Continues Pay Hikes for White-Collared Workers in 2008 ------------------------------------------------------------------ Ford Motor Co. and General Motors Corp. will resume salary increases of white-collared employees in 2008, various reports say. The Detroit News relates that after discontinuing pay hikes in 2007, Ford announced that its white-collared workers will get 2.7% wage increases based on business conditions and employee performance in April. GM spokeswoman Brenda Rios confirmed that GM has consented to dipping into the merit fund to give out to workers as salary raises in the first half of 2008, Sharon Terlep of The Detroit News reports. Although, the automaker hasn't disclosed how much it will release to each worker. Ford is also mulling shelling out annual bonuses to 54,000 United Auto Workers union workers in 2008 as promised, Staff writer Sarah A. Webster of the Free Press relates. In 2006, GM and Ford, the Detroit News says, offered wage hikes while Chrysler LLC didn't. Although, this year, Chrysler did, while GM and Ford didn't. Chrysler spokesman Kevin McCormick says he is not sure if the carmaker will have pay increases next year. 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 Ford Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. EVRAZ GROUP: Launches Cash Tender Offer to Purchase Claymont Steel ------------------------------------------------------------------ Evraz Group S.A., through its wholly owned subsidiary Titan Acquisition Sub Inc., is commencing a cash tender offer to purchase all outstanding shares of common stock of Claymont Steel Holdings Inc. The tender offer is being made pursuant to a definitive agreement among Evraz, Titan Acquisition Sub, Inc. and Claymont Steel dated Dec. 9, 2007. Upon the successful closing of the tender offer, Claymont Steel stockholders will receive $23.50 in cash for each share of Claymont Steel common stock tendered in the offer, less any applicable stock transfer taxes and withholding taxes. Following the purchase of shares in the tender offer, Claymont Steel will become a subsidiary of Evraz. Evraz will file with the Securities and Exchange Commission a tender offer statement on Schedule TO setting forth in detail the terms of the tender offer. Claymont Steel will file with the Commission a solicitation/recommendation statement on Schedule 14D-9 setting forth in detail, among other things, the recommendation of Claymont Steel's board of directors that Claymont Steel stockholders accept the tender offer and tender their shares in the tender offer. Claymont Steel's board of directors has unanimously concluded that the merger agreement and the transactions contemplated thereby (including the tender offer and the merger) are advisable and are fair to and in the best interests of Claymont Steel and Claymont Steel's stockholders. The tender offer will expire at 12:00 midnight on Jan. 16, 2008, unless extended in accordance with the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission. The offer will be subject to customary conditions, including anti-trust clearance and the acquisition by Evraz of a majority of Claymont Steel's shares on a fully diluted basis. ABN AMRO Incorporated is acting as exclusive financial advisor to Evraz and will be the dealer-manager for the tender offer. Jefferies & Company, Inc. is acting as lead financial advisor to Claymont Steel in the transaction, and both Jefferies & Company, Inc. and Western Reserve Partners LLC delivered fairness opinions to Claymont Steel's board of directors. Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Evraz, and Morgan, Lewis & Bockius LLP is acting as legal counsel to Claymont Steel. About Claymont Steel Headquartered in Claymont, Delaware, Claymont Steel Inc. -- http://www.claymontsteel.com/-- fka CitiSteel USA Inc., mills carbon steel plate. It services all major plate markets including service centers, bridge fabricators, railcar manufacturers, heavy construction machinery and material handling equipment, mining equipment, storage tanks, pressure vessel, and shipbuilding. It produces somewhere near 400,000 tons per year. The company sells its products to clients in Canada and the US. Previously a subsidiary of CITIC Group, Claymont Steel (as CitiSteel USA) was acquired by H.I.G. Capital, a private equity and venture capital investment firm in 2005. H.I.G. formed Claymont Steel Holdings in 2006 with the intent to take the company public. About Evraz Headquartered in Luxembourg, Evraz Group S.A. (LSE:EVR) -- http://www.evraz.com/-- manufactures and distributes steel and related products. In addition, the Company owns and operates certain mining assets. Its steel production and mining facilities are mainly located in the Russian Federation. It operates three steel mills in Russia, one mill in the Sverdlovsk region and two mills in the Kemerovo region. * * * In November 2007, Moody's Investor's Service upgraded the corporate family rating for Evraz Group from Ba3 to Ba2. Moody's also has upgraded the ratings for the Senior Unsecured global bonds at Evraz Group S.A. totaling $750 million due in 2015 from B2 to Ba3 and the Senior guaranteed Eurobonds at Evraz Securities S.A. totaling $300 million due in 2009 from Ba3 to Ba2. Moody's said the outlook on all ratings is stable. As of Nov. 20, 2007, Evraz Group carries BB- Local and Foreign Issuer Credit ratings from Standard & Poor's. S&P said the Outlook is Positive. The company carries BB Issuer Default and Senior Unsecured ratings and B Short-Term IDR. Fitch said the Outlook is Stable. GEMSTONE CDO: Moody's Reviews Ba2 Rating on $6.1 Mil. Notes ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Gemstone CDO II Ltd. on review for possible downgrade: * Class Description: $20,500,000 Class A-2 Floating Rate Notes Due May 2040 -- Prior Rating: Aa1 -- Current Rating: Aa1, on review for possible downgrade * Class Description: $141,400,000 Class A-3 Floating Rate Notes Due May 2040 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $28,000,000 Class B Floating Rate Notes Due May 2040 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade * Class Description: $12,000,000 Class C Floating Rate Deferrable Interest Notes Due May 2040 -- Prior Rating: A2 -- Current Rating: A2, on review for possible downgrade * Class Description: $10,000,000 Class D Floating Rate Deferrable Notes Due May 2040 -- Prior Rating: A3 -- Current Rating: A3, on review for possible downgrade * Class Description: $25,000,000 Class E Floating Rate Deferrable Notes Due May 2040 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade * Class Description: $6,100,000 Class F Floating Rate Deferrable Interest Notes Due May 2040 -- Prior Rating: Ba2 -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. GEMSTONE CDO: Moody's Reviews Ba2 Rating on $7.5 Mil. Notes ----------------------------------------------------------- Moody's Investors Service placed these notes issued by Gemstone CDO III, Ltd. on review for possible downgrade: * Class Description: $31,500,000 Class A-3 Floating Rate Notes due July 2040 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $28,000,000 Class B Floating Rate Notes due the July 2040 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade * Class Description: $19,000,000 Class C Floating Rate Deferrable Interest Notes due the July 2040 -- Prior Rating: A2 -- Current Rating: A2, on review for possible downgrade * Class Description: $23,500,000 Class D Floating Rate Deferrable Interest Notes due the July 2040 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade * Class Description: $7,500,000 Class E Floating Rate Deferrable Interest Notes due the July 2040 -- Prior Rating: Ba2 -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. GEMSTONE CDO: Moody's Reviews Ba2 Rating on $6 Mil. Notes --------------------------------------------------------- Moody's Investors Service announced placed these notes issued by Gemstone CDO Ltd. on review for possible downgrade: * Class Description: $143,000,00 Class A-1 Floating Rate Notes Due December 2034 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $160,000,000 Class A-2 Floating Rate Notes Due December 2034 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $40,000,000 Class A-3 Floating Rate Notes Due December 2034 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $25,000,000 Class B Floating Rate Notes Due December 2034 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade * Class Description: $20,000,000 Class C Floating Rate Deferrable Interest Notes Due December 2034 -- Prior Rating: A2 -- Current Rating: A2, on review for possible downgrade * Class Description: $20,000,000 Class D-1 Floating Rate Deferrable Interest Notes Due December 2034 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade * Class Description: $10,000,000 Class D-2 Fixed Rate Deferrable Interest Notes Due December 2034 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade * Class Description: $6,000,000 Class E Floating Rate Deferrable Interest Notes Due December 2034 -- Prior Rating: Ba2 -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. GENERAL MOTORS: Resumes Pay Hikes for Salaried Employees in 2008 ---------------------------------------------------------------- General Motors Corp. and Ford Motor Co. will resume salary increases of white-collared employees in 2008, various reports say. As reported in the Troubled Company Reporter on Feb. 13, 2006, GM unveiled new actions to support its ongoing North American turnaround plan. The new actions are expected to generate savings, stem losses, reduce costs and business risks, and further enhance GM's financial flexibility. A major part of the turnaround plan is for GM Chairman and CEO Rick Wagoner and other senior officers and directors to take pay cuts and for the company to slash its cash dividends. GM spokeswoman Brenda Rios confirmed that GM has consented to dipping into the merit fund to give out to workers as salary raises in the first half of 2008, Sharon Terlep of The Detroit News reports. Although, the automaker hasn't disclosed how much it will release to each worker. The Detroit News relates that after discontinuing pay hikes in 2007, Ford announced that its white-collared workers will get 2.7% wage increases based on business conditions and employee performance in April. Ford is also mulling shelling out annual bonuses to 54,000 United Auto Workers union workers in 2008 as promised, Staff writer Sarah A. Webster of the Free Press relates. In 2006, GM and Ford, the Detroit News says, offered wage hikes while Chrysler LLC didn't. Although, this year, Chrysler did, while GM and Ford didn't. Chrysler spokesman Kevin McCormick says he is not sure if the carmaker will have pay increases next year. About Ford Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. 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. GENERAL MOTORS: Sells 1 Million Vehicles in China in One Year ------------------------------------------------------------- General Motors Corp. became the first global automaker to sell 1 million vehicles in China in a single year today when GM China Group President and Managing Director Kevin Wale handed the keys to a Buick Park Avenue to Mr. Zhang Jianping at Shanghai GM's corporate showroom in Shanghai. "Becoming the first global manufacturer to sell 1 million vehicles in China is a demonstration of the strength of our product, our people and our partnerships," GM Chairman and CEO Rick Wagoner said. "China is a very important market, and we're extremely proud of the contribution we have been able to make to the growth and development of its automotive industry. It's been an extremely beneficial relationship for both sides." GM sales in China first surpassed 100,000 units annually back in 2002. Since then, GM sales have enjoyed steady growth, topping 500,000 annual sales in 2005, thanks to its growing lineup of brands and vehicles. The milestone million mark featured GM's best-known and strongest brand in China, Buick. "I'm extremely honored to be the one millionth customer in 2007 for General Motors," Mr. Zhang said. "This is my second Buick and I appreciate the performance, safety and durability of Buick. In addition, I was very satisfied with the fuel economy of my first car. After comparing other products in the premium segment for my next car, it made perfect sense to choose the Park Avenue." "From day one, GM and our partners have been committed to continually rolling out new and upgraded models, with specific engineering done in China for China to satisfy the needs of Chinese vehicle buyers across the country," Mr. Wagoner added. This year, GM and its joint venture partners have begun offering several new products, including the Cadillac SLS luxury business sedan, Buick Park Avenue premium sedan, Chevrolet Captiva SUV, all-new Chevrolet Epica intermediate sedan and Wuling Hong Tu minivan. According to Wagoner, reaching the new sales mark in 2007 is especially significant as it is taking place in a year in which GM has celebrated several milestones in China. Both Shanghai GM, the automaker's flagship manufacturing joint venture, and the Pan Asia Technical Automotive Center (PATAC), GM's engineering and design joint venture with Shanghai Automotive Industry Corporation (SAIC), marked their 10th anniversaries earlier this year. SAIC- GM-Wuling, GM's mini-vehicle joint venture, also celebrated its fifth anniversary. 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. GMAC LLC: Moody's Cuts Senior Unsecured Debt Rating to Ba3 ---------------------------------------------------------- Moody's Investors Service downgraded GMAC LLC's senior unsecured debt rating to Ba3 from Ba2. This action concludes Moody's review of GMAC's ratings, initiated on Nov. 26, 2007. GMAC subsidiary Residential Capital LLC's ratings were not affected by the GMAC rating action. The rating outlook for both GMAC and ResCap is negative. The downgrade equalizes the GMAC and ResCap ratings, reflecting Moody's view that, in the near-term, GMAC is likely to use its capital resources to support ResCap through its operating and funding difficulties in a manner that could compromise GMAC's stand-alone credit profile. It has been Moody's position that any use of GMAC's stand-alone capital in support of ResCap that is not backed in equal measure by explicit support from GMAC's owners would result in an equalization of the ResCap and GMAC ratings. Moody's has come to believe that such support from GMAC is now likely. During 2007, ResCap has been challenged by adverse performance in its subprime mortgage business, resulting in large mark-to-market charges and loss provisions, operating losses and capital shortfalls. Moody's believes GMAC and its owners are committed to maintaining ResCap's capital at sufficient levels for it to comfortably remain in compliance with a $5.4 billion minimum tangible net worth covenant in its bank credit agreements. As a priority, Moody's believes GMAC support for ResCap would be designed to ensure ResCap's continued compliance with this covenant. Moody's analyst Mr. Mark Wasden said that "GMAC began 2007 in a highly leveraged position on a stand-alone basis, and despite modest capital generation during the year, remains highly leveraged versus peers; as such, the firm has no capacity to provide un-backed support to ResCap without compromising its rating profile." Moody's believes that GMAC's auto finance and insurance businesses have strong ongoing strategic importance to GM. GM is unlikely to consent to GMAC support of ResCap that reaches such a magnitude and manner as to challenge GMAC's own stand-alone business viability. This therefore suggests that GMAC's ratings will move in tandem with ResCap's ratings until the point that ResCap suffers severe setbacks that would constrain GMAC's auto finance operations were GMAC to continue to provide support. At that point the ratings could again be separated, Moody's said. Affected GMAC ratings include: -- Senior Unsecured: to Ba3 from Ba2 -- Long-Term Issuer: to Ba3 from Ba2 -- Senior Unsecured Shelf: to (P)Ba3 from (P)Ba2 -- Preferred Stock: to B3 from B1 Detroit-based GMAC LLC provides retail and wholesale auto financing, auto extended warranty and insurance products, and residential mortgage finance through wholly-owned subsidiary Residential Capital, LLC. GMAC reported a consolidated nine-month net loss of $1.6 billion. GREENBRIAR CLO: Moody's Assigns Ba2 Rating on $40 Mil. Notes ------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by Greenbriar CLO, Ltd.: (1) Aaa to the $730,000,000 Class A Floating Rate Senior Secured Extendable Notes Due 2021; (2) Aa2 to the $60,000,000 Class B Floating Rate Senior Secured Extendable Notes Due 2021; (3) A2 to the $50,000,000 Class C Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2021; (4) Baa2 to the $40,000,000 Class D Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2021; and (5) Ba2 to the $40,000,000 Class E Floating Rate Senior Secured Deferrable Interest Extendable Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Loans, High-Yield Bonds, Structured Finance Obligations and Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Highland Capital Management L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. IDAHO HEALTH: S&P Cuts Rating on Revenue Bonds to BB from BBB- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its underlying rating to 'BB' from 'BBB-' on Idaho Health Facilities Authority's hospital revenue bonds, issued for Portneuf Medical Center located in Pocatello. The outlook is stable. "Since Portneuf was formed in 2002, with the consolidation of Bannock Regional Medical Center and its chief competitor, Pocatello Regional Medical Center, consolidation issues have prevented the organization from realizing many of the benefits of coming together," said Standard & Poor's credit analyst Ms. Geraldine Poon. "As a result, Portneuf has been unable to stabilize operating performance and has made little progress on its master facility plan, which is key to benefiting from the consolidation," she added. "Operating losses have accelerated in unaudited fiscal 2007 due in large part to volume declines, which have resulted in a revenue drop." The organizational structure is currently under discussion, as the county commissioners are analyzing Portneuf's proposal for 501c(3) status because Portneuf, as a county-owned entity, requires two- thirds voter approval to issue bonds. It is not clear how long this decision-making process will take, but it could result in additional debt of up to $150 million (because Portneuf, as a 501c(3) could issue bonds), which would materially deteriorate the balance sheet. IMAX CORP: Limited Liquidity Cues S&P to Affirm CCC+ Rating ----------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on IMAX Corp. to stable from positive. S&P also affirmed the ratings on the company, including the 'CCC+' corporate credit rating. "The outlook revision reflects our expectation that crucial elements of an upgrade scenario may take longer to materialize," explained Standard & Poor's credit analyst Tulip Lim. "Although we believe there have been positive developments at the company recently and that the revenue-sharing arrangements it has struck with AMC Entertainment Inc. could improve recurring revenue and visibility, the deployment of these systems will use up the company's very limited liquid resources." S&P also expects that the revenue-sharing business model will require additional external funding for at least the next two years. S&P also lowered the rating on the $160 million unsecured notes due 2010 to 'CCC' from 'CCC+' based on its expectation of increased borrowings under the senior secured facility, which would diminish recovery prospects of unsecured debt holders. The rating reflects the modest size of the company's niche market relative to its debt burden, weak discretionary cash flow, uncertain implications of revenue-sharing arrangements, and limited liquidity. These concerns overshadow IMAX's position as a specialized provider of giant-screen projection, camera, and sound systems; the recurring revenue provided by the installed base of 296 IMAX theater systems; and a measure of near-term revenue visibility provided by the company's backlog of pending system installations. IMC HOME: Delinquent Loans Prompt S&P to Cut Ratings to B --------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class B home equity loan pass-through certificates from IMC Home Equity Loan Trust 1998-5 to 'B' from 'BBB-'. In addition, S&P affirmed its ratings on the remaining classes from the transaction. The downgrade reflects realized losses that have exceeded monthly excess interest cash flow, thereby reducing overcollateralization to $1,224,009 versus a target amount of $2,500,000. This is the lowest level for the deal in both an absolute dollar value and as a percentage of its target since it reached its initial O/C target in October 1999. Six- and 12-month average losses have increased to $132,316 and $109,491, respectively, from $100,557 and $97,229 over the past two months. There are sizeable loan amounts that are severely delinquent (90-plus-days, foreclosures, and REOs), which suggests that the unfavorable performance trends are likely to continue. Severe delinquencies amount to $4.869 million, which is 21.24% of the current pool balance. As of the November 2007 remittance report, cumulative realized losses were $33,816,157, which is 6.76% of the original pool balance. The affirmations reflect a level of credit support that is sufficient to maintain the current ratings. Subordination, O/C, and excess interest cash flow provide credit support for this transaction. The underlying collateral for the transaction is mostlyfixed-rate, first-lien mortgages on one- to four-family residential properties. Rating Lowered IMC Home Equity Loan Trust 1998-5 Home equity loan pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 1998-5 B B BBB- Ratings Affirmed IMC Home Equity Loan Trust 1998-5 Home equity loan pass-through certificates Series Class Rating ------ ----- ------ 1998-5 A-5, A-6 AAA 1998-5 M-1 AA 1998-5 M-2 A INDUSTRIAS UNIDAS: S&P Holds B Ratings with Negative Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Mexico City-based Industrias Unidas S.A. de C.V. to negative from stable. At the same time, S&P affirmed its 'B' corporate credit and senior unsecured ratings on IUSA. The rating action follows the release of IUSA's third-quarter earnings, which were below S&P's expectations. The negative outlook reflects the uncertainty and challenges from the downturn in IUSA's end markets, particularly in the U.S. The ratings could be lowered if IUSA's liquidity weakens and/or its key financial ratios fail to improve. The rating on IUSA reflects the inherent cyclicality of the construction industry, commodity price volatility, competitive pressure on core products and markets, low operational margins, and high leverage relative to operating cash flow generation. These factors are partially offset by the company's leading market positions in Mexico and the U.S., its diversified product mix, and some geographic diversification in the manufacturing and distribution of copper tubing, copper-alloy products, valves, controls, watt-hour meters, wire and cable, and electrical devices. The ratings are also based on S&P's expectation that IUSA will continue to follow a disciplined commercial strategy and increase its offering of value-added products, as well as its liquidity access. "The negative outlook mainly reflects the uncertainty and challenges from the downturn IUSA's end markets, particularly in the U.S," said Standard & Poor's credit analyst Mr. Jose Coballasi. The ratings could be lowered if IUSA's liquidity weakens and/or its key financial ratios fail to improve. The outlook could revert to stable if IUSA's strategies start generating steady free operating cash flow that allows its key financial ratios to improve. INTERFACE INC: Earns $8.6 Million in Third Quarter Ended Sept. 30 ----------------------------------------------------------------- Interface Inc. reported net income of $8.6 million in the third quarter ended Sept. 30, 2007, compared with net income of $9.1 million in the 2006 third quarter. Sales for the third quarter of 2007 increased 19.3% to $279.5 million from sales of $234.2 million in the year ago period. The company sold its fabrics division in July 2007, and therefore the financial statements for the third quarter of 2007, and all other periods presented, now reflect the fabrics division as discontinued operations. Operating income for the third quarter of 2007 increased 36.1% to $34.8 million, or 12.4% of sales. This compares with operating income of $25.5 million, or 10.9% of sales, in the third quarter of last year. Income from continuing operations was $15.2 million in the 2007 third quarter, compared with income from continuing operations of $9.5 million in the third quarter of 2006. The results for the third quarter 2007 included expenses on an after-tax basis of $700,000 for premiums paid in connection with the redemption of the company's 7.3% Senior Notes, versus $100,000 on an after-tax basis for premiums paid on repurchases of those notes in the prior year period. "We are very pleased with our performance during the third quarter of 2007, in which we saw strong growth in revenue and record levels in operating margin and income from continuing operations," said Daniel T. Hendrix, president and chief executive officer. "Driven by the continuing strength of the corporate office market and our segmentation strategy, our modular business continued its strong performance in the period, as revenues grew more than 20% to record levels across each of our key geographic regions of the Americas, Europe and Asia-Pacific." Patrick C. Lynch, Senior Vice President and Chief Financial Officer, commented, "We are extremely pleased with the results of the quarter, particularly with respect to our modular carpet segment. Sales in that segment increased 25.5% year-over-year with its operating income increasing 44.9%. In our Bentley Prince Street segment, overall revenues were modestly lower compared with the third quarter of 2006. However, the modular component within the Bentley Prince Street segment had strong sales growth, which was in-line with the demand we are seeing in our modular carpet segment and indicative of the shift we have seen in the broader market to modular solutions. "We reported operating income of $1.3 million in the Bentley Prince Street segment, which is down from the prior year period primarily as a result of the investment we are making in the installation of a new carpet tile backing line at the plant. During the quarter, we also continued to improve our balance sheet with the reduction of outstanding debt by $81 million, mostly due to our redemption of the outstanding 7.3% Senior Notes." For the first nine months of 2007, sales were $787.9 million, compared with $655.5 million for the same period a year ago, an increase of 20.2%. Operating income for the 2007 nine-month period was $90.0 million, versus operating income of $69.7 million for the comparable 2006 nine-month period. Income from continuing operations was $37.6 million in the 2007 nine-month period, compared with income from continuing operations of $23.4 million in the same period a year ago. Including results of discontinued operations, the company recorded a net loss for the first nine months of 2007 of $31.1 million, compared with a net loss of $2.1 million for the 2006 first nine months. At Sept. 30, 2007, the company's consolidated balance sheet showed $823.3 million in total assets, $560.4 million in total liabilities, and $6.8 million in minority interest, resulting in a $256.1 million total stockholders' deficit. 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?2694 About Interface Inc. Headquartered in Atlanta, Georgia, Interface Inc. (NASDAQ: IFSIA) -- http://www.interfaceinc.com/-- is a manufacturer of modular carpets, which it markets under the InterfaceFLOR, FLOR, Heuga and Bentley Prince Street brands, and, through its Bentley Prince Street brand. * * * As reported in the Troubled Company Reporter on Sept. 26, 2007, Standard & Poor's Ratings Services raised Interface Inc.'s corporate credit rating to 'B+' from 'B', and the ratings were removed from CreditWatch, where they placed with positive implications on June 22, 2007. The outlook is stable. IZATYS GROUP: Case Summary & Four Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Izatys Group, L.L.C. 40005-85th Avenue Onamia, MN 56359 Bankruptcy Case No.: 07-34936 Type of Business: The Debtor owns and manages a recreational resort. See http://www.izatys.com Chapter 11 Petition Date: December 21, 2007 Court: District of Minnesota (St Paul) Judge: Nancy C. Dreher Debtor's Counsel: Douglas W. Kassebaum, Esq. Fredrikson & Byron, P.A. 200 South Sixth Street, Suite 4000 Minneapolis, MN 55402 Tel: (612) 492-7292 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sysco Food Services of goods and/or $8,393 Minnesota services 2400 County Road J Saint Paul, MN 55112 Garrison Disposal Co., Inc goods and/or $8,341 36091 400th Avenue services Aitkin, MN 56431 Rohlfing goods and/or $7,790 923 Wright Street services Brainerd, MN 56401 Turfwerks goods and/or $7,541 services JP MORGAN MORTGAGE: Fitch Puts BB Rating on $18 Mil. Certs. ----------------------------------------------------------- Fitch Ratings has taken these rating actions on the J.P. Morgan Mortgage Acquisition Corp. mortgage pass-through certificates. Affirmations total $1.6 billion and downgrades total $157.3 million. In addition $20.3 million is placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class is included with these rating actions: Series 2005-FLD1 -- $121.5 million class A affirmed at 'AAA' (BL: 74.71, LCR: 4.90); -- $41.4 million class M-1 affirmed at 'AA+' (BL: 63.56, LCR: 4.17); -- $38.3 million class M-2 affirmed at 'AA' (BL: 53.26, LCR: 3.49); -- $22.8 million class M-3 affirmed at 'AA-' (BL: 47.08, LCR: 3.09); -- $20.7 million class M-4 affirmed at 'A+' (BL: 41.09, LCR: 2.70); -- $18 million class M-5 affirmed at 'A' (BL: 36.29, LCR: 2.38); -- $18 million class M-6 affirmed at 'A-' (BL: 31.39, LCR: 2.06); -- $15.4 million class M-7 affirmed at 'BBB+' (BL: 27.13, LCR: 1.78); -- $15.4 million class M-8 affirmed at 'BBB' (BL: 22.94, LCR: 1.50); -- $12.7 million class M-9 affirmed at 'BBB-' (BL: 19.57, LCR: 1.28); -- $11.7 million class M-10 affirmed at 'BB+' (BL: 17.10, LCR: 1.12). Deal Summary -- Originators: Fieldstone Mortgage Company (100%); -- 60+ day Delinquency: 27.35%; -- Realized Losses to date (% of Original Balance): 1.32%; -- Expected Remaining Losses (% of Current Balance): 15.25%; -- Cumulative Expected Losses (% of Original Balance): 6.65%. Series 2005-OPT1 -- $135.3 million class A affirmed at 'AAA' (BL: 78.99, LCR: 5.47); -- $60.4 million class M1 affirmed at 'AA+' (BL: 63.56, LCR: 4.40); -- $46.8 million class M2 affirmed at 'AA' (BL: 53.52, LCR: 3.70); -- $29.4 million class M3 affirmed at 'AA-' (BL: 47.17, LCR: 3.26); -- $27.1 million class M4 affirmed at 'A+' (BL: 41.01, LCR: 2.84); -- $24.9 million class M5 affirmed at 'A' (BL: 22.51, LCR: 1.56); -- $23.4 million class M6 downgraded to 'BBB+' from 'A-' (BL: 19.37, LCR: 1.34); -- $21.1 million class M7 downgraded to 'BBB-' from 'BBB+' (BL: 16.72, LCR: 1.16); -- $18.8 million class M8 downgraded to 'BB' from 'BBB' (BL: 14.42, LCR: 1.00); -- $15.1 million class M9 downgraded to 'B' from 'BBB-' (BL: 12.60, LCR: 0.87); -- $15.1 million class M10 downgraded to 'B' from 'BB+' (BL: 11.42, LCR: 0.79). Deal Summary -- Originators: Option One (100%); -- 60+ day Delinquency: 26.81%; -- Realized Losses to date (% of Original Balance): 0.86%; -- Expected Remaining Losses (% of Current Balance): 14.45%; -- Cumulative Expected Losses (% of Original Balance): 5.31%. Series 2005-OPT2 -- $316 million class A affirmed at 'AAA' (BL: 47.41, LCR: 3.97); -- $34.3 million class M1 affirmed at 'AA+' (BL: 40.87, LCR: 3.42); -- $31.4 million class M2 affirmed at 'AA' (BL: 35.12, LCR: 2.94); -- $19.8 million class M3 affirmed at 'AA-' (BL: 31.47, LCR: 2.63); -- $16.4 million class M4 affirmed at 'A+' (BL: 28.43, LCR: 2.38); -- $15.4 million class M5 affirmed at 'A' (BL: 25.55, LCR: 2.14); -- $14 million class M6 affirmed at 'A-' (BL: 22.87, LCR: 1.91); -- $13.5 million class M7 affirmed at 'BBB+' (BL: 20.18, LCR: 1.69); -- $11.6 million class M8 affirmed at 'BBB' (BL: 16.11, LCR: 1.35); -- $10.6 million class M9 affirmed at 'BBB-' (BL: 14.28, LCR: 1.20); -- $10.6 million class M10 rated 'BB+' is placed on Rating Watch Negative (BL: 12.97, LCR: 1.09); -- $9.6 million class M11 rated 'BB' is placed on Rating Watch Negative (BL: 12.15, LCR: 1.02). Deal Summary -- Originators: Option One (100%); -- 60+ day Delinquency: 15.11%; -- Realized Losses to date (% of Original Balance): 0.71%; -- Expected Remaining Losses (% of Current Balance): 11.94%; -- Cumulative Expected Losses (% of Original Balance): 7.43%. Series 2005-WMC1 -- $261.9 million class A affirmed at 'AAA' (BL: 64.11, LCR: 3.42); -- $55.7 million class M1 affirmed at 'AA+' (BL: 54.85, LCR: 2.92); -- $49.9 million class M2 affirmed at 'AA' (BL: 46.13, LCR: 2.46); -- $29.6 million class M3 affirmed at 'AA-' (BL: 41.24, LCR: 2.20); -- $26.7 million class M4 affirmed at 'A+' (BL: 36.75, LCR: 1.96); -- $25.3 million class M5 affirmed at 'A' (BL: 32.50, LCR: 1.73); -- $23.1 million class M6 affirmed at 'A-' (BL: 28.56, LCR: 1.52); -- $20.9 million class M7 affirmed at 'BBB+' (BL: 24.91, LCR: 1.33); -- $18 million class M8 downgraded to 'BBB-' from 'BBB' (BL: 21.79, LCR: 1.16); -- $18 million class M9 downgraded to 'BB' from 'BBB-' (BL: 18.65, LCR: 0.99); -- $13.7 million class M10 downgraded to 'B' from 'BB+' (BL: 16.36, LCR: 0.87); -- $13.7 million class M11 downgraded to 'B' from 'BB' (BL: 14.68, LCR: 0.78). Deal Summary -- Originators: WMC Mortgage (100%); -- 60+ day Delinquency: 28.83%; -- Realized Losses to date (% of Original Balance): 2.00%; -- Expected Remaining Losses (% of Current Balance): 18.76%; -- Cumulative Expected Losses (% of Original Balance): 9.75%. JP MORGAN MORTGAGE: Fitch Holds Low-B Ratings on Three Certs. ------------------------------------------------------------- Fitch Ratings affirmed JP Morgan Commercial Mortgage Finance Corp., commercial mortgage pass-through certificates, series 2000- C10: -- $434.3 million class A-2 at 'AAA'; -- Interest only class X at 'AAA'; -- $31.4 million class B at 'AAA'; -- $29.5 million class C at 'AAA'; -- $9.2 million class D at 'AAA'; -- $23.1 million class E at 'AAA'; -- $10.2 million class F at 'AAA'; -- $14.8 million class G at 'A'; -- $14.8 million class H at 'BBB-'; -- $7.4 million class J 'at BB-'; -- $5.5 million class K at 'B+'; -- $ 7.4 million class L at 'B-'. The $1.4 million class M remains at 'C/DR5'. Fitch does not rate the $1.5 million class Q. Class A1 has been repaid in full. The affirmations are a result of stable pool performance, limited pay down (0.4%), and the additional defeasance of three loans (5.3%) since Fitch's last rating action. As of the December 2007 distribution date, the transaction's aggregate principal balance has been reduced 20.3% to $589.7 million from $740.1 million at issuance. In total, 47 loans (44.7%) have defeased. There are no delinquent or specially serviced loans. There are no loan maturities or anticipated repayment dates in 2008 and 40 non-defeased loans (37.8% of the pool) mature or have ARDs in 2009. Interest rates on the non-defeased loans range from 7.570% to 9.875% with a weighted average coupon of 8.34%. Of the 96 remaining non-defeased loans, 86 (91.8%) reported year-end 2006 financials with a weighted average debt service coverage ratio of 1.43 times (x). KNIGHTSBRIDGE CLO: Moody's Puts Ba2 Rating on $22 Mil. Notes ------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by Knightsbridge CLO 2007-1 Limited: (1) Aaa to the $316,300,000 Class A-1 Senior Secured Floating Rate Notes, Due 2022; (2) Aa1 to the $20,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2022; (3) Aa2 to the $30,000,000 Class B Senior Secured Floating Rate Notes, Due 2022; (4) A2 to the $35,000,000 Class C Senior Secured Deferrable Floating Rate Notes, Due 2022; (5) Baa2 to the $22,000,000 Class D Secured Deferrable Floating Rate Notes, Due 2022; and (6) Ba2 to the $22,000,000 Class E Secured Deferrable Floating Rate Notes, Due 2022. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of senior secured middle market loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. DB MidMarket Capital will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. KNOLLWOOD CDO: Moody's Lowers Rating on $16.5 Mil. Notes to Ba3 --------------------------------------------------------------- Moody's Investors Service placed these notes issued by Knollwood CDO Ltd. on review for possible downgrade: * Class Description: $54,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade * Class Description: $30,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2039 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade In addition, Moody's also downgraded and left on review for possible downgrade these notes: * Class Description: $16,500,000 Class C Mezzanine Secured Floating Rate Notes Due 2039 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. LEVITT AND SONS: Submits DIP Financing Term Sheet with Wachovia --------------------------------------------------------------- Levitt and Sons LLC, Levitt and Sons of Cherokee County LLC, Levitt and Sons of Hall County LLC, Levitt and Sons of Paulding County LLC, Levitt and Sons of Horry County LLC, Levitt and Sons of Manatee County LLC, and Levitt and Sons at World Golf Village LLC -- the Borrowers, except LAS -- delivered to the United States Bankrupty Court for the Southern District of Florida a term sheet for debtor-in-possession credit facility with Wachovia Bank, National Association. Jordi Guso, Esq., at Berger Singerman, P.A., in Miami, Florida, relates that Wachovia has made prepetition loans to the Borrowers and LAS, which loans are presently secured by perfected first priority liens on, and security interests in, certain residential construction projects. According to him, the prepetition indebtedness owing under the Wachovia Loans presently exceeds the fair market value of the Wachovia Projects, resulting in the absence of any equity in the Wachovia Projects for the Borrowers. Wachovia believes that there exists some possibility for enhancement of the value of the Wachovia Projects, for the benefit of the Borrowers' bankruptcy estates, through, among other things, DIP financing, which would facilitate the completion and sale of homes in the Wachovia Projects. The salient terms of the DIP Term Sheet are: (a) The Credit Facility will consist of a DIP revolving line of credit in a maximum principal amount not exceeding $3,500,000; provided that upon the mutual agreement of Wachovia and the Borrowers, the principal amount may be increased to not more than $10,000,000, without further Court approval. (b) Wachovia, or a designated affiliate, as Lender, will be entitled to sell participating interests in the Credit Facility contemplated, but will at all times remain the "lead" lender under the Loan Documents and retain all servicing obligations with respect to the Credit Facility, as well as all obligations to the Borrowers. In the event that Lender will at any time cease to serve as lead lender under the Credit Facility, the then unfunded balance of an "Admin Cap" and a certain guaranteed amount will be immediately due and payable by Wachovia. (c) Interest accruing on the outstanding principal balance of the Credit Facility will be due and payable monthly in arrears, with principal due and payable in full at maturity. (d) Subject to Wachovia's obligation to fund the Admin Cap and the Guaranteed Amount, all advances under the Credit Facility will be made in the absolute discretion of Lender, subject to any requirements or limitations imposed by court order. (e) Simple interest will be calculated on the basis of a 360- day year at a variable rate equal to the 30-day LIBOR plus 350 basis points. (f) An amount equal to 300 basis points of the Credit Facility amount, due and payable at closing. (g) A $7,500 monthly fee will be payable to Wachovia. (h) Proceeds of the Credit Facility will be available exclusively or the purpose of funding costs and expenses related to the Debtors' Chapter 11 cases, the Credit Facility and the Wachovia Projects as Wachovia may elect in its sole discretion. Wachovia agrees that the payment of the Admin Cap and Guaranteed Amount is not discretionary. (i) Subject to lender's general termination rights, the Credit Facility will expire and terminate on the earlier to occur of (a) the date which is 23 months after commencement of the Credit Facility, or (b) the earlier of 30 days after entry of an interim order, if a final order authorizing the Credit Facility has not been entered by the Court before the expiration of the 30-day period, or the date of dismissal or conversion of the Debtors' Chapter 11 cases with respect to the Borrowers pursuant to an order entered by the Court. (j) Subject to Wachovia's discretion, and so long as no default will exist under the Loan Documents, availability under the Credit Facility will be guaranteed until the time as not less than 80 of the houses located within the Wachovia Projects have been completed or sold. The Lender will then be entitled to terminate the Credit Facility at any time upon one week's written notice to the Borrowers. (k) Subject to the presentation of the DIP Term Sheet on Dec. 19, 2007, and the agreement of the Debtors and the Official Committee of Unsecured Creditors to forbear from prosecuting the Debtors' Abandonment Motion in respect of the Wachovia Collateral pending the entry of an Interim Order, Wachovia will pay $125,000 to the Debtors. Thereafter, on the 10th day of each of the first seven calendar months following the closing of the Credit Facility, Wachovia will advance under the Credit Facility the sum of $125,000 to the attorneys trust account of Genovese Joblove & Battista P.A., counsel to the Creditors Committee, up to an aggregate of $875,000. Wachovia will have no obligation to fund, and the Collateral will be free from any charge for, administrative expense once the full amount of the Admin Cap has been funded by the Lender. (l) Wachovia will cause not less than $3,000,000 to be paid into the attorneys' trust account of Genovese for the benefit of unsecured creditors in addition to the Admin Cap. (m) The Loan Documents will establish a procedure for the sale of homes within the Wachovia Projects in the ordinary course of business, free and clear from all liens, claims or other rights of third parties. (n) Upon closing of the Credit Facility, Wachovia will be granted relief from the automatic stay, exercisable upon the expiration or earlier termination of the Credit Facility without need of any Court order or application. Mr. Guso states that the Borrowers will retain the services of a professional acceptable to Lender to manage and provide all administrative functions of the Borrowers as the Chief Administrator of the Borrowers. The fees and expenses of the Chief Administrator and other professionals or service providers will be funded by the Lender through advances under the Credit Facility. With respect to all proceeds received by the Lender as a result of any liquidation of the Wachovia Projects to a third party purchaser, which is not an affiliate of Lender, Mr. Guso states that these will be applied: * brokerage commissions, legal fees and other reasonable and customary closing costs payable to third parties not affiliated with any Debtor, which costs may not include prepetition liens and may not, in the aggregate, exceed 8% of the gross sale price of the property being sold; * all net sale proceeds will be applied to any then- outstanding indebtedness owing to the Lender under the Credit Facility and junior lien holders or unsecured creditors, until such time as Wachovia has been paid in full; * upon satisfaction of all payments, all excess Net Sale Proceeds will be divided equally between Wachovia and the bankruptcy estates of the Borrowers. Certain conditions apply precedent to closing and advances. A full-text copy of the Wachovia DIP Term Sheet is available for free at http://researcharchives.com/t/s?2696 As disclosed at the "first day hearings" in their Chapter 11 cases, the Debtors have been in discussions with their senior lenders regarding the willingness to provide additional financing to complete vertical construction necessary to complete sales of homes, including homes that are currently under contract. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' exclusive plan filing period expires on March 8, 2008. LEVITT AND SONS: Courts Okays Use of Cash on Hand Until Jan. 9 -------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of Florida has authorized Levitt and Sons LLC and its debtor- affiliates, on an interim basis, to use its Cash On Hand from Nov. 9, 2007, through Jan. 9, 2008, the next scheduled hearing on the matter. The Debtors may use Cash On Hand to pay their ordinary and necessary business expenses as set forth in a budget, provided that the Debtors may exceed the line items in the Budget by no more than 10%. The Debtors will not pay any cost of "Shared Services" reflected on the Budget, without prejudice to the right of Levitt Corp. to request the allowance and payment of an administrative expense claim for the cost of Shared Services, and any objection to a request. The Debtors will no use the proceeds of postpetition sales of any property that is collateral of the Debtors' prepetition lenders, absent the lenders' consent. As adequate protection, each Lender is granted a replacement lien on all postpetition property of the Debtors that is of the same nature and type as each Lender's prepetition collateral. Before the January 9 hearing, any Lender may seek to terminate the Debtors' use of Cash Collateral on an emergency basis with expedited notice to the Debtors. All objections to the Motion not previously resolved are overruled. Objections to the entry of a final order granting the Motion will be filed and served no later than two business days before the January 9 hearing. As reported in the Troubled Company Reporter on Dec. 7, 2007, the Court gave interim authority to Levitt and Sons LLC and its debtor-affiliates to use cash on hand from the date of bankruptcy through the Dec. 19, 2007 hearing. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' exclusive plan filing period expires on March 8, 2008. LEVITT AND SONS: Panel Asks Court to Reconsider Abandonment Orders ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in Levitt and Sons LLC and its debtor-affiliates' bankruptcy cases asks the United States Bankrupty Court for the Southern District of Florida to reconsider its Abandonment Orders consistent with the Creditors Committee's concerns, including the preservation of certain rights to protect the interests of the Debtors' estates and other creditors. The Creditors Committee does not want the Debtors' estates to be prejudiced by the motion of Keybank National Association to have the automatic stay lifted and the resulting state court actions that will come from the KeyBank Motion, Paul J. Battista, Esq., at Genovese Joblove & Battista P.A., in Miami, Florida, tells the Hon. Raymond B. Ray. The Debtors also filed motions for authority to abandon properties of the estate subject to liens held by Bank of America N.A., and Wachovia Bank N.A. In the Abandonment Motions, certain of the Debtors sought to abandon real estate to BOA, or Wachovia, on the basis that BOA, or Wachovia, had a mortgage lien on the assets, that the value of the assets in the aggregate did not exceed the debt owed to BOA, or Wachovia, in the aggregate, and that the continual maintenance of the collateral was burdensome to the Debtors' estates. The Court granted the BOA Abandonment Motion on November 29. The BOA Abandonment Motion only applied to the real estate that constituted BOA's collateral under its loan documents. BOA has yet to file a motion for stay relief to address the balance of its collateral, Mr. Battista notes. Wachovia has also filed a motion seeking, among other things, relief from the automatic stay to permit it to exercise all of its statutory and contractual rights and remedies in and to the real and personal property securing the obligations of certain Debtors to Wachovia. The Creditors Committee, while not objecting conceptually to the abandonment to BOA, and Wachovia, of its collateral, has similar concerns about the effect of the abandonment on the bankruptcy cases of the Debtors, as it does with respect to KeyBank. Based on the BOA Abandonment Order, the Creditors Committee expects that BOA will commence state court foreclosure actions against the collateral under its Loan Documents. The Creditors Committee anticipates that BOA will ultimately obtain unopposed foreclosure judgments against the Debtors, although the other lienholders may contest the foreclosure actions in the state court, Mr. Battista says. Mr. Battista tells the Court that the Creditors Committee simply has not had sufficient time within which to conduct an investigation into potential claims and causes of action against KeyBank, BOA, and Wachovia. In a separate filing, Eric and Jaynie Greenman points out that the title company supporting KeyBank's Motion omitted their residence, 5165 Jennings Trail, Brooksville, Florida, which is on tract 151 of parcel 5, from the list of "less and except tracts" within Parcel 5. The Greenmans note that the title company listed tract 167 twice. The Greenmans therefore ask the Court to exclude their property from KeyBank's Stay Motion to foreclose on the lots owned by Levitt and Sons of Hernando Co. LLC, at Cascades in Hernando County, Florida. Creditors Committee's Concerns re KeyBank Request KeyBank National Association previously filed a motion to lift the automatic stay to commence and proceed with state court foreclosure and receivership actions against the assets of certain of the Debtors that KeyBank asserts constitutes collateral for its loans to the KeyBank Debtors. The Keybank Motion also addresses KeyBank's response to the Debtors' request for authority to abandon estate property subject to a lien held by KeyBank. The Official Committee of Unsecured Creditors was not yet formed when the Abandonment Motion and the KeyBank Motion were initially filed, Mr. Battista states. In fact, he says, the Court has already entered an order granting the Abandonment Motion as it relates to KeyBank. Mr. Battista relates that the Creditors Committee understands the Debtors' desire, among other things, to preserve their assets by not expending carrying costs on the KeyBank collateral given the Debtors' view that no equity exists in the collateral. The Creditors Committee does not object conceptually to KeyBank obtaining relief from the automatic stay, but has several concerns about the extent and effect of the stay relief on the Debtors' Chapter 11 cases. The Creditors Committee believes that the order granting the KeyBank Motion should be straightforward and only provide that KeyBank is granted relief to pursue only those rights and remedies available to KeyBank under its loan documents or applicable non-bankruptcy law. In addition, the Creditors Committee anticipates that KeyBank either has or will shortly commence state court foreclosure actions against the collateral under its Loan Documents. The panel anticipates that the Debtors will not contest any state foreclosure actions. Mr. Battista also notes that the Creditors Committee is concerned, among other things, that the foreclosure judgments that may be obtained by KeyBank in the state court proceedings could have an adverse effect on the rights, claims and causes of action that the Debtors' estates may have against KeyBank. Specifically, the Creditors Committee is concerned that KeyBank may attempt to obtain orders of the state court that confirm the extent, validity or priority of the liens and claims, or the amount of KeyBank's claims against the Debtors or any one of them. KeyBank Objects to Reconsideration Phillip M. Hudson, III, Esq., at Arnstein & Lehr LLP, in Miami, Florida, representing KeyBank, notes that it has been almost three weeks since the Creditors committee was appointed and the order was entered. Mr. Hudson argues that the Creditors Committee has had sufficient time within which to conduct an investigation into potential claims and causes of actions against KeyBank, and thus, should know if the causes of actions even exist. The Creditors Committee's request, if granted, would, in essence, eliminate the purpose of the order granting the Debtors' KeyBank Abandonment Motion and any subsequent foreclosure judgment obtained by KeyBank, Mr. Hudson tells the Court. In other words, the language proposed by the Creditors Committee prevents KeyBank from moving forward with its collateral as it would not be able to transfer clear title in any of the Collateral. KeyBank relates that it has proposed certain language that it submits protects both parties' interests, but that the Creditors Committee has not agreed. American Woodmark's Response to Wachovia Motions The Debtors have filed a Motion for Authority to Abandon Property of the Estate Subject to Liens Held by Wachovia Bank N.A. Wachovia Bank also filed a Motion for Relief from the Automatic Stay with respect to its collateral. American Woodmark Corporation holds recorded mechanic's liens arising under applicable non-bankruptcy law against certain property of the Debtors' estates, including real property that is the subject of the Wachovia Stay Motion and the Debtors' Wachovia Abandonment Motion. American Woodmark perfected its mechanic's liens in accordance with Section 546(b) of the Bankruptcy Code on Dec. 3, 2007. American Woodmark does not object to the relief requested in the Wachovia Stay Motion and the Wachovia Abandonment Motion, however, it seeks that, to the extent the Court grants the relief requested in the Motions, the Court preserve and not decide the validity, extent or priority of any liens or interests any party may have in the Wachovia Collateral. Cascades Transition Committee's Memorandum Representing the Cascades at Sarasota Transition Committee, David W. Langley, Esq., at David W. Langley P.A., in Plantation, Florida, states that, a debtor-in-possession may not abandon property in contravention of a state statute or regulation that is reasonably designed to protect the public welfare from identified hazards, citing Midlantic National Bank v. New Jersey Department of Environmental Protection, 474 U.S. 494, 106 S. Ct. 755, 88 L. Ed. 859 (1986). The Midlantic exception is designed to protect legitimate state interest but is not limited to environmental concerns, he notes. Per Florida statutes, Levitt and Sons LLC must relinquish control of the Cascades of Sarasota once occupancy reaches 90%. If the Debtor is permitted to abandon the Cascades at Sarasota prematurely, abandonment would cause LAS to violate a statute designed to further public safety and welfare, Mr. Langley notes. As a lien holder foreclosing a real property, Wachovia has no fiduciary obligations running to the homeowners or the Homeowner's Association, Mr. Langley says. The rights of the homeowners and Homeowner's Association will be neglected, despite the Florida legislature's clear intent to protect them, he adds. The Transition Committee relates that now there is no security, the utilities are not being paid, and the $7,000,000 clubhouse in the development is not insured. The Transition Committee is out of funds and unable to provide the safety and security that should be provided by the Debtor until the Association is turned over to the homeowners, thereby allowing them to assess all units. Mr. Langley tells the Court that even if abandonment would not result in a violation of state statute, a Court may not authorize abandonment without formulating conditions that will adequately protect the public welfare. Mr. Langley contends that LAS must maintain the property until control has been relinquished to the Transition Committee, including maintaining insurance, adequate security and safety necessities. The Debtor's failure to maintain the development clearly increases its exposure to liability, rather than decrease, he says. Unless the Debtor's estate is held responsible for the Cascades at Sarasota maintenance and insurance, LAS will be open to personal injury and breach of contract liability for which it has no means to compensate, Mr. Langley adds. The Debtor's abandonment of the Cascades at Sarasota poses a method of disposition, which subjects LAS to further liability and, the Court must take appropriate steps to protect the rights of the Cascades at Sarasota, Mr. Langley avers. The Transition Committee asks the Court to deny the Debtor's Wachovia Abandonment Motion, or in the alternative, grant the Transition Committee's Motion for Turnover. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) The Debtors' exclusive plan filing period expires on March 8, 2008. LIBERTY MEDIA: Fitch Maintains BB Ratings with Stable Outlook ------------------------------------------------------------- Fitch Ratings has affirmed these ratings for Liberty Media LLC and its subsidiary QVC Inc.: Liberty Media LLC -- Issuer Default Rating (IDR) at 'BB'; -- Senior unsecured debt at 'BB'; QVC Inc. -- IDR at 'BB'; -- Bank Facility at 'BBB-'; The Rating Outlook has been revised to Stable from Negative. The ratings continue to be supported by operating businesses (predominantly QVC) which cover cash interest at approximately 3 times (x). Despite some challenges over the last few quarters (price of gold in the U.S., Japan regulation, and weak demand in Germany), Fitch expects QVC to continue to produce margins substantially greater than its retail peers and strong free cash flow conversion. Bondholder protection is further supported by strong asset coverage metrics. The company's existing portfolio of public and private assets (worth approximately $40 billion at Sept. 30, 2007) cover net debt over 4x and cover net debt and deferred tax liabilities over 2x. These public equity holdings are generally liquid despite non-binding ties to exchangeable debt, equity derivatives, and strategic plans. Collars have traditionally provided some stability in asset value however Fitch does not expect Liberty to collar its eventual DirecTV holdings. Rating concerns include the potential for significant deals and shareholder friendly transactions (asset swaps, spin-offs, and consolidations, etc.). Fitch also recognizes that there are limited covenants that could protect bondholders from the company spinning-off other assets (Indenture has all or substantially all language) similar to the Discovery spin-off in 2005. Also, QVC's recent slowed growth causes some concern from an operating perspective, as does the potential for shareholder-friendly activities to offset this slower growth as QVC and the Liberty Interactive tracking stock were intended to isolate the faster growing assets of Liberty. While there continues to be some uncertainty related to the company's ultimate portfolio composition, Fitch recognizes that management has made progress on its stated plans of simplifying the capital structure and transitioning towards operating businesses rather than passive equity stakes. The revision of the outlook to stable reflects Fitch's belief that given the strong asset coverage, the 'BB' rating category captures many event risk scenarios including some potential structural subordination concerns. Fitch expects Liberty to use up its remaining net operating carryover losses through 2007 and therefore should be close to being a full cash tax payer in 2008 resulting in an additional $100 million - $200 million in cash taxes. The company disclosed earlier this year that the IRS notified Liberty that it believes the interest expense deductions on exchangeable debt is overstated by using the comparable yield calculation (the interest that Liberty would pay had it issued straight debt) versus the low coupons used to calculate cash interest. Fitch estimates that total liability including interest and penalties could approximate $1 billion, however this potential liability has always been accounted for in Fitch's supplemental asset coverage calculations that deduct for deferred tax liabilities. Aside from its basket of marketable securities, Liberty's liquidity is generally supported by $3.1 billion of cash and equivalents and $1.35 billion of available QVC credit facilities at Sept. 30, 2007. The QVC facilities have delay draws through year-end which Fitch expects the Company to use and should result in pro forma availability of $500 million - $1 billion going forward. Despite the higher cash taxes, Fitch still expects the Company to generate annual free cash flow in excess of $600 million going forward. Covenants on the QVC facilities include a 4x maximum leverage covenant which also governs restricted payments out of the subsidiary. Liberty's indenture does not have any meaningful covenant protection. LONG BEACH MORTGAGE: Fitch Junks Rating on $37.5 Mil. Notes ----------------------------------------------------------- Fitch Ratings has taken these rating actions on Long Beach mortgage pass-through certificates. Affirmations total $639.6 million and downgrades total $148.5 million. In addition, $4.9 million is placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class is included with these rating actions: Series 2005-WL1 Pool 1 & 2 -- $154.1 million class I/II-A affirmed at 'AAA' (BL: 90.91, LCR: 3.71); -- $147.5 million class I/II-M1 affirmed at 'AA+' (BL: 70.55, LCR: 2.88); -- $139.1 million class I/II-M2 affirmed at 'AA' (BL: 53.41, LCR: 2.18); -- $40.3 million class I/II-M3 affirmed at 'AA-' (BL: 48.49, LCR: 1.98); -- $65.4 million class I/II-M4 affirmed at 'A+' (BL: 40.50, LCR: 1.65); -- $43.1 million class I/II-M5 affirmed at 'A' (BL: 35.19, LCR: 1.44); -- $37.5 million class I/II-M6 downgraded to 'BBB' from 'BBB+' (BL: 30.46, LCR: 1.24); -- $41.7 million class I/II-M7 downgraded to 'BB' from 'BBB-' (BL: 25.06, LCR: 1.02); -- $61.2 million class I/II-M8, I/II-M9 remains at 'CCC', and assigned 'DR2'; -- $19.4 million class I/II-M10 remains at 'CCC', and assigned 'DR1'; -- $27.8 million class I/II-B1 downgraded to 'CC/DR3' from 'CCC'; -- $37.5 million class I/II-B2 downgraded to 'C/DR5' from 'CCC'. Deal Summary -- Originators: (100% Long Beach); -- 60+ day Delinquency: 34.68%; -- Realized Losses to date (% of Original Balance): 2.46%; -- Expected Remaining Losses (% of Current Balance): 24.51%; -- Cumulative Expected Losses (% of Original Balance): 9.74%. Series 2005-WL1 Group 3 -- $21.9 million class III-A affirmed at 'AAA' (BL: 70.59, LCR: 5.48); -- $11.8 million class III-M1 affirmed at 'AA+' (BL: 50.69, LCR: 3.93); -- $3.6 million class III-M2 affirmed at 'AA' (BL: 44.55, LCR: 3.46); -- $6.1 million class III-M3 affirmed at 'A+' (BL: 33.39, LCR: 2.59); -- $2.7 million class III-M4 affirmed at 'A' (BL: 28.73, LCR: 2.23); -- $2.2 million class III-M5 affirmed at 'A-' (BL: 24.67, LCR: 1.91); -- $1.8 million class III-M6 affirmed at 'BBB+' (BL: 21.26, LCR: 1.65); -- $1.8 million class III-M7 rated 'BBB-', placed on Rating Watch Negative (BL: 17.71, LCR: 1.37); -- $1.8 million class III-M8 rated 'BB', placed on Rating Watch Negative (BL: 14.19, LCR: 1.1); -- $1.3 million class III-M9 rated 'BB-', placed on Rating Watch Negative (BL: 11.66, LCR: 0.91); -- $1.8 million class III-B1 downgraded to 'C/DR6' from 'B'; -- $1.4 million class III-B2 downgraded to 'C/DR6' from 'CCC'; -- $0.8 million class III-B3 downgraded to 'C/DR6' from 'CCC'. Deal Summary -- Originators: (100% Long Beach); -- 60+ day Delinquency: 30.89%; -- Realized Losses to date (% of Original Balance): 1.62%; -- Expected Remaining Losses (% of Current Balance): 12.88%; -- Cumulative Expected Losses (% of Original Balance): 5.77%. MAAX HOLDINGS: Caa3 Senior Note Rating Cut by Moody's to Ca ----------------------------------------------------------- Moody's Investors Service downgraded MAAX Holdings Inc.'s corporate family rating to Ca from Caa2, and its senior unsecured discount notes to C from Caa3, and also downgraded MAAX Corporation's senior subordinated notes to Ca from Caa3. The downgrades were prompted by MAAX Corporation's failure to make the Dec. 15, 2007 interest payment on its 9.75% senior subordinated notes due 2012. MAAX Holdings has an SGL-4 speculative grade liquidity rating. The rating outlook is stable. While the senior subordinated notes indenture provides a 30-day grace period, which began on Dec. 15, 2007, before the failure to pay interest constitutes an event of default, Moody's believes MAAX has limited alternatives to secure funds to make this payment or improve its overall liquidity position within the grace period. Additionally, MAAX Corporation may breach the minimum adjusted EBITDA covenant of $33 million under its credit agreement for the 12 months ended Nov. 30, 2007. Unless waived by the company's senior creditor, this event of default would lead to an acceleration of payment demand. Downgrades - Issuer: MAAX Holdings, Inc. -- Corporate family rating to Ca from Caa2 -- Probability of default rating to Ca from Caa2 -- 11.57% senior unsecured discount notes due 2012 to C (LGD6, 93%) from Caa3 - Issuer: MAAX Corporation -- $150 million of 9.75% senior subordinated notes due 2012 to Ca (LGD5, 73%) from Caa3 The previous rating action for MAAX was on Jan. 24, 2007, when Moody's downgraded MAAX Holdings' corporate family rating to Caa2 from B3, its senior unsecured discount notes to Caa3 from Caa1, and MAAX Corporation's senior subordinated notes to Caa3 from Caa1. MAAX Holdings' speculative grade liquidity rating was lowered to SGL-4 from SGL-3 on June 21, 2006. MAAX Holdings, Inc. headquartered in Quebec, Canada, is a manufacturer of gel coated and acrylic bath and spa products. For the LTM period ended Aug. 31, 2007, the company had revenues of $420 million and had a net loss of $123 million. MAGNA ENT: Inks Pacts to Sell Excess Real Estate for $28.7 Mil. --------------------------------------------------------------- Magna Entertainment Corp. has entered into an agreement to sell 225 acres of excess real estate located in Ebreichsdorf, Austria to a subsidiary of Magna International Inc. for use in its automotive business for a purchase price of EUR20.0 million or $28.7 million, subject to customary adjustments. The closing of the transaction is expected to occur during the first quarter of 2008 following the satisfaction of customary closing conditions including obtaining all necessary regulatory approvals. The net proceeds received on closing will be used entirely to repay debt. "This transaction is the first significant contracted asset sale as contemplated by our previously announced debt elimination plan," Blake Tohana, Executive Vice-President and Chief Financial Officer of MEC, commented. "We are continuing to pursue other asset sale transactions and remain committed to our debt elimination plan." MEC's consideration of the transaction was supervised by the Special Committee of MEC's board of directors, consisting of Jerry D. Campbell (Chairman), Anthony Campbell and William J. Menear. The transaction was approved by MEC's Board after a unanimous recommendation of the Special Committee. The transaction was also reviewed by MII's Corporate Governance and Compensation Committee and subsequently approved by the independent members of MII's Board based on the unanimous recommendation of the Committee. MEC also disclosed that it has entered into sale agreements, with unrelated parties, for three parcels of excess real estate comprising approximately 825 acres in Porter, New York. The expected total sale proceeds from these transactions are $1.8 million. These sale transactions are expected to be completed on or about Dec. 28, 2007 and the net sale proceeds will be used entirely to repay debt. About Magna Entertainment Based in Aurora, Ontario, Magna Entertainment Corp. (NASDAQ: MECA; TSX: MEC.A) -- http://www.magnaentertainment.com/-- acquires, develops, owns and operates horse racetracks and related pari- mutuel wagering operations, including off-track betting facilities. MEC also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. MEC owns and operates AmTote International Inc., a provider of totalisator services to the pari-mutuel industry, XpressBet(R), a national Internet and telephone account wagering system, as well as MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a 50% interest in HorseRacing TV(TM), a 24-hour horse racing television network and TrackNet Media Group LLC, a content management company formed for distribution of the full breadth of MEC's horse racing content. Going Concern Doubt Chartered accountants, Ernst & Young LLP, expressed substantial doubt about Magna Entertainment's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring operating losses and working capital deficiency. MBIA INC: Company Rating Outlook Changed to Negative by Moody's --------------------------------------------------------------- Following the release by MBIA yesterday of additional information related to its CDO exposures, Moody's has received a number of inquires from market participants about whether all the CDOs detailed in that disclosure had been incorporated into the analysis leading to Moody's recent rating action on MBIA. Moody's would like to clarify that in its recent stress testing of MBIA's mortgage-related risk, the rating agency included the CDOs totaling $30.6 billion in net par that are detailed on MBIA's website. For those CDOs whose underlying collateral included ABS CDOs, Moody's analysis included stressing the performance of the "inner ABS CDO" collateral based on its specific composition. On December 14th, Moody's affirmed MBIA's Aaa insurance financial strength rating, but changed the company's rating outlook to negative. MERCURY CDO: Moody's Cuts Rating on $17 Mil. Notes to Ba2 --------------------------------------------------------- Moody's Investors Service downgraded this note issued by Mercury CDO 2004-1, Ltd.: * Class Description: $17,000,000 Class C Fourth Priority Mezzanine Secured Floating Rate Notes -- Prior Rating: Baa2 on review for downgrade -- Current Rating: Ba2 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of mortgage backed securities and asset-backed collateral debt obligations. MKP CBO: Moody's Cuts Baa3 Rating on $5 Mil. Note to B1 ------------------------------------------------------- Moody's Investors Service placed these notes issued by MKP CBO V, LTD. on review for possible downgrade: Class Description: $56,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due January 2046 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade Class Description: $10,500,000 Class C Mezzanine Secured Deferrable Floating Rate Notes Due January 2046 -- Prior Rating: A2 -- Current Rating: A2, on review for possible downgrade Class Description: $7,000,000 Class D Mezzanine Secured Deferrable Floating Rate Notes Due January 2046 -- Prior Rating: A3 -- Current Rating: A3, on review for possible downgrade Class Description: $19,250,000 Class E Mezzanine Secured Deferrable Floating Rate Notes Due January 2046 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade In addition Moody's also downgraded and left on review for possible downgrade these notes: Class Description: $5,000,000 Class F Mezzanine Secured Deferrable Floating Rate Notes Due January 2046 -- Prior Rating: Baa3 -- Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. MOBILE MINI: Earns $12.7 Million in Third Quarter Ended Sept. 30 ---------------------------------------------------------------- Mobile Mini Inc. reported net income of $12.7 million for the third quarter ended Sept. 30, 2007, which approximated last year's net income of $12.9 million. Total revenues increased 12.8% to $83.5 million, up from $74.0 million a year ago. Lease revenues increased 12.8% to $74.0 million from $65.6 million last year. Earnings before interest expense, tax, depreciation and amortization increased 4.2% to $32.9 million from $31.6 million in the 2006 third quarter. Operating margin was 32.6%, as compared to 36.7% during the 2006 third quarter. These results include share-based compensation expenses under SFAS 123(R) of approximately $1.1 million before tax and $700,000 after tax in the third quarter of 2007 and approximately $800,000 and $500,000 after tax in the third quarter of 2006. Steven Bunger, chairman, president & chief executive officer of Mobile Mini, stated, "We are very pleased with the internal growth rate and the increase in lease revenues we have achieved in the third quarter and through the first nine months of the year. Strong demand from our core industrial, retail and institutional markets offset the slower growth in non-residential construction, a sector which historically represents a larger part of our competitors' business than ours. At the same time, thanks to our superior product line and customer service, supported by a powerful and effective marketing program, we continue to gain market share. As the 8.3% increase in yield indicates, price competition and yield erosion are certainly not impacting our business." He went on to say, "In light of slower growth in the non- residential construction sector, which is continuing to impact certain regions of the U.S., we have scaled down certain domestic manufacturing operations. The costs associated with these initiatives should not carry over into the fourth quarter. As we previously reported, our revenue growth was partially offset by third quarter fleet repair and maintenance expenses, which were higher than we have historically experienced. However, keeping our fleet at the highest maintenance level is a key competitive advantage and just one of the reasons why our units have been able to command premium pricing. We expect that these costs will return to more normalized levels within the next two to three quarters." Lawrence Trachtenberg, executive vice president & chief financial officer, noted, "At Sept. 30, we had only $198 million in outstanding borrowings under our $425 million amended revolving line of credit. This modest level of borrowings outstanding, combined with the liquidity afforded by our recent sale of $150 million of 6-7/8% Senior Notes, gives Mobile Mini the business advantages that go along with a strong financial position. Since September 30, we have increased our borrowings under the credit line by only $32.2 million, virtually all of which was used to fund stock repurchases. The repurchases should be accretive to diluted earnings per share in 2008." At Sept. 30, 2007, the company's consolidated balance sheet showed $1.00 billion in total assets, $530.1 million in total liabilities, and $477.4 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?2695 About Mobile Mini Based in Tempe, Arizona, Mobile Mini Inc. (Nasdaq: MINI) -- http://www.mobilemini.com/-- provides portable storage solutions through its total fleet of over 164,000 portable storage units and portable offices with 66 branches in U.S., United Kingdom, Canada and The Netherlands. * * * Todate, the company holds Moody's Ba3 long-term corporate family rating and B1 senior unsecured debt rating. The outlook is positive. Standard & Poor's also rates the company's long-term foreign and local issuer credits at BB with a positive outlook. MORGAN STANLEY: Fitch Junks Ratings on Eight Certificates --------------------------------------------------------- Fitch Ratings has taken rating actions on these Morgan Stanley issues: Series 2002-AM1 -- Class M-1 affirmed at 'AAA'; -- Class M-2 downgraded to 'B' from 'A'; -- Class B-1 remains at 'CC/DR3'. Series 2002-AM2 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'B' from 'BBB-'; -- Class B-1 remains at 'C/DR6'. Series 2002-HE1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'BBB+'; -- Class B-1 downgraded to 'CC/DR2' from 'B+; -- Class B-2 downgraded to 'C/DR5' from 'B'. Series 2002-HE3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'BBB+'; -- Class B-1 downgraded to 'CCC/DR2' from 'B+'; -- Class B-2 remains at 'C/DR6'. Series 2002-NC2 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'B' from 'BBB'; -- Class B-1 remains at 'CCC/DR2'. Series 2002-NC4 -- Class M-1 affirmed at 'AA'; -- Class M-2 rated 'A', placed on Rating Watch Negative; -- Class B-1 downgraded to 'CCC/DR2' from 'B'; -- Class B-2 remains at 'C/DR5'. Series 2002-NC6 -- Class M-1 downgraded to 'AA' from 'AA+'; -- Class M-2 downgraded to 'BBB-' from 'BBB; -- Class B-1 downgraded to 'C/DR4' from 'B+'; -- Class B-2 downgraded to 'C/DR6' from 'B'. Series 2003-NC1 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'A-' from 'A'; -- Class M-3 downgraded to 'BBB+' from 'A-'; -- Class B-1 downgraded to 'B' from 'BB'; -- Class B-2 downgraded to 'C/DR5' from 'B+'. Series 2003-NC8 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; --Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'. Series 2003-HE1 -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 rated 'BBB', placed on Rating Watch Negative; -- Class B-3 downgraded to 'B-/DR1' from 'BB'. Series 2003-HE2 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 rated 'BBB-', placed on Rating Watch Negative. Series 2003-SD1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'BB' from 'A-'; -- Class B-1 downgraded to 'CC/DR3' from 'B'; -- Class B-2 remains at 'C', and the Distressed Recovery Rating is revised to 'DR6' from 'DR4'. Series 2004-HE4 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 rated 'BBB+', placed on Rating Watch Negative; -- Class B-2 downgraded to 'B' from 'BBB'; -- Class B-3 downgraded to 'B-/DR1' from 'BBB-'. The mortgage loans consist of fixed- and adjustable-rate, 15- and 30-year mortgages extended to subprime borrowers and are secured by first and second liens, primarily on one- to four-family residential properties. As of the November 2007 distribution date, the pools are seasoned between 41 (2004-HE4) and 70 (2002- AM1) months and have pool factors (current collateral balance as a percentage of the initial balance) ranging from approximately 4% (2002-AM1) to 14% (2004-HE4). The 60+ delinquencies range from 8.07% (2006-1) to 49.58% (2001-NC4). The AM series are backed by a majority of collateral originated or acquired by Aames Capital Corporation. The NC series are backed by a majority of collateral originated or acquired by New Century Capital Corporation. The HE and the SD series are backed by collateral originated or acquired from multiple sellers. The loans are serviced by various servicers. The affirmations, affecting approximately $719.5 million in outstanding certificates, reflect adequate levels of credit enhancement relative to expected losses. The downgrades, affecting approximately $120.3 million, are the result of deterioration in the relationship between CE and expected losses. All of the affected bonds have serious delinquencies (loans delinquent more than 60 days, inclusive of loans in foreclosure, bankruptcy, and real estate owned [REO]) of between 18.11% (2003-HE2) and 37.67% (2003-NC1) and current cumulative losses of between 1.11% (2003-HE2) and 3.79% (2002- AM1). Of the 13 transactions, 11 issues have one or more class rated in the 'B-' to 'C' range, indicating that the transaction has either exhausted its overcollateralization and the most subordinate bond has begun to experience write downs due to losses, or that the OC will be exhausted in the coming months, at which time continued losses would cause the most subordinate bonds to be written down. Four classes, representing approximately $16.1 million in outstanding certificates, were placed on Rating Watch Negative due to recent trends in delinquency and losses. Fitch will continue to closely monitor these transactions over the next six months. If credit enhancement continues to deteriorate, further rating actions may be necessary. MORGAN STANLEY: Delinquencies Cue Fitch to Downgrade Ratings ------------------------------------------------------------ Fitch Ratings has taken rating actions on these Morgan Stanley issues: Series 2002-AM1 -- Class M-1 affirmed at 'AAA'; -- Class M-2 downgraded to 'B' from 'A'; -- Class B-1 remains at 'CC/DR3'. Series 2002-AM2 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'B' from 'BBB-'; -- Class B-1 remains at 'C/DR6'. Series 2002-HE1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'BBB+'; -- Class B-1 downgraded to 'CC/DR2' from 'B+; -- Class B-2 downgraded to 'C/DR5' from 'B'. Series 2002-HE3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'BBB+'; -- Class B-1 downgraded to 'CCC/DR2' from 'B+'; -- Class B-2 remains at 'C/DR6'. Series 2002-NC2 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'B' from 'BBB'; -- Class B-1 remains at 'CCC/DR2'. Series 2002-NC4 -- Class M-1 affirmed at 'AA'; -- Class M-2 rated 'A', placed on Rating Watch Negative; -- Class B-1 downgraded to 'CCC/DR2' from 'B'; -- Class B-2 remains at 'C/DR5'. Series 2002-NC6 -- Class M-1 downgraded to 'AA' from 'AA+'; -- Class M-2 downgraded to 'BBB-' from 'BBB; -- Class B-1 downgraded to 'C/DR4' from 'B+'; -- Class B-2 downgraded to 'C/DR6' from 'B'. Series 2003-NC1 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'A-' from 'A'; -- Class M-3 downgraded to 'BBB+' from 'A-'; -- Class B-1 downgraded to 'B' from 'BB'; -- Class B-2 downgraded to 'C/DR5' from 'B+'. Series 2003-NC8 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'. Series 2003-HE1 -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 rated 'BBB', placed on Rating Watch Negative; -- Class B-3 downgraded to 'B-/DR1' from 'BB'. Series 2003-HE2 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 rated 'BBB-', placed on Rating Watch Negative. Series 2003-SD1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'BB' from 'A-'; -- Class B-1 downgraded to 'CC/DR3' from 'B'; -- Class B-2 remains at 'C', and the Distressed Recovery Rating is revised to 'DR6' from 'DR4'. Series 2004-HE4 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 rated 'BBB+', placed on Rating Watch Negative; -- Class B-2 downgraded to 'B' from 'BBB'; -- lass B-3 downgraded to 'B-/DR1' from 'BBB-'. The mortgage loans consist of fixed- and adjustable-rate, 15- and 30-year mortgages extended to subprime borrowers and are secured by first and second liens, primarily on one- to four-family residential properties. As of the November 2007 distribution date, the pools are seasoned between 41 (2004-HE4) and 70 (2002- AM1) months and have pool factors (current collateral balance as a percentage of the initial balance) ranging from approximately 4% (2002-AM1) to 14% (2004-HE4). The 60+ delinquencies range from 8.07% (2006-1) to 49.58% (2001-NC4). The AM series are backed by a majority of collateral originated or acquired by Aames Capital Corporation. The NC series are backed by a majority of collateral originated or acquired by New Century Capital Corporation. The HE and the SD series are backed by collateral originated or acquired from multiple sellers. The loans are serviced by various servicers. The affirmations, affecting approximately $719.5 million in outstanding certificates, reflect adequate levels of credit enhancement relative to expected losses. The downgrades, affecting approximately $120.3 million, are the result of deterioration in the relationship between CE and expected losses. All of the affected bonds have serious delinquencies (loans delinquent more than 60 days, inclusive of loans in foreclosure, bankruptcy, and real estate owned [REO]) of between 18.11% (2003-HE2) and 37.67% (2003-NC1) and current cumulative losses of between 1.11% (2003-HE2) and 3.79% (2002- AM1). Of the 13 transactions, 11 issues have one or more class rated in the 'B-' to 'C' range, indicating that the transaction has either exhausted its overcollateralization and the most subordinate bond has begun to experience write downs due to losses, or that the OC will be exhausted in the coming months, at which time continued losses would cause the most subordinate bonds to be written down. Four classes, representing approximately $16.1 million in outstanding certificates, were placed on Rating Watch Negative due to recent trends in delinquency and losses. Fitch will continue to closely monitor these transactions over the next six months. If credit enhancement continues to deteriorate, further rating actions may be necessary. MOSAIC CO: Will Prepay $150 Mil. of Term Loans on December 31 ------------------------------------------------------------- The Mosaic Company has notifed the lenders under its senior secured bank credit facility of its election to prepay $150 million principal amount of term loans under the facility on Dec. 31, 2007. "This prepayment reflects a very important milestone for Mosaic," Jim Prokopanko, president and chief executive officer, said. "We have successfully prepaid $1 billion of long-term debt in the past eight months, and we've also established a strong financial base from which to grow." The prepayments will consist of $56.4 million principal amount of Term Loan A-1 borrowings and $87.1 million principal amount of Term Loan B borrowings by Mosaic and $6.5 million principal amount of Term Loan A borrowings by its subsidiary, Mosaic Potash Colonsay ULC. After the prepayments, outstanding term loans under the facility will be reduced to $2.2 million principal amount of Term Loan A borrowings, $19.2 million principal amount of Term Loan A-1 borrowings, and $29.6 million principal amount of Term Loan B borrowings. With the prepayment on Dec. 31, 2007, during the last eight months Mosaic will have used cash generated by its ongoing business operations to prepay $1 billion of long-term debt. Mosaic considers the prepayments to be a significant step in its plan to reduce outstanding borrowings, strengthen its balance sheet, and achieve investment grade credit ratings. About The Mosaic Company Headquartered in Plymouth, Minnesota, The Mosaic Company (NYSE: MOS) -- http://www.mosaicco.com/-- is a producer and marketer of concentrated phosphates and potash crop nutrients. For the agriculture industry, Mosaic is a single source of phosphates, potash, nitrogen fertilizers and feed ingredients. * * * As reported in the Troubled Company Reporter on Nov. 6, 2007, Fitch Ratings upgraded these ratings of The Mosaic Company: a) issuer default rating to 'BB+' from 'BB-'; b) senior secured revolver to 'BBB-' from 'BB+'; c) senior secured term loan to 'BBB-' from 'BB+'; and d) senior unsecured notes to 'BB+' from 'BB'. NATIONAL RV: Court Approves Use of Well Fargo's Cash Collateral --------------------------------------------------------------- National R.V. Holdings Inc. and its debtor-affiliate, National R.V. Inc., obtained authority from the Honorable Peter H. Carroll of the United States Bankruptcy for the Central District of California to access Wells Fargo's cash collateral. As reported in the Troubled Company Reporter on Dec. 21, 2007, the Debtors told the Court that they intend to use the cash collateral to fund payroll, security services, utility deposits and other essential items. The Debtors said that they have no access to cash, other than cash collateral, to satisfy their immediate and outstanding obligations. Secured Lender The Debtors said that Wells Fargo is their principal prepetition secure creditor. The Debtor further said that they entered into the prepetition credit agreement with UPS Capital Corp., as agent and Wells Fargo, as a lender. UPS Capital, the Debtor added, 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. NATIONAL RV: Taps O'Melveny & Myers as Special Litigation Counsel ----------------------------------------------------------------- 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 O'Melveny & Myers LLP as their special litigation counsel. O'Melveny & Myers will represent the Debtors in connection with the Kemlite Litigation. Kemlite Litigation In June 2006, the Debtors commenced a lawsuit against Crane Composited Inc. and its parent company, Crane Co., for breach of contract, breach of warranty, misrepresentation and other causes of action. The lawsuit seeks both compensatory and punitive damages, which is pending before the Court and is scheduled to go to trial in Riverside in January 2008. At a hearing held before Judge Larson on Dec. 3, 2007, the Court reaffirmed that trial would start in January. The Debtors said that they believe that this action represents 19 a valuable asset of the estates and are eager to proceed to trial. The firm's professionals and their compensation rates are: Professional Hourly Rate ------------ ----------- Daniel Petrocelli, Esq. $950 Wallace M. Allan, Esq. $820 Robert C. Welsh, Esq. $730 Matt Kline, Esq. $635 David Kirman, Esq. $480 Lindsay Welch, Esq. $450 Jessica L. Stebbins, Esq. $395 Randall Whattoff, Esq. $395 Designation Hourly Rate ----------- ----------- Partners $635-$950 Associates $395-$480 Paralegals & Projects Clerks $110-$225 Litigation Support $40-$275 The Debtors tell the Court that it agreed to pay the firm 33.5% of the firm $10,000,000 of any recovery the Debtors obtained. Wallace M. Allan, Esq., a partner of the firm, assures the Court tha the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Allan can be reached at: Wallace M. Allan, Esq. O'Melveny & Myers LLP 400 South Hope Street Los Angeles, California 90071-2899 Tel: (213) 430-6000 Fax: (213) 430-6407 http://www.omm.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. NEW CENTURY: Fitch Junks Rating on $37 Mil. Class M-1 Cert. ----------------------------------------------------------- Fitch Ratings has taken these rating actions on one New Century mortgage pass-through certificate transaction. Downgrades total $156.5 million. Break Loss percentages and Loss Coverage Ratios for each class, rated 'B' or higher, are included with these rating actions: New Century 2006-S1 -- $53.6 million class A-1 downgraded to 'B' from 'BBB-' (BL: 50.23, LCR: 0.88); -- $32.7 million class A-2a downgraded to 'B' from 'AAA' (BL: 50.23, LCR: 0.88); -- $33.1 million class A-2b downgraded to 'B' from 'BBB-' (BL: 50.23, LCR: 0.88); -- $37.0 million class M-1 downgraded to 'C/DR6' from 'B+'; -- $22.5 million class M-2 remains at 'C/DR6'; -- $5.7 million class M-3 remains at 'C/DR6'; -- $6.2 million class M-4 remains at 'C/DR6'; -- $744,414 class M-5 remains at 'C/DR6'; -- $0.0 class M-6 remains at 'C/DR6'; -- $0.0 class M-7 remains at 'C/DR6'; -- $0.0 class M-8 remains at 'C/DR6'. Deal Summary -- Originators: 100% New Century; -- 60+ day Delinquency: 26.94%; -- Realized Losses to date (% of Original Balance): 15.56%; -- Expected Remaining Losses (% of Current Balance): 57.32%; -- Cumulative Expected Losses (% of Original Balance): 50.75%. While Fitch's analysis takes into consideration the sequential distribution of principal to the senior classes, under Fitch's revised base-case expectation the senior tranche will become under-collateralized prior to any of the senior classes paying off in full. Once the senior tranche has become under-collateralized, the distribution of principal to the senior classes will become pro rata. For that reason, Fitch does not make a distinction in long-term credit risk among the senior classes for this particular transaction. In addition, 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. Minimum LCRs specifically for subprime second lien transactions are: 'AAA': 2.00; 'AA': 1.75; 'A': 1.50; 'BBB': 1.20; 'BB' 0.95; 'B': 0.75. NEW CENTURY: Exclusive Plan Filing Period Expires Tomorrow ---------------------------------------------------------- The Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware has extended the period during which New Century Financial Corp. and its debtor-affiliates have the exclusive right to: (i) file a Chapter 11 plan through and including Dec. 28, 2007, with respect to all non-Debtor parties other than the Official Committee of Unsecured Creditors. (ii) solicit acceptances of that Plan to Feb. 27, 2008, with respect to all parties other than the Creditors Committee. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a plan expired on Dec. 20, 2007, as last extended. (New Century Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NEW CENTURY: More Than $32 Billion in Claims Filed Through Aug. 31 ------------------------------------------------------------------ New Century Financial Corporation reports that more than $32,000,000,000 in claims have been filed in its bankruptcy cases through Aug. 31, 2007. New Century is in the preliminary stages of its review of the claims. Based on the company's preliminary review, New Century believes certain of the claims will be subject to objection as being duplicative, overstated, based upon contingencies that have not occurred, or because they otherwise do not state a valid claim. The $32,000,000,000 amount does not include claims that were filed without a specified dollar amount, referred to as unliquidated claims, and claims that were filed after the claim bar date. New Century currently believes that there will be no recovery in respect of the company's outstanding common stock under a plan of liquidation. Further and updated information regarding the claims will be included in the Debtors' disclosure statement explaining its would be liquidation plan. The United States Bankruptcy Court for the District of Delaware established the claims bar date in an order dated June 28, 2007. New Century reported $25,059,768,000 in total assets and $22,995,419,000 as of September 30, 2006. It disclosed $7,865,698,909 in total assets and $7,545,353,461 in total liabilities as of Oct. 31, 2007. New Century has not been able to file its Annual Report on Form 10-K for the year ended Dec. 31, 2006. One month before its bankruptcy filing, New Century said it was unable to file its Annual Report pending completion of its audit committee's investigation on the issues that gave rise to the company's need to restate its financial statements, and issues pertaining to the company's valuation of residual interests in securitizations in 2006 and prior periods. On Feb. 7, 2007, New Century announced that it was restating consolidated financial results for the quarters ended March 31, June 30 and Sept. 30, 2006, to correct errors discovered in the accounting and financial reporting of loan repurchase losses. Since its Chapter 11 filing, the Debtors have sold mortgage loans, as well as residual interests in certain securitization trusts, to Ellington Capital Management Group LLC, for roughly $58,000,000. The sale closed on May 18, 2007. The Debtors also sold their servicing assets and servicing platform to Carrington Capital LLC, for $184,000,000, on June 29, 2007. Their Technology Assets were acquired by EquiFirst Corporation, a subsidiary of London-based Barclays PLC, for roughly $8,050,000. On Sept. 12, 2007, Residential Mortgage Solution LLC purchased the Debtors' disputed loans for $23,330,000. Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a plan expires on Dec. 28, 2007. (New Century Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NEW JERSEY EDUCATIONAL: S&P Holds BB+ Rating on 1998B Bonds ----------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on New Jersey Educational Facilities Authority's series 1998B bonds, issued for Saint Peter's College, to stable from positive, on weaker-than-expected financial performance, low liquidity levels, and moderately high debt levels. Additionally, Standard & Poor's affirmed its 'BB+' rating on the authority's series 1998B bonds, issued for St. Peter's. "The stable outlook reflects our expectations that St. Peter's College will have a deficit in fiscal 2007 and a surplus in fiscal 2008, and that the college will maintain its liquidity levels," said Standard & Poor's credit analyst Bobbi Gajwani. The 'BB+' rating reflects the college's weaker-than-expected financial performance on a GAAP-basis in fiscal 2006; further weakening of already slim liquidity levels; and moderately high debt levels of $50 million as of fiscal year end 2006 (including $18 million in notes), although management expects to restructure its debt profile by the end of the calendar year 2007. NEWPAGE CORP: Closes Purchase of Stora Enso's North American Biz ---------------------------------------------------------------- NewPage Corporation disclosed completion of its acquisition of Stora Enso Oyj's North American paper manufacturing operations. "NewPage, majority owned by Cerberus Capital Management, completed the $2.556 billion financing arranged by Goldman Sachs in one of the most difficult credit markets in memory," Mark A. Suwyn, NewPage Chairman and Chief Executive Officer, said. "This speaks well of the soundness of the business combination, the quality of the management team, and the strength of the support we've received from Cerberus and Goldman Sachs. This news is very exciting for the business. We've achieved regulatory approvals and other milestones more quickly than anticipated, and therefore were able to close ahead of schedule." The combined product portfolio is the broadest in North America. The new organization will have approximately $4.3 billion in pro forma net sales for the last twelve months ended Sept. 30, 2007, and exceptional platforms in the company's core businesses including coated freesheet, coated groundwood, supercalendered and specialty papers. These papers are used for corporate collateral, high-end advertising brochures, magazines, catalogs, books, coupons, inserts, packaging applications and direct mail advertising. "We have an excellent senior leadership team in place and are creating new opportunities for our employees to grow and succeed," Richard D. Willett, President and Chief Operating Officer of NewPage, said. "We know there are many challenges ahead of us, but we believe we're well positioned for success and look forward to making the company prosper and grow. With this combination and the powerful businesses it creates, NewPage has improved its ability to meet the needs of its customers with the high quality customer service and products they've come to expect from both companies. This should also enable us to deliver higher returns on investment and meet our return on capital goal. Our plan to achieve $265 million in annualized cost synergies is just the first step toward that goal." Goldman, Sachs & Co. acted as exclusive financial advisor to NewPage Corporation and Goldman Sachs and its affiliates acted as sole lead arranger and sole bookrunner on the financing. Schulte Roth & Zabel LLP acted as legal advisor to NewPage Corporation. As a result of the transaction, affiliates of Cerberus Capital Management, L.P., and certain members of NewPage management own, in the aggregate, 80.1% of the outstanding capital stock of NewPage Group Inc., the indirect parent entity of NewPage Corporation. Stora Enso Oyj owns the remaining 19.9% of outstanding capital stock. About NewPage Headquartered in Miamisburg, Ohio, NewPage Corporation -- http://www.newpagecorp.com/-- a wholly owned subsidiary of NewPage Holding Corporation -- is a U.S. producer of coated papers in North America. The company produces coated papers in sheets and rolls with many finishes and weights to offer design flexibility for a wide array of end uses. With 4,300 employees, NewPage operates integrated pulp and paper manufacturing mills located in Escanaba, Michigan; Luke, Maryland; Rumford, Maine; and Wickliffe, Kentucky; and a converting and distribution center in Chillicothe, Ohio. The mills have a combined annual capacity of approximately 2.2 million tons of coated paper. * * * As reported in the Troubled Company Reporter on Dec. 11, 2007, Moody's Investors Service assigned a Ba2 rating to NewPage Corporation's new $1.6 billion senior secured term loan and a B2 rating to the company's new $456 million second lien notes. At the same time, Moody's confirmed NewPage's B1 corporate family rating, the B2 rating on the company's existing second lien notes, the B3 rating on the company's existing senior subordinated notes, as well as the company's speculative grade liquidity rating of SGL-2. The ratings outlook is negative. Standard & Poor's Ratings Services places its 'BB-' rating to the proposed $1.6 billion term loan B of NewPage Corp. (B/Stable/--), based on preliminary terms and conditions. At the same time, S&P assigned its 'B-' senior secured debt rating and '5' recovery rating to NewPage's proposed second-lien $456 million add-on fixed rate notes, based on preliminary terms and conditions. Standard & Poor's also lowered its ratings on the $225 million senior secured second-lien floating-rate notes and $350 million senior secured second-lien fixed-rate notes of NewPage Corp. The ratings on both issues were lowered to 'B-' from 'B' and removed from CreditWatch, where they were placed with negative implications on Sept. 24, 2007. NEWPARK RESOURCES: Secures New $225 Mil. Secured Debt Facility -------------------------------------------------------------- Newpark Resources Inc. has entered into a new $225 million secured credit facility with a bank group led by JP Morgan Chase Bank N.A. The new facility consists of a $175 million revolving line of credit and a $50 million term loan. Borrowings under this new facility were used to repay in full the outstanding balances and terminate the company's $150 million term credit facility and $100 million revolving credit facility. In conjunction with the termination of these credit facilities, the company expects to record a non-cash charge of approximately $4 million during the fourth quarter of 2007 to write-off capitalized financing costs. The maturity date of the new facility is Dec. 21, 2012. "This new debt facility provides us with lower cost financing and increased financial flexibility for the execution of our strategic plan," Paul Howes, president and chief executive officer of Newpark, stated. About Newpark Resources Headquartered in Metarie, Louisiana, Newpark Resources Inc. (NYSE: NR) -- http://www.newpark.com/-- provides drilling fluids, temporary worksites and access roads for oilfield and other commercial markets, and environmental waste treatment solutions. * * * Moody's Investor Services assigned B1 on Newpark Resources Inc.'s long term corporate family rating and probability of default rating. The outlook is stable. In November 2006, Standard and Poor's rated B+ its long term foreign and local issuer credit. The ratings still hold to date. NY RACING: Creditors Balk at Confirmation of Reorganization Plan ---------------------------------------------------------------- Several creditors owed money by The New York Racing Association Inc. wants the U.S. Bankruptcy Court for the Southern District of New York to reject the third amended chapter 11 plan of reorganization filed by the Debtor, the Associated Press reports. The Official Committee of Unsecured Creditors, Internal Revenue Service, and Pension Benefit Guaranty Corp. told the Court that the Debtor could not possibly get approval from the New York State Legislature on a $75 million postpetition loan, which will be distributed to creditors under the plan, AP reveals. According to creditor Plainfield Special Situations Master Fund Ltd., implementation of the Debtor's plan is unlikely hence creditors "should not be forced to remain boxed," AP relates, citing document filed with the Court. The Committee told AP that although they want to be hopeful, they need "concrete" proof that the "plan is commercially viable." Plainfield added that creditors should now be allowed to present another plan for the Debtor, AP says. As reported in the Troubled Company Reporter on Dec. 3, 2007, Judge Peck approved NYRA's third amended disclosure statement describing its plan of reorganization dated Nov. 29, 2007. Provisions of the Plan Under the third amended plan, Class 2 Secured Claim holders will receive 100% of their allowed claim amount through any of these distributions: a) payment of allowed secured claim in full, in cash; b) sale or disposition proceeds of the property securing any allowed secured claim to the extent of the value of their respective interests in the property; or c) surrender to the holder or holders of any allowed secured claim of the property securing the claim. Commencing on the effective date of the Plan, Unsecured Claims will receive payments in full and in cash. Holders of Insured Litigation Claims are entitled to proceed with the liquidation of their claims, including any litigation pending as of the Debtor's bankruptcy filing; and seek recovery from applicable insurance carrier. Pursuant to the terms of a settlement agreement, state claims will be deemed allowed and each state claims holder, other than the holder of the New York State Tax Claim, will not be entitled to, and will not receive or retain, any property or interest in property on account of allowed state claims under the plan. On or prior to the effective date of the plan, the Debtor or the Reorganized Debtor will make these payments to its benefit plans: 1) funding deficiencies for the years ended on or prior to Dec. 31, 2006; and 2) normal costs for the year ended Dec. 31, 2007. By those payments, the Debtor's benefit plans will be deemed cured and the Pension Benefit Guaranty Corporation's claims will be deemed satisfied in full. The Internal Revenue Service will receive a promissory note in the amount of its allowed claim, which will bear interest at the rate of 8% per annum, payable in 15 equal quarterly installments commencing on March 31, 2008. Each holder of an Allowed Penalty Claim will be entitled to receive a pro rata share of cash available for distribution after all allowed unsecured claims have been paid in full. Equity Interests in the Debtor will be cancelled and holders of interests will not receive any distribution under the plan. About NYRA Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. Edward M. Fox, Esq., Eric T. Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. NY RACING: Says Plan of Reorganization Gets 97% "Yes" Votes ----------------------------------------------------------- The New York Racing Association Inc. aka NYRA said last weekend that its third amended chapter 11 plan of reorganization garnered 97% "yes" votes from creditors, The Business Review (Albany) reports. Under the plan, the New York State will waive about $100 million that the Debtor owes in addition to extending a $75 million postpetition loan, Business Review notes. Also, NYRA officials and Gov. Eliot Spitzer signed an agreement granting another 30 years to the Debtor to keep its racing franchise, which expires by the end of 2007, Business Review relates. However, some Senate Republicans are against Gov. Spitzer's proposal and insist on further supervision on the Debtor's operations instead, Business Review says. The Legislative Officials will vote on a new proposal when a legislative meeting for 2008 commences, Business Review adds. About NYRA Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. Edward M. Fox, Esq., Eric T. Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. OCEANVIEW CBO: Moody's Cuts Ratings on Two Notes from Caa3 to C --------------------------------------------------------------- Moody's Investors Service placed these notes issued by Oceanview CBO I, Ltd. on review for possible downgrade: Class Description: Class A-1B Floating Rate Notes due June 2032 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade In addition, Moody's also downgraded and left on review for possible downgrade these notes: Class Description: Class A-2 Floating Rate Notes due June 2037 -- Prior Rating: A3 -- Current Rating: Ba3, on review for possible downgrade Moody's also downgraded these notes: Class Description: Class B-F Fixed Rate Notes due June 2037 -- Prior Rating: Caa3 -- Current Rating: C Class Description: Class B-V Floating Rate Notes due June 2037 -- Prior Rating: Caa3 -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. In addition, Moody's also withdrew these classes of notes: (1) $12,500,000 Combination Securities According to Moody's, the ratings were withdrawn because the notes were paid in full. OMEGA HEALTHCARE: S&P Holds BB Senior Unsecured Debt Rating ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit, 'BB' senior unsecured debt, and 'B+' preferred stock ratings on Omega Healthcare Investors Inc. These actions affect $603.5 million in rated securities. The outlook is stable. "The speculative-grade ratings reflect the company's modest liquidity position and significantly higher exposure to government reimbursement at the operator level when compared with the rated peer group," said credit analyst Mr. George Skoufis. "The current ratings are supported by the company's stable portfolio and strong coverage measures." A stable operator base, comfortable rent coverage at the property level, and modest lease and mortgage expirations should produce stable cash flow to support debt protection measures. Positive ratings momentum would be derived from a steady improvement in the company's leverage profile and maintenance of currently strong fixed-charge coverage. Ratings would be negatively affected by unexpected shifts in the currently stable reimbursement environment, or if the company pursues growth initiatives in a highly leveraged manner. ON SEMICONDUCTOR: Moody's Affirms Ba3 Credit Facility Rating ------------------------------------------------------------ Moody's Investors Service has placed the ratings of ON Semiconductor (B1 CFR) on review for possible upgrade and affirmed the Ba3 corporate family and credit facility ratings for AMI Semiconductor, following the companies' Dec. 13, 2007 announcement that they have entered into a definitive agreement for ON Semi to acquire AMI Semi for approximately $915 million in an all-stock transaction. ON Semi's review for possible upgrade reflects the potential for enhanced scale, an expanded product portfolio (i.e., standard and custom), broader and deeper client relationships, end market diversification and expansion opportunities into untapped market segments, as well as improved margins, higher EBITDA and increased free cash generation provided by the merger. It also reflects the potential for ON Semi to realize manufacturing efficiency improvements and lower unit production costs for AMI Semi's growing standard products portfolio via the transfer of ON Semi's advanced manufacturing capabilities and process technologies. AMI Semi's affirmation reflects the relative stability of its business model due to the sole source status for over 88% of its product base, relatively long product life cycles, high entry barriers and moderate ASP volatility associated with its integrated mixed- signal operations. The review will focus on the combined company's prospects for client retention, asset rationalization, improved capacity utilization (particularly at the Gresham facility) and capex savings on a combined basis, the timing for restructuring actions and cost synergies, as well as its definitive capital structure and refinancing plan. The review will also examine the extent of integration risk associated with the combination given the size of the transaction, which would represent ON Semi's largest acquisition to date. To the extent the transaction closes as planned, AMI Semi's corporate family and probability of default ratings would be withdrawn. Moody's notes that AMI Semi's secured bank credit facility is subject to a change of control covenant, which enables lenders to put the bank loan back to the acquirer upon the transaction's close. As such, the bank debt ratings would also be withdrawn upon repayment. Pro forma for the transaction, leverage is approximately 2.8x combined EBITDA (Moody's adjusted) for the LTM period ended Sept. 30, 2007, which is comparable to Ba3 rated industry peers. Under terms of the agreement, AMI Semi's shareholders will receive 1.15 shares of ON Semi common shares for each share of AMI Semi common stock owned. The stock consideration represents a premium of roughly 38% over AMI Semi's Dec. 12, 2007 closing price. ON Semi expects to issue approximately 104 million shares of common stock on a fully diluted basis to complete the transaction. Upon closing, ON Semi and AMI Semi shareholders will own roughly 74% and 26%, respectively of the combined company. These ratings for ON Semi were placed on review for possible upgrade: -- Corporate Family Rating - B1 -- Probability of Default Rating -- B1 -- $ 25.0 Million Guaranteed Senior Secured Revolving Credit Facility due 2013 - Ba1 (LGD-1, 4%) -- $174.1 Million Guaranteed Senior Secured Term Loan maturing through 2013 -- Ba1 (LGD-1, 4%) These ratings for AMI Semi were affirmed: -- Corporate Family Rating -- Ba3 -- Probability of Default Rating -- B1 -- $ 90.0 Million Senior Secured Revolver due 2010 - Ba3 (LGD-3, 35%) -- $277.5 Million Senior Secured Term Loan B due 2012 - Ba3 (LGD-3, 35%) AMI Semi's rating outlook is stable. Headquartered in Phoenix, Arizona, ON Semiconductor is a global manufacturer of power- and data-management semiconductors and standard semiconductor components. Revenues and EBITDA for the twelve months ended Sept. 30, 2007 were $1.56 billion and $402 million, respectively. Headquartered in Pocatello, Idaho, AMI Semiconductor, Inc. is a leading designer and manufacturer of mixed-signal application- specific integrated circuits and structured digital products. Revenues and EBITDA for the twelve months ended Sept. 30, 2007 were $619 million and $141 million, respectively. PACIFIC COAST : Moody's Reviews Caa3 Rating on $96 Mil. Notes ------------------------------------------------------------- Moody's Investors Service placed these notes issued by Pacific Coast CDO, Ltd. on review for possible downgrade: * Class Description: $450,000,000 Class A First Priority Senior Secured Floating Rate Notes due 2036 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade * Class Description: $96,000,000 CIass B Second Priority Senior Secured Floating Rate Notes due 2036 -- Prior Rating: B3 -- Current Rating: Caa3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. PERFORMANCE TRANS: CIT Group Balks at Imperial Cap.'s Retention --------------------------------------------------------------- The CIT Group/Business Credit Inc., and Bayerische Hypo-und Vereinsbank AG, New York Branch, filed their objection with the U.S. Bankruptcy Court for the Western District of New York, to Performance Transportation Services Inc. and its debtor- affiliates' application to employ Imperial Capital LLC as investment banker. Jonathan N. Helfat, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., in New York, said the terms of the engagement letter would provide that: a. Imperial is only entitled to the portion of the M&A Transaction Fee attributable to the cash consideration obtained by the Debtors; and b. Imperial is not entitled to the M&A Transaction Fee in the event that the purchaser of the assets is a party that has already submitted a bid or is a secured creditor of the Debtors with a right to credit bid for the assets. Mr. Helfat also said that Imperial's fees would be subject to a review of reasonableness. Mr. Helfat contended that non-cash consideration provided no value to the First Lien Lenders and will diminish their position because the M&A Transaction Fee will be paid from the First Lien Lenders' collateral. According to Mr. Helfat, Imperial would not be entitled to the M&A Transaction Fee if the purchaser is a party that has already submitted a bid or is a secured creditor with a right to credit bid because, very little work will be required of Imperial. Debtors' Response Julie S. Kreher, Esq., at Hodgson Russ LLP, relates that the Debtors and Imperial incorporated a specific procedure into their engagement letter, to ensure they would be able to value any non- cash components of the Transaction Consideration. The procedure provides that in the event that the consideration in the sale transaction is paid in whole or in part in the form of securities or other assets, the value of the securities or other assets, for the purposes of calculating the M&A Transaction Fee, will be their fair market value. According to Ms. Kreher, the value of Imperial's marketing efforts and other activities remains true regardless of whether Allied, Black Diamond or one of the Debtors' other secured lenders eventually purchases the Debtors' assets. Without the sale process as administered by Imperial, there could be no assurance that a purchase by any secured lender was in fact the highest and best bid for the Debtors' assets, Ms. Kreher relates. Ms. Kreher contends that the fee structure is reasonable and in the Debtors' best interests. Imperial is entitled to a nominal initial fee at the outset of the engagement and the M&A Transaction Fee in the event the Debtors consummate a transaction. Imperial did not request a monthly fee or hourly fees, Ms. Kreher notes. Imperial has assumed a significant risk that it will receive no payment from the Debtors for its efforts other than the Initial Fee; this is the type of fee structure that is protected by the Bankruptcy Code from review of reasonableness, Ms. Kreher says. About Performance Transportation Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and lighttrucks 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 Dayrepresented the Debtors in their retructuring efforts. When theDebtor filed for protection from their creditors it reported morethan $100,000,000 in total assets. It also disclosed owing morethan $100,000,000 to at most 10,000 creditors, including $708,679to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter11 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 Approves Jones Day as Bankr. Counsel ------------------------------------------------------------- Performance Transportation Services Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Western District of New York to employ Jones Day as their counsel, nunc pro tunc to their bankruptcy filing. Jeffrey L. Cornish, president and chief executive officer of Performance Logistics Group Inc., related that Jones Day has obtained valuable institutional knowledge of the Debtors' businesses and financial affairs as a result of its representation of the Debtors prior to their bankruptcy filing. Jones Day is expected to: (a) advise the Debtors of their rights, powers, and duties in continuing to operate and manage their businesses and properties under Chapter 11 of the Bankruptcy Code; (b) prepare on the Debtors' behalf all necessary and appropriate applications, motions, draft orders, other pleadings, notices, schedules, and other documents, and review all financial and other reports to be filed in the Chapter 11 cases; (c) advise the Debtors concerning, and prepare responses to, applications, motions, other pleadings, notices, and other papers that may be filed by other parties in the Chapter 11 cases; (d) advise the Debtors with respect to, and assist in the negotiation and documentation of, financing agreements and related transactions; (e) review the nature and validity of any liens asserted against the Debtors' property and advise the Debtors concerning the enforceability of those liens; (f) advise the Debtors regarding their ability to initiate actions to collect and recover property for the benefit of their estates; (g) advise the Debtors in connection with the formulation, negotiation, and promulgation of a plan or plans of reorganization, and related transactional documents; (h) advise and assist the Debtors in connection with any sales and potential property dispositions; (i) advise the Debtors concerning executory contract and unexpired lease assumptions, assignments, and rejections, and lease restructurings and recharacterizations; (j) assist the Debtors in reviewing, estimating, and resolving claims asserted against the Debtors' estates; (k) commence and conduct litigation necessary and appropriate to assert rights held by the Debtors, protect assets of the Debtors' Chapter 11 estates, or otherwise further the goal of completing the Debtors' successful reorganization; (l) provide non-bankruptcy services for the Debtors to the extent requested by the Debtors; and (m) perform all other necessary and appropriate legal services in connection with the Chapter 11 cases. The Debtors will pay Jones Day based on its restructuring professionals' hourly rates: Professional Designation Rate ------------ ----------- ---- Tobias S. Keller Partner $575 Robert J. Graves Partner $675 Mark A. Cody Partner $550 Robert E. Krebs Associate $400 Steven A. Domanowski Associate $375 Kelly M. Mayerfeld Associate $350 Timothy W. Hoffmann Associate $350 Joseph M. Tiller Associate $215 Dennis N. Chi Associate $215 Kay Sobczak Paralegal $200 The Debtors will reimburse the firm of its actual and necessary out-of-pocket expenses. Tobias S. Keller, Esq., a partner at Jones Day, in San Francisco, California, discloses that from the start of Jones Day's retention by the Debtors, the Debtors have provided Jones Day with various funds for services to be rendered and for reimbursement of expenses to be incurred. Mr. Keller relates that Jones Day has applied portions of the funds to services rendered and, as of the Petition Date, $184,840 of the funds remained unapplied. Mr. Keller assures the Court that Jones Day is a "disinterested person," as 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. 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). PIER 1: Posts $10 Million Net Loss in Third Quarter Ended Dec. 1 ---------------------------------------------------------------- Pier 1 Imports Inc. disclosed Thursday last week financial results for its third quarter ended Dec. 1, 2007. The company reported a net loss from continuing operations of $10.0 million for the third quarter ended Dec. 1, 2007, versus a net loss of $72.7 million for the year ago period. Also, the company generated a positive EBITDA of $2.9 million including $6.5 million in charges primarily related to the exit of Pier 1 Kids. Alex W. Smith, the company's president and chief executive officer, said, "Our strategy of profitable sales at sustainable margins, combined with a greater emphasis on lower ticket impulse items, is beginning to pay off. We are pleased with our third quarter margin results, which would have been higher had it not been for the clearance of our Pier 1 Kids merchandise. I am obviously very delighted that we achieved a positive EBITDA for the first time in seven quarters." Total sales for the third fiscal quarter declined 7.1% to $374.2 million from $402.7 million in the year-ago quarter, primarily as a result of the closure of 98 stores. Comparable store sales, which exclude Pier 1 Kids, clearance stores and e- commerce, declined 1.7% for the quarter. Merchandise margins in the third quarter were 53.0% of sales, up from 49.7% in the year ago quarter. The company had disclosed that the clearance activity related to closing down its Pier 1 Kids concept reduced the reported merchandise margin during this fiscal quarter. Management estimates the impact on margins resulting from the clearance of the Pier 1 Kids merchandise was 130 basis points. Gross profit margins for the third quarter were 33.6% of sales, up from 30.9% in the year ago period, and although the store count was significantly reduced from the year ago period, gross profit dollars improved $1.3 million. Selling, general and administrative expenses for the third quarter were $59.7 million less than the year ago period, and were 33.1% of sales compared to 45.6% of sales last year. The primary contributors to the decrease in on-going costs were savings of approximately $21.2 million in marketing expense, $10.8 million in payroll, and $5.4 million in other general administrative costs when compared to the same period last year. Additionally, during the third quarter, selling, general and administrative expenses included $6.5 million in special charges compared to $28.8 million reported in the same period last year, a decrease of $22.3 million. Excluding the impact of the aforementioned charges, adjusted selling, general and administrative expenses for the third quarter declined $37.4 million from the year ago period and for the year declined $91.0 million when compared to the first nine months of fiscal 2007. At Dec. 1, 2007, the company's consolidated balance sheet showed $853.6 million in total assets, $599.9 million in total liabilities, and $253.7 million in total stockholders' equity. About Pier 1 Imports Based in Fort Worth, Texas, Pier 1 Imports Inc. (NYSE: PIR) -- http://www.pier1.com/-- is a specialty retailer of imported decorative home furnishings and gifts. * * * As reported in the Troubled Company Reporter on Oct. 31, 2007, Standard & Poor's Ratings Services lowered its ratings on Pier 1 Imports Inc. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Dec. 19, 2005. The outlook is negative. At the same time, Standard & Poor's withdrew all its ratings on Pier 1 at the company's request. PINE RIVER: Files Amended Combined Plan & Disclosure Statement -------------------------------------------------------------- Pine River Plastics Inc. filed with the United States Bankruptcy Court for the Eastern District of Michigan an Amended Combined Plan of Liquidation and Disclosure Statement. Plan Overview The Debtor's estate contains minimal assets, other than certain funds held in escrow representing the proceeds of sales of tooling which are subject to litigation regarding the priority of liens to such tooling, and other miscellaneous assets. As a result, the Plan does not provide for a distribution to any creditors other than those holding allowed (i) administrative claims (other than administrative claims pursuant to Section 503(b)(9) of the Bankruptcy Code, who will be paid in full, and (ii) secured claims, who will not be paid in full. All matters relating to claims resolution and avoidance actions, as well as distributions to general unsecured creditors and holders of administrative claims pursuant to Section 503(b)(9) of the Bankruptcy Code have been previously assigned to a liquidation trust, and the Plan provides that the Court will retain jurisdiction over the activities of the liquidation trustee. In the event that assets of the Debtor's estate remain after payment in full to administrative priority and secured creditors, such assets will be conveyed to the liquidation trust, to be distributed pursuant to a liquidation trust agreement. Treatment of Claims Under the Plan, Professional Fees, subject to allowance by the Court after notice and hearing, will be paid in advance and as a carve out by PNC Bank N.A. PNC is a secured lender pursuant to a debtor-in-possession revolving credit and security agreement dated as of Feb. 8, 2007 by and between the Debtor, the DIP lenders, and PNC as agent for the lenders. PNC also agreed to pay legal fees, capped at $15,000, to Jaffe, Raitt, Heuer & Weiss, P.C., counsel for the Official Committee of Unsecured Creditors and the liquidation trustee, for costs incurred in addressing, reviewing and confirmation of the Plan. Any recovery by holders of Prepetition Administrative Claims will be achieved through a liquidation trust, as there are no estate funds to pay such claims. All Allowed Administrative Claims, if any, other than the Prepetition Administrative Claims and the Claims of professionals for Professional Fees, which will not receive payment under the Plan, will be paid on a pro rata basis as soon as funds are available. Holders of Allowed Priority Claims will be paid on, or as soon as funds are available after (a) the later of (i) the effective date of the Plan or (ii) the date the Priority Claim becomes an Allowed Claim, and (b) after full payment of Allowed Administrative Expense Claims and Section III, Class I Allowed Secured Claims. To the extent this class cannot be paid in full, all proceeds distributed to this Class will be distributed pro-rata. No interest will be paid on any Priority Claim. Class I Secured Claims will be paid as soon as funds are available. To the extent that any Allowed Secured Claim is secured by property the value of which is greater than the amount of such Allowed Secured Claim, pursuant to Section 506(b) of the Bankruptcy Code, such Allowed Secured Claim will be entitled to interest from the effective date of the Plan. The Debtor said it does not have assets available to pay all Allowed Secured Claims in full. Allowed Claims of all Unsecured Creditors will not receive any distribution under the Plan. All Allowed Interests in the Debtor will be cancelled upon the effective date of the Plan. About Pine River Based in Saint Clair, Michigan, Pine River Plastics, Inc. -- http://www.prplastics.com/-- manufactures plastic injection moldings. The company filed for Chapter 11 protection Feb. 1, 2007 (Bankr. E.D. Mich. Case No. 07-42051). Brendan G. Best, Esq. and Ronald L. Rose, Esq., at Dykema Gossett PLLC, represent the Debtor in its restructuring efforts. The Debtor have selected Kurtzman Karson Consultants LLC as its claim,notice and balloting agent. The U.S. Trustee for Region 9 has appointed creditors to serve on an Official Committee of Unsecured Creditors in the Debtor's case. Judith Greenstone Miller, Esq., and Jay L. Welford, Esq., Jaffe, Raitt, Heuer and Weiss, represent the Committee. When the Debtor filed for protection from its creditors, it listed estimated assets and liabilities of $1 million to $100 million. PINNACLE POINT: Moody's Junks Ratings on Two Classes of Notes ------------------------------------------------------------- Moody's Investors Service downgraded ratings of two classes of notes issued by Pinnacle Point Funding II Ltd. The notes affected by this rating action are: (1) $12,000,000 Class C-1 Floating Rate Deferrable Notes due 2052; -- Prior Rating: Ba3 on review for possible downgrade -- Current rating: Ca (2) $10,000,000 Class C-2 Fixed Rate Deferrable Notes due 2052; -- Prior Rating: Ba3 on review for possible downgrade -- Current rating: Ca The rating actions reflect severe deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee, on Dec. 11, 2007 of an event of default caused by a failure of the ratio of the Par Value Coverage Amount divided by an amount equal to the sum of the Aggregate Outstanding Amount of the Super Senior Notes and the Class A-2 Notes to be greater than or equal to 100 per cent , as required by Section 5.1(d) of the Indenture dated June 7, 2007. Pinnacle Point Funding II Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities, CDO securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the ratio noted above failed to meet the required percentage. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. POPE & TALBOT: U.S. Trustee Sets Jan. 8 Sec. 341 Creditors Meeting ------------------------------------------------------------------ Kelly Beaudin Stapleton, the United States Trustee for Region 3, will convene a meeting of creditors of Pope & Talbot Inc. and its debtor affiliates at 11:00 a.m., on Jan. 8, 2008, at Room 5209, 5th Floor, J. Caleb Boggs Federal Building, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases. Attendance by the Debtors' creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. About Pope & Talbot Headquartered in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products business. Pope & Talbot was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the company's products include the US, Europe, Canada, South America and the Pacific Rim. The company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada on Oct. 28, 2007. The Debtors' CCAA Stay expires on Jan. 16, 2008. The company and fourteen of its debtor-affiliates filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case No. 07-11738). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl & Jones L.L.P. is Debtors' proposed bankruptcy counsel. When the Debtors filed for bankruptcy, they listed total assets of $681,960,000 and total debts of $601,090,000. The Debtors' exclusive period to file a plan expires on March 18, 2008. Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. If the Belgian court grants Pope & Talbot Europe's application, it is expected it will be liquidated through the bankruptcy proceeding. (Pope & Talbot Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPE & TALBOT: Courts Extends Deadline to File Schedules -------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware has approved Pope & Talbot Inc. and its debtor-affiliates' request to extend the deadline by which they must file their Schedules and Statements. The Hon. Christopher S. Sontchi directed Pope & Talbot Inc., Pope & Talbot Ltd., Pope & Talbot Spearfish Limited Partnership, and Pope & Talbot Lumber Sales Inc. to file their Schedules and Statements on or before Jan. 4, 2008. The Court grants the remaining Debtors an extension of 30 days within which to file their Schedules and Statements -- a total of 60 days after the bankruptcy filing date -- through and including Jan. 18, 2008. According to Judge Sontchi, the Debtors may seek further extensions of the filing deadlines. As reported in the Troubled Company Reporter on Dec. 3, 2007, Pope & Talbot Inc. and its debtor-affiliates asked the Bankruptcy Court for authority to extend the deadline by which they must file their Schedules and Statements through and including Jan. 18, 2008. About Pope & Talbot Headquartered in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products business. Pope & Talbot was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the company's products include the US, Europe, Canada, South America and the Pacific Rim. The company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada on Oct. 28, 2007. The Debtors' CCAA Stay expires on Jan. 16, 2008. The company and fourteen of its debtor-affiliates filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case No. 07-11738). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl & Jones L.L.P. is Debtors' proposed bankruptcy counsel. When the Debtors filed for bankruptcy, they listed total assets of $681,960,000 and total debts of $601,090,000. The Debtors' exclusive period to file a plan expires on March 18, 2008. Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. If the Belgian court grants Pope & Talbot Europe's application, it is expected it will be liquidated through the bankruptcy proceeding. (Pope & Talbot Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPE & TALBOT: Courts Approve Cross-Border Insolvency Protocol -------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware and the British Columbia Supreme Court approved in all respects Pope & Talbot Inc.'s and its debtor-affiliates' proposed cross- border insolvency protocol, to govern the administration of the Debtors' dual proceedings between the Bankruptcy Court and the Canadian Court. Monitor's Comments PricewaterhouseCoopers Inc., the monitor of the proceedings commenced by Pope & Talbot Ltd. and its subsidiaries under the Companies' Creditors Arrangement Act, notes that the Cross-Border Insolvency Protocol has been amended to provide for a joint approval of the sale of the Debtors' mill assets located in Canada. The Monitor agrees that the Protocol is appropriate for sales that involve assets in both the United States and Canada. However, the Monitor is concerned that requiring joint approval of the Courts for the mill assets located solely in British Columbia may increase expense and lead to delays and ultimately the possibility of duplicative decisions. The Monitor has been advised that the Official Committee of Unsecured Creditors has representation before the Canadian Court, and any concerns of the Creditors Committee could be aired before the Canadian Court, which, the Monitor believes, has considerable experience in dealing with "sales of these sorts of assets". As reported in the Troubled Company Reporter on Dec. 5, 2007, the protocol will become effective only upon approval of both the Bankruptcy Court and the Canadian Court. About Pope & Talbot Headquartered in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products business. Pope & Talbot was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the company's products include the US, Europe, Canada, South America and the Pacific Rim. The company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada on Oct. 28, 2007. The Debtors' CCAA Stay expires on Jan. 16, 2008. The company and fourteen of its debtor-affiliates filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case No. 07-11738). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl & Jones L.L.P. is Debtors' proposed bankruptcy counsel. When the Debtors filed for bankruptcy, they listed total assets of $681,960,000 and total debts of $601,090,000. The Debtors' exclusive period to file a plan expires on March 18, 2008. Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. If the Belgian court grants Pope & Talbot Europe's application, it is expected it will be liquidated through the bankruptcy proceeding. (Pope & Talbot Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). QUEBECOR MEDIA: Earns CDN$84.8 Million in Third Quarter ------------------------------------------------------- Quebecor Media generated net income of CDN$84.8 million in the third quarter of 2007, compared with CDN$46.6 million in the same quarter of 2006. The CDN$38.2 million increase was mainly due to the CDN$58.4 million increase in operating income. Quebecor Media Inc. reported third quarter 2007 revenues of CDN$834.6 million, a CDN$116.0 million increase. All of Quebecor Media's business segments posted higher revenues. Quebecor Media's operating income increased by CDN$58.4 million to CDN$253.6 million in the third quarter of 2007, mainly because of higher operating income in the Cable segment, as well as increases in Newspapers and Broadcasting. "Quebecor Media continued growing its revenues, operating income and net income in the third quarter of 2007," said Pierre Karl Peladeau, president and chief executive officer of Quebecor Inc. "The strong performance was spearheaded by the Cable segment, which once again posted substantial increases in the customer base for its cable telephone, Internet access and digital cable television services. The Newspapers and Broadcasting segments also improved their operating results." Year to Date Results Quebecor Media's year to date revenues increased by CDN$246.6 million to CDN$2.40 billion. All of Quebecor Media's business segments without exception reported higher revenues. Operating income rose by CDN$115.4 million to CDN$676.7 million, mainly because of higher operating income in the Cable segment, as well as increases in Broadcasting, Leisure and Entertainment and Newspapers. Excluding the impact of the consolidated stock option expense, the increase in year to date operating income was 24.4%, compared with 8.0% in the same period of 2006. Year to date net income was CDN$214.7 million, compared with a CDN$72.6 million net loss in the same period of 2006. The company attributed the CDN$287.3 million improvement primarily to the favourable impact on the analysis of the 2007 numbers of the recognition in the first nine months of 2006 of a CDN$342.1 million loss on debt refinancing. The CDN$115.4 million increase in operating income was also a factor in the improvement. At Sept. 30, 2007, the company's consolidated balance sheet showed CDN$7.36 billion in total assets, CDN$4.99 billion in total liabilities, and CDN$2.37 billion in total stockholders' equity. About Quebecor Media Headquartered in Montreal, Canada, Quebecor Media Inc., a subsidiary of Mortsel, Belgium-based, Quebecor Inc. -- http://www.quebecor.com/-- owns operating companies in numerous media-related businesses: Videotron Ltd., a cable operator in Quebec and a major Internet Service Provider and provider of telephone and business telecommunications services; Sun Media Corporation, Canada's chain of tabloids and community newspapers; TVA Group Inc., operator of French-language general-interest television network in Quebec, a number of specialty channels, and the English-language general-interest station Sun TV; Canoe Inc., operator of a network of English-and French-language Internet properties in Canada; Nurun Inc., a major interactive technologies and communications agency with offices in Canada, the United States, Europe and Asia; companies engaged in book publishing and magazine publishing; and companies engaged in the production, distribution and retailing of cultural products, namely Archambault Group Inc., a chain of music stores in eastern Canada, TVA Films, and Le SuperClub Videotron ltee, a chain of video and video game rental and retail stores. The company has global facilities in India, France and Argentina. * * * As reported in the Troubled Company Reporter on Oct. 1, 2007, Moody's Investors Service rated Quebecor Media Inc.'s CDN$700 million add-on senior unsecured note issue B2. Ratings on the underlying 7.75% senior unsecured notes due in March of 2016 were affirmed at the same B2 level. At the same time, QMI's Ba3 corporate family rating and stable ratings outlook were affirmed. QUINTILES TRANSNATIONAL: S&P Holds BB- Corporate Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the ratings for Quintiles Transnational Corp., including the 'BB-' corporate credit rating. The affirmation follows the announcement that One Equity Partners, the private equity arm of JPMorgan Chase, will sell its stake in the company to a new investment partnership, in which Bain Capital and TPG Capital are the lead investors. This transaction is not expected to affect the company's creditworthiness given that it will incur no new debt as a result of the deal. Quintiles holds an industry-leading position as a contract services provider to the pharmaceutical and biotechnology industries. RED VISTAS: Case Summary & Four Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Red Vistas at Magic Ranch, L.L.C. c/o Richard Harris P.O. Box 51000 Mesa, AZ 85208 Bankruptcy Case No.: 07-07077 Chapter 11 Petition Date: December 24, 2007 Court: District of Arizona (Phoenix) Judge: James M. Marlar Debtor's Counsel: Brian N. Spector, Esq. Jennings, Strouss & Salmon, P.L.C. The Collier Center, 11th Floor 201 East Washington Street Phoenix, AZ 85004-2385 Tel: (602) 262-5977 Fax: (602) 495-2654 Total Assets: $6,750,100 Total Debts: $7,999,784 Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Johnson Utilities, L.L.C. Provider of water $608,000 5230 East Shea Boulevard, and sewer services Suite 200 and infrastructure Scottsdale, AZ 85254 R.B.R. Land Development Project managment $37,572 Services, L.L.C. services 7165 East University Drive, Suite 152-2 Mesa, AZ 85207 Pinal County Treasurer Unpaid 2007 real $29,000 P.O. Box 729 estate taxes Florence, AZ 85232 Terrano Landscaping and $3,651 irrigation design RITCHIE MULTI-STRATEGY: Involuntary Chapter 11 Case Summary ----------------------------------------------------------- Alleged Debtor: Ritchie Multi-Strategy Global, L.L.C., 801 Warrenville Road, Suite 650 Lisle, IL 60532 Case Number: 07-24236 Type of Business: The Debtor is engaged in investment offices. Involuntary Petition Date: December 26, 2007 Court: Northern District of Illinois (Chicago) Petitioner's Counsel: Jeff J. Marwil, Esq. Winston & Stawn, L.L.P. 35 West Wacker Drive Chicago, IL 60601 Tel: (312) 558-5600 Fax: (312) 558-5700 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Benchmark Plus Institutional unpaid investor $39,072,654 Partners, L.L.C. debt obligation Attention: Robert S. Ferguson 820 A Street, Suite 700 Tacoma, WA 98402 Benchmark Plus Partners, unpaid investor $6,125,085 L.L.C. debt obligation Attention: Robert S. Ferguson 820 A Street, Suite 700 Tacoma, WA 98402 Sterling Low Volatility Fund unpaid investor $883,430 Q.P., debt obligation National City Corp. Attention: Jeff Suhanic, John Abbink 1111 Superior Avenue, Suite 250 Cleveland, OH 44114 RITE AID: Posts $84.8 Million Net Loss in 3rd Qtr. Ended Dec. 1 --------------------------------------------------------------- Rite Aid Corporation disclosed Thursday last week financial results for its third quarter ended Dec. 1, 2007. Other than same-store comparisons, results for the third quarter reflect the acquisition of the Brooks Eckerd stores and distribution centers acquired June 4, 2007. Net loss for the quarter was $84.8 million compared to last year's third quarter net income of $1.1 million. The company said that an increase in adjusted EBITDA of $71.5 million and an increase in the income tax benefit of $53.6 million were exceeded by the increase in expenses resulting from the Brooks Eckerd acquisition including an increase in depreciation and amortization expense of $69.7 million, additional interest expense of 62.1 million, integration expense of $53.3 million and an increase in store closing and impairment charge of $16.7 million. Revenues for the 13-week third quarter were $6.52 billion versus revenues of $4.32 billion in the prior year third quarter. Revenues increased 51.0%. Same store sales increased 0.7% during the third quarter as compared to the year-ago like period, consisting of a 1.2% pharmacy same store sales increase and a 0.4% decrease in front- end same store sales. The number of prescriptions filled in same stores increased 0.2%. Prescription sales accounted for 68.3% of total sales, and third party prescription sales represented 96.0% of pharmacy sales. Adjusted EBITDA was $232.3 million or 3.6% of revenues for the third quarter compared to $160.8 million or 3.7% of revenues for last year's third quarter. The $71.5 million increase in adjusted EBITDA was due to the increase in revenues, which came primarily from acquired Brooks Eckerd stores, along with an improvement in gross margin rate. Excluding occupancy expenses related to the company's new and relocated store program, expenses as a percent of revenues were lower. "Pharmacy same store sales increases remained steady throughout the quarter, gross margin rate improved and our team once again did a good job of controlling expenses. But even though our front end sales started to turn positive in November, we are disappointed with our results," said Mary Sammons, Rite Aid chairman, president and chief executive officer. "Like the rest of the industry, our business has been negatively impacted by a slow start to the cough, cold and flu season and a more cautious consumer. "On the positive side, we're pleased with our progress on the Brooks Eckerd integration and continue to expect all of the acquired stores to be converted and integrated into Rite Aid by fall of next year," Sammons said. "Our new and relocated store development is also on track for the year." In the third quarter, the company opened 12 new stores, relocated 21 stores and closed or sold 64 stores which were primarily related to combining acquired stores in close proximity to existing stores. Stores in operation at the end of the quarter totaled 5,089. At Dec. 1, 2007, the company's consolidated balance sheet showed $12.55 billion in total assets, $9.89 billion in total liabilities, and $2.66 million in total stockholders' equity. About Rite Aid Headquartered in Camp Hill, Pa., Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is one of the United States' leading drugstore chains with approximately 5,100 stores in 31 states and the District of Columbia. * * * Todate, Rite Aid Corp. still carries Standard & Poor's Ratings Services 'B' long term foreign issuer credit and long term local issuer credit ratings which were placed on May 8, 2007. Outlook is Stable. RIVER NORTH: Moody's Cuts Rating on $14.25 Million Notes to B3 -------------------------------------------------------------- Moody's Investors Service placed these notes issued by River North CDO Ltd. on review for possible downgrade: * Class Description: $33,000,000 Class B Senior Secured Floating Rate Notes Due 2040 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade * Class Description: $5,250,000 Class C Senior Secured Deferrable Floating Rate Notes Due 2040 -- Prior Rating: A2 -- Current Rating: A2, on review for possible downgrade * Class Description: $11,500,000 Class D-1 Secured Deferrable Floating Rate Notes Due 2040 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade * Class Description: $5,000,000 Class D-2 Secured Deferrable Fixed Rate Notes Due 2040 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade In addition Moody's also downgraded and left on review for possible downgrade these notes: * Class Description: $14,250,000 Class Subordinated Notes Due 2040 -- Prior Rating: Ba3 -- Current Rating: B3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. SACO MORTGAGE: Fitch Cuts Ratings on Four Certs. to Low-B --------------------------------------------------------- Fitch Ratings has taken these rating actions on four SASCO mortgage pass-through certificate securitizations. Affirmations total $1.30 billion and downgrades total $38.5 million. In addition, $45.8 million is placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with these rating actions: SASCO 2005-OPT1 -- $237.8 million class A affirmed at 'AAA' (BL: 29.65, LCR: 1.97); Deal Summary -- Originators: Option One (100%); -- 60+ day Delinquency: 19.83%; -- Realized Losses to date (% of Original Balance): 0.44%; -- Expected Remaining Losses (% of Current Balance): 15.07%; -- Cumulative Expected Losses (% of Original Balance): 8.90%. SASCO 2005-WMC1 -- $3.7 million class M-1 affirmed at 'AA' (BL: 96.30, LCR: 7.96); -- $18 million class M-2 affirmed at 'A' (BL: 60.28, LCR: 4.98); -- $4.5 million class M-3 affirmed at 'A-' (BL: 50.44, LCR: 4.17); -- $8.5 million class M-4 affirmed at 'BBB' (BL: 31.12, LCR: 2.57); -- $3.6 million class M-5 affirmed at 'BB+' (BL: 22.87, LCR: 1.89); -- $5.6 million class M-6 downgraded to 'B' from 'BB' (BL: 10.76, LCR: 0.89); -- $1.6 million class B rated 'B' (BL: 9.22, LCR: 0.76), placed on Rating Watch Negative. Deal Summary -- Originators: WMC (100%); -- 60+ day Delinquency: 34.02%; -- Realized Losses to date (% of Original Balance): 1.5%; -- Expected Remaining Losses (% of Current Balance): 12.1%; -- Cumulative Expected Losses (% of Original Balance): 3.24%. SASCO 2005-WF3 -- $221.7 million class A affirmed at 'AAA' (BL: 37.87, LCR: 7.17); -- $30.3 million class M-1 affirmed at 'AA+' (BL: 28.81, LCR: 5.46); -- $19.3 million class M-2 affirmed at 'AA' (BL: 15.43, LCR: 2.92); -- $9.7 million class M-3 affirmed at 'AA-' (BL: 13.45, LCR: 2.55); -- $9.7 million class M-4 affirmed at 'A+' (BL: 11.45, LCR: 2.17); -- $9.2 million class M-5 affirmed at 'A' (BL: 9.51, LCR: 1.80); -- $5.7 million class M-6 affirmed at 'A-' (BL: 8.27, LCR: 1.57); -- $4.8 million class M-7 affirmed at 'BBB+' (BL: 7.19, LCR: 1.36); -- $4.4 million class M-8 downgraded to 'BBB-' from 'BBB' (BL: 6.13, LCR: 1.16); -- $4.4 million class M-9 downgraded to 'BB' from 'BBB-' (BL: 5.46, LCR: 1.03); -- $4.4 million class B-1 downgraded to 'BB' from 'BB+' (BL: 5.15, LCR: 0.98). Summary -- Originators: Wells Fargo (100%); -- 60+ day Delinquency: 18.14%; -- Realized Losses to date (% of Original Balance): 0.28%; -- Expected Remaining Losses (% of Current Balance): 5.28%; -- Cumulative Expected Losses (% of Original Balance): 2.30%. SASCO 2005-WF4 -- $499.5 million class A affirmed at 'AAA' (BL: 46.02, LCR: 5.02); -- $60.8 million class M-1 affirmed at 'AA+' (BL: 38.37, LCR: 4.19); -- $51.0 million class M-2 affirmed at 'AA' (BL: 32.34, LCR: 3.53); -- $33.4 million class M-3 affirmed at 'AA-' (BL: 28.33, LCR: 3.09); -- $26.5 million class M-4 affirmed at 'A+' (BL: 25.11, LCR: 2.74); -- $22.6 million class M-5 affirmed at 'A' (BL: 16.11, LCR: 1.76); -- $21.6 million class M-6 affirmed at 'A-' (BL: 14.23, LCR: 1.55); -- $14.7 million class M-7 rated 'BBB+' (BL: 12.90, LCR: 1.41) placed on Rating Watch Negative; -- $14.7 million class M-8 rated 'BBB' (BL: 11.62, LCR: 1.27) placed on Rating Watch Negative; -- $14.7 million class M-9 rated 'BBB-' (BL: 10.34, LCR: 1.13) placed on Rating Watch Negative; -- $19.6 million class B-1 downgraded to 'B' from 'BBB-' (BL: 8.60, LCR: 0.94). Summary -- Originators: Wells Fargo (100%); -- 60+ day Delinquency: 15.78%; -- Realized Losses to date (% of Original Balance): 0.52%; -- Expected Remaining Losses (% of Current Balance): 9.16%; -- Cumulative Expected Losses (% of Original Balance): 4.47%. SINCLAIR BROADCAST: S&P Affirms BB- Rating with Stable Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Sinclair Broadcast Group Inc., including the 'BB-' corporate credit rating, and changed the outlook to stable from negative. "The outlook change reflects Sinclair's progress in reducing its leverage and our expectation that the company's debt levels will continue to improve," explained Standard & Poor's credit analyst Ms. Debbie Kinzer. The ratings on Sinclair Broadcast Group Inc. and its subsidiary, Sinclair Television Group Inc. (the debt of which it guarantees), reflect the company's financial risk from high debt leverage, its portfolio of generally lower-ranked stations, and TV advertising's mature revenue growth prospects. The company's large TV audience reach, TV broadcasting's typically good margin and discretionary cash flow potential, and resilient station asset values partially offset these factors. SIRICOMM INC: Files Chapter 11 Petition in Missouri --------------------------------------------------- SiriCOMM Inc. sought for protection from creditors under chapter 11 on Dec. 21, 2007, Melissa Dunson of the Joblin Globe reports. Board members, Dick Landis, Mark Grannell, Steve Fox and Terry Thompson, filed with the U.S. District Court for the Western District of Missouri on Dec. 10, 2007, indicating agreement of a bankruptcy filing, Joblin Globe relates. The board was then allowed a 30-day period to decide whether to pursue the bankruptcy or not, Joblin Globe adds. Former network operations manager, William Tylle, told Joblin Globe that it was "pretty crappy" for the company to ask staff to continue reporting to work after the initial disclosure of a likely bankruptcy. Mr. Tylle adds that the company owes thousands of dollars of back pay to hundreds of workers, to whom they promised payment by the end of 2007, Joblin Globe says. Mr. Grannell, also SiriCOMM's president and chief executive officer of SiriCOMM, said a week ago that the "company's future was uncertain," Joblin Globe notes. Polsinelli Shalton Flanigan & Suelthaus, of Kansas City, represents the SiriCOMM, Joblin Globe adds, citing court documents. ViaSat Cuts Connection Over Non-Payment On Nov. 20, 2007, SiriCOMM said in a filing with the Securities and Exchange Commission that ViaSat Inc., its core network and internet provider turned off the connectivity between the SiriCOMM network nodes, effectively disabling its entire wireless network. The network, the company said, will remain inactive pending resolution of certain key issues, including non-payment. "We are very disappointed at the actions taken by ViaSat and we are continuing to work diligently to remedy the situation," said Mr. Grannell. About SiriCOMM Joplin, Missouri-based SiriCOMM Inc. (OTC Bulletin Board: SIRC) -- http://www.siricomm.com/-- provides application service and specializes in wireless Internet connectivity and productivity applications tailored to the transportation industry. By providing both network access and a robust application host platform, SiriCOMM delivers a responsive and convenient way for all industry stakeholders to interact with information needed on a regular basis. The company uses Wi-Fi technologies to create hot spots at locations convenient to highway travel. As of June 30, 2007, the company's balance sheet showed $3,991,222 in total assets and $3,026,695 in total liabilities. SIRICOMM INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: SiriComm, Inc. 4710 East 32 Street Joplin, MO 64804 Bankruptcy Case No.: 07-30900 Type of Business: The Debtor provides wireless internet access and software to the transportation industry. see: http://www.siricomm.com/ Chapter 11 Petition Date: December 21, 2007 Court: Western District of Missouri (Joplin) Judge: Jerry W. Venters Debtor's Counsel: James E. Bird, Esq. Polsinelli Shalton Flanigan Suelthaus PC 700 W. 47th Street, Suite 1000 Kansas City, MO 64112 Tel: (816) 753-1000 Fax: (816) 753-1536 http://www.polsinelli.com/ Estimated Assets: $3,991,222 Estimated Debts: $3,912,400 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ViaSat contract $1,850,041 P.O. Box 512860 Los Angeles, CA 90051-2860 Henry P. Hoffman contract $187,872 3820 Old Orchard Road Joplin, MO 64804 Idling Solutions deposit $168,432 5000 Legacy Drive Suite 47 Plan, TX 75024 Direct Truck LLC trade debt $63,000 Weaver and Martin LLC trade debt $50,000 Terry Thompson compensation $38,099 Markinetics Inc. trade debt $27,591 Dick Landis compensation $27,500 Mark L. Grannell claim $27,317 Taxing Authorities taxes $22,843 Kory S. Dillman claim $20,001 John C. Hillring claim $20,718 Steve Fox compensation $20,000 Cadco Inc. trade debt $18,447 John P. Burton claim $16,114 David A. Miller claim $13,609 Sommer & Scheider LLP trade debt $12,039 4301 Main LLC trade debt $11,400 MarketSphere trade debt $10,950 Satellite Dish trade debt $10,386 Communications Inc. SPANSION INC: Amends Merger Agreement with Saifun Semiconductors ---------------------------------------------------------------- Spansion Inc. and Saifun Semiconductors Ltd. boards of directors have executed an amendment to their merger agreement providing for an approximately $31.4 million increase in the cash distribution, which would result in a cash distribution of approximately $6.05 per share in cash based on Saifun Semiconductor's current capitalization. The cash distribution will be funded solely from Saifun's existing cash on hand prior to or on the closing of the transaction. The exchange ratio that each outstanding share of Saifun common stock would receive in the merger remains 0.7429 shares of Spansion common stock. In connection with this amendment, Saifun will send to its shareholders and file with the Securities and Exchange Commission additional solicitation materials. "We are very excited about this transaction as the combined company will be well positioned for future growth. Additionally, with the cash that will be acquired in the transaction, the combined company will be capitalized to further leverage Saifun's licensing business," said Spansion Inc president and Chief Executive Officer, Bertrand Cambou. "We also feel it is appropriate in this environment that Saifun shareholders receive a higher cash distribution." The special general meeting of Saifun shareholders called to obtain the shareholder approval necessary to complete the merger and all transactions contemplated under the amended merger agreement including the increased cash distribution will be held, as originally scheduled, on Dec. 20, 2007 at 4:00 p.m. Israel time. The record date for Saifun shareholders entitled to attend and vote at the Saifun special general meeting remains Nov. 11, 2007. Saifun notes that shareholders that have previously voted may either change their vote as a result of the amendment, or decide to leave their original vote unchanged, in which case their vote shall be seemed to refer to the amended merger agreement which includes the increased cash distribution amount as detailed above. The merger remains subject to satisfaction of customary closing conditions that include Israeli court approval, regulatory approvals and the Saifun shareholders' approval, and is expected to close in the first quarter of 2008. Saifun shareholders are reminded that their vote is very important. Any shareholder who has not yet voted is urged to vote 'FOR' the approval of the merger agreement as amended, the merger and the transactions the amended merger agreement contemplates, including the increased cash distribution. Saifun shareholders are advised that if they have any questions or need any assistance in the voting of their shares or if they need additional copies of Saifun's proxy materials, they should contact Saifun's proxy solicitor, Innisfree M and A Incorporated, toll-free at 888-750-5834 (United States and Canada) or 00800 7710 9971 (Europe and Israel). Additional Information About the Merger and Where to Find It Saifun Semiconductors has filed a Form 6-K with the SEC containing a definitive proxy statement and other relevant materials in connection with the proposed merger. On or about Nov. 13, 2007, the definitive proxy statement was mailed to Saifun shareholders of record as of the close of business on Nov. 11, 2007. Saifun security holders are urged to read the definitive proxy statement and the other relevant materials because they contain, among other things, important information about the merger, the merger agreement, the cash distribution and the special general meeting of Saifun shareholders, as well as important information about Saifun and Spansion. The definitive proxy statement and other relevant materials, and any other documents filed by Spansion or Saifun with the SEC, may be obtained free of charge at the SEC's web site at http://www.sec.gov/ In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Spansion by contacting its Investor Relations, Bob Okunski, (408) 616-1117. Investors and security holders may obtain free copies of the documents filed with the SEC by Saifun by contacting KCSA Worldwide, Lee Roth, (212) 896-1209. About Spansion Inc. Headquartered in Sunnyvale, California, Spansion Inc. (NASDAQ: SPSN) -- http://www.spansion.com/-- designs, develops, manufactures, markets and sells flash memory solutions for wireless, automotive, networking and consumer electronics applications. The company has European operations in France, Asia-Pacific facilities in Japan, China, Malaysia and Thailand, as well as sales offices in Latin American countries including Brazil and Mexico. * * * As of Oct. 18, 2007, Spansion Inc. still carries Moody's 'B3' long term corporate family rating last placed on Dec. 5, 2005. Outlook is Stable. STRUCTURED ASSET: Fitch Junks Ratings on 21 Certificates -------------------------------------------------------- Fitch Ratings has taken these rating actions on five Structured Asset Investment Loans mortgage pass-through certificate transactions. Affirmations total $2.7 billion and downgrades total $873.1 million. Break Loss percentages and Loss Coverage Ratios for each class are included with these rating actions: SAIL 2005-HE1 -- $277 million class A affirmed at 'AAA' (BL: 59.10, LCR: 3.11); -- $84.5 million class M1 affirmed at 'AA+' (BL: 44.12, LCR: 2.32); -- $48.2 million class M2 affirmed at 'AA' (BL: 36.00, LCR: 1.90); -- $28.4 million class M3 downgraded to 'A+' from 'AA-' (BL: 31.09, LCR: 1.64); -- $25.8 million class M4 downgraded to 'A-' from 'A+' (BL: 26.59, LCR: 1.40); -- $25 million class M5 downgraded to 'BBB-' from 'A' (BL: 22.23, LCR: 1.17); -- $17.2 million class M6 downgraded to 'BB' from 'A-' (BL: 19.15, LCR: 1.01); -- $17.2 million class M7 downgraded to 'B' from 'BBB+' (BL: 15.94, LCR: 0.84); -- $10.3 million class M8 downgraded to 'C/DR6' from 'BBB'; -- $12 million class M9 downgraded to 'C/DR6' from 'BB+'; -- $15.5 million class B1 downgraded to 'C/DR6' from 'BB-'. Deal Summary -- Originators: Finance America (53%), Ameriquest (47%); -- 60+ day Delinquency: 33.25%; -- Realized Losses to date (% of Original Balance): 1.87%; -- Expected Remaining Losses (% of Current Balance): 18.98%; -- Cumulative Expected Losses (% of Original Balance): 8.27%. SAIL 2005-HE2 -- $169.6 million class A affirmed at 'AAA' (BL: 53.83, LCR: 2.28); -- $30.7 million class M1 affirmed at 'AA+' (BL: 44.41, LCR: 1.88); -- $24.4 million class M2 affirmed at 'AA' (BL: 36.86, LCR: 1.56); -- $15.1 million class M3 downgraded to 'BBB+' from 'AA-' (BL: 32.14, LCR: 1.36); -- $13.8 million class M4 downgraded to 'BBB-' from 'A+' (BL: 27.77, LCR: 1.18); -- $11.7 million class M5 downgraded to 'BB' from 'A' (BL: 24.05, LCR: 1.02); -- $10.1 million class M6 downgraded to 'B' from 'A-' (BL: 20.78, LCR: 0.88); -- $7.5 million class M7 downgraded to 'B' from 'BBB+' (BL: 18.21, LCR: 0.77); -- $7.5 million class M8 downgraded to 'C/DR5' from 'BBB'; -- $9.2 million class M9 downgraded to 'C/DR5' from 'BBB'; -- $8.8 million class M10 downgraded to 'C/DR5' from 'BB+'; -- $6.3 million class B1 downgraded to 'C/DR6' from 'BB-'; -- $5.8 million class B2 downgraded to 'C/DR6' from 'B+'. Deal Summary -- Originators: OwnIt (52%), Ameriquest (46%); -- 60+ day Delinquency: 33.76%; -- Realized Losses to date (% of Original Balance): 2.40%; -- Expected Remaining Losses (% of Current Balance): 23.58%; -- Cumulative Expected Losses (% of Original Balance): 11.46%. SAIL 2005-HE3 -- $524.9 million class A affirmed at 'AAA' (BL: 50.05, LCR: 2.44); -- $100.7 million class M1 affirmed at 'AA+' (BL: 39.13, LCR: 1.91); -- $63.9 million class M2 affirmed at 'AA' (BL: 32.37, LCR: 1.58); -- $52.1 million class M3 downgraded to 'BBB+' from 'AA-' (BL: 26.82, LCR: 1.31); -- $28.4 million class M4 downgraded to 'BBB-' from 'A+' (BL: 23.76, LCR: 1.16); -- $24.8 million class M5 downgraded to 'BB' from 'A' (BL: 21.07, LCR: 1.03); -- $22.5 million class M6 downgraded to 'B' from 'A-' (BL: 18.57, LCR: 0.91); -- $20.1 million class M7 downgraded to 'B' from 'A-' (BL: 16.25, LCR: 0.79); -- $20.1 million class M8 downgraded to 'C/DR5' from 'BBB+'; -- $18.9 million class M9 downgraded to 'C/DR5' from 'BBB'; -- $14.2 million class M10 downgraded to 'C/DR5' from 'BB+'; -- $21.3 million class M11 downgraded to 'C/DR5' from 'BB-'. Deal Summary -- Originators: BNC (51%), Ameriquest (35%); -- 60+ day Delinquency: 31.84%; -- Realized Losses to date (% of Original Balance): 1.48%; -- Expected Remaining Losses (% of Current Balance): 20.48%; -- Cumulative Expected Losses (% of Original Balance): 9.63%. SAIL 2005-6 -- $405.5 million class A affirmed at 'AAA' (BL: 54.38, LCR: 3.69); -- $68 million class M1 affirmed at 'AA+' (BL: 44.48, LCR: 3.02); -- $63.5 million class M2 affirmed at 'AA' (BL: 36.53, LCR: 2.48); -- $38.5 million class M3 affirmed at 'AA-' (BL: 31.45, LCR: 2.14); --$ 34 million class M4 affirmed at 'A+' (BL: 26.94, LCR: 1.83); -- $34 million class M5 affirmed at 'A' (BL: 22.43, LCR: 1.52); -- $26 million class M6 affirmed at 'BBB-' (BL: 18.89, LCR: 1.28); -- $34 million class M7 downgraded to 'B' from 'BB-' (BL: 11.03, LCR: 0.75); -- $22.6 million class M8 downgraded to 'CC/DR3' from 'B+'; -- $11.3 million class M9 downgraded to 'C/DR5' from 'B+'; -- $5.6 million class M10-A downgraded to 'C/DR6' from 'B'; -- $5.6 million class M10-F downgraded to 'C/DR6' from 'B'. Deal Summary -- Originators: BNC (63%), Option One (21%); -- 60+ day Delinquency: 28.81%; -- Realized Losses to date (% of Original Balance): 1.24%; -- Expected Remaining Losses (% of Current Balance): 14.73%; -- Cumulative Expected Losses (% of Original Balance): 6.17%. SAIL 2005-11 -- $732.9 million class A affirmed at 'AAA' (BL: 37.80, LCR: 2.15); -- $132 million class M1 downgraded to 'A-' from 'AA' (BL: 25.35, LCR: 1.44); -- $33.7 million class M2 downgraded to 'BBB' from 'AA-' (BL: 22.11, LCR: 1.26); -- $29.9 million class M3 downgraded to 'BB' from 'A+' (BL: 19.22, LCR: 1.09); -- $29 million class M4 downgraded to 'B' from 'A' (BL: 16.41, LCR: 0.93); -- $22.4 million class M5 downgraded to 'B' from 'A-' (BL: 14.15, LCR: 0.8); -- $20.6 million class M6 downgraded to 'C/DR5' from 'BBB'; -- $16.8 million class M7 downgraded to 'C/DR5' from 'BB+'; -- $11.2 million class M8 downgraded to 'C/DR5' from 'B+'; -- $18.7 million class B1 downgraded to 'C/DR6' from 'B'; -- $8.1 million class B2 downgraded to 'C/DR6' from 'CCC'. Deal Summary -- Originators: BNC (76%); -- 60+ day Delinquency: 23.43%; -- Realized Losses to date (% of Original Balance): 1.45%; -- Expected Remaining Losses (% of Current Balance): 17.59%; -- Cumulative Expected Losses (% of Original Balance): 11.37%. STRUCTURED ASSET: S&P Cuts Rating on Class B Certificates to "D" ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class B mortgage pass-through certificates from Structured Asset Securities Corp. Mortgage Loan Trust 2005-GEL3 to 'D' from 'CCC', and S&P downgraded class M-5 to 'BB' from 'BBB+'. At the same time, S&P lowered its rating on class M-6 to 'CCC' from 'BB' and removed it from CreditWatch with negative implications. Concurrently, S&P affirmed its ratings on the remaining five classes from this series. The downgrades reflect the deteriorating performance of the collateral pools as monthly net losses continue to significantly outpace monthly excess interest cash flows, resulting in principal write-downs to the overcollateralization (O/C) for these deals. As of the November 2007 distribution period, total delinquencies were 30.06% of the current pool balance, while severe delinquencies (90-plus days, foreclosures, and REOs) were 15.82%. The transaction, which is 28 months seasoned, has experienced approximately 2.80% in cumulative realized losses to date. The outstanding pool factor for this deal is 32.36%. If delinquencies continue to translate into realized losses, S&P will likely take further negative rating actions. Subordination, O/C, and excess interest cash flows provide credit support for this transaction. The underlying collateral originally consisted of document-deficient, outside-the- guidelines, and reperforming mortgage loans that are secured by first and second liens on one-to four-family residential properties. Ratings Lowered and Removed from CreditWatch Negative Structured Asset Securities Corp. Mortgage Loan Trust 2005-GEL3 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-6 CCC BB/Watch Neg Ratings LOwered Structured Asset Securities Corp. Mortgage Loan Trust 2005-GEL3 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-5 BB BBB+ B D CCC Ratings Affirmed Structured Asset Securities Corp. Mortgage Loan Trust 2005-GEL3 Mortgage pass-through certificates Class Rating ----- ------ A, M1 AAA M2 AA+ M3 A+ M4 A- SURETY CAPITAL: Files for Bankruptcy to Pursue Sale of Asset ------------------------------------------------------------ Surety Capital Corp., parent company of Surety Bank of Fort Worth, has filed for bankruptcy with the U.S. Bankruptcy Court for the Northern District of Texas, Barry Shlachter writes for the Star- Telegram. The bankruptcy, according to Surety chairman and chief executive officer Jerom Weiner, will enable the bank to proceed with a sale of the company and counter a likely major shareholder objection, Star-Telegram reports. The bank has received a buy offer from an undisclosed bank in Texas for a purchase price of $3 million, which is significantly above its book value estimated at $5.5 million to $6 million, Star-Telegram reveals, citing Mr. Weiner, successor to Richard N. Abrams. Securities and Exchange Commission filings reveal that Surety signed a stock purchase agreement with Pax Holdings Inc. dated Oct. 11, 2006. Under the stock purchase agreement, Pax will buy 100% of Surety's stock for a sum equal to the bank's shareholder equity as determined on the business day preceding the closing date plus $3,000,000. However, Pax notified Surety in a letter dated May 29, 2007, of the termination of the stock purchase agreement. Mr. Weiner stressed that the new offer they received was not from Pax, Star-Telegram reports. Surety had $9 million in assets and $6.6 million in debts, Star- Telegram relates, citing documents filed with the Court. The bank had assets of $36.2 million and deposits of $29.9 million as of Sept. 30, 2007, based on filing with the Federal Deposit Insurance Corp., Star-Telegram says. Mr. Weiner told Star-Telegram that there were no audits on the company since 2004, while Mr. Abrams was chairman and added that the company failed to make the needed disclosures with the SEC. However, Surety has informed the SEC of the missed filings and has made the necessary state and federal disclosures, Star-Telegram relates, citing Mr. Weiner. About Surety Capital Surety Capital Corp. is the parent company of Surety Bank, -- http://www.suretybank.com/-- an independent community bank serving Fort Worth's community businesses and consumers. It targets small and medium sized businesses in Fort Worth and throughout Tarrant County. It currently has 15 employees. In 1998, Surety operated 13 bank branches and had $240 million in assets. It sold off its offices to in the late 1990s and early 2000 to get additional funds after a series of financial problems. In 1997, Surety Bank incurred a $4.1 million loss related to its accounts receivable factoring operation. Its former presidentand its chairman paid fines after pleading guilty for a 1999 diversion of wrong accounts to cover bad loans and boost earnings. Surety Bank presently maintains a single branch at Summit Avenue in Fort Worth, Texas. SURETY CAPITAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Surety Capital Corp. 1501 Summit Avenue Fort Worth, TX 76102 Bankruptcy Case No.: 07-45637 Type of Business: The Debtor provides retail and commercial banking services, like checking and savings accounts, time deposits, IRAs, money transfers, safe deposit facilities, commercial loans, real estate mortgage loans, consumer loans and night depository facilities. In addition, it offers insurance premium financing, which involves the lending of funds to companies and individuals for the purpose of financing their purchase of property and casualty insurance. See http://www.suretybank.com Chapter 11 Petition Date: December 21, 2007 Court: Northern District of Texas Judge: D. Michael Lynn Debtor's Counsel: Robert A. Simon, Esq. Barlow, Garsek & Simon, L.L.P. 3815 Lisbon Street Fort Worth, TX 76107 Tel: (817) 731-4500 Fax: (817) 731-6200 Total Assets: $9,001,002 Total Debts: $6,646,387 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Indenture Trustee debentures $6,405,375 Attention: Bank of New York 101 Barklay Street, Northwest New York, NY 10286 Dick Abrams 2001-2007 $85,421 301 Byron Street compensation Forth Worth, TX 76114 Bank of New York indenture trustee $40,240 101 Barklay Street, Southwest New York, NY 10286 SYMPHONY CLO: Moody's Puts Ba2 Rating on $12.24 Mil. Notes ---------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Symphony CLO V, Ltd.: (1) Aaa to the $311,300,000 Class A-1 Senior Secured Floating Rate Notes due 2024; (2) Aa2 to the $25,000,000 Class A-2 Senior Secured Floating Rate Notes due 2024; (3) A2 to the $16,000,000 Class B Senior Secured Deferrable Floating Rate Notes due 2024; (4) Baa2 to the $14,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2024; and (5) Ba2 to the $12,240,000 Class D Secured Deferrable Floating Rate Notes due 2024. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Debt Obligations, Participation Interests, Synthetic Securities and Structured Finance Obligations due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Symphony Asset Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. SYNIVERSE TECHNOLOGIES: Completes BSG Wireless Acquisition ---------------------------------------------------------- Syniverse Technologies has closed its acquisition of the wireless services business of Billing Services Group Limited has been completed. The combined company serves more than 500 customers in over 100 countries with the industry's broadest suite of voice and data roaming, financial clearinghouse, messaging, and signaling services. "This acquisition significantly expands Syniverse's global footprint and adds a world-class financial settlement platform to our industry-leading suite of services," said Tony Holcombe, President and Chief Executive Officer, Syniverse. "The combination of Syniverse and BSG Wireless also will lead to increased operating efficiencies, and we expect to realize $12 million of annual cost synergies within two years." The former BSG Wireless operations will become part of Syniverse's EMEA organization and will be led by Eugene Bergen Henegouwen, Executive Vice President, EMEA, Syniverse. Bergen Henegouwen said the acquisition will enable Syniverse to provide increasingly superior products and services over the long term. "The blend of Syniverse and BSG Wireless know-how will allow us to deliver mobile operators even higher levels of expertise and innovative solutions while addressing their needs for a trusted one-stop shop for both data clearing and financial clearing services," he said. The transaction was funded through the draw down of the company's amended and restated credit facility completed in August 2007. Included in the facility were a delayed draw term loan of $160 million in aggregate principal and a Euro-denominated delayed draw term loan facility of the equivalent of $130 million intended to finance this acquisition. About Syniverse Syniverse Technologies Inc. in Tampa, Florida (NYSE: SVR) -- http://www.syniverse.com/-- provides technology services for wireless telecommunications companies. Its integrated suite of services include technology interoperability services, which enable the invoicing and settlement of domestic and international wireless roaming telephone calls and wireless data events; SMS and MMS routing and translation services between carriers; and interactive video and mobile broadband solutions, prepaid applications, and roaming services. Celebrating its 20th anniversary in 2007, Syniverse has offices in major cities around the globe. Syniverse is ISO 9001:2000 certified and TL 9000 approved, adhering to the principles of customer focus and quality improvement practices. The company has offices in the Netherlands, Brazil and China. * * * Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating, along with its stable outlook, and its 'B' senior subordinated debt rating on Syniverse Technologies Inc on June 2007. At the same time, Standard & Poor's assigned its 'BB' bank loan rating and '2' recovery rating to Syniverse's proposed $489 million senior secured bank facility. TEKNI-PLEX INC: Moody's Cuts Corporate Rating to Caa3 from Caa1 --------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Ratings of Tekni-Plex, Inc. to Caa3 from Caa1. The outlook remains negative. Additional instrument ratings are detailed below. Moody's took these rating actions: -- $275 million 8.75% sr. secured second lien notes due 2013, to Caa3 (LGD3, 46%) from Caa1 (LGD3, 46%) -- $150 million 10.87% sr. secured notes due 2012, to B3 (LGD2, 16%) from B1 (LGD2, 16%) -- $275 million 12-3/4% sr. subordinated notes due 2010, to Ca (LGD5, 85%) from Caa3 (LGD5, 85%) -- $40 million 12-3/4% sr. subordinated notes due 2010, to Ca (LGD5, 85%) from Caa3 (LGD5, 85%) -- Caa3 Corporate Family Rating -- Caa3 Probability of Default Rating The outlook remains negative. The downgrade of the corporate family rating reflects the company's failure to pay interest on its 12-3/4% senior subordinated notes due 2010, continued deterioration of credit metrics, high leverage, and poor liquidity. On Dec. 17, 2007 the company announced that it had failed to make the $20.5 million interest payment due on its 12-3/4% senior subordinated notes due 2010. If Tekni-Plex does not make the interest payment by the end of the 30 day grace period on Jan. 17, 2008, then the company will be in default according to the terms of the subordinated notes indenture. A default under the subordinated notes indenture would allow the noteholders to accelerate the maturity on the notes which could constitute an event of default under the company's 10 7/8% senior secured notes due 2012 and 8 3/4% senior secured notes due 2013. The company has obtained a waiver from lenders for its $75 million asset based revolving credit facility (not rated by Moodys) which provides full access to the facility through Feb. 14, 2008. Tekni-Plex intends to seek a forbearance agreement with the holders of the senior subordinated notes prior to the expiration of the grace period. In addition, the company has announced the appointment of a restructuring officer to help implement a series of initiatives aimed at maintaining near term liquidity and improving financial performance. Previously, on Nov. 14, 2007, the company announced that it had engaged Rothschild Inc. as a financial advisor to consider various strategic alternatives including divestitures, debt refinancings, and restructurings. The company's continued negative operating performance, primarily driven by poor results in the tubing segment, has further strained already weak credit metrics. For the twelve months ended Sept. 30, 2007 including Moody's standard analytical adjustments, total adjusted debt to EBITDA has risen to over 11.0 times, EBIT to gross interest has declined to well below 1.0 time and free cash flow to debt has declined to the negative low single digit range. Tekni-Plex is a global manufacturer of packaging, packaging products and materials as well as tubing products. Operating in two main segments, packaging and tubing products, the company primarily serves the food, healthcare, and consumer goods markets. The packaging segment produces egg cartons, foam food trays, blister films, closure liners, aerosol packaging, and foam plates. The tubing segment produces garden & irrigation hoses, pool & vacuum hoses, and medical tubing. Products that do not fall within these two categories are classified as other, including recycled polyethylene terephthalate, medical grade PVC, Rating Update: Bessemer Non-Profit Development Corporation, AL. TEMBEC INC: Considers Conversion of $1.2 Billion Debt to Equity --------------------------------------------------------------- Tembec Inc. disclosed a proposed recapitalization transaction with these key elements: -- conversion of $1.2 billion of Tembec's debt into new equity; -- implementation of a new 4-year term loan of $250 million to $300 million, final amount to be determined by Tembec, to provide additional liquidity; -- reduction of Tembec's annual interest expense by approximately $67 million; -- business as usual for employees, trade creditors and customers, the customers will not be affected by the recapitalization; -- implementation of the recapitalization is expected to occur by the end of February 2008. The new capital structure will provide a stronger financial base for the execution of Tembec's operating strategy and enhance the long-term value of Tembec. Tembec's trade creditors, well as its obligations to employees, including under its pension and benefit plans, are unaffected by the recapitalization and will continue to be paid or satisfied in the ordinary course of business. "This recapitalization transaction is a significant and positive development for Tembec and its stakeholders. It is a consensual solution that is fair to both our noteholders and our shareholders, and it meets Tembec's business objectives of improving its capital structure and liquidity," James Lopez, president and CEO of Tembec Inc., said. "This transaction does not affect Tembec's customers, suppliers or workforce. It is business as usual." Tembec's board of directors is unanimously recommending all noteholders and shareholders support the transaction because it will reduce net debt by approximately $1.2 billion, normalizing Tembec's capital structure. Tembec's financial advisor BMO Capital Markets has provided an opinion to Tembec's board that the terms of the recapitalization are fair from a financial point of view to the company. "With this transaction, Tembec is delivering on its key commitment to explore and pursue strategic alternatives to reduce its debt levels and improve liquidity," Guy Dufresne, chairman of the board of directors, said. "The board and management believe this transaction accomplishes Tembec's objectives. It is a comprehensive recapitalization that creates a stronger company and allows for the pursuit of greater opportunities." An ad hoc committee of noteholders has executed support agreements with Tembec whereby they have agreed to vote in favour of and support the recapitalization. The committee holds in excess of $250 million of notes. Tembec will continue to solicit and obtain additional noteholder support for the recapitalization. Tembec expects to hold separate noteholder and shareholder meetings on Feb. 22, 2008 in Montreal, Quebec to obtain the required approvals for certain steps necessary to implement the recapitalization transaction, including approval by the noteholders of a Plan of Arrangement under the Canada Business Corporations Act. Details of the Recapitalization will be provided in an information circular expected to be distributed to noteholders and existing shareholders by the end of January 2008. In addition to noteholder and shareholder approvals, implementation of the Plan of Arrangement is subject to final approval of the Court and receipt of all necessary regulatory and stock exchange approvals. About Tembec Inc. Headquartered in Montreal, Quebec, Tembec Inc. (TSE:TBC) -- http://www.tembec.com/-- is engaged in the business of integrated forest products. Its business segments are forest products, pulp, paper, and chemical and other products. The forest products segment consists of forest and sawmill operations, which produce lumber and building materials. The pulp segment includes the manufacturing and marketing activities of a number of different types of pulps. The paper segment consists of production and sales of newsprint, coated papers and bleached board. The chemical and other products segment consists of the transformation and sale of resins and pulp by-products. * * * Standard & Poor's placed Tembec Inc.'s long term foreign and local issuer credit ratings at 'CC' in Dec. 20, 2007. TENNECO INC: Completes Realignment of Some Foreign Subsidiaries --------------------------------------------------------------- Tenneco Inc. has completed the realignment of some of the company's foreign subsidiaries, a move designed to align the company's U.S. and European assets and revenues with liabilities and expenses in the appropriate local currencies. The company has formed a Luxembourg holding corporation, which has become the owner of certain key European entities. The realignment will also provide opportunities to reduce the company's cash taxes by about $4 million annually and allow Tenneco to accelerate the use of its U.S. net operating losses. The realignment of the European ownership structure is another step in Tenneco's financial strategy toward earning an investment grade debt rating. On Nov. 30, 2007, the company completed the refinancing of a portion of its 10-1/4% senior secured notes, due in 2013, with 8-1/8% senior unsecured notes due in 2015. This refinancing reduces interest expense by approximately $3 million annually. The subsequent European ownership structure realignment will allow Tenneco to shift a portion of its debt to Europe, which will better match the company's liabilities and expenses with its European assets and revenue. The company's European operations have improved since the original debt structure was established when the company became independent in 1999. The European revenue growth and improved profitability give the company flexibility to align its debt with its operations. "We are very pleased to complete these transactions, which represent strategic steps in our transition from a highly leveraged company to achieving an investment grade rating," Gregg Sherrill, Tenneco chairman and CEO, said. "This European structure change allows us to more appropriately apportion our debt." "Completing the refinancing in such a tough financing environment reflects investor confidence in Tenneco's financial position and long-term growth potential," Mr. Sherrill added. "Tenneco is well-positioned to generate significant growth in our emissions control business over the next five years, and beyond, as vehicle emissions standards tighten worldwide." Tenneco expects to record non-cash income tax charges of $66 million in fourth quarter 2007 related to the realignment, which will generate U.S. taxable income and utilize a portion of the U.S. net operating losses. About Tenneco Inc. Based in Lake Forest, Illinois, Tenneco Inc., (NYSE: TEN) -- http://www.tenneco.com/-- manufactures automotive ride and emissions control products and systems for both the original equipment market and aftermarket. Brands include Monroe(R), Rancho(R), and Fric Rot ride control products and Walker(R) and Gillet emission control products. The company has operations in Argentina, Japan, and Germany, with its European operations headquartered in Brussels, Belgium. The company has approximately 19,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Sept. 26, 2007, Fitch Ratings has placed Tenneco Inc.'s Issuer Default Ratings and securities ratings on Rating Watch Negative. Fitch confirmed these ratings: (i) IDR 'BB-'; (ii) Senior secured bank facility 'BB+'; (iii) Senior secured notes 'BB'; and (iv) Subordinated 'B'. TEXAS STUDENT: S&P Lowers 2001A Bonds' Rating to BB- from BB ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating to 'BB-' from 'BB' on Texas Student Housing Corp.'s series 2001A bonds, issued for the University of North Texas Project in Denton. The rating change reflects the project's barely breakeven financial operations, its continuing failure to meet the minimum coverage covenant on just the senior lien 2001A bonds, and continuing competition for off-campus student housing in Denton. The outlook is stable. "The 'BB-' rating reflects the project's speculative business fundamentals," said Standard & Poor's credit analyst Ms. Susan Carlson. "The project's inability to replenish the renewal and replacement account is of particular concern," she added. "Occupancy rates improved in 2006 and 2007, but still generated only enough net income to pay senior lien debt service. Net income did not meet the rate coverage covenant. Occupancy, according to management, fell slightly to 89% for the current 2008 budget year." TSHC used the series 2001 bond proceeds to acquire a housing project known as Jefferson Commons, located near the UNT campus in Denton. The project has since been renamed The Ridge at North Texas. TISHMAN SPEYER: S&P Maintains BB- Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating assigned to Tishman Speyer Real Estate D.C. Area Portfolio L.P. At the same time, S&P affirmed all other TSDC- related ratings, affecting $570 million in secured debt. The outlook is stable. "The ratings acknowledge TSDC's high quality portfolio of stabilized office properties that are well located within the still solid Washington, D.C., office market," said credit analyst Ms. Linda Phelps. "However, these strengths are tempered by TSDC's weak financial profile, characterized by a highly leveraged balance sheet and relatively weak coverage measures, as well as by a concentration of holdings in a single metropolitan market." S&P expects the Washington, D.C., office market to remain relatively stable, and do not anticipate any new development or acquisitions within the TSDC portfolio. While coverage measures will likely decline modestly in 2008 as TSDC renovates a handful of properties, S&P would expect coverage measures to improve in 2009. S&P would look for meaningful improvement in TSDC's leverage and coverage metrics to generate any upward ratings momentum. However, a decline in market conditions for the Washington, D.C., office market, or meaningful deterioration in currently weak coverage metrics, would put pressure on the ratings. TRUMP ENTERTAINMENT: Secures $500 Mil. Mortgage Credit Facility --------------------------------------------------------------- Trump Entertainment Resorts Inc. has originated a new $500 million first lien mortgage credit facility from Beal Bank Nevada. The transaction refinances all current first-lien debt for Trump Entertainment properties in Atlantic City, including the Trump Taj Mahal, Trump Plaza and Trump Marina. "From our initial conversation to the closing of the deal, we have continued to enjoy working with Beal Bank Nevada on this new credit facility, as we have in the past," Mark Juliano, Trump Entertainment chief executive officer, said. "We believe that the execution of this agreement in today's credit market is an endorsement of our strategic plan, and we are very pleased to have Beal Bank Nevada as a key partner." "This transaction represents another opportunity to do business with Trump Entertainment and we enjoy working with Donald Trump," Andy Beal, the founder and president of Beal Bank Nevada, said. "We are pleased to be able to provide this financing to Trump Entertainment." About Trump Entertainment Resorts Inc. Based in Atlantic City, New Jersey, Trump Hotels & Casino Resorts Inc. nka Trump Entertainment Resorts Inc. (NASDAQ:TRMP) -- http://www.trump.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The company and its debtor-affiliates filed for Chapter 11 bankruptcy protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005. The Plan took effect on May 20, 2005. * * * Trump Entertainment Resorts Inc.'s 8.5% Senior Secured Notes due 2015 hold Standard & Poor's Rating Services' B rating and Moody's Investors Service's Caa1 rating. TSG INC: Judge Cornish Confirms Chapter 11 Liquidation Plan ----------------------------------------------------------- The Honorable Tom R. Cornish of the United States Bankruptcy Court for the Eastern District of Oklahoma confirmed TSG Inc. and its debtor-affiliates' Amended Chapter 11 Plan of Liquidation. As reported in the Troubled Company Reporter on Oct. 9, 2007, under the Plan, Administrative Claims will be paid in full. All Secured Claims against the Debtors, except Xtria LLC's claim, will retain all of the liens and all of the security interests in the collateral securing their liens. Xtria LLC's secured claim will receive the collateral securing its claim under the Plan. Holders of Unsecured Claims, totaling approximately $13 million, will receive a pro rata distribution. Holders of Equity Interest and Subordinated Claims will not receive any distribution under the Plan. A full-text copy of TSG's Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=071008023525 Based in Oklahoma, TSG Inc. -- http://www.tsgincorporated.com/-- is a private health care company operating under the name, The Schuster Group. The company filed for Chapter 11 protection on Nov. 9, 2006 (Bankr. E.D. Okla. Case No. 06-80899). Cherish King Ralls, Esq., at Crowe & Dunlevy, represents the Debtor. Ross A. Plourde, Esq., at Mcafee & Taft, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from their creditors, it listed assets and debts between $1 million to $100 million. UBS MORTGAGE: Fitch Puts BB+ Rating on Class B Certificates ----------------------------------------------------------- Fitch has taken rating actions on these UBS Mortgage Asset Securitization Transactions Specialized Loan Trust mortgage pass- through certificates: MASTR SLT Series 2004-2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB'; -- Class M-4 rated 'BBB-', placed on Rating Watch Negative; -- Class B rated 'BB+', placed on Rating Watch Negative. The affirmations, affecting approximately $26.9 million of the outstanding certificates, are taken as a result of a stable relationship between credit enhancement and expected loss. Classes M-4 and B, representing $2.1 million of outstanding certificates, are placed on Rating Watch Negative because of current trends in the relationship between serious delinquency and credit enhancement. This transaction has 8.2% of the current collateral balance in foreclosure and REO. In addition, the 60+ DQ (including loans in bankruptcy, FC, and REO) is 15.44% of the current collateral balance, while the CE of the M-4 and B is currently 13.57% and 11.01, respectively. Fitch will continue to closely monitor this transaction over the next six months. If credit enhancement continues to deteriorate, further rating actions may be necessary. The collateral of the above transactions primarily consists of fixed-rate and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties. The loans were acquired by UBS from various originators. Wells Fargo Bank, N.A., is the master servicer for the transaction. The collateral initially included delinquent loans, performing bankruptcy loans, foreclosure loans, and loans that have had prior delinquencies. The pool factor (i.e., current mortgage loans outstanding as a percentage of the initial pool) for the above transaction is 35% and it is seasoned 36 months. UBS MORTGAGE: Fitch Puts Low-B Ratings on Two Certificates ---------------------------------------------------------- Fitch Ratings has taken rating actions on these UBS Mortgage Asset Securitization Transactions Adjustable Rate Mortgage Trust mortgage pass-through certificates: MARM Series 2004-15 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 rated 'B', placed on Rating Watch Negative. The affirmations, affecting approximately $196.6 million of the outstanding certificates, are taken as a result of a stable relationship between credit enhancement and expected loss. Class B-5, representing $1.8 million of outstanding certificates, is placed on Rating Watch Negative because of current trends in the relationship between serious delinquency and credit enhancement. This transaction has 3.1% of the current collateral balance in foreclosure and real estate-owned. In addition, the 60+ DQ (including loans in bankruptcy, FC, and REO) is 5.18% of the current collateral balance, while the CE of the B-5 is currently 1.21%. The transaction has experienced 0.03% of loss to date. Fitch will continue to closely monitor this transaction over the next six months. If credit enhancement continues to deteriorate, further rating actions may be necessary. The collateral of the above transaction consists of conventional, fully amortizing, 30-year fixed-rate and adjustable-rate, prime mortgage loans secured by first liens on one- to four-family residential properties. The loans were acquired by UBS from various originators. Wells Fargo Bank, N.A. is the master servicer for the transaction. VESTA INSURANCE: Florida Select Files Plan of Liquidation --------------------------------------------------------- Florida Select Insurance Agency, Inc., a debtor-affiliate of Vesta Insurance Group, Inc., delivered to the U.S. Bankruptcy Court for the Northern District of Alabama a Plan of Liquidation and an accompanying Disclosure Statement on Dec. 19, 2007. The Plan calls for the liquidation of all of Florida Select's assets and the distribution of the proceeds to the Debtor's creditors, FSIA President Ralph Brotherton relates. Florida Select's principal assets are cash in bank accounts, some items of furniture and various claims against persons or entities associated or affiliated with the Debtor. Florida Select is a wholly owned subsidiary of J. Gordon Gaines, Inc., the management company within the Vesta Insurance Group. The Debtor is in the business of serving as a licensed managing general agent within an insurance enterprise. The salient features of the Plan, Mr. Brotherton points out, are: -- the liquidation of Florida Select's remaining core assets; -- the investigation, evaluation and pursuit of Florida Select's claims against insiders, affiliates and independent third parties; -- the satisfaction of outstanding claims against Florida Select in accordance with the claims' classifications and order of priority; -- the pro-rata distribution of available funds among a class of allowed claims in the event of insufficiency of the funds; -- the evaluation of claims and shareholder interests asserted against Florida Select; -- the fair treatment of executory contracts and leases; and -- the appointment of a Plan Trustee to take necessary actions to implement and effectuate the Plan. Post-Confirmation Structure Upon the effective date of the plan, all of the estate property will remain vested in Florida Select and will be subject to use, sale, lease and other disposition as provided for in the plan. The automatic stay will remain in place. Florida Select will continue to exist after the effective date in accordance with the laws of the State of Florida and will continue to have full corporate authority to engage in lawful activities as a corporation under Florida laws. Existing shareholder interests in Florida Select will be canceled, and new interests will be issued solely to the plan trustee, who will own and hold all equity interests in the Debtor for the beneficiaries under the Plan. The plan trustee, in his sound business judgment, will conduct the limited business of Florida Select. Executory Contracts and Unexpired Leases All executory contracts and unexpired leases that have not been assumed or assigned will be deemed rejected by Florida Select upon confirmation of the plan. The provisions of each contract or lease to be assumed under the plan, which are or may be in default, will be satisfied solely by cure. To the extent any Insurance Policy is deemed an executory contract, Florida Select will assume that Insurance Policy effective as of the confirmation date. The Debtor is not in default under any Insurance Policy and therefore, will not make any cure payments with the assumption of the policies. A full-text copy of Florida Select's Plan of Liquidation is available for free at: http://bankrupt.com/misc/FSIA_LiquidationPlan.pdf A full-text copy of Florida Select's Disclosure Statement is available for free at: http://bankrupt.com/misc/FSIA_DisclosureStatement.pdf About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines Inc. is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered an order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. On Oct. 11, 2006, both Vesta and Gaines filed separate Plans of Liquidation and Disclosure Statements. They filed an amended Plan on Nov. 7, 2006, and a Second Amended Plan on Nov. 10, 2006. The Court approved the Disclosure Statements of Vesta and Gaines on Nov. 10, 2006. On Dec. 22, 2006, the Court confirmed the Third Amended Plans of Vesta and Gaines. Florida Select Insurance Agency Inc., an affiliate, filed for chapter 11 protection on April 24, 2007 (Bankr. N.D. Ala. Case No. 07-01849). Rufus Dorsey, IV, Esq., at Parker Hudson Rainer & Dobbs LLP, represents Florida Select. FSIA's exclusive period to file a plan of reorganization expires on Dec. 20, 2007. (Vesta Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) VONAGE HOLDINGS: Settles AT&T Patent Dispute; Agrees to Pay $39MM ----------------------------------------------------------------- Vonage Holdings Corp. and AT&T have entered into a definitive agreement to settle their patent dispute. The companies had agreed in principle to a settlement on Nov. 7, 2007. The company reached an agreement in principle with AT&T to settle the IP litigation suit which was filed on Oct. 17, 2007. Specifically, AT&T filed suit against Vonage in the District Court, Western District of Wisconsin, concerning Patent No. 6,487,200, entitled "Packet Telephone System". The parties will work diligently to finalize the specific terms of the settlement agreement. The general terms being discussed by the parties would require Vonage to pay $39 million over five years. AT&T would agree to dismiss the lawsuit against Vonage, and Vonage would agree to dismiss a case against AT&T which is also outstanding. If negotiations of a definitive settlement agreement fail, then Vonage intends to vigorously defend itself in this matter. 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. * * * At Sept. 30, 2007, Vonage Holdings Corp.'s consolidated balance sheet showed $665.8 million in total assets and $728.7 million in total liabilities, resulting in a $62.9 million total shareholders' deficit. WAMU ASSET: Fitch Assigns Low-B Ratings on Four Certificates ------------------------------------------------------------ Fitch Ratings affirms $264.4 million and downgrades $783.2 million on WaMu asset-backed certificates series 2007-HE3 mortgage pass- through certificates. Break Loss percentages and Loss Coverage Ratios for each class is included with these rating actions: WaMu 2007-HE3 -- $354.1 million class I-A1 downgraded to 'AA-' from 'AAA' (BL: 34.89, LCR: 1.90); -- $127.5 million class II-A1 affirmed at 'AAA' (BL: 66.36, LCR: 3.62); -- $51.4 million class II-A2 affirmed at 'AAA' (BL: 39.34, LCR: 2.14); -- $85.4 million class II-A3 affirmed at 'AAA' (BL: 37.28, LCR: 2.03); -- $33 million class II-A4 downgraded to 'AA-' from 'AAA' (BL: 34.94, LCR: 1.90); -- $186.9 million class II-A5 downgraded to 'AA-' from 'AAA' (BL: 34.94, LCR: 1.90); -- $53.5 million class M-1 downgraded to 'A+' from 'AA+' (BL: 30.05, LCR: 1.64); -- $37.4 million class M-2 downgraded to 'A-' from 'AA' (BL: 26.56, LCR: 1.45); -- $21.8 million class M-3 downgraded to 'BBB+' from 'AA-' (BL: 24.47, LCR: 1.33); -- $19 million class M-4 downgraded to 'BBB' from 'A+' (BL: 22.56, LCR: 1.23); -- $19 million class M-5 downgraded to 'BBB-' from 'A' (BL: 20.60, LCR: 1.12); -- $14.9 million class M-6 downgraded to 'BB' from 'A-' (BL: 18.93, LCR: 1.03); -- $16.1 million class M-7 downgraded to 'B' from 'BBB+' (BL: 17.09, LCR: 0.93); -- $10.9 million class M-8 downgraded to 'B' from 'BBB' (BL: 15.96, LCR: 0.87); -- $16.1 million class M-9 downgraded to 'B' from 'BBB-' (BL: 14.68, LCR: 0.8). Deal Summary -- Originators: 100% WaMu; -- 60+ day Delinquency: 9.17%; -- Realized Losses to date (% of Original Balance): 0.08%; -- Expected Remaining Losses (% of Current Balance): 18.35%; -- Cumulative Expected Losses (% of Original Balance): 17.60%. * FTI Consulting Promotes Ten Exec. to Senior Managing Director --------------------------------------------------------------- FTI Consulting Inc. promoted ten executives to the title of senior managing director. "These ten outstanding professionals embody FTI's core values- integrity, quality, tenacity and relationships," Dominic DiNapoli, executive vice president and chief operating officer, said. "They are recognized by their managers, peers and clients for their exemplary leadership in the areas of client service, business development and team development. "We look forward to their continued contributions as we continue to grow and execute our business strategy." The new senior managing directors are: a) Scott Bingham, Corporate Finance, Atlanta. As a member of the Transaction Advisory Services group of FTI Corporate Finance, Mr. Bingham has assisted both strategic and financial buyers throughout the deal continuum, including the identification of potential targets, due diligence, contract structuring and negotiation and transition planning. In addition, he has experience in advising clients on technical deal specifications, including leverage recapitalizations, stock versus asset acquisitions and taxation planning considerations. His prior industry experience spans several sectors including healthcare, manufacturing and technology. At FTI, Mr. Bingham has taken a lead role in developing FTI's Healthcare diligence platform. Prior to joining FTI, Scott was the business development leader for PricewaterhouseCoopers in Atlanta, and the U.S. practice leader of their healthcare transaction consulting practice. b) Jim Braley, Corporate Finance, Brentwood. Mr. Braley is an experienced turnaround project leader in the FTI Healthcare group with particular expertise working with hospital boards of directors, well as medical staffs and hospital CEOs. Mr. Braley serves as a project leader, directing teams that assess, advise and actively guide hospitals in improving competitiveness and viability. Mr. Braley has worked with hospitals ranging from small rural facilities to academic medical centers. Prior to joining FTI Consulting, Mr. Braley has served as regional vice president for Quorum Health Services and also served as a multi-facility manager for the largest manager of non-profit hospitals in the United States. In addition he served as CEO for Huntsville Memorial Hospital in Huntsville, TX and Smith County Memorial Hospital in Carthage, Tennessee, well as being assistant administrator and human resource director at West Paces Ferry Hospital in Atlanta. Mr. Braley is a Fellow in the American College of Health Care Executives. c) Michael J. Buchanan, Forensic and Litigation Consulting, Dallas. Mr. Buchanan provides statistical and economic analysis to clients involved in litigation, arbitration, mediation and other contexts in which parties are engaged in complex business disputes. Michael is the Labor and Employment product leader of FTI's Forensic and Litigation Consulting segment. Mr. Buchanan, an applied econometrician and sports economist, has significant experience in dispute matters and in dealing with large data sets, statistical modeling and forecasting. In addition to Mr. Buchanan's widespread industry experience, his engagement experience has included testifying at trial, deposition and through mediation as an expert witness. Mr. Buchanan has provided advisory and expert witness services to clients involved in labor/employment, product liability, intellectual property, lost profits and lost earnings matters. d) Jayson S. Dukes, Forensic and Litigation Consulting, New York. Mr. Dukes has provided dispute advisory and forensic accounting services to attorneys and corporate clients for more than 16 years. He has extensive experience in the pharmaceutical and healthcare industries. Mr. Dukes has advised clients on a variety of governmental regulatory matters, including matters concerning Medicare and Medicaid reimbursement. He also has assisted in negotiating resolutions with many government agencies, including the Department of Justice, the United States Attorney's Office, and the Center for Medicare and Medicaid Services. In the pharmaceutical industry, Mr. Dukes has helped clients address government investigations and congressional and regulatory inquiries. e) David A. Hile, Forensic and Litigation Consulting, Nashville. Mr. Hile has over 18 years of experience providing forensic, litigation, operational, strategic and financial advisory consulting services to the healthcare industry. Mr. Hile's clients have included large academic medical centers, integrated health systems, national payor organizations, HMO's, specialty hospitals and providers, hospital districts, physician practices and independent practice associations. He has worked extensively with external and internal counsel, well as management on financial, forensic, economic and accounting matters as they relate to the facts and the determination of values in litigation and dispute resolution, as well as assisting clients with DOJ, OIG, IRS and internal whistleblower investigations. f) Erica Massaro-Hales, Forensic and Litigation Consulting, Atlanta. Ms. Massaro-Hales has extensive experience in analyzing and transforming legal themes and arguments into compelling visual presentations for attorneys and their clients in major civil and criminal litigation matters. She consults with trial teams on the identification of key case strategies and the use of demonstrative evidence and multimedia technology in all litigation settings. Ms. Massaro-Hales has worked on hundreds of cases in her career with diverse needs ranging from graphics to courtroom technology. Prior to entering the field of trial services and litigation consulting, Ms. Massaro-Hales practiced law for over six years specializing in complex fraud and criminal cases. She is also engaged in all phases of litigation, including witness preparation, jury selection, presentation of evidence, and mock and direct cross examinations. g) Steve Nathan, Corporate Finance, Brentwood. Mr. Nathan is a senior executive for FTI Cambio, the turnaround solutions practice of FTI Healthcare, and has worked on various projects ranging from short-term consulting projects to providing interim management for comprehensive turnaround projects to providing testimony in bankruptcy court. He has led two large, complex turnaround projects: Wishard Health Services and Methodist Hospitals of Gary, Indiana. Prior to joining FTI Cambio, Mr. Nathan was the CEO of American Red Cross Blood Service (Florida), COO of Jackson Memorial Hospital and COO of Parkland Memorial Hospital. He has also worked as a hospital CFO, first line supervisor and budget director. h) Ed Pfromer, Technology, Denver. Mr. Pfromer will lead the management of the FTI Partner Program, a strategic alliance and channels program, and is responsible for overseeing all aspects of marketing for the Technology segment. He has 20 years of experience in developing and delivering cost-effective, large-scale software development and information technology solutions. Upon joining FTI in 2005, Mr. Pfromer provided litigation and technical consulting to several of FTI's top clients and government agencies, including the New York City Law Department. i) John Siedlecki, Corporate Finance, Brentwood. Mr. Siedlecki is a senior executive for FTI Cambio, and has 23 years of experience in healthcare-related industries. Mr. Siedlecki helps to develop and provide operations improvement, turnaround and bond covenant violation solutions for underperforming hospitals and health systems. He also serves as a strategic advisor to hospitals seeking a capital partner. His expertise includes strategic and business planning, market plan development and implementation, and merger and acquisition. Mr. Siedlecki has served as a member of senior management teams and as an officer of companies in the healthcare sector, and has also provided litigation support to attorneys representing a major healthcare system in a legal dispute. j) Sean Windsorm, Corporate Finance, New York. Mr. Windsor, who is with FTI's Corporate Finance Transaction Advisory Services group, has more than 20 years of financial advisory experience with international consulting firms, investment banks and private industry. He has extensive experience providing financial and operating transaction support, including business enterprise valuations, the identification of value drivers and deal breakers critical to the investment decision, acquisition structuring advice, quality of earnings and related cash flows assessments, quality of balance sheet, working capital, capital expenditure requirements, financing and negotiating strategies and purchase price allocations. Mr. Windsor has particular expertise in the energy and power sector where he leads financial due diligence deals and post-transaction projects. About FTI Consulting FTI Consulting (NYSE: FCN) -- http://www.fticonsulting.com/-- is a business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 2,400 professionals located in most major business centers in the world, the company works closely with clients every day to anticipate, illuminate, and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring. * Squire Sanders Enhances Restructuring and Insolvency Team ----------------------------------------------------------- Squire Sanders & Dempsey L.L.P. has enhanced its international legal team that provides on-the-ground expertise to clients' businesses in Asia, Europe, Latin America or the United States. The team is coordinated by Phoenix-based Thomas J. Salerno and Andrew O. Visintin, who is managing partner of the firm's London office. The firm's overall restructuring and insolvency practice is led by Stephen D. Lerner. "Our global clientele rely on Squire Sanders to help their business thrive and to protect their investment in the business," chairman R. Thomas Stanton, said. "Sophisticated, thorough understanding of and expertise in international insolvency is an essential part of providing that protection." "Tom and Andrew have decades of experience representing clients around the world," Mr. Stanton said. "Tom is widely recognized for his pioneering work in international insolvency counseling countries such as the Czech Republic, Costa Rica and the Dominican Republic to revise insolvency legislation. Andrew has extensive experience with complex cross-border restructuring in the United Kingdom, Germany and the United States." Squire Sanders' international insolvency group includes more than 40 lawyers working in 11 countries including China, six countries in Continental Europe, the United Kingdom, Brazil, the Dominican Republic and the United States. "Members of this talented team have been involved in landmark transactions in Germany, complex privatizations in Hungary and global representations in some of the most significant restructurings in US history for clients with extensive European and Latin American subsidiaries," Mr. Salerno said. Mr. Salerno has worked on restructurings in the United States, the United Kingdom, Germany, France, Switzerland and the Czech and Slovak Republics. He is a member of the United Nations Commission on International Trade Law working group's Insolvency Reform Project, completed earlier this year. Mr. Salerno, who teaches comparative international insolvency at the University of Salzburg, is listed in the 2007 edition of The International Who's Who of Insolvency and Restructuring Lawyers. Mr. Visintin represents a number of UK insolvency practitioners from the "Big Four" and medium-ranked accountancy practices. He also has extensive experience in the asset-based lending and receivables financing sector advising clients on restructuring and financing structures. About Squire Sanders Founded in 1890, Squire, Sanders & Dempsey L.L.P. -- http://www.ssd.com/-- has more than 850 lawyers in 30 offices and 14 countries around the world. Founded in 1890, Squire, Sanders has one of the strongest integrated global platforms and a longstanding one-firm philosophy, Squire Sanders provides sophisticated seamless legal counsel. Offices in the Americas are located in Cincinnati, Cleveland, Columbus, Houston, Los Angeles, Miami, New York, Palo Alto, Phoenix, San Francisco, Tallahassee, Tampa, Tysons Corner, Washington DC, West Palm Beach, Caracas, Rio de Janeiro and Santo Domingo. In Europe, offices are in Bratislava, Brussels, Budapest, Frankfurt, London, Moscow, Prague and Warsaw. In Asia, offices are in Beijing, Hong Kong, Shanghai and Tokyo. Associated offices include Bucharest, Buenos Aires, Dublin, Kyiv and Santiago. * William Yoo Joins Fried Frank-Asia's Real Estate Equity Team -------------------------------------------------------------- William Yoo, a resident in Hong Kong, has joined Fried Frank's Asia practice. William specializes in both real estate equity and debt transactions and corporate finance. His real estate work includes structuring equity investments for off-shore investors. William has worked extensively with banks, financial institutions, private equity funds and investors, both based in Asia and looking to expand into Asia. He joins from Paul Hastings, Tokyo. "We believe that the addition of William to our office in Hong Kong will particularly enhance our capacity to service US equity investors and lenders seeking to expand in the Asian Market," Jon Mechanic, head of Fried Frank's real estate practice, said. "William's history of acting for equity investors, lenders and borrowers enables us to support our clients effectively in their full range of legal needs in the market," managing partner, Justin Spendlove, added. "The market in Asia has experienced phenomenal growth over the past few years," Valerie Ford Jacob, chairperson, said. "William further strengthens the depth of our team and growing presence in the region." About Fried Frank Harris Shriver Fried, Frank, Harris, Shriver & Jacobson LLP -- http://www.friedfrank.com/-- is an international law firm with more than 600 attorneys in offices in New York, Washington, D.C., London, Paris, Frankfurt, Hong Kong and Shanghai. Fried Frank lawyers regularly represent major investment banking firms, private equity houses and hedge funds, as well as many of the largest companies in the world. The Firm offers legal counsel on M&A, private equity, asset management, capital markets and corporate finance matters, white-collar criminal defense and civil litigation, securities regulation, compliance and enforcement, government contracts, environmental law and litigation, real estate, tax, bankruptcy, antitrust, benefits and compensation, intellectual property and technology, international trade, and trusts and estates. The firm has an association with Huen Wong & Co. in Hong Kong. * S&P Cuts Ratings on 88 Tranches 20 U.S. Cash Flow and CDOs ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 88 tranches from 20 U.S. cash flow and hybrid collateralized debt obligation transactions. At the same time, S&P affirmed its ratings on another 55 tranches from these transactions, and removed two ratings from CreditWatch negative and affirmed them at their current rating level. The downgraded tranches have a total issuance amount of $5.458 billion, and all are from CDOs of asset- backed securities collateralized by structured finance securities, including U.S. residential mortgage-backed securities. The ratings on 23 of the downgraded tranches remain on CreditWatch negative, indicating a significant likelihood of further downgrades. At the same time, S&P removed from CreditWatch with negative implications its rating on the A-1 tranche from Sharps CDO I Ltd. The rating had erroneously been placed on CreditWatch negative on Dec. 19, 2007. The tranche is insured by CIFG and continues to be rated 'AAA'. In 2007 to date, including the CDO tranches listed below and including actions on both publicly and confidentially rated tranches, S&P has lowered its ratings on 1,078 tranches from 353 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the residential mortgage market and credit deterioration of U.S. RMBS. In addition, 682 ratings from 163 transactions are currently on CreditWatch negative for the same reasons. In all, the affected tranches represent an issuance amount of $68.163 billion. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Additionally, Standard & Poor's will continue to review its current criteria assumptions in light of the recent performance of RMBS assets and CDOs. Rating and CreditWatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- Aardvark ABS CDO 2007-1 B AA/Watch Neg AA Aardvark ABS CDO 2007-1 C BBB/Watch Neg A/Watch Neg Aardvark ABS CDO 2007-1 D BB/Watch Neg BBB/Watch Neg Aardvark ABS CDO 2007-1 Sub notes CCC+//Watch Neg BB+/Watch Neg Altius III Fdg Ltd. D BBB- BBB/Watch Neg Altius III Fdg Ltd. E BB BB+/Watch Neg Broderick CDO 3 Ltd. A-1 AAA/Watch Neg AAA Broderick CDO 3 Ltd. B A+/Watch Neg AA/Watch Neg Broderick CDO 3 Ltd. C BB+/Watch Neg A/Watch Neg Broderick CDO 3 Ltd. D CC BBB/Watch Neg Broderick CDO 3 Ltd. E CC BB+/Watch Neg Cairn Mezz ABS CDO IV Ltd. A2 AA- AA Cairn Mezz ABS CDO IV Ltd. A3 BBB- A Cairn Mezz ABS CDO IV Ltd. B1 B- BBB/Watch Neg Cairn Mezz ABS CDO IV Ltd. B2 CCC- BBB-/Watch Neg Cairn Mezz ABS CDO IV Ltd. A1J AA+ AAA Charles River CDO I, Ltd. B-F BB+ BBB/Watch Neg Charles River CDO I, Ltd. B-V BB+ BBB/Watch Neg Charles River CDO I, Ltd. C B+ BB/Watch Neg Delphinus CDO 2007-1 Ltd. A-1C AA+ AAA/Watch Neg Delphinus CDO 2007-1 Ltd. A-2 AA+ AAA/Watch Neg Delphinus CDO 2007-1 Ltd. A-3 A+ AAA/Watch Neg Delphinus CDO 2007-1 Ltd. B BBB+ AA/Watch Neg Delphinus CDO 2007-1 Ltd. C BBB- A/Watch Neg Delphinus CDO 2007-1 Ltd. D-1 B+ BBB+/Watch Neg Delphinus CDO 2007-1 Ltd. D-2 CCC+ BBB-/Watch Neg Delphinus CDO 2007-1 Ltd. D-3 CCC BBB-/Watch Neg Delphinus CDO 2007-1 Ltd. E CC BB/Watch Neg Duke Funding VI, Ltd. A2 A+ AA Duke Funding VI, Ltd. A3 BB A/Watch Neg Duke Funding VI, Ltd. BF CCC+ BBB/Watch Neg Duke Funding VI, Ltd. BV CCC+ BBB/Watch Neg Duke Funding VI, Ltd. Comp l sec CCC- BBB/Watch Neg Duke Funding XIII Ltd. A1J AA+ AAA/Watch Neg Duke Funding XIII Ltd. A2J A+ AA-/Watch Neg Duke Funding XIII Ltd. A2S AA- AA/Watch Neg Duke Funding XIII Ltd. A3 BBB A/Watch Neg Duke Funding XIII Ltd. B1 BBB- BBB+/Watch Neg Duke Funding XIII Ltd. B2 BB+ BBB/Watch Neg Hudson Mezzanine Fndg 2006-1 C BBB/Watch Neg A/Watch Neg Hudson Mezzanine Fndg 2006-1 D B/Watch Neg BBB/Watch Neg Hudson Mezzanine Fndg 2006-1 E CC BB+/Watch Neg Hudson Mezzanine Fndg 2006-2 B AA- AA+/Watch Neg Hudson Mezzanine Fndg 2006-2 C BBB+ A+/Watch Neg Hudson Mezzanine Fndg 2006-2 D B+ BBB+/Watch Neg Hudson Mezzanine Fndg 2006-2 E CCC BBB-/Watch Neg Istana High Grade ABS CDO I Ltd. C BB A/Watch Neg Istana High Grade ABS CDO I Ltd. D BB- BBB/Watch Neg Istana High Grade ABS CDO I Ltd. E B BB+/Watch Neg Kleros Preferred Fndg V PLC A-3 AAA/Watch Neg AAA Kleros Preferred Fndg V PLC B AA/Watch Neg AA Kleros Preferred Fndg V PLC C A/Watch Neg A Kleros Preferred Fndg V PLC D A-/Watch Neg A- Kleros Preferred Fndg V PLC E BBB-/Watch Neg BBB/Watch Neg Longshore CDO Fndg 2007-3 Ltd. D BBB-/Watch Neg BBB/Watch Neg Markov CDO I Ltd. A-0 AAA/Watch Neg AAA Markov CDO I Ltd. A-1 AA+/Watch Neg AAA/Watch Neg Markov CDO I Ltd. A-2 AA+/Watch Neg AAA/Watch Neg Markov CDO I Ltd. A-3 AA+/Watch Neg AAA/Watch Neg Markov CDO I Ltd. B A+/Watch Neg AA/Watch Neg Markov CDO I Ltd. C-1 BB/Watch Neg A/Watch Neg Markov CDO I Ltd. C-2 BB/Watch Neg A/Watch Neg Markov CDO I Ltd. C ComboNts BB/Watch Neg A/Watch Neg Markov CDO I Ltd. D CC BBB/Watch Neg Markov CDO I Ltd. D ComboNts CC BBB/Watch Neg Markov CDO I Ltd. E CC BB+/Watch Neg Markov CDO I Ltd. RA Nts AA+/Watch Neg AAA/Watch Neg Markov CDO I Ltd. S AAA/Watch Neg AAA North Cove CDO II Ltd. A AA+ AAA North Cove CDO II Ltd. B A AA North Cove CDO II Ltd. C BBB+ AA-/Watch Neg North Cove CDO II Ltd. D BB A-/Watch Neg North Cove CDO II Ltd. E BB- BBB/Watch Neg Sharps CDO I Ltd. A-1 AAA AAA/Watch Neg STAtic ResidenTial CDO 2005-C Ltd B AA AA+/Watch Neg STAtic ResidenTial CDO 2005-C Ltd C A+ AA-/Watch Neg STAtic ResidenTial CDO 2005-C Ltd D BBB- A-/Watch Neg STAtic ResidenTial CDO 2005-C Ltd E BB+ BBB/Watch Neg Structured Fin. Advisors ABS CDO B BBB- A Structured Fin. Advisors ABS CDO C CCC- BB+/Watch Neg Structured Fin. Advisors ABS CDO Pref Shrs CC B/Watch Neg South Coast Funding VII Ltd. A-2 AA+ AAA South Coast Funding VII Ltd. B AA- AA South Coast Funding VII Ltd. C A- A South Coast Funding VII Ltd. D-1A BB BBB South Coast Funding VII Ltd. D-1B BB BBB South Coast Funding VII Ltd. D-2 BB BBB South Coast Funding VII Ltd. Pref shrs CCC- BB+/Watch Neg Tricadia CDO 2006-7, Ltd. A-1 funded AAA/Watch Neg AAA Tricadia CDO 2006-7, Ltd. A-1 unfd AAA/Watch Neg AAA Tricadia CDO 2006-7, Ltd. A-2 AA-/Watch Neg AAA/Watch Neg Tricadia CDO 2006-7, Ltd. B BBB/Watch Neg AA/Watch Neg Tricadia CDO 2006-7, Ltd. C BB-/Watch Neg A/Watch Neg Tricadia CDO 2006-7, Ltd. D CCC+/Watch Neg BBB/Watch Neg Tricadia CDO 2006-7, Ltd. E CCC-/Watch Neg BBB-/Watch Neg Tricadia CDO 2006-7, Ltd. F CC BB/Watch Neg Vertical ABS CDO 2007-2 Ltd. A2 AA AA/Watch Neg Vertical ABS CDO 2007-2 Ltd. A3 BBB+ A/Watch Neg Vertical ABS CDO 2007-2 Ltd. B BB+ BBB/Watch Neg Ratings Affirmed Transaction Class Rating ----------- ----- ------ Aardvark ABS CDO 2007-1 A-1 A-1 Aardvark ABS CDO 2007-1 A-2 AAA Altius III Fdg Ltd. A-1a AAA Altius III Fdg Ltd. A-1a-2 AAA Altius III Fdg Ltd. A-1a-3 AAA Altius III Fdg Ltd. A-1b-1B AAA Altius III Fdg Ltd. A-1b-1F AAA Altius III Fdg Ltd. A-1b-V AAA Altius III Fdg Ltd. A-2 AAA Altius III Fdg Ltd. B AA Altius III Fdg Ltd. C A Altius III Fdg Ltd. S AAA Cairn Mezz ABS CDO IV Ltd. A1S AAA Charles River CDO I, Ltd. A-1A AAA Charles River CDO I, Ltd. A-1B AAA Charles River CDO I, Ltd. A-2F AA Charles River CDO I, Ltd. A-2V AA Charles River CDO I, Ltd. Combo sec. AAA Delphinus CDO 2007-1 Ltd. A-1A AAA Delphinus CDO 2007-1 Ltd. A-1B AAA Delphinus CDO 2007-1 Ltd. S AAA Duke Funding VI, Ltd. A1J AAA Duke Funding VI, Ltd. A1S AAA Duke Funding XIII Ltd. 2 combo A Duke Funding XIII Ltd. I combo AAA Duke Funding XIII Ltd. X AAA Hudson Mezzanine Funding 2006-1 A-b AAA Hudson Mezzanine Funding 2006-1 A-f AAA Hudson Mezzanine Funding 2006-1 B AA Duke Funding XIII Ltd. A1S VFN AAA Hudson Mezzanine Funding 2006-1 S AAA Hudson Mezzanine Funding 2006-1 UnfdSrSwp AAAsrb Hudson Mezzanine Funding 2006-2 A-1 AAA Hudson Mezzanine Funding 2006-2 A-2 AAA Hudson Mezzanine Funding 2006-2 S AAA Istana High Grade ABS CDO I Ltd. A-1 AAA Istana High Grade ABS CDO I Ltd. A-2 AAA Istana High Grade ABS CDO I Ltd. A-3 AAA Istana High Grade ABS CDO I Ltd. A-4 AAA Istana High Grade ABS CDO I Ltd. B AA Kleros Preferred Funding V PLC A-1 AAA Kleros Preferred Funding V PLC A-2 AAA Longshore CDO Funding 2007-3 Ltd. A-1 AAA Longshore CDO Funding 2007-3 Ltd. A-2 AAA Longshore CDO Funding 2007-3 Ltd. A-3 AAA Longshore CDO Funding 2007-3 Ltd. B AA South Coast Funding VII Ltd. A-1ANV AAA South Coast Funding VII Ltd. A-1AV AAA South Coast Funding VII Ltd. A-1B AAA STAtic ResidenTial CDO 2005-C Ltd. A-1 AAA STAtic ResidenTial CDO 2005-C Ltd. A-2 AAA Structured Fin. Advisors ABS CDO A AAA III Ltd. Vertical ABS CDO 2007-2 Ltd. A1J AAA Vertical ABS CDO 2007-2 Ltd. A1S AAA Vertical ABS CDO 2007-2 Ltd. X AAA Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Broderick CDO 3 Ltd. A-2 AAA/Watch Neg Broderick CDO 3 Ltd. A-3 AAA/Watch Neg Broderick CDO 3 Ltd. A-4 AAA/Watch Neg Broderick CDO 3 Ltd. A-5 AAA/Watch Neg Longshore CDO Funding 2007-3 Ltd. C A/Watch Neg Tricadia CDO 2006-7, Ltd. A-X AAA/Watch Neg * S&P Downgrades 14 Tranches' Ratings from 10 U.S. CDOs ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 14 tranches from 10 U.S. synthetic CDO of ABS transactions following the downgrade of 1,292 classes of U.S. residential mortgage-backed securities backed by U.S. first-lien Alternative A (Alt-A) mortgage collateral and 793 classes of RMBS backed by U.S. closed-end second-lien collateral. The downgraded tranches have a total issuance amount of $464.62 million, and all are from CDOs of asset-backed securities collateralized by structured finance securities, including U.S. RMBS. The CDO transactions were all issued either in 2006 or 2007. All 10 CDOs are mezzanine structured finance CDOs of ABS, collateralized by 'A' and 'BBB' rated tranches of RMBS and other structured finance securities. S&P reviewed the ratings on all of the classes that downgraded to determine the appropriate rating action. If the synthetic rated overcollateralization ratio was lower than 100% at the current date and at a 90-day-forward projected date, S&P lowered the rating on the tranche until the SROC ratio was at or above 100% at its lower rating level. Ratings List Abacus 2006-14 Ltd. Rating ------ Class To From ----- -- ---- B BB+ BBB- C B+ BB- Coriolanus Ltd. Series 39 Rating ------ Class To From ----- -- ---- Tranche BB- BB+ Eirles Two Ltd. Rating ------ Class To From ----- -- ---- Series 252 BB BB+ Eirles Two Ltd. Rating ------ Class To From ----- -- ---- Series 257 BBB BBB+ Series 259 BBB- BBB Series 264 BB- BB Ixion PLC Series 4, 5, 6, & 7 Rating ------ Class To From ----- -- ---- 4 BB+ BBB- 7 BB+ BBB- Ixion PLC Series Syrah 2006-11 (16) Rating ------ Class To From ----- -- ---- 16 A+ AA- Ixion PLC Series 29 & 30 Rating ------ Class To From ----- -- ---- K BB- BB Magnolia Finance II PLC Rating ------ Class To From ----- -- ---- Notes AA AA+ Rutland Rated Investments Series Millbrook 2006-4 (32) Rating ------ Class To From ----- -- ---- B BBB BBB+ SPGS SPC Series ABSpoke 2006-IIC Rating ------ Class To From ----- -- ---- Var notes BBB- BBB * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Great Kings Cafe, Inc. Bankr. S.D. Fla. Case No. 07-21271 Chapter 11 Petition filed December 19, 2007 See http://bankrupt.com/misc/flsb07-21271.pdf In Re Lukasz Remiasz Bankr. N.D. Ill. Case No. 07-23899 Chapter 11 Petition filed December 19, 2007 See http://bankrupt.com/misc/ilnb07-23899.pdf In Re Atrium of Evansville, L.L.C. Bankr. S.D. Ind. Case No. 07-71561 Chapter 11 Petition filed December 19, 2007 See http://bankrupt.com/misc/insb07-71561.pdf In Re Silver Streak Trucks & Equipment, Inc. Bankr. E.D. Ky. Case No. 07-10522 Chapter 11 Petition filed December 19, 2007 See http://bankrupt.com/misc/kyeb07-10522.pdf In Re Perry J. Lishman Bankr. N.D. Miss. Case No. 07-14628 Chapter 11 Petition filed December 19, 2007 See http://bankrupt.com/misc/msnb07-14628.pdf In Re Knoxville Restaurant Ventures, L.L.C. Bankr. W.D. Penn. Case No. 07-12016 Chapter 11 Petition filed December 19, 2007 See http://bankrupt.com/misc/pawb07-12016.pdf In Re Theresa Marie Mosley Bankr. D. Nev. Case No. 07-18575 Chapter 11 Petition filed December 19, 2007 Filed as Pro Se In Re X.S.B., L.L.C. Bankr. W.D. Tenn. Case No. 07-32758 Chapter 11 Petition filed December 19, 2007 See http://bankrupt.com/misc/tnwb07-32758.pdf In Re Preferred Surgeon's Assistants, L.L.C. Bankr. N.D. Ga. Case No. 07-81422 Chapter 11 Petition filed December 20, 2007 See http://bankrupt.com/misc/ganb07-81422.pdf In Re Ryme, Inc. Bankr. N.D. Iowa Case No. 07-02363 Chapter 11 Petition filed December 20, 2007 See http://bankrupt.com/misc/ianb07-02363.pdf In Re Le Parisien, L.L.C. Bankr. D. Minn. Case No. 07-44738 Chapter 11 Petition filed December 20, 2007 See http://bankrupt.com/misc/mnb07-44738.pdf In Re Southland Investments, Inc. Bankr. E.D. Tenn. Case No. 07-34421 Chapter 11 Petition filed December 20, 2007 See http://bankrupt.com/misc/tneb07-34421.pdf In Re Clarkston Hines, Inc. Bankr. N.D. Ga. Case No. 07-81519 Chapter 11 Petition filed December 21, 2007 See http://bankrupt.com/misc/ganb07-81519.pdf In Re International Art Galleries, L.L.C. Bankr. D. Hawaii Case No. 07-01363 Chapter 11 Petition filed December 21, 2007 See http://bankrupt.com/misc/hib07-01363.pdf In Re Roslindale Gas & Mini Mart, Inc. Bankr. D. Mass. Case No. 07-18044 Chapter 11 Petition filed December 21, 2007 See http://bankrupt.com/misc/mab07-18044.pdf In Re William A. Burch Bankr. D. Md. Case No. 07-23044 Chapter 11 Petition filed December 21, 2007 See http://bankrupt.com/misc/mdb07-23044.pdf In Re Radiance Medspa of Bethesda, L.L.C. Bankr. D. Md. Case No. 07-23050 Chapter 11 Petition filed December 21, 2007 See http://bankrupt.com/misc/mdb07-23050.pdf In Re Urszula A. Studzinski, M.D., P.C. Bankr. E.D. Mich. Case No. 07-65994 Chapter 11 Petition filed December 21, 2007 See http://bankrupt.com/misc/mieb07-65994.pdf In Re Kneeland Construction Co., Inc. Bankr. N.D. N.Y. Case No. 07-13509 Chapter 11 Petition filed December 21, 2007 See http://bankrupt.com/misc/nynb07-13509.pdf In Re Area 51 Pittsburgh Bankr. W.D. Penn. Case No. 07-28052 Chapter 11 Petition filed December 21, 2007 See http://bankrupt.com/misc/pawb07-28052.pdf In Re Platner Associates, Inc. Bankr. E.D. Calif. Case No. 07-31186 Chapter 11 Petition filed December 21, 2007 Filed as Pro Se In Re Kenyatta Goins Bankr. D. Ariz. Case No. 07-07062 Chapter 11 Petition filed December 21, 2007 Filed as Pro Se In Re Gregory G. Hrapchak Bankr. N.D. W.V. Case No. 07-01668 Chapter 11 Petition filed December 23, 2007 See http://bankrupt.com/misc/wvnb07-1668.pdf In Re Hashim A. Rama Bankr. W.D. Wis. Case No. 07-15081 Chapter 11 Petition filed December 24, 2007 See http://bankrupt.com/misc/wiwb07-15081.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, 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 ***