/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080107.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 7, 2008, Vol. 12, No. 5 Headlines 1633 BROADWAY: Case Summary & 20 Largest Unsecured Creditors 94/BELLEVILLE RESTAURANT: Voluntary Chapter 11 Case Summary A.R.E.I. NEWHALL: Voluntary Chapter 11 Case Summary AFFILIATED COMPUTER: S&P Maintains 'BB' Corporate Credit Rating AIR DEVELOPMENT: Case Summary & Eight Largest Unsecured Creditors ALLIED SECURITY: Sept. 30 Balance Sheet Upside-Down by $18 Million ALTERNATIVE A: S&P Expects Further Decline of Issuances in 2008 ANTARES FUNDING: Fitch Puts Low-B Ratings Under Negative Watch ARVINMERITOR INC: S&P Holds BB Rating on $700MM Credit Facility ASSET BACKED: Fitch Junks Rating on $6.7MM Class M10 Debentures AUDIOVOX CORP: Completes $19.7MM Buyout of Thomson's Consumer AVNET INC: Acquires Semiconductor Distributor YEL Electronics AXCESS INT'L: Sept. 30 Balance Sheet Upside-Down by $3.1 Million BAPTIST FOUNDATION: Auction of Remaining Assets Set for Jan. 17 BERRY PLASTICS: Inks $500 Mil. Merger Deal With Captive Holdings BERRY PLASTICS: S&P Retains CCC+ Rating on Senior Unsecured Debt BERTHEL GROWTH I: Sept. 30 Balance Sheet Upside-Down by $5.3 Mil. BLUEGRASS ABS: Poor Credit Quality Cues Moody's Ratings Review BORIS PAVLOV: Case Summary & 12 Largest Unsecured Creditors BUFFETS INC: Has Until Jan. 31 to Pay Interest on $640MM Sr. Notes BUSK ENTERTAINMENT: Case Summary & 20 Largest Unsecured Creditors C&S SOLOMONS: Case Summary & 16 Largest Unsecured Creditors CARBIZ INC: Increases Credit Facility to $111.98 Million CHECK ELECT: Section 341(a) Meeting Scheduled for February 12 CHESAPEAKE ENERGY: Fitch Attaches 'BB' Issuer Default Rating CLEAR CHANNEL: TV Unit President and CEO Donald D. Perry Resigns CONSOLIDATED COMMS: Releases NPSI Shareholders Final Votes DC PROPERTIES: Non-Filing of Reports Prompts Court to Dismiss Case DELPHI CORP: Seeks Provisional Allowance of Unreconciled Claims DELPHI CORP: UAW Objects to Management Compensation Plan COMBIMATRIX CORP: Posts $3.4 Million Net Loss in Third Quarter DELTA PETROLEUM: Tracinda Deal Cues S&P's Positive CreditWatch DOV PHARMA: Posts $3.8 Million Net Loss in Third Quarter DUNMORE HOMES: Gets Final OK to Hire A&M CF as Financial Advisor DUNMORE HOMES: Obtains Final Court Nod to Employ A&M as Consultant DURA AUTOMOTIVE: Court Defers DIP Financing Maturity to January 31 DURA AUTOMOTIVE: Restructuring of Canadian Subsidiaries Approved ENCORE ACQUISITION: Unit Agrees to Buy EAC Assets for $250 Mil. ENVISION LAGRANGE: Voluntary Chapter 11 Case Summary EPICEPT CORP: Sept. 30 Balance Sheet Upside-Down by $9.4 Million FEDERAL-MOGUL: S&P Puts BB- Rating on $2.96 Billion Senior Loan GAP INC: Names Simon Kneen as Creative Dir. for Banana Republic GIBRALTAR GRANITE: Voluntary Chapter 11 Case Summary GREEN AGGREGATES: Case Summary & 19 Largest Unsecured Creditors HARVEY ELECTRONICS: Gets Interim OK to Borrow $1.5 Mil. DIP Fund HYACINTH DANIEL: Case Summary & 16 Largest Unsecured Creditors IMAX CORP: Turns Over Feinstein Theatre to National Amusements INSIGHT COMMS: S&P Withdraws 'CCC+' Rating on $350 Mil. Notes INSIGHT MIDWEST: S&P Withdraws 'B' Rating on $200 Mil. Notes JEFFREY SHOTKOSKI: Case Summary & 11 Largest Unsecured Creditors JOHN STEWART: Case Summary & 19 Largest Unsecured Creditors KELLWOOD COMPANY: Posts $1.1 Million Net Loss in Third Quarter KELLWOOD CO: Sun Capital's Renewed Offer Expected To Be Higher KELLWOOD CO: Inks $80 Million Accelerated Share Repurchase Pact KELLWOOD CO: Share Repurchase Cues S&P to Retain Negative Watch KIMBALL HILL: Delays Annual Report Filing Over Weak Housing Market KIMBALL HILL: Impairment Charges Cue a Likely Covenant Violation KIMBALL HILL: S&P Junks Corporate credit Rating KIWA BIO-TECH: Sept. 30 Balance Sheet Upside-Down by $1.73 Million LAS VEGAS SANDS: Gets SGD$5.44 Bil. Financing for Marina Bay Sands LEVITT AND SONS: Cascades Committee Wants Estate Assets Insured LEVITT AND SONS: Wants to Employ Watson Realty as Listing Agent LEVITT AND SONS: Wants to Use AmTrust Loan to Build Hartwood Homes MACKLOWE PROPERTIES: A $6.4BB Debt Waiting To Be Paid Next Month MARINER ENERGY: High Debt Leverage Cues S&P's Negative Outlook MARK IV: Completes Acquisition Deal with Sun Capital's Unit MCKINLEY FUNDING: Moody's Junks Rating on $38 Mil. Notes from Aa2 MEDISTEM LABS: Posts $380,417 Net Loss in Third Quarter MERITAGE MORTGAGE: Fitch Junks Ratings on Three Certificates MOVIE GALLERY: Wants Removal of Action Period Moved to July 14 N-STAR REAL: Fitch Holds BB Rating on $12,606,874 Class F Notes NATIONAL EASTERN: Court Approves T.M. Byxbee as Accountants NAVIOS MARITIME: Creates South American Logistics w/ Horamar Group NEW CENTURY: S&P Junks Ratings on Three Classes of Certificates PAETEC HOLDING: Launches Exchange Offer for 9.5% Senior Notes PERFORMANCE PROPERTIES: Section 341 Meeting Continued to Jan. 14 POWER RECEIVABLE: S&P's BB+ Rating Unaffected by CDWR'S "A" Rating RACE POINT: Fitch Affirms Low-B Ratings on Three Note Classes RAPID LINK: Extends Maturity of GCASIF Notes to Nov. 1, 2009 RASC SERIES 2003-KS3: Moody's Cuts Ratings on Two Trust Classes RASC SERIES 2003-KS6: Moody's Lowers Ratings on Three Classes RAMP SERIES 2003-RS9: Moody's Junks Ratings on Two Classes RES-CARE INC: S&P Holds BB+ Rating on Amended $250 Mil. Facility RICHARD SMITH: Case Summary & 19 Largest Unsecured Creditors RITE AID: Reports Sales of $2.201 Billion in December 2007 RITE AID: To Exit Las Vegas Market; Sells Prescription Files RITE AID: Declares Series E and I Preferred Stock Dividends SCRIPPS VINEYARDS: Case Summary & Seven Largest Unsec. Creditors SMART BALANCE: S&P Revises Outlook to Stable from Negative STATE STREET: To Set $279MM 4th Qtr. Reserve for Legal Claims STATE STREET: James Phalen Back as Investment Arm's CEO STATE STREET: Earns $358 Million in Third Quarter STATE STREET: $279MM After-Tax Charge Cues Fitch's Rating Cuts STATE STREET: Moody's Holds B+ Bank Financial Strength Rating STATE STREET: S&P Says Ratings Unaffected by After-Tax Charge STIEFEL LABS: S&P Holds 'B+' Corporate Credit Rating SUNDALE LTD: Court Extends Schedules-Filing Period to January 11 SUSQUEHANNA AREA: Fitch Cuts Rating on $59.7MM Bonds to BB+ TARRANT COUNTRY: Moody's Retains 'Ca' Rating on Revenue Bonds TELLURIDE ENT: Chap. 11 Case Converted To Ch. 7 Liquidation TENASKA OKLAHOMA: S&P Retains Rating Despite Unscheduled Outage THOMAS MORLEY: Voluntary Chapter 11 Case Summary TRUMP ENT: New Credit Facility Cues S&P to Remove "BB-" Rating VONAGE HOLDINGS: Inks Pact Implementing MOU on Sprint's Lawsuit VYTERIS INC: Sept. 30 Balance Sheet Upside-Down by $16.3 Million WARNER CHILCOTT: Good Financial Profile Cues S&P's Pos. Outlook WEEKS STREET: Section 341(a) Meeting Scheduled for January 16 WELLS FARGO: Fitch Affirms Ratings on 49 Certificate Classes WELLS FARGO: Fitch Holds 'CCC' Rating on Class B-5 Loan WHEELING-PITTSBURGH: Posts $56.5 Million Net Loss in 3rd Quarter YRC WORLDWIDE: Declining Credit Profile Cues Fitch's Rating Cut * Ontario Gets Series of Tax Breaks Beginning January 1 * Patrick J. Trostle Joins Jenner & Block-New York as Partner * Fitch Identifies 11 US CMBS Transactions Exposed to Centro * Losses and Delinquencies Cues S&P's Rating Cuts on 16 Classes * S&P Cuts 89 Tranches' Ratings from 22 U.S. Cash Flow and CDOs * BOND PRICING: For the Week of Dec. 31, 2007 - Jan. 4, 2008 ********* 1633 BROADWAY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: 1633 Broadway Mars Restaurant Corp. 1633 Broadway New York, NY 10019 Bankruptcy Case No.: 07-14062 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: December 28, 2007 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Gary B. Sachs, Esq., and Scott R. Kipnis, Esq. Hofheimer Gartlier & Gross, LLP 530 Fifth Avenue New York, NY 10036 Tel: (212) 818-9000 Fax: (212) 869-4930 http://www.hgg.com/ Estimated Assets: $1,818,400 Estimated Debts: $3,011,004 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ MRI Broadway Rental Inc. claim $1,000,000 c/o Paramount Group Inc. 1633 Broadway New York, NY 10019 New York State Department $175,000 of Taxation and Finance W.A. Harriman State Campus Albany, NY 12227-0001 U.S. Foodservice Inc. $76,161 360 Van Brunt Street Englewood, NJ 07631 Fireman's Fund Insurance $52,191 Mid-Island Cleaning Inc. contract $43,500 Edward Don & Company $35,386 Park Avenue Foods $30,743 Davidoff & Malito LLP $30,096 Islandwide Food Service $19,364 Southern Wine and Spirits $14,508 Specialties Inc. Swede Farms $12,726 New York City Department $11,000 Finance Pepsi-Cola Bottling $10,304 Company Empire Merchants $7,064 Cosentini Associates $6,794 Certified Bakery $6,703 Spice House International $6,574 Georgia-Pacific $4,545 Conkur Printing Co. $4,226 Beantown MKTG & Promotions $3,537 94/BELLEVILLE RESTAURANT: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: 94/Belleville Restaurant, Inc. 11511 Belleville Road Belleville, MI 48111 Bankruptcy Case No.: 08-40012 Type of Business: The Debtor owns and operates restaurants. Chapter 11 Petition Date: January 2, 2008 Court: Eastern District of Michigan (Detroit) Judge: Phillip J. Shefferly Debtor's Counsel: Robert N. Bassel, Esq. 201 West Big Beaver, 6th Floor Troy, MI 48099 Tel: (248) 528-1111 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its largest unsecured creditors. A.R.E.I. NEWHALL: Voluntary Chapter 11 Case Summary --------------------------------------------------- Lead Debtor: A.R.E.I. Newhall 9, L.L.C. 5 Ike Court Novato, CA 94945 Bankruptcy Case No.: 07-15210 Debtor-affiliates filing separate Chapter 11 petitions on January 3, 2008: Entity Case No. ------ -------- A.R.E.I. Newhall 28, L.L.C. 08-10062 A.R.E.I. Newhall 31, L.L.C. 08-10064 Debtor-affiliates filing separate Chapter 11 petitions on January 2, 2008: Entity Case No. ------ -------- A.R.E.I. Newhall 24, L.L.C. 08-10013 A.R.E.I. Newhall 20, L.L.C. 08-10018 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- A.R.E.I. Newhall 5, L.L.C. 07-15211 A.R.E.I. Newhall 27, L.L.C. 07-15212 A.R.E.I. Newhall 32, L.L.C. 07-15213 A.R.E.I. Newhall 30, L.L.C. 07-15214 A.R.E.I. Newhall 16, L.L.C. 07-15215 A.R.E.I. Newhall 18, L.L.C. 07-15216 A.R.E.I. Newhall 29, L.L.C. 07-22209 A.R.E.I. Newhall 3, L.L.C. 07-15244 A.R.E.I. Newhall 4, L.L.C. 07-15246 Type of Business: The Debtors own and manages real estate. Chapter 11 Petition Date: December 27, 2007 Court: Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtors' Counsel: David A. Tilem, Esq. 206 North Jackson Street, Suite 201 Glendale, CA 91206 Tel: (818) 507-6000 Fax: (818) 507-6800 Total Assets Total Debts ------------ ----------- A.R.E.I. Newhall 9, L.L.C. $6,788,861 $24,000,000 A.R.E.I. Newhall 5, L.L.C. $625,293 $24,000,000 A.R.E.I. Newhall 27, L.L.C. $771,417 $24,000,000 A.R.E.I. Newhall 32, L.L.C. $586,676 $24,000,000 A.R.E.I. Newhall 30, L.L.C. $277,722 $24,000,000 A.R.E.I. Newhall 16, L.L.C. $428,922 $24,000,000 A.R.E.I. Newhall 18, L.L.C. $1,343,520 $24,000,000 A.R.E.I. Newhall 29, L.L.C. $586,278 $24,000,000 A.R.E.I. Newhall 3, L.L.C. $911,007 $24,000,000 A.R.E.I. Newhall 4, L.L.C. $890,217 $24,000,000 Financial Condition of Debtors filing separate Chapter 11 petitions on January 2, 2008: Total Assets Total Debts ------------ ----------- A.R.E.I. Newhall 24, L.L.C. $462,861 $24,000,000 A.R.E.I. Newhall 20, L.L.C. $200,880 $24,000,000 Financial Condition of Debtors filing separate Chapter 11 petitions on January 3, 2008: Total Assets Total Debts ------------ ----------- A.R.E.I. Newhall 28, L.L.C. $366,930 $24,000,000 A.R.E.I. Newhall 31, L.L.C. $335,583 $24,000,000 The Debtors did not file lists of largest unsecured creditors. AFFILIATED COMPUTER: S&P Maintains 'BB' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Dallas, Texas-based Affiliated Computer Services Inc. (ACS), and removed it from CreditWatch, where it had been placed with negative implications on March 20, 2007. The outlook is negative. The affirmation follows the withdrawal of a buyout offer by private equity firm Cerberus Capital Management, and led by ACS' chairman and founder, for over $8 billion (including the assumption of debt). "Although ACS' current debt levels (in the 3x area) are somewhat moderate for the rating given ACS' satisfactory business profile, the company has exhibited a much more aggressive financial policy in its willingness to pursue an LBO, and it may continue to pursue ongoing acquisitions and share repurchases," said Standard & Poor's credit analyst Philip Schrank. "At the 'BB' rating level, our expectation is that ACS will manage its debt leverage at 3x-5x over the intermediate term, which would allow it to complete its outstanding $800 million share repurchase program, as well as make some moderate-size acquisitions." The negative outlook reflects ACS' ability within its credit facilities to significantly increase debt to finance sizable share repurchases or acquisitions, if it desires. AIR DEVELOPMENT: Case Summary & Eight Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Air Development, L.L.C. P.O. Box 86 Hartford, AL 36344 Bankruptcy Case No.: 08-10001 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: January 2, 2008 Court: Middle District of Alabama (Dothan) Debtor's Counsel: Collier H. Espy, Jr., Esq. Espy, Metcalf & Espy, P.C. P.O. Drawer 6504 Dothan, AL 36302-6504 Tel: (334) 793-6288 Total Assets: $800,100 Total Debts: $1,066,796 Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ C.I.T. Lending Services Corp. commercial property $1,059,420 1 C.I.T. Drive value of security: Livingston, NJ 07039 $800,000 Dean Sheilds, Rev. Comm. Ad valorem property $4,872 Geneva County taxes P.O. Box 326 Geneva, AL 36340 R. Bryan Thompson, C.P.A., Pre-petition $2,500 P.C. accounting services 504 North Watson Street Enterprise, AL 36330 Flowers Insurance Agency $1 Ronald Hovey balance associated $1 with construction contract Parsons Group, L.L.C. Judgment recovered in $1 the Small Claims Court of Houston City, AL on July 5, 2007 (S.M.-2007-1538) H Construction, Inc. balance associated $1 with construction contract Steadman S. Shealy, Jr. legal services Unknown ALLIED SECURITY: Sept. 30 Balance Sheet Upside-Down by $18 Million ------------------------------------------------------------------ Allied Security Innovations Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $6.1 million in total assets and $24.1 million in total liabilities, resulting in an $18.0 million total stockholders' deficit. At Sept. 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $1.5 million in total current assets available to pay $23.8 million in total current liabilities. The company reported a net loss of $3.8 million on net sales of $1.4 million forthe third quarter ended Sept. 30, 2007, compared with a net loss of $291,791 on net sales of $1.3 million in the same period a year ago. The increase in net loss was primarily due to the change in accounting procedures in which convertible debentures are treated as derivative according to the guidance of SFAS133 and EITF00-19. The company recorded a loss of $3.8 million as a result of the change in fair market value of derivative liability in the three months ended Sept. 30, 2007, compared with a gain of $36,539 in the corresponding period in 2006. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26bc Going Concern Doubt Bagell, Josephs, Levine & Company L.L.C., in Gibbsboro, N.J., expressed substantial doubt about Digital Descriptor Systems Inc. nka. Allied Security Innovations Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm said that the company did not generate sufficient cash flows from revenues during the year ended Dec. 31, 2006, to fund its operations. Also at Dec. 31, 2006, the company had negative net working capital of $11,855,140. About Allied Security Based in Wall, New Jersey, Allied Security Innovations Inc. (OTC BB: ASVN.OB) fka. Digital Descriptor Systems Inc. -- http://www.ddsi-cpc.com/ -- develops and markets integrated enterprise-wide image applications specifically designed for criminal justice organizations. Customers include states, cities, counties, corrections, justice, and public safety agencies. Its subsidiary, CGM Applied Security Technologies Inc., with locations in Wall, N.J. and a factory in Staten Island, N.Y., is a manufacturer and distributor of Homeland Security products, including indicative and barrier security seals, security tapes and related packaging security systems, protective security products for palletized cargo, physical security systems for tractors, trailers and containers, as well as a number of highly specialized authentication products. ALTERNATIVE A: S&P Expects Further Decline of Issuances in 2008 --------------------------------------------------------------- Following a second quarter in which issuance of Alternative-A (Alt-A) mortgages reached heights previously unseen, it decreased sharply in third-quarter 2007, according to a recent report by Standard & Poor's Ratings Services. The dramatic drop, to $39.3 billion in issuance from the previous quarter's all-time high of $109.5 billion, is the result of unprecedented credit and liquidity disruptions-affecting both borrowers and lenders-that emerged in the U.S. residential mortgage market over the summer in response to the rapidly deteriorating housing sector. "Severe delinquencies in the 2006 and 2007 subprime and Alt-A vintages have risen at an extremely high and unexpected rate in recent months, especially during the latter part of the second quarter and through the third quarter, and there are no signs of the trend abating in the near term," said Standard & Poor's Ratings Services credit analyst Jeff Watson, a director in the residential mortgage-backed securities (RMBS) group. "In response, investor demand for U.S. RMBS has fallen sharply, which has limited a key source of funding available to originators and issuers from the secondary market." Standard & Poor's said it expects Alt-A issuance to further decline during fourth-quarter 2007 and into early 2008 as the industry continues to feel the effects of limited liquidity in the U.S. RMBS market. ANTARES FUNDING: Fitch Puts Low-B Ratings Under Negative Watch -------------------------------------------------------------- Fitch Ratings has placed five classes of notes issued by Antares Funding, LP. on Rating Watch Negative, effective immediately: -- $28,500,000 class C-1 rated 'BBB'; -- $15,000,000 class C-2 rated 'BBB'; -- $23,911,911 class D-1 rated 'BB'; -- $14,065,830 class D-2 rated 'BB'; -- $42,000,000 class E rated 'B-'. Antares is a collateralized debt obligation managed by GE Asset Management, Inc. which closed Dec. 14, 1999. Antares was established to issue approximately $600 million in debt and equity securities and invest the proceeds in a portfolio of predominantly high-yield bank loans, middle-market loans, and bonds. As of the trustee report dated Dec. 4, 2007, more than $67 million of the par amount of the corporate middle-market loans was not publicly rated, composing approximately 40% of the non-defaulted assets in the portfolio. Due to the lack of recent data received from Antares on these corporate middle-market loans, Fitch is unable to evaluate the current risk of the deal. As a result, the current ratings may no longer reflect the risk associated with the rated notes. ARVINMERITOR INC: S&P Holds BB Rating on $700MM Credit Facility --------------------------------------------------------------- Standard & Poor's Ratings Services said that although ArvinMeritor Inc. amended its credit agreement on Dec. 10, 2007, the issue- level rating on its $700 million revolving credit facility due 2011 remains unchanged at 'BB' (two notches higher than the corporate credit rating), and the recovery rating on this debt remains '1', indicating an expectation of very high (90%-100%) recovery in the event of a payment default. The amendments reduced the facility to $700 million from $900 million, incorporated a new financial covenant package, and modified the pricing schedule. The corporate credit rating on ArvinMeritor is 'B+', and the outlook is negative. "The rating reflects the company's weak profitability, which has recently kept cash flow negative, along with the cyclical and competitive pricing pressures of the capital-intensive automotive and heavy-vehicle component supply industry," said Standard & Poor's credit analyst Lawrence Orlowski. ASSET BACKED: Fitch Junks Rating on $6.7MM Class M10 Debentures --------------------------------------------------------------- Fitch Ratings has taken rating actions on Asset Backed Securities Corporation Home Equity Loan Trust 2007-HE2. Affirmations total $74.3 million and downgrades total $189 million. In addition, $87.6 million has been placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: ABSC 2007-HE2 -- $101.4 million class A1 downgraded to 'AA-' from 'AAA' (BL: 37.33, LCR: 1.94), placed on Rating Watch Negative; -- $74.3 million class A2 affirmed at 'AAA' (BL: 60.85, LCR: 3.17); -- $20.9 million class A3 rated 'AAA' (BL: 49.86, LCR: 2.60), placed on Rating Watch Negative; -- $30 million class A4 rated 'AAA' (BL: 39.20, LCR: 2.04), placed on Rating Watch Negative; -- $13.4 million class A5 downgraded to 'AA-' from 'AAA' (BL: 37.42, LCR: 1.95), placed on Rating Watch Negative; -- $16.4 million class M1 downgraded to 'A+' from 'AA+' (BL: 32.41, LCR: 1.69), placed on Rating Watch Negative; -- $16.4 million class M2 downgraded to 'A-' from 'AA' (BL: 27.42, LCR: 1.43), placed on Rating Watch Negative; -- $5 million class M3 downgraded to 'BBB+' from 'AA-' (BL: 25.87, LCR: 1.35), placed on Rating Watch Negative; -- $5 million class M4 downgraded to 'BBB' from 'A+' (BL: 24.28, LCR: 1.26), placed on Rating Watch Negative; -- $5.7 million class M5 downgraded to 'BBB-' from 'A' (BL: 22.43, LCR: 1.17), placed on Rating Watch Negative; -- $3.8 million class M6 downgraded to 'BBB-' from 'A-' (BL: 21.13, LCR: 1.10), placed on Rating Watch Negative; -- $5.1 million class M7 downgraded to 'BB' from 'BBB+' (BL: 19.29, LCR: 1.00), placed on Rating Watch Negative; -- $4.6 million class M8 downgraded to 'B' from 'BBB' (BL: 17.61, LCR: 0.92), placed on Rating Watch Negative; -- $5 million class M9 downgraded to 'B' from 'BBB-' (BL: 15.90, LCR: 0.83), placed on Rating Watch Negative; -- $6.7 million class M10 downgraded to 'CCC' from 'BBB-'. Deal Summary -- Originators: Argent (100%); -- 60+ day Delinquency: 11.66%; -- Realized Losses to date (% of Original Balance): 0.05%; -- Expected Remaining Losses (% of Current Balance): 19.21%; -- Cumulative Expected Losses (% of Original Balance): 18.28%. 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. AUDIOVOX CORP: Completes $19.7MM Buyout of Thomson's Consumer ------------------------------------------------------------- Audiovox Corporation completed its acquisition of Thomson's Consumer Electronics Audio Video Business outside of Europe for $19.7 million, plus a net asset payment, and includes a five-year fee, which begins in 2010, related to the RCA brand. The acquisition includes worldwide rights to the RCA brand for consumer electronics audio video product lines except TVs and certain additional product categories. Audio Video Products acquired include DVD players and recorders, portable DVD players, GPS devices, HD and Internet Radios, stand alone ATSC terrestrial television converters, clock radios, MP3 and MP4 players, digital cameras and camcorders and other product that falls within the audio/video field of use. In total, Audiovox will be acquiring approximately $400 million in sales and expects to retain $150 million of that related to the RCA branded MP3 and MP4 players, digital cameras, camcorders and clock radios. The company is entering into a license agreement with Multimedia Device Ltd., a Chinese manufacturer to market the remaining product categories acquired in the transaction. The company expects the transaction to be accretive within the first year. "Our goal with this acquisition was to further control and consolidate the RCA brand and prevent fractionalization at the retail level," Patrick Lavelle, president and CEO of Audiovox stated. "We believe this acquisition will add approximately $150 million in sales and a revenue stream with an up front $10 million payment." "In addition, it will allow us to spread fixed overhead over a higher sales base, which will further reduce OPEX percentage, since the acquired overhead will be limited," Mr. Lavelle said. "We will establish Audiovox Mexico utilizing the former Thomson facility there, giving Audiovox a presence in that growing market and allowing us to expand the entire Audiovox line." "Over the past year, we have made five acquisitions including this one that should generate sales of approximately $300-$350 million ... for approximately $100 million," added Mr. Lavelle. "We believe we have purchased wisely and that these acquisitions should lead to improved operating and financial performance in our next fiscal year." The company intends to integrate the Thomson and Technuity assets into its operations during the remainder of its fiscal 2008 fourth quarter and fiscal 2009 first quarter and would have much of the work complete by May 31, 2008. The newly acquired assets will be included in Audiovox Electronics Corporation's Consumer Electronics group. In January 2007, Audiovox completed its acquisition of Thomson's America's consumer electronics accessory business, which included the rights to the RCA brand for consumer electronics accessories. That acquisition also included the Recoton, Spikemaster, Ambico and Discwasher brands for use on any products and the Jensen, Advent, Acoustic Research and Road Gear brands for accessory products that complemented the purchase of those brands for electronics products in 2003. In March 2007, Audiovox German Holdings GmbH completed the acquisition of Oehlbach a European market leader in accessories. That was followed by an August 2007 acquisition of Incaar Limited, a UK business that specializes in rear seat entertainment systems, which added to our European operation an accessory and OE component. In November 2007, Audiovox Accessories Corporation completed the acquisition of all of the outstanding stock of Technuity, Inc., a battery and power products industry and exclusive licensee of the Energizer brand in North America for rechargeable batteries and battery packs for camcorders, cordless phones, digital cameras, DVD players and other power supply devices. This acquisition was made to further strengthen the company's position in the accessory market. About Audiovox Headquartered in Hauppauge, New York, Audiovox Corp. (Nasdaq: VOXX) -- http://www.audiovox.com/-- is a supplier and value added service provider in the consumer electronics industry. The company conducts its business through subsidiaries and markets mobile and consumer electronics products both domestically and internationally under several of its own brands. It also functions as an original equipment manufacturer supplier to a wide variety of customers, through several distinct distribution channels. * * * In October 1997, Moody's Investors Service placed Audiovox Corp.'s long term corporate family and bank loan debt ratings at 'B1'. Both ratings still hold to date. AVNET INC: Acquires Semiconductor Distributor YEL Electronics ------------------------------------------------------------- Avnet Inc. has acquired YEL Electronics Hong Kong Ltd. YEL is a distributor of interconnect, passive, electromechanical and limited semiconductor components in the Asia region, representing over 30 franchised suppliers. YEL generated approximately $200 million of revenue in the twelve months ended December 2007 with over 80% coming from IP&E products. With the acquisition, Avnet expects to gain a team of talented and knowledgeable employees serving over 2000 customers in 8 countries across Asia Pacific. The acquisition, Avnet relates, also expands Avnet Electronics Marketing's franchised line card with new IP&E suppliers in the region. Harley Feldberg, president of Avnet Electronics Marketing global, noted that the acquisition is another significant step in Electronics Marketing's strategy to accelerate growth. "The IP&E distribution industry in Asia is highly fragmented, and Avnet intends to actively participate in its consolidation," Mr. Feldberg said. "The acquisition of YEL provides an excellent opportunity to supplement our organic growth initiatives by adding a well respected regional distributor with a management team that shares our focus on profitable growth and superior customer service. With this acquisition, we have increased our IP&E business in Asia by over 50% and become the largest IP&E distributor in the region." Avnet YEL will operate as a specialist division to maintain its focus on IP&E profitable growth. The combined customer base will also provide additional opportunities for cross selling as our sales organizations will have an expanded line card supported by Avnet's world-class supply chain management and logistics capabilities. The transaction is expected to be immediately accretive to earnings, excluding minimal integration charges, and supports Avnet's long-term return on capital goals. "The acquisition of YEL is a clear demonstration of Avnet's commitment to invest in the high growth Asia components market." Stephen Wong, president of Avnet Electronics Marketing Asia added. "With a larger team of talented people, a broadened account base and an expanded line card, Electronics Marketing Asia will have additional opportunities to accelerate organic growth while leveraging our scale and scope advantages to deliver superior value to our trading partners." In addition to distributing an industry-leading line card comprised of the suppliers of semiconductor and IP&E products, Electronics Marketing Asia also offers a wide portfolio of value added services -- from design, demand creation and technical support to a supply chain and logistic services. The company relates that this acquisition further validates Avnet's desire and ability to continue investing in this high growth region. About YEL Electronics Hong Kong Ltd Headquartered in Hong Kong, YEL Electronics Hong Kong Ltd. -- www.yel-electronics.com/ -- invests in people, linecards, supply chain solutions and value-added services to ensure serving its customers to their satisfaction. YEL was established in 1992, and has 16 sales offices and 3 major warehouses in 8 countries. YEL has over 300 qualified service-oriented staffs that serves more than 2000 customers in the Asia Pacific region. About Avnet Electronics Avnet Electronics Marketing -- http://www.em.avnet.com/-- is an operating group of Phoenix-based Avnet, Inc. (NYSE:AVT), a Fortune 500 company. Avnet Electronics Marketing serves electronic original equipment manufacturers and electronic manufacturing services providers in more than 70 countries, distributing electronic components from leading manufacturers and providing associated design-chain and supply-chain services. About Avnet Inc. Headquartered in Phoenix, Arizona, Avnet, Inc. -- http://www.avnet.com/-- distributes electronic components and computer products, primarily for industrial customers. It has operations in the following countries: Australia, Belgium, China, Germany, Hong Kong, India, Indonesia, Italy, Japan, Malaysia, New Zealand, Philippines, Singapore, and Sweden, Brazil, Mexico and Puerto Rico. * * * Moody's Investors Service affirmed Avnet's Ba1 corporate family long-term debt ratings in March 2007. Moody's said the outlook is positive. AXCESS INT'L: Sept. 30 Balance Sheet Upside-Down by $3.1 Million ---------------------------------------------------------------- Axcess International Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $1.6 million in total assets and $4.7 million in total liabilities, resulting in a $3.1 million total stockholders' deficit. At Sept. 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $1.5 million in total current assets available to pay $4.7 million in total current liabilities. Net loss for the third quarter of 2007 was $1.1 million, as compared to a net loss of $873,608 in the prior year period. The increase in the net loss is mainly related to the gross margin contribution of the Barbados contract offset by an increase in expenses as the company develops the Enterprise Dot, its next generation RFID product. Revenue was $281,656 for the three months ended Sept. 30, 2007, a decrease of 24% from revenue of $369,621 in the same quarter in 2006. Gross margin was 51%, or $144,785, in the third quarter 2007 as compared to 47%, or $172,242, in the 2006 period. 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?26cd Going Concern Doubt Hein & Associates LLP, in Dallas, expressed substantial doubt about Axcess International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and resulting continued dependence upon access to additional external financing. About Axcess International Headquartered in Carrollton, Texas, Axcess International Inc. (OTC BB: AXSI.OB) -- http://www.axcessinc.com/-- delivers wireless intelligence through real-time business activity monitoring solutions that improve productivity, security and revenue growth. The systems derive wireless intelligence from automatic advanced workforce management, workflow management, asset monitoring and distributed sensing. Its revolutionary and patented Dot micro- wireless technology platform combines RFID, RTLS and wireless sensing for better decision-making and control throughout the enterprise. Axcess is a portfolio company of Amphion Innovations plc (AIM: AMP). BAPTIST FOUNDATION: Auction of Remaining Assets Set for Jan. 17 --------------------------------------------------------------- BFA Liquidation Trust is set to sell the remaining assets of Baptist Foundation of Arizona, The Business Journal of Phoenix reports. The Southwest Real Estate Auctioneers said in its Web site that the auction will be on Thursday, Jan. 17, 2008, at 2:00 p.m., Sheraton Cresent Hotel 2620 West Dunlap Ave (I-17 & Dunlap) in Phoenix, Arizona. Over 10 properties are to be sold including custom home lots, commercial and horse property. For information and to get a bidder's information kit, parties may call (602) 995- 8500. BFA Liquidation Trust can be reached at: Clifton R. Jessup, Jr. Liquidating Trustee 1313 East Osborn Road, Suite 250 Phoenix, AZ 85014 Tel: (602) 222-3700 Fax: (602) 222-3770 http://www.bfalt.org/ Southwest Real Estate Auctioneers -- http://www.swreauctioneers.com/-- serves as the auctioneer of the Debtor's assets. About Baptist Foundation of AZ The Baptist Foundation of Arizona Inc. -- http://www.bfaz.org/-- manages church building funds and retirement funds for a few thousand Baptist layman. Profits came from land investments in the red-hot Arizona market. In August 1999, the Arizona Corporation Commission halted Foundation security sales because it allegedly misrepresented investment returns. It also said the Foundation does not have the money in its corporate accounts to cover money owed investors. Investors and state regulators criticize the restructuring plan, which they say leaves too many questions unanswered. Final defendants in the Baptist Foundation fraud case were sentenced early 2007. The case reportedly cost elderly investors millions of dollars after the Foundation collapsed in 1999 and leaders were charged with fraud in attempt to conceal real estate losses, poor investment decisions and deceptive accounting. The Foundation filed for chapter 11 bankruptcy protection in Nov. 11, 1999, and listed $640 million in debts and $160 million to $200 million in assets. BERRY PLASTICS: Inks $500 Mil. Merger Deal With Captive Holdings ---------------------------------------------------------------- Berry Plastics Corporation, an Apollo Management LP and Graham Partners portfolio company, entered into an agreement to acquire 100% of the outstanding common stock of Captive Holdings Inc., the parent company of Captive Plastics Inc., a First Atlantic Capital Ltd. portfolio company. Pursuant to the acquisition agreement, Berry will pay $500 million for Captive, subject to certain customary adjustments. Berry has obtained financing commitments to finance the transaction. The transaction will close in the first quarter of 2008 and is subject to customary closing conditions. "The acquisition of Captive is another step in our quest to be a total solution provider of plastic packaging with the Captive product line significantly enhancing our abilities to better serve our customers," Ira Boots, chairman and CEO of Berry Plastics Corporation, stated. "We are excited about the skill sets that the Captive employees bring to Berry for the benefit of all of our customers, employees and investors. Captive has a history of strong growth and fits in perfectly with our existing product lines," Mr. Boots added. "We are very pleased with the success of Captive over the past three years and believe the business is well positioned for future growth as part of Berry Plastics," Roberto Buaron, chairman of First Atlantic Capital, said. "Our strategy of expanding Captive through internal investment and add-on acquisitions has built a very strong company and generated an excellent outcome for our investors." "Captive is an excellent fit with Berry Plastics and, together, we will offer a more integrated product line with the ability and scale to serve the growing plastic packaging needs of our customers," Peter Martin, president and CEO of Captive, said. "We look forward to joining the Berry family." The Captive disclosure is the second acquisition declared by Berry in the last few days. On Dec. 19, 2007, Berry divulged the acquisition of MAC Closures Inc. About Berry Plastics Corporation Headquartered in Evansville, Nebraska, Berry Plastics Corporation -- http://www.berryplastics.com/ -- is a manufacturer and supplier of a diverse mix of rigid plastics packaging products focusing on the open top container, closure, aerosol overcap, drink cup and housewares markets. The company sells a broad product line to over 12,000 customers. Berry Plastics concentrates on manufacturing high quality, value-added products sold to marketers of institutional and consumer products. In 2004, the company created its international division as a separate operating and reporting division to increase sales and improve service to international customers utilizing existing resources. The international segment includes the company's foreign facilities and business from domestic facilities that is shipped or billed to foreign locations. About Captive Plastics, Inc. Based in Piscataway, New Jersey, Captive Plastics -- http://www.captiveplastics.com -- makes plastic containers for the health care, personal care, and food and beverage industries. Captive Plastics operates over a dozen manufacturing facilities across the US and provides over 550 varieties of rigid plastic packaging products, including wide mouth, cylinder, round, and square containers. Its services include engineering, computer aided design, mold construction, production, decorating, and filling. First Atlantic Capital, a private investment firm, owns a majority interest in Captive Plastics. * * * As reported in the Troubled Company Reporter on June 12, 2007, Moody's Investors Service downgraded the Corporate Family Rating of Berry Plastics Holding Corporation to B3 from B2. The outlook is stable. BERRY PLASTICS: S&P Retains CCC+ Rating on Senior Unsecured Debt ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its first- and second- lien senior secured debt ratings on Berry Plastics Holding Corp. on CreditWatch with negative implications. At the same time, S&P affirmed its 'B' corporate credit ratings on Berry Plastics Holding Corp. and its parent Berry Plastics Group Inc. as well as its 'CCC+' senior unsecured and subordinated debt ratings. The outlooks remain negative. These rating actions follow Berry's announcement that it has agreed to acquire privately held Captive Holdings Inc., parent of Captive Plastics Inc., for about $500 million in cash. Captive manufactures blow-molded bottles and injection-molded closures for the food, health care, spirits, and personal care markets at 13 plants across the U.S. Although Berry has not released details regarding financing for the transaction, it has announced that it has obtained financing commitments and expects the transaction to close in the first quarter of 2008, subject to customary closing conditions. "The CreditWatch placement indicates that we could lower or affirm the ratings on the first- and second-lien debt, depending on financing for the acquisition and the implications for recovery prospects for these instruments in the post-acquisition capital structure," said Standard & Poor's credit analyst Cynthia Werneth. "Recovery prospects could deteriorate if Berry finances the acquisition with additional secured debt." The affirmation of the corporate credit rating reflects S&P's view that even if the transaction is all debt-financed, it's unlikely to materially worsen Berry's already very aggressive debt leverage. As of Sept. 29, 2007, total debt (adjusted to capitalize operating leases) was about $3.4 billion, and total adjusted debt to EBITDA pro forma for recent acquisitions and expected synergies was close to 7x. S&P expects liquidity to remain sufficient to meet all near-term operating and financing needs. The affirmation of the ratings on the senior unsecured and subordinated debt, which are both rated 'CCC+', two notches below the corporate credit rating, indicates S&P's expectation that these ratings will remain unchanged following completion of the Captive transaction. The negative outlook associated with the corporate credit rating points to the risk of a downgrade if operating problems, difficulty integrating recent acquisitions, or market factors such as rapidly rising resin costs or demand weakness forestall strengthening of Berry's financial profile or cause it to weaken further. S&P could also lower the ratings if liquidity unexpectedly deteriorates. BERTHEL GROWTH I: Sept. 30 Balance Sheet Upside-Down by $5.3 Mil. ----------------------------------------------------------------- Berthel Growth & Income Trust I's consolidated balance sheet at Sept. 30, 2007, showed $5.8 million in total assets and $11.1 million in total liabilities, resuting in a total net assets deficit of $5.3 million. The Trust reported a $23,598 net increase in net assets on total revenues of $25,304 for the third quarter ended Sept. 30, 2007, compared with a net increase in net assets of $4,525 on total revenues of $39,994 for the same period in 2006. On July 25, 2007, management of the Trust Advisor decided to waive the management fees for 2007. This forgiveness of debt, in the amount of $73,471, is reflected in the financial statements during the third quarter of 2007. Net investment income was $23,598 in the three months ended Sept. 30, 2007, compared with a net investment loss of $95,475 in the same period last year. Net investment income reflects the Trust's revenues and expenses excluding realized and unrealized gains and losses on portfolio The Trust recognized an unrealized gain on investments of $100,000 in the three months ended Sept. 30, 2006, versus $-0- in the corresponding period in 2007. The change in the unrealized gains and losses are the result of carrying the Trust's portfolio of loans and investments at fair value. 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?26bd Going Concern Doubt As reported in the Troubled Company Reporter on Mar. 23, 2007, McGladrey & Pullen LLP expressed substantial doubt about Berthel Growth & Income Trust I's ability to continue as a going concern after auditing the Trust's consolidated financial statements for the years ended Dec. 31, 2006 and 2005. The auditing firm reported that the Trust continues to have a deficiency in net assets, as well as net losses. The auditing firm also added that Berthel SBIC LLC, a wholly owned subsidiary of the Trust, has agreed to liquidate its portfolio assets in order to pay its indebtedness to the United States Small Business Administration. In August, 2007, the SBIC and the SBA agreed to a one-year extension. The agreement requires principal payments on the debt to the extent the SBIC receives cash proceeds exceeding $250,000 for the sale or liquidation of investments. As of Sept. 30, 2007, $2,783,689 is outstanding under the loan agreement, which is secured by substantially all assets of the SBIC. About Berthel Growth Headquartered in Marion, Iowa, Berthel Growth & Income Trust I is registered under the Investment Company Act of 1940, as amended, as a nondiversified, closed-end management investment company electing status as a business development company. The Trust was formed on Feb. 10, 1995, under the laws of the State of Delaware and received approval from the Securities and Exchange Commission to begin offering shares of beneficial interest effective June 21, 1995. In accordance with the prospectus, the Trust was scheduled to terminate upon the liquidation of all of its investments, but no later than June 21, 2007. However, the Independent Trustees have extended the term of the Trust for one year to June 21, 2008. Berthel Fisher & Company Planning Inc., a wholly-owned subsidiary of Berthel Fisher & Company, is the Trust's investment advisor and manager. BLUEGRASS ABS: Poor Credit Quality Cues Moody's Ratings Review -------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade these notes issued by Bluegrass ABS CDO II Ltd.: Class description: $52,800,000 Class B Floating Rate Notes due April 2039 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade Class description: $10,000,000 Type II Composite Notes due April 2039 -- Prior Rating: Baa2 -- Current Rating: Baa2, on review for possible downgrade In addition, Moody's also announced that it has downgraded and left on review for possible downgrade these notes: Class description: U.S.$15,000,000 Class C-1 Floating Rate Notes due April 2039 -- Prior Rating: Baa2 -- Current Rating: Ba3, on review for possible downgrade Class description: U.S.$7,400,000 Class C-2 Floating Rate Notes due April 2039 -- Prior Rating: Baa2 -- 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 has exposure to residential mortgage-backed securities and collateralized debt obligation securities. BORIS PAVLOV: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Boris Pavlov 46 Preston Drive Gillette, NJ 07933 Bankruptcy Case No.: 07-29025 Chapter 11 Petition Date: December 28, 2007 Court: District of New Jersey (Newark) Judge: Morris Stern Debtor's Counsel: Melinda D. Middlebrooks, Esq. and Stuart M. Nachbar, Esq. Middlebrooks Shapiro & Nachbar, P.C. 1767 Morris Avenue, Suite 2A Union, NJ 07083 Tel: (908) 687-6161 Fax: (908) 687-9090 http://www.middlebrooksshapiro.com/ Estimated Assets: $1,978,029 Estimated Debts: $1,777,853 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America $69,167 c/o Frederick J. Hanna & Associates 1655 Enterprise Way Marietta, GA 30067 AT&T Universal Card $25,595 P.O. Box 183065 Columbus, OH 43218-3065 FIA Card Servies, N.A. reference # $22,214 80 Holtz Drive 11165875 PMR Buffalo, NY 14225 Chase $18,911 American Express $17,984 Capital One $16,692 Chase Bank USA $16,127 The Palmer Firm, P.C. $8,233 Discover Card $4,529 DFS Services, LLC $3,935 Wells Fargo Financial Bank $1,921 Wells Fargo Financial $850 BUFFETS INC: Has Until Jan. 31 to Pay Interest on $640MM Sr. Notes ------------------------------------------------------------------ Buffets Inc. said late last week that it has elected to take advantage of the 30-day grace period with respect to the missed interest payment due Jan. 2, 2008, on its 12.5% senior notes due Nov. 1, 2014. The aggregate amount of this interest payment is approximately $18.75 million. The company explained that it is taking advantage of the grace period to pursue restructuring discussions with its creditors. However, there can be no assurance that the company will reach an agreement on any restructuring. The company said that failure to make the interest payments by Jan. 31, 2008, would constitute an event of default under the indenture for the senior notes that would permit the indenture trustee or holders of 25% or more of the senior notes to accelerate the maturity of the senior notes. In addition, Buffets said that failure to make the interest payment within the grace period would constitute an event of default under Buffets $640 million credit facility that would permit the administrative agent or lenders holding in excess of 50% of the indebtedness outstanding under the credit facility to terminate any commitments to extend credit to the company and accelerate the maturity of the indebtedness outstanding. As reported in the Troubled Company Reporter on Jan. 4, 2008, Buffets missed a coupon payment on a debt totalling $293 million. Matthew Lee, the debt trustee and customer service representative at U.S. Bank NA, said the company was not able to pay interest on its 12.5% notes maturing in 2014. The missed interest payment sent bond prices to another low and increased fears that corporate defaults are starting to rise. "Default rates are going to start to increase this year," Katalin Kutasi, a principal and investment manager for distressed debt at hedge fund Kellner DiLeo & Co. in New York stated. "A lot of them are going to be consumer-sensitive companies." About Buffet Inc. Based in Eagan, Minnesota, Buffets Inc., -- http://www.buffet.com/ -- and http://www.ryansrg.com/-- operates and franchises steak-buffet style restaurants principally under the "Old Country Buffet", "Hometown Buffet" brand names and grill/buffet format restaurants under the brand names "Ryan's" and "Fire Mountain". The company is the second largest family dining restaurant in the industry, operating 643 restaurants in 42 states. Total reported revenues as of Sept. 19, 2007 were approximately $1.55 billion. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Moody's Investors Service lowered Buffets' ratings reflecting the company's heightened probability of default as it approached a covenant violation on its maximum leverage ratio, primarily stemming from a further deterioration in its operating performance. The action also reflected increasing uncertainty over the company's capital structure now that the company has engaged Houlihan, Lokey, Howard & Zukin Capital to review its capital structure and business plan. The lowered ratings include Buffets' corporate family rating to Caa2 from Caa1, senior secured credit facilities rating to Caa1 from B2, and senior unsecured notes rating to Caa3 from Caa2. Approximately $940 million of debt securities were affected. The rating outlook remains negative. BUSK ENTERTAINMENT: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Busk Entertainment LLC P.O. Box 2849 Mission Viejo, CA 92690 Bankruptcy Case No.: 7-14507 Chapter 11 Petition Date: December 28, 2007 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Richard J. Reynolds, Esq. Turner Reynolds Greco & O'Hara 16845 Laguna Canyon Road, Suite 250 Irvine, CA 92618 Tel: (949) 474-6900 Fax: (949) 474-6907 http://www.trlawyers.com/ Estimated Assets: $1 million $10 million Estimated Debts: $500,000 to $1 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alfa Plaza trade debt $348,713 23276 South Point Drive Suite 112 Aliso Viejo, CA 92656 Talent Air trade debt $109,340 10880 Walker Street Cypress, CA 90630 Harrah's Theatre Equipment trade debt $76,938 25612 Dollar Street, Suite #1 Hayward, CA 94544 Lido Interior Drywall trade debt $67,351 Manley Builders trade debt $46,053 Superior Sign trade debt $36,745 Pacific Environmental trade debt $35,667 Planning Schindler Elavator trade debt $28,798 Picone Company trade debt $26,083 Paragon Schmidt trade debt $22,500 Topline Drafting Services trade debt $19,056 Messa Roofing trade debt $18,281 Berkey Welding trade debt $16,793 Southern Cal Fire Protection trade debt $12,510 Imperial Scaffolding trade debt $12,180 United Rentals trade debt $9,887 Occidental Services trade debt $7,500 Land Concern Ltd. trade debt $5,000 Desa Structural trade debt $4,600 Jerry Wyman trade debt $3,500 C&S SOLOMONS: Case Summary & 16 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: C.&S. Solomons Enterprise, Inc. dba Catamaran's Restaurant P.O. Box 1556 Solomons, MD 20688 Bankruptcy Case No.: 08-10017 Type of Business: The Debtor owns and manages restaurants. Chapter 11 Petition Date: January 2, 2008 Court: District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Howard M. Heneson, Esq. 810 Glen Eagles Court, Suite 301 Towson, MD 21286 Tel: (410) 494-8388 Fax: (410) 494-8389 Total Assets: $3,378,000 Total Debts: $2,711,863 Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Thomas Seymour personal loan $980,000 7795 Penn Manor Court Port Tobacco, MD 20677 Internal Revenue Service (941) Withholding $110,000 Special Procedures DIvision tax 31 Hopkins Plaza, Room 1120 Baltimore, MD 21201 Tribul Merchant Services cash advance $65,000 55 Broad Street, 2nd Floor New York, NY 10004 Dennis Grimsley personal loan $35,000 Comptroller of Maryland state property tax $20,000 state sales tax $15,000 U.S. Foodservice/Baltimore food deliveries $14,000 E. Goodwin & Sons, Inc. food deliveries $12,000 Ziner Tax Service accounting services $5,000 B.M.E. Business Systems P.O.S. System $4,500 Robert's Oxygen Co., Inc. CO-2 Deliveries $2,500 Mudd, Mudd & Fitzgerald, P.A. legal fees $2,500 Bookkeeping by Blanche accounting services $2,030 Waste Management refuse service $1,500 Suntrust Bank/Merchant credit card $1,500 Services servicing fees Nards Entertainment Satellite $1,157 Calvert County Treasurer's Personal Property $176 Office Tax CARBIZ INC: Increases Credit Facility to $111.98 Million -------------------------------------------------------- CarBiz Inc. has increased its credit facility with SWC Services LLC and AGM LLC from $30 million to a funding package of up to $111,975,000. The facility was used to: -- acquire the 26 dealerships in seven Midwestern states of Astra Financial Services Inc. and Calcars AB Inc. in October 2007 (approximately $22 million); -- finance CarBiz's Texas business that it acquired on December 24 ($15 million to date); and -- fund present operations and future growth. In the acquisition of the Texas business, the $15 million funded to date has been used to acquire approximately 1,500 used car and truck loans to spearhead CarBiz's newly formed "Superstore" operation in Houston, Texas. In its "Superstore," the typical vehicle will be financed by CarBiz at $15,000 with a four year term compared to $6,000 at its typical store. In addition to funds that have been made available for present operations under the facility, another $4 million has been set aside to provide inventory financing for CarBiz and the remaining balance, approximately $60 Million, will be used for future growth if certain terms and conditions under the facility are satisfied. "We know we have a solid business plan and others are starting to see it too," CarBiz CEO Carl Ritter commented. "This significant financing package, which is non dilutive to our shareholders, tells everyone that we are definitely on the right track as we start the New Year." About Carbiz Inc. 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. CHECK ELECT: Section 341(a) Meeting Scheduled for February 12 ------------------------------------------------------------- The U.S. Trustee for Region 16 will convene a meeting of Check Elect Inc. and its debtor-affiliates' creditors on Feb. 12, 2008, 9:00 a.m., at the U.S. Trustee's Office, Room 2610, 725 South Figueroa Street, in Los Angeles, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Based in San Francisco, California, Check Elect, Inc. and its affiliates -- http://www.paybytouch.com/-- are engaged in biometric authentication for loyalty and payments. The Debtor and nine of its affiliates filed for Chapter 11 protection on Dec. 14, 2007 (Bankr. C.D. Calif. Lead Case No. 07-21768). James O. Johnston, Esq., at Hennigan, Bennett, & Dorman, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets of $1 million to $100 million and debts of $100 million to $500 million. CHESAPEAKE ENERGY: Fitch Attaches 'BB' Issuer Default Rating ------------------------------------------------------------ Fitch Ratings considered Chesapeake Energy Corporation's recent sale of proved reserves via a volumetric production payment for $1.1 billion as debt equivalent. In the transaction, Chesapeake sold scheduled quantities of natural gas from interest in over 4,000 producing wells for a 15-year period. The transaction, which closed on Dec. 31, 2007, includes approximately 210 bcfe of proved reserves and 55 mmcfe per day of current net production. Chesapeake retains the obligation to deliver the scheduled quantities of gas which includes responsibility for all production costs and production taxes over the 15-year period. Chesapeake has also retained the drilling rights on the properties below currently producing intervals and outside of existing producing wellbores. Chesapeake's asset monetization is consistent with the revised financial plan the company announced during the second half of 2007. This plan also includes future asset monetizations in 2008 and 2009 for proceeds of at least $2 billion utilizing the VPP structure. Under the company's previous financial strategy, management had attempted to fund cash flow shortfalls (i.e. for growth capital) via a balanced strategy of approximately 50/50 debt and equity. The revised financial plan deviates from this balanced funding strategy and is expected to result in a much higher percentage of growth capital being funded with debt. As a result, debt levels, as measured by debt/boe of proven reserves, could increase from current levels which are already considered high for the existing ratings. Near-term, the proceeds received from the transaction are expected to be used to reduce revolver borrowings and therefore the transaction is expected to have only minor impacts on the company's credit metrics. Longer-term, the proceeds and the increased borrowing capacity are expected to support higher levels of capital expenditures and could therefore result in further deterioration of credit metrics. Future rating action will be determined based on the company's success in growing both reserve and production levels combined with the revised financial strategy which includes a larger component of debt financing. Additional factors that will be considered include the company's hedging strategy, capital expenditure levels and the resulting levels of free cash flows. Fitch rates Chesapeake's debts -- Issuer Default Rating at 'BB'; -- Senior unsecured debt at 'BB'; -- Senior secured revolving credit facility and hedge facilities at 'BBB-'; -- Convertible preferred stock at 'B+'. The Rating Outlook is Negative. Chesapeake is an Oklahoma City-based company focused on the exploration, production and development of natural gas. The company's proved reserves remain predominantly natural gas and are based 100% in North America. Chesapeake's operations are concentrated primarily in the Mid-Continent, South Texas, the Permian Basin, and the Appalachia Basin. The company's reserve growth in recent years reflects the company's aggressive acquisition strategy and consistent success through the drill-bit. CLEAR CHANNEL: TV Unit President and CEO Donald D. Perry Resigns ---------------------------------------------------------------- Clear Channel Communications disclosed that Donald D. Perry, president and chief executive officer of Clear Channel Television, will depart the company to pursue the next phase of his broadcast career. Craig Millar, senior vice president, Southern Region will assume Perry's duties on an interim basis until a new president and chief executive officer is named. "Don has made significant contributions to Clear Channel, to CCTV, and to the television industry during his long tenure with our company," Mark Mays, president and CEO of Clear Channel Communications, said. "He's a seasoned executive and we anticipate that his high standards and professionalism will ensure continued industry contributions. We sincerely thank him and wish him well in his future endeavors." Perry was named to his position in January 2006, and had served as executive vice president and chief operating officer of the division since 2005. He has also served as vice president and general manager of WOAI-TV since 1996, and as Southwest regional vice president of Clear Channel Television since 2002. About Clear Channel Communications Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Moody's Investors Service stated that it will likely downgrade Clear Channel Communications Inc.'s Corporate Family Rating to B2 when its change of control is completed. On Dec. 17, 2007, Clear Channel disclosed a tender offer and consent solicitation for its outstanding 7.65% senior notes due 2010 and its subsidiary, AMFM Operating Inc. announced a tender offer and consent solicitation for its 8% senior notes due 2008. CONSOLIDATED COMMS: Releases NPSI Shareholders Final Votes ---------------------------------------------------------- Consolidated Communications Holdings Inc. disclosed the final results of the North Pittsburgh Systems Inc. shareholder election associated with the merger completion announced on Dec. 31, 2007. The merger agreement provided that North Pittsburgh shareholders could elect to receive either $25.00 in cash, without interest, or 1.1061947 shares of Consolidated common stock for each share of North Pittsburgh common stock, subject to proration so that 80% of the North Pittsburgh shares are exchanged for cash and 20% are exchanged for stock. Of the 15,005,000 shares of North Pittsburgh common stock outstanding immediately prior to closing the merger: -- 12,398,398 shares, or approximately 82.6%, elected to receive cash; -- 1,349,601 shares, or approximately 9.0%, elected to receive stock; -- 1,257,001 shares, or approximately 8.4%, did not make an effective election. As a result, North Pittsburgh shares as to which a stock election was made will receive Consolidated common stock; North Pittsburgh shares as to which a cash election was made will receive cash for approximately 96.82% of those shares and Consolidated common stock for the remainder; and shares with respect to which no effective election was made will receive Consolidated common stock. Consolidated will not issue any fractional shares of stock and, instead, each North Pittsburgh shareholder immediately prior to the merger who would otherwise be entitled to a fractional share of Consolidated common stock (based on the total stock consideration into which the holder's North Pittsburgh shares have been converted in the merger) will receive an amount in cash equal to $18.53 multiplied by the fractional share interest to which the shareholder would otherwise be entitled. About Consolidated Communications Based in Mattoon, Illinois, Consolidated Communications Holdings, Inc. -- http://www.consolidated.com/-- is a rural local exchange company providing voice, data and video services to residential and business customers in Illinois and Texas. Each of the operating companies has been operating in their local markets for over 100 years. With approximately 241,000 local access lines and over 43,000 digital subscriber lines, the Company offers a wide range of telecommunications services, including local and long distance service, custom calling features, private line services, dial-up and high-speed Internet access, digital TV, carrier access services, and directory publishing. Consolidated Communications is the 17th largest local telephone company in the United States. * * * As reported in the Troubled Company Reporter on Oct. 19, 2007, Moody's Investors Service affirmed the B1 corporate family rating for Consolidated Communications Holdings Inc. and assigned a B1 rating to the proposed $950 million senior secured credit facilities at the company's direct subsidiaries, Consolidated Communications Acquisition Texas Inc., Consolidated Communications Inc., and Fort Pitt Acquisition Sub Inc. Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Consolidated Communications Holdings Inc. and the 'BB' rating on the company's existing bank loan. The outlook is negative. DC PROPERTIES: Non-Filing of Reports Prompts Court to Dismiss Case ------------------------------------------------------------------ At the behest of the U.S. Trustee for Region 4, the U.S. Bankruptcy Court for the Southern District of West Virginia dismissed DC Properties LLC's Chapter 11 case after the Debtor failed to file reports and pay fees. As reported on the Troubled Company Reporter on Oct. 6, 2006, the U.S. Trustee asked the Court to convert the Debtor's chapter 11 case into one under Chapter 7 of the Bankruptcy Code due to the Debtor's failure to file operating reports for the months of June, July and August 2006. The Court denied the U.S. Trustee's motion in a November 2006 order, and instead directed the Debtor to file operating reports. Subsequently, the U.S. Trustee asked the Court to dismiss the Debtor's case for failure to: -- file documents particularly report of sale and operating report; and -- pay fees with certificate of service. Headquartered in Huntington, West Virginia, DC Properties, LLC filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D. W.Va. Case No. 05-26014). Joseph W. Caldwell, Esq., at Caldwell & Riffee, and Marshall C. Spradling, Esq., represented the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed assets between $1 million and $10 million and debts between $10 million and $50 million. DELPHI CORP: Seeks Provisional Allowance of Unreconciled Claims --------------------------------------------------------------- Delphi Corp. and its debtor-affiliates seek the provisional allowance or estimation of 1,817 claims solely for purposes of distributing the Discount Rights provided for the in First Amended Plan of Reorganization. The estimated allowed amounts for the claims aggregate $414,716,298, but majority of the claims are estimated at $0. The Plan provides that each holder of an Allowed General Unsecured Claim will receive: (i) the number of shares of New Common Stock equal to 77.3% of the Face Amount of the Allowed Claim and (ii) the entitlement to participate in the Discount Rights Offering. Discount Rights are to be distributed on a pro rata basis to holders of allowed claims in Class C - General Unsecured Claims under the Plan. The Plan provides in pertinent part that "[i]f a Claim of a Discount Rights Offering Eligible Holder is not Allowed or otherwise reconciled by the Debtors by the date of commencement of the Confirmation Hearing, such Claim shall be temporarily allowed, solely for purposes of participation in the Discount Rights Offering, in the amount so estimated by the Bankruptcy Court or agreed to by the holder of the claim and the Debtors." John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, relates that to make a pro rata distribution of the Discount Rights, it is necessary to estimate or temporarily allow any claims that have not been allowed, disallowed, or reconciled prior to the commencement of the Discount Rights Offering. Although the vast majority of claims against the Debtors have been allowed or reconciled, there remain a number of Unreconciled Claims that will need to be estimated or provisionally allowed for purposes of making the appropriate calculations for a pro rata distribution of the Discount Rights, Mr. Butler tells the Court. A list of the Unreconciled Claims, and their estimated allowed amounts is available for free at: http://bankrupt.com/misc/Delphi_RightsOffering_Caims.pdf The list includes certain holders of Supplemental Executive Retirement Program claims for which the holder has not yet filed a proof of claim, but for whom the Debtors will schedule an actuarially determined SERP claim prior to the confirmation hearing so that these claimants are able to participate in the Discount Rights Offering. In particular, several claims that were filed as secured claims or claims with other priority status, but which the Debtors assert should be reclassified as general unsecured claims, are included on the list in the amount of $0 because as currently classified they are not entitled to participate in the Discount Rights Offering under the Plan, Mr. Butler explains. The Debtors note that, to the extent that the Claimants will receive contract cure payments in cash, and those amounts are reconciled prior to the commencement of the Discount Rights Offering, the amount at which the claimants are entitled to participate in the Discount Rights Offering will be correspondingly reduced. The Debtors also propose that, should the provisional allowance or estimation results in a particular claimant's receiving more Discount Rights than the claimant should have received based on the ultimate allowed amount of the claim and those rights are transferred or exercised, then, in the Reorganized Debtors' sole discretion, (a) an amount of New Common Stock equivalent to the value of the Excess Discount Rights will be withheld from the ultimate distribution to such claimant or (b) the claimant will be required to remit payment to the Reorganized Debtors in an amount equal to the value of the Excess Discount Rights. The Debtors, in this request, do not seek estimation or temporary allowance of certain claims which, while filed as general unsecured claims, will not be entitled to distributions as general unsecured claims. These claims include Flow-Through Claims, which are not impaired under the Plan, and certain other unsecured claims that will be expunged or otherwise resolved on or shortly after the Effective Date of the Plan, or that have been or will be satisfied pursuant to other orders of the Court. Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. (Delphi Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: UAW Objects to Management Compensation Plan -------------------------------------------------------- The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America objects to confirmation of Delphi Corp. and its debtor-affiliates' Joint Plan of Reorganization solely based on the Management Compensation Plan, which was made part of the Plan. The UAW reserves its right, after taking discovery, to amend, change or add to the assertions set forth herein, to reflect facts and evidence discovered. The proposed MCP includes, among other things, cash and equity emergence awards to be issued on the Plan's effective date, as well as other compensation to be paid to executives after the Effective Date, including a long-term incentive plan that purports to reserve 8% of Reorganized Delphi's fully diluted new common stock for annual grants to executives covered by the MCP. Peter D. DeChiara, Esq., at Cohen, Weiss and Simon LLP, in New York, avers that among other possible grounds that the UAW may assert for its objection after taking discovery, the UAW objects on the ground that Plan, to the extent it contains the MCP, fails to satisfy Section 1129(a)(3) of the Bankruptcy Code. Section 1129(a)(3) provides that a court shall only confirm a plan if it "has been proposed in good faith and not by any means forbidden by law." Mr. DeChiara argues that the MCP is not reasonable and is not fundamentally fair to the UAW-represented employees who made enormous sacrifices for the Debtors' reorganization. In particular, the MCP, he says, violates the "Equivalence of Sacrifice" provision of the UAW-Delphi-GM Memorandum of Understanding, which the Court approved on July 19, 2007. The UAW finds the MCP in its entirety objectionable, in that the total compensation that it will provide to the executives covered by it will make it impossible to conclude that the Plan is fundamentally fair to the UAW-represented employees or that the executives have sacrificed in a manner equivalent to the UAW- represented employees. UAW intends to focus on these provisions on the MCP -- Short-Term Incentive Plan, the Long-Term Incentive Plan and the Chapter 11 Effective Date Executive Payments. These specific provisions will make the executives covered by it whole or substantially whole for any compensation they did not receive because of the Debtors' Chapter 11 filing, Mr. DeChiara relates. He notes that the UAW-represented employees, by contrast, have not been and will not be made whole, but have sacrificed tremendously for the Debtors' reorganization. Mr. DeChiara adds that the incentives and payments under the MCP will leave some or all of the executives above market levels regarding some or all of their compensation. "To the extent some or all of the executives are above market levels as a result of the MCP, the POR is unfair and violates the equivalence-of- sacrifice requirement." UAW filed the Amended Objection to heed to certain demands by the Debtors. At a meet-and-confer held on Dec. 19, 2007, the Debtors told UAW that they would not agree to the discovery requested by the union, unless it (i) amended its preliminary objection to reflect that it was an objection to confirmation of the Plan; and (ii) add allegations on the specific provisions of the MCP to which the UAW was objecting. Headquartered in Troy, Michigan, Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Debtors' exclusive plan-filing period expires on Dec. 31, 2007. On Sept. 6, 2007, the Debtors filed their Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan. (Delphi Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) COMBIMATRIX CORP: Posts $3.4 Million Net Loss in Third Quarter -------------------------------------------------------------- CombiMatrix Corp. reported a net loss of $3.4 million for the third quarter ended Sept. 30, 2007, versus a net loss of $4.3 million in the comparable 2006 period. These results included non-cash gains of $290,000 and $913,000, respectively, related to the adjustment of the company's long-term warrant liability to fair value. Excluding the effects of the warrant liability adjustments, the third quarter net loss improved by $1.5 million, or 29% as compared to the net loss for the comparable 2006 period. Revenues for the third quarter of 2007 were $1.7 million versus $1.3 million for the second quarter of 2007 and $1.8 million in the comparable 2006 period. Third quarter 2007 revenues were comprised of $627,000 in government contact revenues and $1.05 million in CustomArrayTM product, equipment and service revenues, including diagnostic services. Third quarter 2006 revenues were comprised of $725,000 of government contract revenues and $1.12 million of CustomArrayTM product, equipment and service revenues. "For the third quarter of 2007, we achieved revenues of $1.7 million which represents a 26% increase over the second quarter of 2007 and a 9% decrease from the third quarter of 2006. The decrease relative to 2006 was expected as we made a significant strategic shift in our commercial focus early in 2007 from selling R&D products to researchers to selling diagnostic products and services to physicians, patients and reference laboratories. The change in strategy enables us to allocate resources to our diagnostics business, while facilitating reduced operating costs. "Consequently, our net cash burn for the third quarter of 2007 was $2.3 million, which represents a 16% reduction in net cash burn incurred during the second quarter of 2007 and a 39% reduction in net cash burn incurred during the third quarter of 2006," concluded Dr. Kumar. Operating expenses for the third quarter of 2007 were $5.6 million versus $7.2 million in the comparable 2006 period. Operating expenses included research and development and marketing, general and administrative expenses of $1.9 million and $2.2 million, respectively, versus $2.8 million and $2.7 million, respectively, in the comparable 2006 period. Included in these amounts were non-cash stock compensation charges totaling $1.4 million in the third quarter of 2007 versus $588,000 in the comparable 2006 period. Cash, cash equivalents and short-term investments totaled $10.5 million as of Sept. 30, 2007 compared to $14.3 million as of Dec. 31, 2006. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $38.4 million in total assets, $2.7 million in total liabilities, and $35.7 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26cc Going Concern Doubt PricewaterhouseCoopers LLP, in Seattle, expressed substantial doubt about CombiMatrix Corporation's ability to continue as a going concern aftr auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. PwC reported that the company has suffered recurring losses from operations and management anticipates that the company will require additional financing in the foreseeable future. About CombiMatrix Corp. Headquartered in Mukilteo, Washington, CombiMatrix Corp. (NasdaqGM: CBMX) -- http://www.combimatrix.com/-- is a diversified biotechnology company that develops and sells proprietary technologies, products and services in the areas of drug development, genetic analysis, molecular diagnostics, nanotechnology research, defense and homeland security, as well as other potential markets where the company's products and services could be utilized. DELTA PETROLEUM: Tracinda Deal Cues S&P's Positive CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on oil and gas exploration and production company Delta Petroleum Corp. on CreditWatch with positive implications. "The rating action reflects the significant improvement expected to the company's liquidity and financial profile following the announcement that Kirk Kerkorian's Tracinda Corp. has reached an agreement with Delta to purchase 36 million common shares," said Standard & Poor's credit analyst Paul B. Harvey. The purchase will represent roughly 35% of Delta's fully diluted common stock, for total proceeds to Delta of $684 million. At this time, Standard & Poor's views Tracinda's investment and resulting liquidity as a meaningful benefit to Delta's credit quality. The company will now have very strong liquidity in order to expand its drilling and infrastructure spending, particularly in the Piceance and Paradox basins, which should benefit the company's financial metrics if successful. Also, the significant liquidity injection reduces the company's near-term liquidity concerns and improves its ability to meet its obligations in the short term. Still, Tracinda will have the ability to nominate one-third of Delta's board members, giving it a measure of control over financial policy. As a result, Delta could take a more aggressive approach to shareholder returns if Tracinda wishes to accelerate its return on investment. Standard & Poor's will review the ratings on Delta following the close of the transaction, which is expected in February and subject to shareholder approval. DOV PHARMA: Posts $3.8 Million Net Loss in Third Quarter -------------------------------------------------------- DOV Pharmaceutical Inc. reported a net loss of $3.8 million on revenue of $229,705 for the third quarter ended Sept. 30, 2007, as compared with a net loss of $17.5 million on revenue of $1.1 million for the comparable period in 2006. Revenue for the three months ended Sept. 30, 2007, is primarily comprised of the reimbursement of certain costs incurred by the company for services provided to XTL. Revenue for the three months ended Sept. 30, 2006, consisted of $1.1 million of amortization of the $35.0 million fee the company received on the signing of the license, research and development agreement for its collaboration with Merck over the estimated research and development period. In December 2006, the license agreement with XTL Biopharmaceuticals Ltd. for the licensing of bicifadine on Jan. 15, 2007, was terminated. Thus the remaining deferred revenue was recognized during the fourth quarter of 2006 upon such termination and thus no additional revenue was recorded in the three months ended Sept. 30, 2007. Research and development expense decreased $5.8 million to $2.5 million for the third quarter of 2007 from $8.3 million for the comparable period in 2006. General and administrative expense decreased $1.3 million to $1.7 million for the third quarter of 2007 from $3.0 million for the comparable period in 2006. The company had $-0- interest expense in the three months ended Sept. 30, 2007, compared to $2.4 million in the corresponding period in 2006, primarily due to the completion of the Exchange Offer and the exchange transactions in the third quarter of 2006 which reduced the aggregate bonds outstanding from $80 million in original principal amount to $-0- million in original principal amount. On July 26, 2006, the company exchanged an aggregate of 3,445,000 shares of its common stock for an aggregate of $10.0 million in original principal amount of the then outstanding convertible debentures. As a result of the exchange, the company recorded a $5.6 million non-cash charge related to the fair value of the additional shares issued to induce the exchange. There was no such expense in 2007. Nine Month Results For the nine months ended Sept. 30, 2007, the company reported a net loss of $6.3 million on revenue of $8.5 million, compared with a net loss of $58.4 million on revenue of $3.7 million for the comparable period in 2006. At Sept. 30, 2007, cash and cash equivalents and marketable securities totaled $10.6 million. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $17.0 million in total assets, $4.5 million in total liabilities, $6.3 million in Series D convertible preferred stock, and $6.2 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?26c0 Going Concern Doubt As reported in the Troubled Company Reporter on April 5, 2007, PricewaterhouseCoopers LLP in Florham Park, N.J., expressed substantial doubt about DOV Pharmaceutical Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. About DOV Pharmaceutical Based in Somerset, N.J., DOV Pharmaceutical Inc. (Other OTC: DOVP.PK) -- http://www.dovpharm.com/-- is a biopharmaceutical company focused on the discovery, acquisition and development of novel drug candidates for central nervous system disorders. The company's product candidates address some of the largest pharmaceutical markets in the world including depression, pain and insomnia. DUNMORE HOMES: Gets Final OK to Hire A&M CF as Financial Advisor ---------------------------------------------------------------- The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York has authorized Dunmore Homes Inc., on a final basis, to employ A&M CF as its financial advisor, nunc pro tunc to Nov. 8, 2007. A&M CF has disclosed that the A&M CF Engagement Letter contains a provision that provides Alvarez & Marsal Securities LLC with a "tail" under certain circumstances -- the Prepetition Tail Claim -- and that although the "tail" provision creates a prepetition contingent unliquidated unsecured claim against the Debtor's estate if A&M-CF's engagement is not approved effective as of the bankruptcy filing date, if A&M-CF is retained, the prepetition claim will be deemed waived. A&M CF will be compensated in accordance with the procedures set forth in Sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules; provided that fee applications filed by A&M will be subject to review only pursuant to the standards set forth in Section 328(a) of the Bankruptcy Code. The Official Committee of Unsecured Creditors retains the right to object, pursuant to Section 330, to any Transaction Fee sought by A&M-CF in connection with a Restructuring Transaction, Financing Transaction or Sale Transaction that does not result in the waiver or release of claims against the Debtor. The Prepetition Tail Claim is waived and released, the Court ruled. The U.S. Trustee retains all rights to object to A&M CF's interim and final fee applications. Committee Objects The Creditors Committee urge Judge Glenn to defer ruling on the employment application of Alvarez & Marsal Securities LLC until it has decided on the Venue Transfer Motion. The outcome of the Court's ruling may significantly impact the administration of the case, the Committee averred. Should the Court decide to proceed, the Committee asked the Court to: -- find that the estate should not pay for services rendered in connection with the wind down of non-debtor subsidiaries and a potential $2,600,000 transaction fee, which is a part of the restructuring of the Debtor's business; -- require the Debtor to submit an amended application that: (a) approximates the time A&M CF expects to spend on each of the services described in the Application as those services apply only to the Debtor; (b) clearly states that the existing DIP loan fees are not subject to a Financing Transaction Fee; and (c) affirmatively states that all fees of A&M will be subject to Section 330 of the Bankruptcy Code, thereby requiring all A&M professionals to keep careful time records to justify the reasonableness of any fees. The Committee said that it does not oppose the retention of A&M CF as the Debtor's financial advisor and investment banker nor does it generally believe that A&M is unqualified to serve as financial advisor and investment banker. Rather, the Committee sought to ensure greater transparency for the Court and all parties-in- interest. Karen Ostad, Esq., at Morrison & Foerster LLP, in New York, asserted that the proposed fee structures are unfair, particularly given the wind-down nature of the Debtor's case. The Committee reminded the Court that the Debtor has non-debtor subsidiaries whose affairs are intertwined with the Debtor's own affairs. Ms. Ostad pointed out that the Fee Structures fail to describe whether and how A&M plans on segregating services provided to the Debtor from services provided to the Non-debtor Subsidiaries. Debtor Replies Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, in New York, maintained that A&M-CF is entitled to a transaction fee only upon a successful transaction. No Transaction Fee is payable in connection with the DIP Loan. "Any transaction entitling A&M-CF to a Transaction Fee will benefit the Debtor's estate because it will result in the release of co-borrowing or guarantee claims against the Debtor to the benefit of its creditors," Ms. Grassgreen contended. Ms. Grassgreen clarified that if A&M-CF is entitled to a Transaction Fee, it will first seek payment of the fee from the non-debtor subsidiaries. To the extent it does not receive payment from the subsidiaries, A&M-CF will seek payment from the Debtor. In this regard, the Debtor suggested that A&M-CF's Transaction Fee be approved pursuant to Section 328(a) of the Bankruptcy Code, provided that the Committee will have the opportunity to review the Transaction Fees solely with respect to the issue regarding whether, and to what extent, a benefit was provided to the Debtor's estate. As reported in the Troubled Company Reporter on Dec. 6, 2007, the Bankruptcy Court authorized the Debtor, on an interim basis, to employ Alvarez & Marsal Securities LLC as its financial advisor and investment banker effective as of Nov. 8, 2007. As reported in the Troubled Company Reporter on Nov. 19, 2007, Dunmore Homes Inc. told the Court that A&M Securities will provide investment banking services with respect to any potential restructuring transaction, financing and sale transaction. Specifically, A&M Securities' services includes: a) with respect to any financial advisory services, the firm will: i) review the Debtor's business, business plan and strategic and financial position; ii) assist with the formulation, evaluation, implementation of various options for a restructuring, financing, reorganization, merger, or sale the Debtor or its assets or business. b) with respect to any restructuring transaction, the firm will: i) provide financial advisory services to the Debtor in connection with developing, and seeking approval for any restructuring plan; ii) provide financial advisory services to the Debtor in connection with any structuring of new securities to be issued under a restructuring plan; iii) assist the Debtor in negotiations with creditors, shareholders and other appropriate parties-in-interest; and iv) participate in hearing before the Bankruptcy Court with respect to matters upon which of the firm has provide advice; c) with respect to any financing transaction, the firm will: i) assist in preparing a private placement memorandum with any amendments and supplements thereto; ii) assist in identifying and contacting prospective investors as well as in soliciting indications of interest in a financing transaction among prospective investors; iii) assist in evaluation indications of interest received from prospective investors; iv) assist in negotiating the financial terms and structure of a financing transactional; v) provide other financial advisory services and investment banking services reasonably necessary to accomplish the foregoing and consummate a financing transaction; d) with respect to any sale transaction, the firm will: i) assist in preparing any offering memorandum for distribution and presentation to prospective purchasers, if necessary; ii) assist in soliciting interest in a transaction among prospective purchasers; iii) assist in evaluating proposals received from prospective purchasers; iv) advise the Debtor as to the structure of any sale transaction, including the valuation of any non-cash consideration; v) assist in negotiating the financial terms and structure of any sale transaction; and vi) provide other financial advisory services and investment banking services reasonable necessary to accomplish the foregoing and consummate a sale transaction. Marc Liebman, a managing director of the firm, assured the Court that the firm does not hold any interest adverse to the Debtor's estate is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Dunmore Homes Headquartered in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. When the Debtor filed for protection against its creditors, it listed assets and liabilities of more than $100 million. The Debtor's exclusive period to file a plan expires on March 7, 2008. (Dunmore Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DUNMORE HOMES: Obtains Final Court Nod to Employ A&M as Consultant ------------------------------------------------------------------ The Hon. Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York has authorized Dunmore Homes Inc., on a final basis, to employ A&M North America, as its consultant, nunc pro tunc to Nov. 8, 2007. A&M North America will been entitled to receive a flat monthly fee of $80,000 with respect to the services of Scott Brubaker, the Court ruled. The Court directed A&M North America to continue to monitor its involvement in the Debtor's case and, if necessary and appropriate under changed circumstances during the course of the case, make further downward adjustments of its monthly fee. The U.S. Trustee retains all rights to object to A&M's interim and final fee applications. Committee Objects The Official Committee of Unsecured Creditors asked the Bankruptcy Court to defer ruling on the Alvarez & Marsal North America LLC Employment Application until it has decided on the Venue Transfer Motion because the outcome of the Court's ruling may significantly impact the administration of the case of the Debtor. Should the Court decide to proceed, the Committee asked the Court to: -- reduce the proposed $100,000 monthly fee with respect to the services of Scott Brubaker; -- require the Debtor to submit an amended application that: (a) approximates the time A&M expects to spend on each of the services described in the A&M Application as those services apply only to the Debtor; (b) affirmatively states that: * no services have been rendered or will be rendered for the benefit of the Dunmore Companies; or * to the extent services performed by A&M have been rendered on behalf of both the Debtor and the Dunmore Companies, only the services which will be specifically described in any fee application presented on A&M's behalf to the Court rendered on behalf of the Debtor are chargeable to the estate; * provides a thorough description of why the estate should, on top of the hourly rates of A&M professionals, be required to pay an additional non-refundable $100,000 monthly fee for the services of Scott Brubaker no matter how little time he may spend on the Debtor's affairs; and * provides that all fees of A&M will be subject to Section 330 of the Bankruptcy Code, thereby requiring all A&M professionals to keep careful time records to justify the reasonableness of any fees. The Committee complained that the Debtor failed to describe why Mr. Brubaker's services are special and why it should be treated differently than A&M services that fall under the hourly A&M fee structures applicable to all other A&M professionals. The A&M Application and Brubaker Affidavit are silent as to why the estate is being asked to pay a non-refundable fee of $100,000 a month for the services of only one person whose background and duties are not described in the A&M Application, Karen Ostad, Esq., at Morrison & Foerster LLP, in New York, argued. Debtor Replies To address the Committee's concern, the Debtor submitted additional information, including the background and expertise of Mr. Brubaker. According to Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, in New York, Mr. Brubaker has significant experience providing financial advisory services to debtors. Specifically, he has provided financial advisory and restructuring services to Spiegel, Hexcel, Primary Health Systems, Trivalley Growers, and Webvan Group. "The Application clearly delineates the financial advisory services to be provided by Mr. Brubaker," Ms. Grassgreen said. As of the retention of A&M North America by the Debtor, Ms. Grassgreen reveals that Mr. Brubaker was initially dedicating between 50 to 60 hours per week. Leading into November 2007, Mr. Brubaker's time commitment was reduced to between 40 to 50 hours per week and although his monthly fee initially was $100,000, in November, Mr. Brubaker and A&M agreed to reduce the fee to $80,000 per month. Mr. Brubaker's hourly rate is $675. As reported in the Troubled Company Reporter on Nov. 19, 2007, A&M North America will provide consulting services to the Debtor's chief executive officer and board of directors in connection with the firm's efforts to stabilize the Debtor's financial performance and assist the Debtor in its reorganization effort. Specifically, the firm will: a) assist in evaluation of the Debtor's current business plan and in preparation of a revised operating plan and cash flow forecast; b) assist in identification of cost reduction and cash conservation opportunities; c) assist in the development of a revised cash management process; d) assist in financing issues, including assistance in preparation of reports and liaison with creditors; and e) other activities as may be approved by the Debtor and agreed to by the firm. The firm's professionals and their compensation rates are: Designations Hourly Rate ------------ ----------- Managing Directors $575 - $700 Directors $400 - $550 Associates $300 - $400 Analysts $250 - $300 Mr. Brubaker assured the Court that the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Dunmore Homes Headquartered in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. When the Debtor filed for protection against its creditors, it listed assets and liabilities of more than $100 million. The Debtor's exclusive period to file a plan expires on March 7, 2008. (Dunmore Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Court Defers DIP Financing Maturity to January 31 ------------------------------------------------------------------ At the request of DURA Automotive Systems, Inc., and its debtor- affiliates, the U.S. Bankruptcy Court for the District of Delaware extended the maturity date of the Debtors' postpetition secured revolving and term loan financing facilities until Jan. 31, 2008. The Debtors told the Court that without extensions of the maturity dates, previously set Dec. 31, 2007, the Debtors obligations under the revolving and term-loan facilities become immediately due and payable, and the DIP Lenders would be entitled to exercise all remedies available to them. Absent the extension, the Debtors would face, among other things, insufficient working capital to fund ongoing operations. Beginning in September 2007, the Debtors initiated discussions with, and solicited exit financing proposals from, a variety of potential exit lenders. The Debtors have selected Goldman Sachs Credit Partners L.P. and Barclays Capital to act as arrangers to syndicate the exit financing, but as of mid-December 2007, the arrangers have been unable to secure a full syndication of DURA's proposed $425 million exit financing, due to tighter credit conditions. Marc Kieselstein, P.C., Esq., at Kirkland & Ellis, LLP, in Chicago, Illinois, recounted that, in December 2007, the Debtors and their advisors also contacted several potential third-party lenders, and solicited debtor-in-financing proposals that would replace the existing DIP Facilities in one form or another. Though some parties showed interest in providing proposals, none expressed confidence they could close the transaction within the time-frame required by the Debtors, said Mr. Kieselstein said. According to Mr. Kieselstein, the Debtors along with their advisors determined that six months would be an appropriate length of for the maturity date extensions of each of the DIP Facilities, but that, to meet the Debtors' operational financing needs between February and June 2008, the extensions would require an increase in the size of the term loan amount under the DIP Facilities. For January 2008, however, no term loan increase is necessary to meet the debtors' operational financing needs. Accordingly, obtaining maturity date extensions of month for each of the DIP facilities was the only feasible extensions available to the Debtors, Mr. Kieselstein told the Court. Given the short period of time allowed by the one-month extensions, the Debtors are presently, however, attempting to negotiate, among other things, follow-on five or six month maturity date extensions of the each of the DIP facilities and the term loan increase. The Debtors will present any request for further amendments to the DIP Facilities at the Jan. 24, 2008 omnibus hearing. Amendments to DIP Facilities The significant amendments to the Term Loan Facility are: Maturity Date: January 31, 2008 Fees: Status Report filed under seal. Canada Restructuring: Transaction authorized subject to pledge of new entity stock in favor of Postpetition Secured Parties, including necessary covenant waivers and authority for Postpetition Agents to release guaranties and liens as necessary. Interest: For Base Rate Loans, Base Rate plus 2.25% per annum. For LIBOR Loans, at the LIBOR Rate plus 3.25% per annum. All loans deemed Base Rate Loans after December 31, 2007. Immediate Default Interest: Default Interest to accrue starting Dec. 31, 2007, provided that if the Event of Default occurs after December 31, there will be no additional increase in the interest rate from that provided in the Term Loan DIP Credit Agreement. Financial Advisor Engagement: Counsel to the Goldman Sachs Credit Partners, L.P., as administrative agent to engage a financial advisor Cash Flow Forecasts: Debtors to provide rolling cash flow forecasts for the following 13-week period each week. Capital Expenditures: Maximum Consolidated Capital Expenditures for January 2008 to be less than or equal to $9 million. Amendments of the Revolving DIP Facility are: Maturity Date: January 31, 2008 Fees: Status Report filed under seal. Canada Restructuring: Transaction authorized subject to pledge of new entity stock in favor of Postpetition Secured Parties, including necessary covenant waivers and authority for Postpetition Agents to release guaranties and liens as necessary. Minimum EBITDA Covenant: None for January 2008. Immediate Default Interest: None. Default interest to accrue, only when applicable, pursuant to the Postpetition Revolving Credit Agreement. New Commitment Letter: On or before January 15, 2008, the Debtors will have procured a commitment from financial institutions reasonably accepted to the Lenders for a new term loan DIP credit facility. New Financial Covenant: During the term of the Maturity Date extension, the Borrowers will have to comply with minimum Excess Availability covenant. Eligible Receivables: Revised to include "25% in respect of Ford Motor Company including any of its affiliates and subsidiaries, or an Account Debtor whose securities are rated Investment Grade." Base Rate Loans: All loans to be deemed Base Rate Loans. Use of Funds: Proceeds of any Credit Extension may not be used to refinance, repay, cash collateralize, back to back, replace, or otherwise support all or any part of the synthetic letters of credit under the Term Loan DIP Agreement or pay any principal amounts due under that agreement other than the amounts mutually agreed. Financial Advisor Engagement: Counsel to the Administrative Agent to engage a financial advisor. Cash Flow Forecasts and Borrowing Base Certificates: Debtors to provide rolling cash flow forecast for the following 13-week period and Borrowing Base Certificate each week. Mr. Kieselstein told the Court that the Debtors, in order to obtain the Maturity Date extensions and effect the Canada Restructuring, were required to offer "sufficient" consideration to obtain unanimous lender consent under the DIP Facilities. The Debtors, however, redacted the Amendment Fees from the Amended Credit Agreements filed with the Court. The Court ruled that all prepetition second priority liens and replacement liens granted to prepetition second priority lenders in the Final DIP Order on any assets being released by the Postpetition Secured Parties in connection with the Canada Restructuring will be released to the same extent as any liens on the "Covered Assets" in favor of the Postpetition Secured Parties are released. All guarantees in favor of the Prepetition Second Priority Lenders from any person that has also issued a guaranty in favor of the Postpetition Secured Parties, which is being terminated in connection with the Canada Restructuring, will be terminated to the same extent as the guarantees by the Covered Guarantors in favor of the Postpetition Secured Parties are terminated. To the extent that (a) any Covered Assets are not property of a Debtor or (b) any Covered Guarantor is not a Debtor, the Prepetition Second Priority Agent will use all efforts to release their liens on the Covered Assets and terminate the guaranties in their favor from the Covered Guarantors. The liens of the Postpetition Secured Parties granted in the Final DIP Order, the Prepetition Second Priority Liens and the replacement liens granted to the Prepetition Second Priority Lenders in the Final DIP Order will each attach to 66% of the capital stock of the newly formed German partnership to the same extent and with the same priority as provided for in the Final DIP Order. All of those liens will be deemed perfected, valid, binding, and enforceable by the Postpetition Secured Parties and the Prepetition Second Priority Lenders and subject to the priorities provided for in the Final DIP Order without the need for any other filing or action, provided that the liens of the Prepetition Second Priority Lenders will be junior in all respects to the liens of the Postpetition Secured Parties. The transfers contemplated in the Canada Restructuring will not increase the value of assets subject to the liens or claims held by the Prepetition Second Lien Lenders. The Court also authorized the Debtors to pay the DIP Lenders $358,000 to overlook loan covenant violations as a result of the Debtors' entry into Court-approved agreements with Johnson Controls Systems, Inc., its affiliates and subsidiaries, and Bridgewater Interiors LLC. Investor Dies in Plane Crash In other news, Michael Kline, the chief executive officer of Pacificor LLC, died in a plane crash on Dec. 23, 2007. Pacificor has previously agreed to invest up to $160 million in reorganized DURA by buying shares of new common stock that were not purchased in an equity rights offering. The Pacificor commitment depended on the bankruptcy exit loans that the Debtors were unable to obtain and will expire on January 31. About DURA Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 41 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Restructuring of Canadian Subsidiaries Approved ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware also authorized Dura Automotive Systems Inc. and its debtor-affiliates to implement corporate restructuring of certain of their subsidiaries located in Canada to obtain certain tax savings. Mr. Kieselstein told the Honorable Kevin J. Carey that, in order to realize the tax savings, the Debtors must begin the Canada Restructuring prior to Dec. 31, 2007. In order to do so, the Debtors required certain waivers under the DIP Facilities. Specifically, the Canada Restructuring involves: (1) Transfer of Debtor Dura Automotive Canada ULC's (i) stock in Debtor Universal Tool & Stamping and Dura Automotive Cables and (ii) $26 million notes receivables from Trident to Debtor Dura Operating Corp. as a return of capital; (2) Migration and re-incorporation of Debtor Dura Ontario, Inc., as an Unlimited Liability Company in British Columbia; (3) Formation of New German Holding Company (NewCo KG); (4) Removal of pledges on Canadian shares, assets and the $84 million DOC-ULC note, and 65% of Dura Holding Germany shares and replacing them with pledge of 65% of NewCo KG shares; (5) Contribution of Dura Operating of its shares in DOC-ULC and the $84 million Note to NewCo KG; and (6) Transfer of Dura Operating's 90% shares in DGH and its 99.9% interest in Debtor Dura Operating Canada LP to NewCo KG. Mr. Kieselstein says the DIP Amendments do not require specific approval by the Ontario Superior Court of Justice. RSM Richter Inc., which provides the Ontario Court with updates on material activities in the Debtors' Chapter 11 cases, supports the Canada Restructuring. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. D. Del. Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). ENCORE ACQUISITION: Unit Agrees to Buy EAC Assets for $250 Mil. --------------------------------------------------------------- Encore Energy Partners LP has signed a definitive agreement to acquire oil and natural gas producing properties in the Permian and Williston Basins from Encore Acquisition Company in exchange for total consideration of $250 million, subject to customary closing conditions and adjustments. The consideration for the acquisition will consist of $125 million in cash and approximately 6.88 million common units representing limited partner interests in ENP (based on the trailing 10-day closing price of $18.156 per common unit from Dec. 26, 2007). In order to fund the cash portion of the purchase price, ENP will borrow under its existing $300 million revolving credit facility. As a result of the transaction, EAC and its affiliates will own approximately 21.98 million of ENP's outstanding units, or approximately 68%. The transaction will be immediately accretive to ENP's 2008 distributable cash flow per unit. "We continue to analyze deals on the market, but this transaction is an example of our ability to grow ENP through the sale of properties from EAC to ENP," Jon S. Brumley, Chief Executive Officer and President, stated. "This transaction is positive for both companies. The MLP is adding another first class set of properties to its portfolio that are long-life, shallow-declining, and have low maintenance capital requirements which are just as accretive three years from now as they are in 2008. EAC is excited about increasing its equity position in ENP and at the same time delevering with the cash proceeds." The oil and natural gas properties being acquired from EAC have these characteristics: -- Proven reserves of 10.8 million barrels of oil equivalent, 88% proved developed producing, and 65% oil. -- Current production of approximately 1,800 BOE per day, 83% operated, and 63% oil. Approximately 80% of current production is located in six fields in the Permian Basin -- Crockett, Nolley McFarland, Dune, North Cowden, Champmon, and Yates. The remaining production is located in three fields in the Williston Basin -- Horse Creek, Charlson Madison Unit, and Elk. -- Encore's internal engineers have estimated that the proved developed producing properties will generate approximately $34 million in cash flow (revenues less direct operating expenses) in 2008. -- An average reserve-to-production ratio of 16 years. -- Estimated maintenance capital expenditures of $5 million per year. -- Expected lease operating expense of approximately $9.70 per BOE for 2008. -- Production taxes of approximately 8.7% of wellhead revenues for 2008. "We have locked in the high-margin cash flows from this transaction through our proven hedging strategy of protecting two- thirds of the downside risk while maintaining two-thirds of the upside exposure to rising commodity prices," Bob Reeves, Chief Financial Officer and Senior Vice President, commented. "He continued, "It's nice to be hedging into the strength of the oil markets which allowed us to set the floors and ceilings at higher oil prices than a few months ago for a lower cost." The Board of Directors of the Partnership's general partner approved the transaction based on a recommendation from its Conflicts Committee, which consists entirely of independent directors. Simmons & Company International and Griffis & Associates, LLC acted as financial advisors to ENP's Conflicts Committee and delivered a fairness opinion in connection with the transaction. Lehman Brothers Inc. acted as financial advisor and rendered a fairness opinion to EAC's Board of Directors in connection with the transaction. About Encore Energy Partners With principal executive offices in Fort Worth, Texas, Encore Energy Partners LP was recently formed by Encore Acquisition Company to acquire, exploit and develop oil and natural gas properties and to acquire, own and operate related assets. Encore Energy Partners' assets consist primarily of producing and non- producing oil and natural gas properties in the Elk Basin of Wyoming and Montana and the Permian Basin of West Texas. About Encore Acquisition 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 in June 2007. The rating still holds to date. ENVISION LAGRANGE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Envision LaGrange, L.L.C. 60 Walton Place Drive Newnan, GA 30263 Bankruptcy Case No.: 08-10012 Chapter 11 Petition Date: January 1, 2008 Court: Northern District of Georgia (Newnan) Judge: W. Homer Drake Debtor's Counsel: Christopher S. Strickland, Esq. Levine, Block & Strickland, L.L.P. 945 East Paces Ferry Road, Suite 2270 Atlanta, GA 30326 Tel: (404) 231-4567 Fax: (404) 231-4618 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. EPICEPT CORP: Sept. 30 Balance Sheet Upside-Down by $9.4 Million ---------------------------------------------------------------- EpiCept Corporation's consolidated balance sheet at Sept. 30, 2007, showed $3.7 million in total assets and $24.3 million in total liabilities, resulting in a $20.6 million stockholders' deficit. This compares with total assets of $18.4 million, total liabilities of $27.8 million and total stockholders' deficit of $9.4 million at Dec. 31, 2006. At Sept. 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $1.5 million in total current assets available to pay $16.3 million in total current liabilities. The company reported a net loss of $7.7 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $5.5 million for the third quarter of 2006. During the three months ended Sept. 30, 2007, the company recognized revenue of approximately $46,000 from the deferred upfront licensing fees and milestone payments received from Endo, DURECT and royalties with respect to certain technology. During the three months ended Sept. 30, 2006, the company recognized revenue of approximately $220,000 from the deferred upfront licensing fees and milestone payments received from Adolor and Endo. As of Sept. 30, 2007, EpiCept had cash and cash equivalents of $748,000. "During the third quarter we continued our steady advancement towards the important value-driving milestones that we established for our company at the beginning of 2007," stated Jack Talley, president and chief executive officer. "We were particularly pleased to have executed on several critical steps required for a recommendation regarding approvability of Ceplene from the CHMP and a final decision by the European Commission during the first half of 2008." Results of Public Offering On Oct. 10, 2007, EpiCept disclosed the pricing of a public offering of approximately 4.26 million shares of common stock at $1.88 per share and five-year warrants to purchase up to approximately 2.13 million shares of common stock at an exercise price of $1.88 per share. EpiCept received approximately $7.3 million in net proceeds from the offering. The warrants will become exercisable beginning six months after the closing. Shares outstanding at Sept. 30, 2007, amounted to 37,952,289, and after the private placement increased to 42,210,758. 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?26cb Going Concern Doubt Deloitte & Touche LLP, in Parsippany, N.J., expressed substantial doubt about EpiCept Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006 and 2005. The auditing firm pointed to the company's recurring losses from operations and stockholders' deficit. The company has devoted substantially all of its cash resources to research and development programs and general and administrative expenses, and to date it has not generated any meaningful revenues from the sale of products and does not expect to generate any such revenues before 2008. About EpiCept Corp. Based in Tarrytown, N.Y., EpiCept Corp. (Nasdaq and OMX Nordic Exchange: EPCT) -- http://www.epicept.com/-- is a specialty pharmaceutical company focused on the development of pharmaceutical products for the treatment of cancer and pain. EpiCept has a staged portfolio of pharmaceutical product candidates with several pain therapies in late-stage clinical trials, and a lead oncology compound for AML with demonstrated efficacy in a Phase III trial. FEDERAL-MOGUL: S&P Puts BB- Rating on $2.96 Billion Senior Loan --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Southfield, Michigan-based Federal-Mogul Corp. following the company's emergence from Chapter 11 on Dec. 27, 2007. The outlook is stable. Standard & Poor's also assigned Federal-Mogul's $540 million asset-based revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation for very high (90%-100%) recovery in the event of a payment default. Standard & Poor's assigned Federal-Mogul's $2.96 billion senior secured term loan a 'BB-' bank loan rating (the same level as the corporate credit rating) with a recovery rating of '4', indicating an expectation for average (30%-50%) recovery. The term loan consists of a $1 billion eight-year facility and a $1.96 billion seven-year facility. Of the total term loan, $878 million was drawn at closing and the balance was drawn on Jan. 3, 2008. "The corporate credit rating reflects Federal-Mogul's weak business profile and high leverage, but also its adequate liquidity," said Standard & Poor's credit analyst Nancy Messer. These ratings are consistent with our report published Nov. 28, 2007, in which S&P detailed the ratings it expected to assign to Federal-Mogul upon emergence. Federal-Mogul has about $3.1 billion of total balance-sheet debt outstanding following emergence from bankruptcy, with the senior secured term loan fully drawn and applied toward refinancing other debt incurred as part of the plan of reorganization. Downside ratings risk is mitigated by S&P's expectation of continued modest sales and EBITDA expansion and of positive free cash flow that could allow for reduced leverage in the near term. Also limiting downside risk is Standard & Poor's expectation that the effect of restructuring activities will produce improved EBITDA margin in 2008-2009. Federal-Mogul's diverse end-market, product portfolio, and customer base also provide ratings support. GAP INC: Names Simon Kneen as Creative Dir. for Banana Republic --------------------------------------------------------------- Gap Inc. has appointed Simon Kneen as executive vice president of design and creative director for Banana Republic, effective January 9. Simon Kneen is a fashion leader with more than 25 years of experience in key design roles for apparel brands in the United States and Europe. In this role, Mr. Kneen will set the product direction for Banana Republic apparel and accessories, well as set the overall creative direction for the brand. "Simon has a tremendous ability to creatively guide a brand, experience delivering a consistent aesthetic across all expressions of the brand, and a proven track record of fostering strong creative teams," Jack Calhoun, president of Banana Republic, said. "After talking with dozens of fantastic candidates, it's clear that Simon is a great fit for Banana Republic." For the past five years, Mr. Kneen served as creative design director for the Retail Brand Alliance, where he led the creative vision for such well-known brands as Brooks Brothers and Adrienne Vittadini. He was the first to design a fashion collection for men's and women's at Brooks Brothers, and was part of the leadership team that helped reposition the brand. While at the Retail Brand Alliance, he was also responsible for designing the collections under the Casual Corner label from 2003 until 2005, prior to the brand's sale. From 2001 to 2003, Mr. Kneen was creative director for Maska, the Italian fashion house known for its exclusive couture collection and fashionable ready-to-wear line. Prior to that, he was head designer, Pret-a Porter, for Maison Balmain, based in Paris. Mr. Kneen also led his own design firm and produced the Simon Kneen Collection, a line of suiting, separate, knitwear and accessories sold through luxury apparel retailers in Italy. Mr. Kneen, 46, will report to Mr. Calhoun in this new role. About Banana Republic Banana Republic is a luxury brand, offering quality apparel and accessories collections for men and women. The brand offers essentials and seasonal collections of accessories, shoes, personal care products and intimate apparel. From work to casual occasions, Banana Republic offers covetable, uncomplicated style. About Gap Inc. Headquartered in San Francisco, California, Gap Inc. (NYSE: GPS) - - http://www.gapinc.com/-- is an international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic, Old Navy, Forth & Towne and Piperlime brand names. Gap Inc. operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Ireland and Japan. In addition, Gap Inc. is expanding its international presence with franchise agreements for Gap and Banana Republic in Southeast Asia and the Middle East. * * * Moody's Investor Service placed Gap Inc.'s corporate family, senior unsecured debt and probability of default ratings at 'Ba1' in February 2007. The ratings still hold to date with a stable outlook. GIBRALTAR GRANITE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Gibraltar Granite & Marble Corp. 309 Essex Road Tinton Falls, NJ 07753-7707 Bankruptcy Case No.: 08-10104 Type of Business: The Debtor sells brick and stone in wholesale. See http://www.gibraltargranite.com/ Chapter 11 Petition Date: January 3, 2008 Court: District of New Jersey (Trenton) Debtor's Counsel: Joseph Casello, Esq. Collins, Vella & Casello 1451 Highway 34 South, Suite 303 Farmingdale, NJ 07727 Tel: (732) 751-1766 Fax: (732) 751-1866 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. GREEN AGGREGATES: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Green Aggregates Inc. 1877 Airport Loop Road Kerrville, TX 78028 Bankruptcy Case No.: 07-53439 Type of Business: The Debtor converts wood chips into thick fiber board. Chapter 11 Petition Date: December 31, 2007 Court: Western District of Texas (San Antonio) Judge: Ronald B. King Debtor's Counsel: William R. Davis, Jr., Esq. Langley & Banack Inc. 745 E. Mulberry Avenue, Suite 900 San Antonio, TX 78212 Tel: (210) 736-6600 Fax: (210) 735-6889 http://www.langleybanack.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service taxes $360,000 Special Procedures Staff 300 E. 8th St., STOP 5022 AUS Austin, TX 78701 Holt lawsuit $220,000.00 c/o Jones, Allen & Fuquay 8828 Greenville Avenue Dallas, TX 75243 Small Business Administration note payable $190,900 10737 Gateway West #300 El Paso, TX 79935 Dial Lubricants services $159,223.14 RAI/CCS interest/note $288,000 Reeder Distributors services $85,289 Haynes & Boone, LLP legal services $83,121 Powerscreen Texas, Inc. services $46,000 Frank Bartel Tire, Inc. services $43,191 Comptroller of Public sales taxes $43,000 Accountants Austin Power Company services $39,465 Alliance Haulers, Inc. trade debt $37,081 Frank Bartel Transportation services $31,820 Inc. Texas Workforce Commission taxes $28,000 Orica U.S.A. Inc. trade debt $23,249 GW Van Keppel services $21,422 Andreea Nicolae lawsuit $21,382 Wise Appraisal District taxes $21,045 United Healthcare insurance $19,972 HARVEY ELECTRONICS: Gets Interim OK to Borrow $1.5 Mil. DIP Fund ---------------------------------------------------------------- The Hon. Allan L. Gropper of the Southern District of New York gave Harvey Electronics Inc. interim approval to access $1.5 million in postpetition financing from an undisclosed lender, The Associated Press reports. The DIP financing, AP relates, will be used to pay the Debtor's employees and other operational expenses and to fund its reorganization. Judge Gropper is set to convene a final hearing on the DIP financing on Jan. 25, 2008, AP says. Harvey, AP notes, filed for bankruptcy when it failed to buy Myer- Emco Inc., a private retailer and installer in Washington, DC due to financing problems. The Debtor said it expects to emerge from bankruptcy in spring, AP adds. New York-headquartered Harvey Electronics Inc. -- http://www.harveyonline.com/-- retails, services and custom installs audio, video and home theater equipment. The equipment includes high-fidelity components and systems, digital versatile disc players, digital video recorders, high definition television, plasma flat screen and liquid crystal display flat-panel television sets, integrated remote controls, media servers, audio/video furniture, conventional telephones, moving picture experts group layer-3 audio players, iPods, satellite and analog radios, service contracts and related accessories. It operates nine locations comprising eight Harvey specialty retail stores and one separate Bang & Olufsen branded store. It also retails brands manufactured by Bang & Olufsen, Crestron, Marantz, McIntosh, NAD, Vienna Acoustics, Sonus Faber, Krell, Boston Acoustics, Martin Logan and Fujitsu. The company filed for chapter 11 protection on Dec. 28, 2007 (Bankr. S.D.N.Y. Case No. 07-14051). Harold S. Berzow, Esq., at Ruskin, Moscou, Faltischek PC represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $9,930,468 and total debts of $10,368,513. HYACINTH DANIEL: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Hyacinth C. Daniel aka Hyacinth Camella Daniel 7608 Killbarron Drive Laurel, MD 20707 Bankruptcy Case No.: 08-10191 Chapter 11 Petition Date: January 3, 2008 Court: District of Maryland (Greenbelt) Debtor's Counsel: Frank Morris, II, Esq. 8201 Corporate Drive, Suite 260 Landover, MD 20785 Tel: (301) 731-1000 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Indy Mack Bank 1st Trust on real $646,800 1 National City Parkway estate Kalamazoo, MI 49009 Homecoming Financial Service 1st Trust on real $366,400 P.O. Box 9001719 estate Louisville, KY 40290 2nd Trust on real $193,200 estate M.&T. Credit Services Purchase Money $60,000 P.O. Box 4005 Security Buffalo, NY 14240-4005 Ocwen Loan Servicing, L.L.C. 2nd Trust on real $45,668 estate Sallie Mae Student Loan $43,683 Bank of America Credit Card Purchases $36,687 Ford Motor Credit Purchase Money $30,000 Security on vehicle Capital One Auto Finance Purchase Money $20,906 Security on vehicle Suzuki Purchase Money $9,852 Security on vehicle Advance Auto Parts Credit Card Purchases $3,272 Reyna Capital Consumer Debt $1,127 Home Depot Credit Services Credit Card Purchases $708 American Express Credit Card Purchases $646 All Data Consumer Debt $582 A.D.T. Security Services Consumer Debt $179 Fortress Emack, L.L.C. Retail Lease $0 IMAX CORP: Turns Over Feinstein Theatre to National Amusements -------------------------------------------------------------- IMAX Corporation has sold the Feinstein IMAX(R) Theatre in Providence, Rhode Island to National Amusements Inc. The IMAX theatre had been owned and operated by IMAX Corporation since it opened in June, 2000. Under the terms of the sale, National Amusements assumed ownership and control of the theatre effective close of business on Dec. 31, 2007. "IMAX theatres are becoming an increasingly important component of today's modern multiplex and nothing underscores this more than when the world's top exhibitors increase the number of IMAX screens they operate," IMAX Co-CEOs and Co-chairmen Richard L. Gelfond and Bradley J. Wechsler, said. "National Amusements has been a phenomenal IMAX operator both domestically and internationally, and we are pleased they are expanding their IMAX presence in Providence." National Amusements is an exhibitor that operates IMAX theatres on three continents - with a total of 9 IMAX theatres in North America, South America and Europe. The exhibitor's purchase of the Feinstein IMAX Theatre in Providence, Rhode Island was made on the box office year for the IMAX theatre network, which showcased IMAX releases that included 300, Spider-Man 3, Harry Potter and the Order of the Phoenix, Transformers, Beowulf and I Am Legend. IMAX and National Amusements both have marketing partnerships with Movietickets.com, giving North American consumers greater access to The IMAX Experience(R). National Amusements' current IMAX locations in North America are at City Center 15: Cinema de Lux in White Plains, New York; Showcase Cinemas Stonybrook in Louisville, Kentucky; Showcase Cinemas Buckland Hills in Manchester, Connecticut; Springdale 18: Cinema de Lux in Springdale, Ohio; and The Bridge: Cinema de Lux in Los Angeles, CA; Showcase Cinemas Ann Arbor in Ypsilanti, Michigan. Internationally, the exhibitor's IMAX locations are the IMAX Theatre at Center Norte in Buenos Aires well as the Coca-Cola IMAX Kinostar City in St. Petersburg, Russia. About National Amusements Inc. Based in Dedham, Massachusetts, National Amusements Inc. -- http://www.national-amusements.com/-- is into the motion picture exhibition industry operating more than 1,500 screens in the U.S., U.K., Latin America and Russia. National Amusements delivers entertainment experience in theatres around the world under its Showcase, Multiplex, Cinema de Lux, and KinoStar brands. It is a closely held company operating under the third generation of Redstone family. National Amusements is also an equal partner in the online ticketing service, MovieTickets.com, and is the parent company of both Viacom and CBS Corporation. About IMAX Corporation Based in New York City and Toronto, Canada, IMAX Corporation (NASDAQ:IMAX) -- http://www.imax.com/-- is an entertainment technology company, with emphasis on film and digital imaging technologies including 3D, post-production and digital projection. IMAX is a fully-integrated, out-of-home entertainment enterprise with activities ranging from the design, leasing, marketing, maintenance, and operation of IMAX(R) theatre systems to film development, production, post-production and distribution of large-format films. IMAX also designs and manufactures cameras, projectors and consistently commits significant funding to ongoing research and development. IMAX has locations in Guatemala, India, Italy, among others. * * * As reported in the Troubled Company Reporter on Dec. 27, 2007, 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. INSIGHT COMMS: S&P Withdraws 'CCC+' Rating on $350 Mil. Notes ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'CCC+' rating on New York City-based Insight Communications Co. Inc.'s $350 million (accreted value) of 12.25% senior discount notes due 2011. At the same time, S&P also withdrew the 'B' rating on the $200 million of 9.75% senior notes due 2009 issued by Insight Midwest L.P. These rating actions follow the two companies' SEC filings that they had redeemed the entire issuance amounts on these instruments on Dec. 31, 2007. Insight Communications' 'CCC+' corporate credit rating remains on CreditWatch with positive implications, and Insight Midwest's 'BB- ' corporate credit rating and Insight Midwest Holdings LLC's 'BB-' bank loan rating and '2' recovery rating remain on CreditWatch with negative implications. These ratings were placed on CreditWatch on April 2, 2007 following Insight Communications' announcement that it reached an agreement with Comcast Corp. to dissolve their Insight Midwest L.P. partnership. "We will resolve the CreditWatch once we complete our review of the company's final capital structure and operations," said Standard & Poor's credit analyst Catherine Cosentino. INSIGHT MIDWEST: S&P Withdraws 'B' Rating on $200 Mil. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B' rating on the $200 million of 9.75% senior notes due 2009 issued by Insight Midwest L.P. At the same time, S&P also withdrew the 'CCC+' rating on New York City-based Insight Communications Co. Inc.'s $350 million (accreted value) of 12.25% senior discount notes due 2011. These rating actions follow the two companies' SEC filings that they had redeemed the entire issuance amount on these two instruments on Dec. 31, 2007. Insight Communications' 'CCC+' corporate credit rating remains on CreditWatch with positive implications, and Insight Midwest's 'BB- ' corporate credit rating and the 'BB-' bank loan rating and '2' recovery rating on Insight Midwest Holdings LLC remain on CreditWatch with negative implications. These ratings were placed on CreditWatch on April 2, 2007, following Insight Communications' announcement that it had reached an agreement with Comcast Corp. to dissolve their Insight Midwest L.P. partnership. "We will resolve the CreditWatch once we complete our review of the company's final capital structure and operations," said Standard & Poor's credit analyst Catherine Cosentino. JEFFREY SHOTKOSKI: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Jeffrey Joseph Shotkoski Constance Lynn Shotkoski aka Jeff Shotkoski aka Connie Shotkoski dba Emerald Storage - Sole Prop. 6209 South Pinehurst Court Sioux Falls, SD 57108 Bankruptcy Case No.: 07-40755 Chapter 11 Petition Date: December 28, 2007 Court: South Dakota (Southern (Sioux Falls)) Debtor's Counsel: Clair R. Gerry, Esq. and Laura L. Kulm Ask, Esq. Stuart, Gerry & Schlimgen, Prof LLC P.O. Box 966 Sioux Falls, SD 57101-0966 Tel: (605) 336-6400 Fax: (605) 336-6842 http://www.sgsllc.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Chase Bank $23,414 Cardmember Services P.O Box 15548 Wilmington, DE 19886-5548 Wells Fargo Card Services $17,719 P.O. Box 9210 Des Moines, IA 50306 Ensz Bros. Drywall $8,500 27309 Atkins Place Tea, SD 57064 Chase $8,500 Midwest Excavating Inc. $7,500 I-29 Brick & Tile Co. $4,200 Consolidated Ready Mix Inc. $3,200 Wright Sod & Seed $1,900 B&G Sanitation Inc. $1,200 Frisbee Plumbing & Heating $1,000 Waterburyy Heating & Cooling Inc. $500 JOHN STEWART: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: John E. Stewart Ellen B. Stewart 2967 Judith Drive Bellmore, NY 11710-5310 Bankruptcy Case No.: 07-47121 Chapter 11 Petition Date: December 28, 2007 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Gary C Fischoff, Esq. Steinberg, Fineo, Berger & Fischoff 40 Crossways Park Drive Woodbury, NY 11797 Tel: (516) 747-1136 http://www.title11.net/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GMAC Mortgage mortgage; value of $315,854 P.O. Box 4622 security: $1,235,000 Waterloo, IA 50704 Option One Mortgage mortgage; value of $278,185 Corporation security: $1,235,000 Steven J. Baum P.C. 220 Northpointe Parkway, Suite G Amherst NY 14228 The CIT Group Commercial $78,948 Services Goldman Horowitz & Cherno LLP 47 Post Avenue P.O. Box 630 Westbury, NY 11501 AW Ford Direct Loan $38,000 Bank of America/FIA Card $35,312 Svcs American Express $34,579 8025 Jericho Realty Corp. $32,000 Bank of America $34,296 Citibank/CCSI $20,443 Chase Bank USA NA $20,394 Franco Sarto/Via Spiga $18,600 Donald J Pilner $17,350 Advanta Bank Corp. $15,964 Lacoste $15,092 Jones Apparel Group $14,700 Steven Eplan $14,400 Skechers/Kitson LA/Michele K $14,350 Steve Madden $12,000 KELLWOOD COMPANY: Posts $1.1 Million Net Loss in Third Quarter -------------------------------------------------------------- Kellwood Company reported a net loss of $1.1 million for third quarter ended Nov. 3, 2007, versus net earnings of $8.1 million in the third quarter last year. Included in total net loss for the third quarter were net earnings from discontinued operations of $4.9 million. Total net earnings for the last year third quarter included earnings from discontinued operations of $9.6 million. Net sales from continuing operations totaled $404.1 million, as compared to $397.0 million in the third quarter last year. Net loss from continuing operations was $5.9 million, versus a net loss of $1.5 million last year. Included in net loss from continuing operations for the current quarter were restructuring and other non-recurring charges of $9.9 million, after tax, associated with the previously disclosed reorganization of the women's sportswear business, transformation of the Phat Farm men's business to solely a licensing model and streamlining of corporate functions. Net earnings from continuing operations for the third quarter last year included restructuring and other non-recurring charges of $12.1 million, after tax, associated with the company's completed 2005 strategic restructuring initiatives. Operating earnings, defined by the company as gross profit less selling, general & administrative expense before stock option expense, amortization and impairment, restructuring and other non- recurring charges, for the third quarter were $17.4 million compared to $22.4 million last year. Net earnings on an ongoing basis (continuing operations excluding the impairment, restructuring and other non-recurring charges), were $4.0 million, compared to $10.6 million in the third quarter last year. Net interest expense totaled $7.0 million and reflected lower interest income on cash balances having utilized $311.9 million for the Hanna Andersson(R), Royal Robbins(R), Vince(R) and HOLLYWOULD acquisitions. The third quarter tax rate from ongoing operations was 34.8% compared to 35.8% last year. The 2007 third quarter effective tax rate was lower than the company's expected third quarter tax rate of 44% due to certain discrete state tax items that benefited diluted earnings per share by $0.02. The effective tax rate for the third quarter of 2007 was also lower than the company's expected annual effective tax rate of 39% due to discrete items, which benefit the full year tax rate being recorded in the third quarter under Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48). "We are successfully executing on our strategic plan and believe that the financial targets we set out for the company are real and achievable," stated Skinner. "Our third quarter results were on target with our expectations, driven by the positive performance of our key initiatives. During the quarter, we managed our business well, leading to continued growth in many of our brands and businesses, such as Vince, Baby Phat, XOXO, My Michelle and Gerber Childrenswear. "At the same time, we strategically operated our women's mainstream business for profitability and cash flow. In addition, we advanced the objectives outlined in our women's sportswear reorganization, including announcing the consolidation of our Briggs New York and Koret divisions to New York and closure of two distribution centers." Gross profit as a percent of net sales rose by approximately 340 basis points to 27.4%, from last year. This increase was primarily driven by the acquisitions of Vince, Hanna Andersson and Royal Robbins, as well as improved performance of the XOXO juniors' brand. Both Women's Sportswear and Other Soft Goods segments achieved a higher gross profit as a percent of net sales compared to last year. Selling, general and administrative costs increased to 23.1% of net sales primarily driven by the lower absorption of corporate overhead resulting from the Smart Shirts business being classified in discontinued operations, the acquisitions of Hanna Andersson and Royal Robbins, the addition of 17 new retail outlet stores since the third quarter last year as well as lower sales of mainstream women's sportswear. Actions to reduce costs resulting from the women's sportswear reorganization and streamlining of corporate functions are expected to positively benefit 2008 and beyond. Operating earnings as a percent of net sales decreased to 4.3% from 5.6% last year. Balance Sheet At Nov. 3, 2007, the company's consolidated balance sheet showed $1.39 billion in total assets, $832.3 million in total liabilities, and $562.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Nov. 3, 2007, are available for free at http://researcharchives.com/t/s?26c7 About Kellwood Headquartered in St. Louis, Missouri, Kellwood Company (NYSE: KWD) -- http://www.kellwood.com/-- markets apparel and consumer soft goods. The company specializes in branded as well as private label products, and markets to all channels of distribution with product specific to a particular channel. KELLWOOD CO: Sun Capital's Renewed Offer Expected To Be Higher -------------------------------------------------------------- Sun Capital Partners Inc.'s renewed plan of a hostile bid for Kellwood Co. is expected by Wall Street to be higher than the investment firm's prior offers for the apparel company, Cheryl Lu-Lien Tan of The Wall Street Journal reports. Commenting on its recent plan, Sun Capital told WSJ in an interview that ". . .[its] strong preference is to acquire Kellwood in a friendly negotiated transaction, but [it is] prepared to take all necessary steps to protect the value of [its] existing 9.9% ownership position in Kellwood." Sun Capital's latest offer, the same as its previous offer, includes a condition allowing any shareholder to own more than 20 percent of the company, Ritsuko Ando of Reuters News relates, citing a New York Post report. Last year, Sun Capital proposed a $21 per share offer for Kellwood, which was unanimously rejected by Kellwood's board of directors. The board then concluded that the unsolicited Sun Capital proposal significantly undervalued the strength of Kellwood's expanded portfolio of brands and the company's opportunities for sales and earnings growth. Banc of America Securities LLC acted as financial advisor and McDermott Will & Emery served as legal counsel to Kellwood in this matter. CtW Calls on Board to Explore Sale Citing the failure of Kellwood's independent directors to open a constructive dialogue with Sun Capital regarding its interest in acquiring Kellwood, the CtW Investment Group has called on the Kellwood board to immediately name a special committee of independent directors to explore strategic alternatives, including a possible sale of the company. The CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a federation of unions representing nearly 6 million members, to enhance long-term shareholder returns through active ownership. These funds, together with public pension funds in which members of CtW unions participate, are substantial long-term Kellwood shareholders. About Kellwood Headquartered in St. Louis, Missouri, Kellwood Company (NYSE: KWD) -- http://www.kellwood.com/-- markets apparel and consumer soft goods. The company specializes in branded as well as private label products, and markets to all channels of distribution with product specific to a particular channel. KELLWOOD CO: Inks $80 Million Accelerated Share Repurchase Pact --------------------------------------------------------------- Kellwood Company has entered into a $80 million accelerated share repurchase agreement with Bank of America N.A. The transaction is consistent with the company's previously announced long-term financial plans and intended use of proceeds from the anticipated closing of the Smart Shirts sale as stated on Nov. 6, 2007. Under the ASR agreement, Kellwood will repurchase $80 million of outstanding common stock, or approximately 18% of its outstanding shares based on Kellwood's current stock price. The final number of shares to be repurchased under the ASR will be determined at the conclusion of the transaction, based upon the volume weighted average share price of the company's common shares during the term of the ASR. Bank of America N.A. is expected to purchase Kellwood common stock in the open market in connection with the ASR program. The program is expected to take up to 9 months to complete. "The repurchase of shares is an attractive use of our capital, aligned with our goal of enhancing shareholder value and consistent with our long-term financial plans and 2008 guidance," stated Robert C. Skinner, Jr., chairman, president and chief executive officer. "We believe that the accelerated share repurchase program serves as confirmation of our strong belief in the future growth prospects of our Company." Kellwood has repurchased nearly 1.1 million shares of its common stock for approximately $19.8 million under the company's current repurchase authorization passed by its Board of Directors in September 2007. The Board of Directors has authorized the investment of up to $90 million of share repurchases, in order to facilitate the ASR program and other possible future repurchases and terminated the prior stock repurchase program announced in September 2007. The company will have $10 million of stock repurchase authority after giving effect to the repurchases under the ASR program. About Kellwood Headquartered in St. Louis, Missouri, Kellwood Company (NYSE: KWD) -- http://www.kellwood.com/-- markets apparel and consumer soft goods. The company specializes in branded as well as private label products, and markets to all channels of distribution with product specific to a particular channel. KELLWOOD CO: Share Repurchase Cues S&P to Retain Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services said that its long-term corporate credit rating 'BB-' on women's apparel designer and marketer Kellwood Co. would remain on CreditWatch with negative implications following Kellwood's announcement that it has entered into an $80 million accelerated share repurchase program. The funding for this transaction will be from proceeds from the sale of its Smart Shirts private label business, which should be closed some time in the first quarter this year. This transaction is in line with the company's previously announced intended use of proceeds from the sale of Smart Shirts. The initial CreditWatch listing on Sept. 19, 2007, followed Kellwood's receipt of an unsolicited bid from Sun Capital Securities Group LLC to buy the company. Ratings were subsequently lowered on Oct. 17, 2007, reflecting weak underlying business trends and the tougher operating environment at retail, as well as weakening credit protection measures. Although Kellwood rejected Sun Capital's bids, the ratings have remained on CreditWatch as Standard & Poor's continues to monitor related events as they arise, including any revised offers or counteroffers. "When we can determine that Kellwood is no longer actively involved in a sale process, we will review future financial policies and operating strategies with management," said Standard & Poor's credit analyst Susan Ding. "In the event that there are no further changes to current financial policy and that operating performance does not weaken further, we would likely affirm the ratings at the current levels." KIMBALL HILL: Delays Annual Report Filing Over Weak Housing Market ------------------------------------------------------------------ Kimball Hill Inc. said in a Securities and Exchange Commission filing on Dec. 31, 2007, that it is unable to file its annual report on Form 10-K for the year ended Sept. 30, 2007, by the prescribed due date without unreasonable effort and expense. According to the company, market conditions in the U.S. homebuilding market have continued to weaken since the end of its fiscal year. Hence, the company determined it appropriate to update the inventory-related impairment analyses on which its financial statements are based. In addition, the company said its chief financial officer has been absent on an unexpected medical leave since the beginning of December. In his absence, certain incremental responsibilities have been borne by individuals who have significant roles in the preparation and review of the company's periodic reports. The company expects to complete its annual report not later than Jan. 15, 2008, within the 15-day extension period afforded by Rule 12b-25. Houston, Texas-headquartered Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- was founded in Chicago in 1969 by David Hill who named the company after his father responsible for constructing Rolling Meadows. It is one of the largest private homebuilders in the U.S. Revenues and about $1.04 billion and $72 million net loss for the 12 months ended June 30, 2007. KIMBALL HILL: Impairment Charges Cue a Likely Covenant Violation ---------------------------------------------------------------- Kimball Hill Inc. said in a Securities and Exchange Commission filing on Dec. 31, 2007, that primarily as a result of the effect of impairment charges it projects to incur, it believes that will not be in compliance with one or more of the covenants in its senior credit facility as of Sept. 30, 2007, including the covenant requiring the company to maintain a minimum tangible net worth (as defined in its senior credit facility). Impairment Charges For the nine months ended June 30, 3007, the company reported a net loss of $75.1 million, compared with net earnings for the nine months ended June 30, 2006 of $38.5 million. Kimball anticipates that it will record a substantial net loss for its fourth quarter of 2007, but are unable to provide a reasonable estimate at this time due to the ongoing impairment analysis on which its financial statements are based. Hence, the company anticipates that its results of operations for the year ended Sept. 30, 2007, will include substantial impairment charges in addition to the $133.7 million in impairment charges reported in its quarterly report on Form 10-Q for the nine month period ending June 30, 2007. The company reported impairment charges of $25.8 million for the year ended Sept. 30, 2006. Talks with Bank Lenders The company said it begun discussions with its bank group regarding amending its senior credit facility. The bank group has not provided formal assurance that the company will be able to amend its senior credit facility upon reasonable terms, or at all. Nonetheless, there has been no indication that the bank group intends to accelerate amounts due under the company's facility. The company added that discussions with its lenders regarding an amendment are active and ongoing. About Kimball Hill Houston, Texas-headquartered Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- was founded in Chicago in 1969 by David Hill who named the company after his father responsible for constructing Rolling Meadows. It is one of the largest private homebuilders in the U.S. Revenues and about $1.04 billion and $72 million net loss for the 12 months ended June 30, 2007. KIMBALL HILL: S&P Junks Corporate credit Rating ----------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Kimball Hill Inc. to 'CCC+' from 'B' and lowered the rating on the company's senior subordinated notes to 'CCC-' from 'CCC+'. At the same time, S&P placed all of the ratings on CreditWatch with negative implications. The rating actions affect $203 million in rated senior subordinated notes. "The rating actions follow Kimball Hill's announcement that it will incur substantial impairment charges for its fiscal fourth quarter, ended Sept. 30, 2007," said Standard & Poor's credit analyst Lisa Wright. "These charges will likely result in the violation of at least one of the covenants governing Kimball Hill's senior revolving credit facility, as the company's tangible net worth is now expected to fall below the minimum level currently required under the facility." The company also announced that it will be late filing its 10-K form due to its chief financial officer's unexpected medical leave. As a result of the expected covenant violations, Kimball Hill will have no access to additional borrowings under this $500 million senior credit facility (which had just over $100 million available at June 30, 2007). This leaves the company with a very limited liquidity position given its modest cash on hand (although potential, moderate levels of planned land sales could boost cash balances). Standard & Poor's will continue to monitor Kimball Hill's negotiations with its bank group, along with the company's liquidity position and homebuilding market conditions. S&P will consider lowering the ratings further if the company is unable to reach an agreement with its bank group for access to additional borrowings, or if S&P expects operating results and cash flow to deteriorate further. KIWA BIO-TECH: Sept. 30 Balance Sheet Upside-Down by $1.73 Million ------------------------------------------------------------------ Kiwa Bio-Tech Products Group Corp.'s consolidated balance sheet at Sept. 30, 2007, showed $3.56 million in total assets, $5.18 million in total liabilities, and $110,278 in minority interest in a subsidiary, resulting in a $1.73 million total stockholders' deficit. The company's consolidated balance sheet at Sept. 30, 2007, also showed strained liquidity with $1.36 million in total current assets available to pay $2.47 million in total current liabilities. The company reported a net loss of $598,521 on net sales of $2.96 million for the third quarter ended Sept. 30, 2007, compared with a net loss of $636,278 on net sales of $906,068 in the same period last year. The increase in net sales primarily reflects the increase in sales of bio-enhanced feeds. The company sold over 2,000 tons of fish feeds in the third quarter of 2007 but only 120 tons in the same period of 2006. Costs of sales were $2.7 million and $852,885 for the three months ended Sept. 30, 2007 and 2006, respectively. Gross profit was $239,260 for the three months ended Sept. 30, 2007, representing an average profit margin of 8.1%. Gross profit was $53,183 for the three months ended Sept. 30, 2006, reflecting a profit margin of 5.9%. Total operating expenses increased $31,796 to $650,339 during the three months ended Sept. 30, 2007, compared to total operating expenses of $618,543 in the same period of 2006. Interest expense increased $100,959 to $171,743 for the three months ended Sept. 30, 2007, as compared to interest expense of $70,784 for the three months ended Sept. 30, 2006. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26c1 Going Concern Doubt Mao & Company CPAs Inc., in New York, exressed substantial doubt about Kiwa Bio-Tech Products Group Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations, working capital deficit, and net capital deficiency. About Kiwa Bio-Tech Products Group Headquartered in Claremont, Calif., Kiwa Bio-Tech Products Group Corporation (OTC BB: KWBT.OB) -- http://www.kiwabiotech.com/-- develops, manufactures, distributes and markets bio-technological products for agricultural and natural resources and environmental conservation. The company has established two subsidiaries in China: (1) Kiwa Shandong in 2002, a wholly owned subsidiary, and (2) Kiwa Tianjin in July 2006, of which the company holds 80% equity. LAS VEGAS SANDS: Gets SGD$5.44 Bil. Financing for Marina Bay Sands ------------------------------------------------------------------ Las Vegas Sands Corp. has entered into a credit agreement which provides financing of up to SGD $5,442,604,530 for the development of the Marina Bay Sands in Singapore. Borrowings under the credit agreement will bear interest at a spread of 2.25% above the Singapore Dollar SWAP Offer Rate for a selected maturity of one, two, three or six months. The current Singapore Dollar Swap Offer Rate for a maturity of three months is approximately 2.16%. Las Vegas Sands Corp. President William Weidner stated, "We are pleased to have completed this important financing for our Marina Bay Sands development. The completion of this Singapore Dollar- denominated facility, which is the largest private Singapore Dollar-denominated financing in Singapore's history, was accomplished on very favorable terms in a challenging global credit environment. "The vote of confidence we have received from the international financial community, including leading Singapore-based financial institutions, is a testament both to our track record of successful Integrated Resort development worldwide and to the significant economic benefits the Marina Bay Sands, South Asia's first Integrated Resort, will deliver to the economy and people of Singapore," continued Weidner. "Our Marina Bay Sands development remains on track for a late 2009 opening, and we look forward to continuing to work closely with the Singapore authorities as we complete the final design components of this iconic development in the coming months." Goldman Sachs, DBS Bank Ltd., UOB Asia Limited, and Oversea- Chinese Banking Corporation Limited acted as coordinators of the financing. The coordinators as well as affiliates of Citigroup, Lehman Brothers, Merrill Lynch, Sumitomo Mitsui Banking Corporation, Malayan Banking Berhad, Standard Chartered Bank, The Royal Bank of Scotland, Calyon, and The Bank of Nova Scotia acted as Mandated Lead Arrangers. DBS Bank Ltd. is acting as Technical Bank, Agent and Security Trustee. About Las Vegas Sands Las Vegas Sands Corp. -- http://www.lasvegassands.com/-- (NYSE: LVS) owns and operates The Venetian Resort-Hotel-Casino and the Sands Expo and Convention Center in Las Vegas and The Venetian Macao Resort-Hotel and the Sands Macao in the People's Republic of China Special Administrative Region of Macao. The company is currently constructing three additional integrated resorts: The Palazzo Resort-Hotel-Casino in Las Vegas; Sands Bethworks(TM) in Bethlehem, Pennsylvania; and The Marina Bay Sands(TM) in Singapore. LVS is also creating the Cotai Strip(TM), a master-planned development of resort-casino properties in Macao. Additionally, the company is working with the Zhuhai Municipal People's Government of the PRC to master-plan the development of a leisure resort and convention complex on Hengqin Island in the PRC. * * * Las Vegas Sands Corp. still carries Standard & Poor's Ratings Services 'BB-' long term foreign and local issuer credit ratings, which were placed on April 17, 2007. Rating outlook is stable. LEVITT AND SONS: Cascades Committee Wants Estate Assets Insured --------------------------------------------------------------- The Cascades at Sarasota Transition Committee asks the U.S. Bankruptcy Court for the Southern District of Florida to compel Levitt and Sons, LLC and its debtor-affiliates to maintain insurance on assets of the estate located at the Cascades' housing development. The Cascades is in the later stages of construction by one of Levitt and Sons, LLC's subsidiaries in Manatee County, Florida. Approximately 82% of the units in the development have been sold, with the remaining lots owned by the developer. Turnover of control and operations of the Association of Cascades at Sarasota is mandated by statute and contract to take place when 90% of the units have been sold. The existing owners in the development have formed a transition committee to begin negotiations with LAS for a smooth and efficient transfer of control to the owners. The transition committee has learned that the clubhouse and other amenities at Cascades of Sarasota may be uninsured. The management company hired by the Debtor to maintain the development has advised that it is not aware of any insurance covering the buildings and that there may not have been any insurance at any time on the property. David W. Langley, Esq., at David W. Langley, P.A., in Plantation, Florida, relates that the transition committee has attempted to verify the information with the Debtors' counsel, but has yet to receive any confirmation that insurance exists on the property. The Cascades at Sarasota clubhouse is a $7,000,000 facility and presently an asset of the bankruptcy estate. The lack of insurance coverage places a major asset of the Debtor at risk, Mr. Langley points out. Moreover, the clubhouse and other facilities have been and are being used regularly by the homeowners and their guests. The Debtor should be required to maintain liability insurance on these facilities until the time the assets are turned over to an owner-controlled homeowners' association, he adds. The maintenance of insurance on an asset of LAS is an administrative expense, which should be bourne by the Debtor, Mr. Langley asserts. The current risk to the health, safety and welfare of the residents of Cascades at Sarasota greatly outweighs any burden on the Debtors to maintain insurance on the common elements until turnover to the owners, Mr. Langley says. Wachovia Agrees Insurance Should be in Place Wachovia Bank, National Association, a secured creditor in the Debtors' Chapter 11 cases, informs the Court that it has a security interest in the clubhouse and other facilities. Wachovia does not have information or knowledge regarding insurance coverage of the Property. In the abundance of caution, Wachovia files its response to preserve its right to respond to the Transition Committee's Motion. Wachovia agrees insurance should be in place. 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: Wants to Employ Watson Realty as Listing Agent --------------------------------------------------------------- Levitt and Sons LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to employ Watson Realty Corporation as its listing agent in connection with contemplated sales of certain homes. LAS files its request on a protective basis because it believes that retention of a listing agent is in the ordinary course of business for which Court permission is not required. LAS and Watson Realty have entered into several Exclusive Right of Sale Listing Agreement, in which the firm is to serve as exclusive listing agent for the Debtor in connection with the anticipated sale of certain completed homes. LAS further seeks the Court's authority to enter into the Listing Agreements, and for it and the other Debtors to enter into additional Listing Agreements, whether with Watson Realty or another listing agent, in the ordinary course of business. In a separate filing, Wachovia Bank, National Association, contends that the the Debtors should be required to first obtain the bank's consent before entering into a Listing Agreement in a development serving as the bank collateral. On Wachovia's behalf, Robert N. Gilbert, Esq., at Carlton Fields, P.A., in West Palm Beach, Florida, states that the Debtors' indebtedness to Wachovia currently exceeds $100,000,000. Wachovia has made loans to certain of the Debtors. He says the Indebtedness is secured by first priority liens on real and personal property of the Debtors and on various projects in Florida, Georgia, and South Carolina. The Debtors have also filed a motion seeking to abandon the real property securing the Indebtedness in the event Wachovia and the Debtors cannot reach mutually acceptable agreement concerning the terms of postpetition financing requested by the Debtors. Wachovia is in negotiations with the Debtors concerning the extension of postpetition financing to the Debtors. On December 19, the Debtors DIP financing agreement with Wachovia had taken place, providing for a DIP revolving line of credit in a maximum principal amount not exceeding $3,500,000. 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: Wants to Use AmTrust Loan to Build Hartwood Homes ------------------------------------------------------------------ Debtors Levitt and Sons, LLC, and Regency Hills by Levitt and Sons, LLC, ask the U.S. Bankruptcy Court for the Southern District of Florida to approve certain procedures for the sale of Hartwood Reserve, a residential project located in Lake County, Florida. LAS Regency Hills holds title to that property, consisting of 160 acres and 325 lots. LAS and LAS Regency Hills also seek to obtain a debtor-in- possession loan to complete construction of 10 substantially completed homes in Hartwood Reserve. Jordi Guso, Esq., at Berger Singerman, P.A., in Miami, Florida, relates that LAS Regency Hills acquired Hartwood Reserve in July 2004 for $8,000,000. He notes that Hartwood Reserve has been substantially sold out, and, as of Sept. 30, 2007, LAS Regency Hills had sold 311 lots and retained title to only 33 lots, including 10 homes, which are substantially completed. The remaining lots are part of the collateral for a credit facility with AmTrust Bank. AmTrust Bank Credit Facility Pursuant to a December 2002 Construction Revolving Loan Agreement among AmTrust Bank, as lender, LAS Regency Hills, as borrower, and LAS, as guarantor, AmTrust Bank provided secured revolving construction loan in the principal amount of up to $8,500,000. As of Sept. 30, 2007, borrowings under the AmTrust Bank Credit Facility totaled approximately $1,100,000. AmTrust Bank asserts first priority liens on, and security interests in, substantially all of LAS Regency Hills' assets. The Debtors have no basis that they are aware of to contest the assertion. LAS and LAS Regency Hills believe that there is meaningful equity in Hartwood Reserve, including in the Substantially Completed Homes, and that promptly resuming sale efforts at Hartwood Reserve will maximize the recoveries available to these estates. Mr. Guso tells the Court that LAS and LAS Regency Hills are unable to obtain financing in the form of unsecured credit allowable solely as an administrative expense under Section 503(b)(1) of the Bankruptcy Code or solely in exchange for the grant of a "superpriority" administrative claim status under Section 364(c)(1). LAS and LAS Regency Hills are also unable to obtain secured financing under Section 364(c)(2) or (c)(3) because they possess no unencumbered assets. In this regard, AmTrust Bank agreed to provide LAS and LAS Regency Hills with secured, postpetition financing. Mr. Guso asserts that LAS and LAS Regency Hills require postpetition financing to pay suppliers, employees and other creditors that are vital to completion of the Substantially Completed Homes, to resume sale activities and to preserve the value of Hartwood Reserve. Given the circumstances in the Debtors' Chapter 11 cases, LAS and LAS Regency Hills believe that certain DIP credit documents and related transactions with AmTrust Bank are fair, reasonable and adequate, and the proposed financing is in the best interest of their estates. LAS and LAS Regency Hills and their estates will receive reasonably equivalent value in the form of financing, a carve-out for the benefit of their estates, and other rights and benefits being provided and made available under a DIP Loan Term Sheet, Mr. Guso says. Proposed DIP Loan of Up to $460,000 The DIP Credit Facility provides, among other things, that: (a) subject to certain conditions, the amount of the postpetition advances will not exceed $460,000, at any one time outstanding; (b) pursuant to Section 364(c)(1), all borrowings and other obligations under the DIP Credit Facility will be entitled to superpriority claim status; (c) the DIP Credit Facility will be secured, subject and subordinate to carve-outs, by first priority liens and security interests in all of LAS Regency Hills' property; (d) interest on the entire DIP Credit Facility will be paid monthly in arrears at the rate of prime plus 5%, which interest will be computed on the basis of a 360-day year for the actual number of days elapsed; (e) the DIP Credit Facility is subject to a DIP Facility Fee of $15,446; (f) AmTrust Bank will set aside an amount equal to $10,000 per home to fund the Borrower's Expense Allowance, plus an additional set aside to fund the Estate Carve-Out in accordance with the Release Price Schedule that has been provided to the Official Committee of Unsecured Creditors, and has been filed under seal; (g) the automatic stay will be vacated and modified to the extent necessary to permit AmTrust Bank to exercise upon the occurrence of any event of default, all rights and remedies provided for in the applicable credit documents; provided that notice will be provided before exercising any lien enforcement rights or remedies in respect of the DIP Collateral; (h) in the event LAS Regency Hills fails to close on the sale of at least two completed homes within 90 days of the closing of the DIP Credit Facility, AmTrust Bank will be entitled, without the necessity of further notice or hearing, to commence its State Court foreclosure of the remaining AmTrust Bank Collateral solely through judgment, including the scheduling of a foreclosure sale for a date immediately after the scheduled DIP Facility Maturity Date, absent the occurrence of some other event of default allowing AmTrust Bank to seek earlier and complete relief from the automatic stay; and (i) the maturity date is 180 days after the funding of the DIP Credit Facility. A full-text copy of the AmTrust DIP Term Sheet is available for free at http://researcharchives.com/t/s?26c8 A full-text copy of the proposed DIP Loan Agreement, which the Debtors state is still being negotiated but will be in substantially the same form, is available for free at: http://researcharchives.com/t/s?26c9 Proposed Sale Procedures In connection with the approval and closing of the DIP Facility, and as a pre-condition of AmTrust Bank's obligation to provide the financing, the Debtors will seek and obtain Court approval before the Maturity Date substantially in the manner contemplated in the Release Price Schedule, which is filed under seal, without the necessity of having to obtain further Court approval before each unit constituting a portion of the DIP Lender's collateral is sold. Accordingly, LAS Regency Hills seeks, without further notice or hearing, to sell homes to be completed outside the ordinary course of business, including approval of the release prices reflected on the schedule to the DIP Loan Term Sheet. LAS and LAS Regency Hills also seek the Court's authority to convey title to completed homes free and clear of all liens, claims, interests and encumbrances, pursuant to Section 363(f), with any and all remaining encumbrances to attach solely to the proceeds of the sales, upon payment of the scheduled release prices due to AmTrust Bank pursuant to the Release Price Schedule. The two Debtors further propose that they be authorized to: -- close on sales of completed homes at Hartwood Reserve, free and clear of all liens, claims and other encumbrances, once construction is finished and all other requirements are met; and -- honor certain existing prepetition contract obligations to homebuyers and others, including payment of commissions due to current or former employees under a certain Company Sales and Design Incentive Plans, which are due upon home closing. From the proceeds of each sale, LAS Regency Hills intends to (i) pay closings cost, (ii) deliver the applicable release price to AmTrust Bank, (iii) set aside the Borrower's Expense Allowance, the Mechanic's Lien Set Aside, and the Estate Carve-Out, for the benefit of the estates. Mr. Guso says the release prices set forth on the Release Price Schedule are required minimums. Any increase in net sale proceeds will increase the release price payable to AmTrust Bank and the Estate Carve-Out amount based on the approximate allocations. Any proposed sale of an AmTrust Unit that does not result in payment of the minimum release price payable to AmTrust Bank must be approved by the DIP Lender in writing before closing. The release prices for any of the remaining 24 lots encumbered by AmTrust Bank's mortgage will be the greater of 90% of the actual sale price or 90% of the appraised value, as determined by an appraisal satisfactory to the DIP Lender, Mr. Guso further states. 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. MACKLOWE PROPERTIES: A $6.4BB Debt Waiting To Be Paid Next Month ---------------------------------------------------------------- Harry B. Macklowe's Macklowe Properties is facing a looming deadline to pay a $6.4 billion debt, according to Charles V. Bagli and Terry Pristin of The New York Times. The report says the debt, which is due in February, funded the company's purchase of seven other Midtown Manhattan office buildings a year ago from Equity Office Properties. The NY Times relates that there is widespread speculation in the real estate industry that Mr. Macklowe and his family may be forced to unload some of their properties at a discount to creditors and could be even be forced to shed much of their portfolio. Commenting on Macklowe Properties' debt, Scott A. Singer, executive vice president of the Singer & Bassuk Organization, told The NY Times that "[t]o owe more than $5 billion in this environment is tremendously risky. There are a very, very limited number of lenders who can make multibillion-dollar loans now." Headquartered in New York City, Macklowe Properties is a real estate investment firm that buys, develops, manages, and leases commercial office properties and apartment buildings primarily in Manhattan. The company was founded in the mid-1960s by chairman and CEO Harry Macklowe. The company owns, among others, the General Motors Building, which it acquired from Conseco Inc. for $1.4 billion. The building originally served as a showroom for General Motors cars and later as the flagship store and showroom FAO Schwartz and the CBS Today Show. Its current tenants include Bank of America, Estee Lauder, the CBS-TV studios and Weil, Gotshal & Manges. MARINER ENERGY: High Debt Leverage Cues S&P's Negative Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on oil and gas exploration and production company Mariner Energy Inc. to negative from stable and affirmed the ratings, including the 'B+' corporate credit rating, on the company. "The outlook revision reflects the increased debt leverage following Mariner's announced acquisition of properties in the Permian Basin and the Gulf of Mexico shelf," said Standard & Poor's credit analyst Paul B. Harvey. "Such an acquisition was not expected at the time of our upgrade of the company in December 2007." The transactions, of $123 million and $243 million, respectively, are expected to be funded with borrowings on Mariner's credit facility. As a result of the acquisitions, adjusted debt per barrel of oil equivalent will climb to nearly $9, which is high for the current rating. Standard & Poor's expects Mariner to repay debt during 2008, supported by improving production cash flow resulting from the start of production from its Nansen and Bass Lite developments. The ratings on Mariner reflect its elevated debt leverage, aggressive growth and exploration strategy, short reserve life, and elevated costs relative to our long-term pricing assumptions. Support for ratings is provided by Mariner's satisfactory financial performance and expectations for debt repayment and improving operating results in 2008. MARK IV: Completes Acquisition Deal with Sun Capital's Unit ------------------------------------------------------------ Mark IV Industries Inc. has completed its purchase deal with Sun Capital Partners Inc.'s affiliate. Terms of the transaction were not disclosed. "Mark IV's products are innovative, highly-engineered, and take advantage of our advanced materials expertise and efficient manufacturing," William P. Montague, chief executive officer, Mark IV Industries, stated. "We are a leading global Tier 1 supplier with products that are integral to many of the world's most popular cars, trucks, and SUVs, and we also enjoy leadership positions in our aftermarket and transportation technologies businesses." "We have deep and long-standing customer relationships, a talented and dedicated group of employees, and now, a new equity sponsor with substantial operating resources," Mr. Montague continued. "We look forward to serving our customers' needs and adding more value to our relationships with them on a global basis." "Through its leading automotive technologies and impressive engineering talent in engine systems, Mark IV is well positioned to assist its OEM and aftermarket customers in meeting ever- changing market demands," Gary M. Talarico, managing director, Sun Capital Partners Inc., added. Sun Capital stated that the transportation technology segment will lead the market. Sun Capital and its affiliates look forward to working with Bill Montague and Mark IV's management team to assist in further developing its strategic objectives to expand and improve its core competencies, both organically and over time through acquisition. About Sun Capital Partners, Inc. Headquartered in Boca Raton, Florida, Sun Capital Partners -- http://www.suncappart.com/ -- is a ray of sunshine for struggling companies. The private investment firm, which has more than $10 billion under management, specializes in leveraged buyouts of companies that are near the tops of their respective industries; it also acquires minority interests in bankrupt or underperforming firms. The company does not specialize in any particular industry; its portfolio companies include restaurant chains Bruegger's Bagels and Garden Fresh; hydraulic hose manufacturer Europower Hydraulics; plumbing fixture maker Eljer; and retailers ShopKo Stores and Marsh Supermarkets. The company has an active interest in some 60 companies; most targeted firms have $50 million to $500 million in sales. About Mark IV Industries, Inc. Based in Amherst, New York, Mark IV Industries Inc., -- http://www.mark-iv.com/-- aims to hit the mark with engineered components and systems for the automotive, industrial machinery, and transportation management markets. The company's automotive products include aftermarket belts, hoses, and camshaft components, along with OEM power transmission systems, timing belts, engine cooling systems, and power steering systems. Mark IV's power train division makes diesel and gasoline engines for industrial, agricultural, and marine uses. Other products include information display systems (for buses, aircraft, and railcars) and traffic management equipment, including electronic toll- collection systems. European private equity firm BC Partners controls Mark IV Industries. * * * As reported in the Troubled Company Reporter on Dec. 13, 2007, Moody's Investors Service lowered the ratings of Mark IV Industries, Inc. Corporate Family, to B3 from B2; senior secured first lien facilities to B2 from Ba3, and the senior secured second lien term loan, to Caa2 from B3. The ratings remain under review for possible downgrade. MCKINLEY FUNDING: Moody's Junks Rating on $38 Mil. Notes from Aa2 ----------------------------------------------------------------- Moody's Investors Service downgraded ratings of four classes of notes and the Preference Shares issued by McKinley Funding III, Ltd. and left on review for possible further downgrade ratings of two of these classes of notes. The notes affected by this rating action are: Class Description: $205,000,000 Class A-2 Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $38,000,000 Class B-l Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $15,000,000 Class B-2 Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ca Class Description: $7,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: 18,000 Preference Shares ($18,000,000 Aggregate Liquidation Preference) -- Prior Rating: Ba1, 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. 10, 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 100%, as required under Section 5.01(i) of the Indenture dated Nov. 30, 2006. McKinley Funding III, Ltd is a collateralized debt obligation backed primarily by a portfolio of RMBS and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Class A 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 taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The expected losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the Class A-2 and the Class B-1 Notes remain on review for possible downgrade pending the receipt of definitive information. MEDISTEM LABS: Posts $380,417 Net Loss in Third Quarter ------------------------------------------------------- Medistem Laboratories Inc. reported a net loss of $380,417 for the third quarter of 2007, compared to a net loss of $682,194 in the corresponding period of 2006. Revenues were $648,052 for the third quarter of 2007 as compared to $105,000 for the third quarter of 2007. The decrease in net loss was primarily due to increased revenues and decreased stock based compensation, partially offset by an increase in costs associated with the operations of the company's consolidated licensee as well as the loss on settlement with a former vendor to settle disputes related to performance under an existing contract dated December 2005, and expenses associated with the acquisition and development of intellectual property surrounding the use of a specified source of stem cells. Steve Rivers, chief financial officer, stated, "The growth in our licensing revenues is reflective of the investments in our business infrastructure made during the second quarter of 2007. As we approach positive operating cash flows, continued growth will help us to finance the development of our pipeline candidates and proprietary stem cell type." At Sept. 30, 2007, the company's consolidated balance showed $1.2 million in total assets, $215,404 in total liabilities, and $1.0 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?26c3 Going Concern Doubt Malone & Bailey P.C., in Houston, expressed substantial doubt about Medistem Laboratories Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the year ended Dec. 31, 2006. The auditing firm reported that the company has had limited operations and has not commenced planned principal operations at Dec. 31, 2006. Medistem has incurred net losses since inception, and has only recently begun generating revenues. About Medistem Laboratories Headquartered in Tempe, Ariz., Medistem Laboratories Inc. (OTC BB: MDSM.OB) is a biotechnology company that discovers, develops, and commercializes adult stem cell products that address serious medical conditions. While drug discovery and development is its primary focus, Medistem has compiled a body of proprietary technologies it outlicenses to commercial entities in markets where stem cell administration is permissible. MERITAGE MORTGAGE: Fitch Junks Ratings on Three Certificates ------------------------------------------------------------ Fitch Ratings has taken these rating actions on Meritage Mortgage Corporation asset-backed certificates: Series 2004-1 -- Class M-1 downgraded to 'A-' from 'AA'; -- Class M-2 downgraded to 'BB+' from 'A+'; -- Class M-3 downgraded to 'B' from 'A'; -- Class M-4 downgraded to 'B' from 'BB+'; -- Class M-5 downgraded to 'CCC/DR1' from 'B'; -- Class M-6 downgraded to 'CCC/DR1' from 'B'; -- Class M-7 downgraded to 'C/DR5' from 'CC/DR2'; -- Class M-8 remains at 'C', and revised to 'DR6' from 'DR5'; -- Class B-1 remains at 'C/DR6'. The downgrades affect approximately $46.8 million of the outstanding certificates. The negative rating actions reflect continued deterioration in the relationship between credit enhancement and future loss expectations. The transaction is experiencing monthly losses that exceed the available excess spread. As of the November 2007 distribution, the transaction has exhausted its overcollateralization and the most subordinate bond has begun to experience write downs due to losses. Non-performing loans (i.e. loans in 60+ delinquency, including foreclosure, bankruptcy, and real estate owned) comprise 35.18% of the pool. The pool is seasoned 44 months and has a pool factor (current principal balance as a percentage of original balance) of 7%. The mortgage pool consists of conventional, first and second lien, adjustable- and fixed-rate residential mortgages. The mortgage loans were originated by Meritage Mortgage Corp. Fitch will closely monitor the relationship between excess spread and monthly losses for those transactions in the upcoming months. If the losses continue to exceed excess spread, the ratings will be reassessed. MOVIE GALLERY: Wants Removal of Action Period Moved to July 14 -------------------------------------------------------------- Movie Gallery, Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Virginia to extend, until July 14, 2008, the period wherein they can seek removal of claims and causes of actions. Currently, the Debtors have until Jan. 14, 2008 to remove current causes of actions. The Debtors, operating thousands of retail stores across the 50 states, are involved in approximately 180 actions -- including employment-related litigation and administrative proceedings, contract disputes, personal injury cases and collection matters -- in more than 39 different venues. The Debtors said that they have not had an opportunity to conclusively determine which actions they will seek to remove, because they have been productively focused on activities critical to their reorganization. Hence, the Debtors and their advisors told the Court that they need additional time to analyze and determine the actions concerning their removal. Parties to the actions that the Debtors ultimately seek to remove retain their rights to have their actions remanded, and will not be prejudiced by the extension, the Debtors said. About Movie Gallery Based in Dothan, Alabama, Movie Gallery Inc. -- http://www.moviegallery.com/-- is a home entertainment specialty retailer. The company owns and operates 4,600 retail stores that rent and sell DVDs, videocassettes and video games. The company and its debtor-affiliates filed for Chapter 11 protection on Oct. 16, 2007 (Bankr. E.D. Va. Case Nos. 07-33849 to 07-33853. Anup Sathy, Esq., Marc J. Carmel, Esq., and Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represent the Debtors. Michael A. Condyles, Esq., and Peter J. Barrett, Esq., at Kutak Rock LLP, is the Debtors' local counsel. The Debtors' claims & balloting agent is Kutzman Carson Consultants LLC. When the Debtors' filed for protection from their creditors, they listed total assets of $891,993,000 and total liabilities of $1,419,215,000. The Official Committee of Unsecured Creditors has selected Robert J. Feinstein, Esq., James I. Stang, Esq., Robert B. Orgel, Esq., and Brad Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, as its lead counsel, and Brian F. Kenney, Esq., at Miles & Stockbridge PC, as its local counsel. The Debtors' spokeswoman Meaghan Repko said that the company does not expect to exit bankruptcy protection before the second quarter of 2008. The Debtors' exclusive plan filing period expires on Feb. 13, 2008. (Movie Gallery Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000) N-STAR REAL: Fitch Holds BB Rating on $12,606,874 Class F Notes --------------------------------------------------------------- Fitch affirms seven classes of notes issued by N-Star Real Estate CDO V, Ltd./Corp. These rating actions are effective immediately: -- $335,921,275 class A-1 notes at 'AAA'; -- $46,472,397 class A-2 notes at 'AAA'; -- $40,935,261 class B notes at 'AA'; -- $17,921,536 class C notes at 'A'; -- $15,068,922 class D notes at 'BBB'; -- $4,943,872 class E notes at 'BBB-'; -- $12,606,874 class F notes at 'BB'. N-Star V is a revolving commercial real estate collateralized debt obligation which closed Sept. 22, 2005, and is supported by collateral selected by NS Advisors, LLC an indirect wholly owned subsidiary of NorthStar Realty Finance Corp. The transaction has a five-year reinvestment period, during which time proceeds from regular asset amortization can be used to purchase additional collateral up to a 35% reinvestment cap. Principal amortization proceeds above the 35% reinvestment cap are used to pay down the capital structure on a pro-rata basis. The portfolio is currently composed of commercial mortgage-backed securities (CMBS 72.4%), real estate investment trust (REIT) debt securities (22.7%), CRE CDOs (4.9%). N-Star V will end its reinvestment period in September 2010. The affirmations are the result of stable portfolio performance measures, such as coverage test ratios and weighted average rating factor. Credit enhancement to the notes increased slightly due to delevering of the capital structure. As of the most recent trustee report dated Nov. 19, 2007 all the five overcollateralization and interest coverage ratios have remained stable and continue to pass their covenants. The current WARF on the collateral is 7 ('BBB'/'BBB-') which remains the same since last review. The collateral has a maximum Fitch WARF of 8 ('BBB- '/'BB+'). There have been no defaulted or distressed securities in the portfolio, to date. However, it should be noted that three transactions within the CDO have classes that have been put on Rating Watch Negative by Fitch. Upgrades during the reinvestment period are unlikely given the pool could still migrate to the maximum weighted average rating factor covenant. NATIONAL EASTERN: Court Approves T.M. Byxbee as Accountants ----------------------------------------------------------- National Eastern Corporation obtained authority from the United States Bankruptcy Court for the District of Connecticut to employ T.M. Byxbee Company, P.C. as its accountants. As reported in Troubled Company Reporter on Dec. 3, 2007, T.M. Byxbee is expected to: a) close out the Debtor's books as of the date of bankruptcy, and to open new books; b) establish a new bookkeeping system to replace the outmoded system used by the Debtor; c) prepare the periodic statements of the Debtor's operations; d) prepare the Debtor's income tax return for the calendar year ending 2007; e) observe taking of year-end inventory; f) prepare internal financial reports; g) compute precentage of completion adjustments for purposes of financial statements; h) perform audit for 401k yearly financial statement; i) perform the annual payroll audit; and j) consult on general accounting and tax matters as requested by the Debtor. John B. Loehmann, the president of T.M. Byxbee, told the Court that the firm's professionals charge these rates for their services: Designation Hourly Rate ----------- ----------- Principals $185 Managers $130 - $170 Senior Staff $100 Other Staff $85 Mr. Loehmann said that the allowable maximum compensation is $15,000. Mr. Loehmann assured the Court that the firm is a "disinterested person", as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. About National Eastern Based in Plainville, Connecticut, National Eastern Corp. fabricates steel. The Debtor filed for Chapter 11 protection on Sept. 17, 2007 (Bankr. D. Conn. Case No. 07-21290). Anthony S. Novak, Esq., at Chorches & Novak, P.C., represents the Debtor in its restructuring efforts. The Debtors chose Edward F. O'Donnel, Esq., at Siegel, O'Connor, O'Donnell & Beck, P.C., as its special counsel. When the company filed for bankruptcy, it listed total assets of $20,786,808 and total debts of $15,398,616. NAVIOS MARITIME: Creates South American Logistics w/ Horamar Group ------------------------------------------------------------------ Navios Maritime Holdings Inc. has formed a South American logistics business through the combination of its existing port operations with the barge and upriver port businesses operated by the Horamar Group. The transaction included a payment of $112.2 million in cash consideration. As a result of the transaction, Navios owns 63.8% of the combined entity, named Navios South American Logistics Inc., and the former Horamar Group stockholders own the remaining 36.2%. "We are delighted to disclose the formation of an end-to-end logistics business which leverages Navios' transshipment facility in Uruguay with an upriver port facility in Paraguay and dry and wet barge capacity," Angeliki Frangou, chairman and CEO of Navios and chairman of NSALI, stated. "This transaction marks the successful conclusion of an effort we commenced in June 2006, when we announced that Navios intended to develop a South American logistics business." Since then, we have studied the market, met with key players and considered a number of opportunities," Ms. Frangou added. "We are pleased with the business partnership we have formed with the Lopez family, the principal shareholders of Horamar. We believe that by blending our businesses, we will develop the critical mass necessary for us to become a significant regional player." "Since we commenced our review, the underlying business fundamentals have continued to strengthen," Ms. Frangou continued. "We plan to grow the combined business by capitalizing on the region's growing agricultural and mineral commodity exports through the significant cost advantage river transport offers compared to alternatives along with our proprietary port and related infrastructure." Navios was represented in this transaction by S. Goldman Advisors LLC. The Horamar Group was represented by Violy & Co. Navios was represented in this transaction by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and the V&P Law Firm. The Horamar Group was represented by Chadbourne & Parke LLP. About Horamar Group The Horamar Group - http://www.horamar.com.ar/-- established in 1975, consists of a group of related companies providing maritime transportation. The group specializes in the transport and storage of liquid cargoes and the transport of dry bulk cargoes along the Hidrovia passing through Argentina, Bolivia, Brazil, Paraguay and Uruguay. It controls a fleet of over 100 barges and vessels, including: (i) 13 push boats; (ii) 55 dry barges; (iii) 42 tank barges; (iv) 3 LPG tank barges; (v) 2 self-propelled barges; (vi) 2 small oil tankers; (vii) 1 handysize tanker; and (vii) 2 docking platforms. The group also owns and operates an upriver oil storage and transfer facility in Paraguay. About Navios Maritime Holdings Based in Norwalk, Connecticut, Navios Maritime Holdings Inc. (NYSE: NM and NM WS) -- http://www.navios.com/-- is an integrated seaborne shipping company, specializing in the carriage, trading, storing, and other related logistics of international dry bulk cargo transportation. The company also owns and operates a port/storage facility in Uruguay and has in- house technical ship management expertise. It has offices in Piraeus, Greece, South Norwalk, Connecticut and Montevideo, Uruguay and Antwerp, Belgium. For over 50 years, Navios has worked with raw materials producers, agricultural traders and exporters, industrial end-users, ship owners, and charterers. Navios also owns and operates a port/storage facility in Uruguay and has in-house technical ship management expertise. Navios Maritime Partners L.P. is a Marshall Islands limited partnership formed by Navios to be an international owner and operator of drybulk vessels. * * * Navios Maritime carries to date Moody's Investors Service's 'B1' probability of default rating and 'B3' senior unsecured debt rating, which were placed in March 2007. NEW CENTURY: S&P Junks Ratings on Three Classes of Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 13 classes of asset-backed pass-through certificates issued by six New Century Home Equity Loan Trust deals. Of the 13 lowered ratings, S&P removed two from CreditWatch with negative implications and placed two on CreditWatch with negative implications. At the same time, 10 additional ratings from one series remain on CreditWatch negative. Concurrently, S&P affirmed its ratings on the remaining 70 classes from these and on six other transactions. The downgrades reflect a reduction in credit enhancement as a result of monthly realized losses. As of the November 2007 remittance date, cumulative realized losses for the downgraded transactions, as a percentage of the original pool balances, ranged from 1.07% (series 2003-3) to 2.58% (series 2001-NC2). Severe delinquencies (90-plus days, foreclosures, and REOs), as a percentage of the current pool balances, ranged from 11.32% (series 2003-3) to 31.47% (series 2001-NC2). Losses for the downgraded deals have outpaced excess interest over the past six months by an average of 2.9x. Series 2003-2 and 2003-3 are seeing losses outpace excess interest by 3.78x and 3.53x, respectively. Overcollateralization is below its target for all five of the downgraded transactions, ranging from 9 basis points (bps) below target (series 2003-6) to 33 bps below target (series 2003-2). S&P removed its ratings on two classes from CreditWatch negative because they were downgraded. One was downgraded to 'B' and the other to 'CCC'. S&P downgraded classes M-2 and M-3 from series 2002-1 and placed them on CreditWatch with negative implications due to severe delinquencies relative to the amount of support remaining in the deal. With a pool balance of $4,038,000, severe delinquencies total $1,066,000, and there is currently $777,639 in overcollateralization. Losses have averaged $35,726 over the past six months. S&P will continue to monitor this transaction and will take further negative rating actions if credit support continues to deteriorate. The 'AAA' rated classes of series 2004-A remain on CreditWatch negative because they are wrapped by bond insurance provided by Financial Guaranty Insurance Co., which has a financial strength rating of 'AAA/Watch Neg'. The affirmations reflect sufficient credit enhancement available to support the current ratings. The classes with affirmed ratings have actual and projected credit support percentages that are in line with their original levels. Subordination, overcollateralization, and excess spread provide credit support for these transactions. In addition, the A-7 and A-8I0 classes from series 1997-NC6, the A-5 and A-6 classes from series 1999-NCA, the A class from series 1999-NCD, the A-I-6A class from series 2003-5, the A-II-3, A-II-4, A-II-5, A-II-6, A- II-7, A-II-8. A-II-9, A-III-A, A-III-B2, and M-I-1 classes from series 2004-A, and the A-4w and A-5w classes from series 2005-A are wrapped with bond insurance. Financial Security Assurance Inc.('AAA/Stable' FSR) is the insurance provider for series 1997- NC6, 1999-NCA, 1999-NCD, and 2005-A; Ambac Assurance Corp. ('AAA/Watch Neg' FSR) is the insurance provider for series 2003-5; and Financial Guaranty Insurance Co. ('AAA/Watch Neg' FSR) is the insurance provider for series 2004-A. The collateral for these transactions originally consisted primarily of conventional, fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties. Ratings Lowered New Century Home Equity Loan Trust Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2001-NC1 M-3 BB BBB 2001-NC2 M-3 BB BBB+ 2003-2 M-2 A AA+ 2003-3 M-3 BB A- 2003-3 M-4 B+ BBB+ 2003-3 M-5 B BBB 2003-3 M-6 CCC BBB- 2003-6 M-5 BB BBB 2003-6 M-6 CCC BBB- Ratings Lowered and Removed from CreditWatch Negative New Century Home Equity Loan Trust Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-2 M-3 B A+/Watch Neg 2003-2 M-4 CCC BB/Watch Neg Ratings Lowered and Placed CreditWatch Negative New Century Home Equity Loan Trust Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-1 M-2 BB/Watch Neg A 2002-1 M-3 BB/Watch Neg BBB Ratings Remaining on CreditWatch Negative New Century Home Equity Loan Trust Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 2004-A A-II-3, A-II-4 AAA/Watch Neg 2004-A A-II-5, A-II-6 AAA/Watch Neg 2004-A A-II-7, A-II-8 AAA/Watch Neg 2004-A A-II-9, A-III-A AAA/Watch Neg 2004-A A-III-B2, M-I-1 AAA/Watch Neg Ratings Affirmed New Century Home Equity Loan Trust Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 1997-NC6 A-7, A-8IO AAA 1999-NCA A-5, A-6 AAA 1999-NCD A AAA 2001-NC1 M-2 AA 2001-NC2 M-2 AA 2003-2 A-IO, M-1 AAA 2003-3 A-2, A-3 AAA 2003-3 M-1 AA 2003-3 M-2 A 2003-5 A-I-3, A-I-4, A-I-5 AAA 2003-5 A-I-6, A-I-6A, A-I-7 AAA 2003-5 A-II AAA 2003-5 M-1 AA 2003-5 M-2 A 2003-5 M-3 BBB+ 2003-5 M-4 BBB 2003-5 M-5 BBB- 2003-5 B BB 2003-6 M-1 AA 2003-6 M-2 A 2003-6 M-3 A- 2003-6 M-4 BBB+ 2004-A A-I-4, A-I-5, A-I-6 AAA 2004-A A-I-7, A-I-8, A-I-9 AAA 2004-A M-I-2, M-II, M-III BBB 2004-A B-I, B-II, B-III BBB- 2005-A A-2, A-3, A-4, A-4w AAA 2005-A A-5, A-5w, A-6 AAA 2005-A M-1 AA+ 2005-A M-2 AA 2005-A M-3 AA- 2005-A M-4 A+ 2005-A M-5 A 2005-A M-6 A- 2005-A M-7 BBB+ 2005-A M-8 BBB 2005-A M-9 BBB- 2005-A B-1 BB+ 2005-A B-2 BB- PAETEC HOLDING: Launches Exchange Offer for 9.5% Senior Notes ------------------------------------------------------------- PAETEC Holding Corp. has commenced an offer to exchange its 9.5% Senior Notes due 2015, which were sold in July 2007 pursuant to Rule 144A and Regulation S of the Securities Act of 1933, as amended, for an equal amount of newly issued 9.5% Senior Notes due 2015. The new notes have substantially identical terms as the original notes, except that the new notes have been registered under the Securities Act. PAETEC will accept for exchange any and all original notes validly tendered and not withdrawn prior to 5:00 p.m. New York City time on Feb. 1, 2008, unless extended. Tenders of original notes may be withdrawn at any time prior to the expiration time. The terms of the exchange offer and other information relating to PAETEC are set forth in the prospectus dated Dec. 31, 2007. Copies of the prospectus and the related letter of transmittal may be obtained from the exchange agent in connection with this exchange offer: The Bank of New York 101 Barclay Street Reorganization Unit 7E New York, NY 10286 Tel (212) 815-5098 Fax (212) 298-1915 About PAETEC Holding Corp. Headquartered in Fairport, New York, PAETEC Holding Corp. (NASDAQ:PAET) -- http://www.paetec.com/-- is a full service provider of Internet protocol, data and voice solutions to medium- sized and large businesses and enterprise organizations throughout 16 eastern states and the District of Columbia. The company provides a range of voice and high-speed data network services on a retail basis to its end-user business and institutional customers. PAETEC offers a range of voice and high-speed data carrier services to other telecommunications companies. Its service offerings include core voice and data services, application services, network integration services and managed services. * * * As reported in the Troubled Company Reporter on Sept. 19, 2007, Standard & Poor's Ratings Services affirmed the ratings on PAETEC Holding Corp., including the 'B' corporate credit rating. The outlook is positive. PERFORMANCE PROPERTIES: Section 341 Meeting Continued to Jan. 14 ---------------------------------------------------------------- The U.S. Trustee for Region 2 will continue the meeting of Performance Properties N.Y.C. LLC and Great Storage LLC's creditors on Jan. 14, 2008, at 10:30 a.m., Room 4529, 271 Cadman Plaza East, in Brooklyn, New York. All creditors are invited, but not required, to attend. The meeting of creditors offers an opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Performance Properties N.Y.C., LLC and Great Storage, LLC filed for Chapter 11 protection on Oct. 14, 2007 and Dec. 17, 2007, respectively (Bankr. E.D. N.Y. Case Nos. 07-45564 and 07-46931). Wayne M. Greenwald, Esq. represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $1 million to $100 million. POWER RECEIVABLE: S&P's BB+ Rating Unaffected by CDWR'S "A" Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its recent upgrade of the California Department of Water Resources (CDWR) rating to 'A' from 'A-' will not affect the 'BBB'-rated senior secured notes and the 'BB+'-rated subordinated notes on Power Receivable Finance LLC (PRF). Under the contract monetization, PRF sells power to CDWR under a long-term contract. PRF's senior secured rating is constrained at the 'BBB' level, because of the risk of novation of the contract by CDWR to a 'BBB'- or higher-rated entity and the expectation of such a novation due to CDWR's previous indications. RACE POINT: Fitch Affirms Low-B Ratings on Three Note Classes ------------------------------------------------------------- Fitch Ratings affirms nine classes of notes issued by Race Point CLO II, Ltd. These affirmations are the result of Fitch's review process and are effective immediately: -- $402,000,000 class A-1 at 'AAA'; -- $15,000,000 class A-2 at 'AA+'; -- $15,000,000 class B-1 at 'A'; -- $38,000,000 class B-2 at 'A'; -- $12,000,000 class C-1 at 'BBB'; -- $5,000,000 class C-2 at 'BBB'; -- $3,500,000 class D-1 at 'BB+'; -- $3,000,000 class D-2 at 'BB+'; -- $4,000,000 class D-3 at 'BB+'. Race Point II is a collateralized debt obligation that closed April 16, 2003 and is managed by Sankaty Advisors, LLC. Race Point II's portfolio will be revolving until May 2009 and currently consists of 90.5% leveraged loans and 9.5% high yield bonds. These affirmations are the result of the relatively stable performance of the underlying collateral and the steady coverage test ratios. Although the weighted average rating factor test continues to fail the maximum of 52.0 ('B+/B') and has increased slightly to 53.2 from 52.5 at the time of Fitch's last review in October 2006, it remains in the 'B/B-' range. According to the latest trustee report, dated Nov. 1, 2007, all overcollateralization (OC) and interest coverage ratios are passing their minimum required levels. The class A, B, C, and D OC tests are all passing their requirements by margins of at least 8%, and the class A, B, C, and D IC tests are all passing their requirements by margins of at least 30%. There were no defaulted assets in the portfolio as of the latest trustee report. The ratings of the classes A-1, A-2, B-1, B-2, C-1, C-2, D-1, D-2, and D-3 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. RAPID LINK: Extends Maturity of GCASIF Notes to Nov. 1, 2009 ------------------------------------------------------------ Rapid Link Inc. has extended all Debenture Notes drawn in the favor of GCA Strategic Investment Fund Limited, a Bermuda corporation, effective Oct. 31, 2007. Both convertible debentures held by GCASIF have had their maturity dates extended to Nov. 1, 2009. "These extensions, agreed to and implemented by Rapid Link and our primary debt holder, are truly an expression of support and cooperation by GCASIF in Rapid Link, our management, and our current course of business," John Jenkins, CEO of Rapid Link, stated. "GCASIF is aware of the tremendous strides Rapid Link has made in its business as detailed in the recent 10Q filed Sept. 13, 2007, and their support in amending our agreements should be an encouraging sign for our investors." Headquartered in Los Angeles, California, Rapid Link Inc. (OTC BB: RPID.OB) -- http://www.rapidlink.com/-- is a communications company providing various forms of voice and data transport services to wholesale and retail customers around the world. Rapid Link companies provide licensed traditional long distance services in the contiguous United States, as well as other next generation communication services worldwide, including voice over internet protocol and information service products tailored for each target market. Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 18, 2007, KBA GROUP LLP, in Dallas, expressed substantial doubt about Rapid Link Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Oct. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses from continuing operations during each of the last two fiscal years. Additionally, the auditing firm reported that at Oct. 31, 2006, the company's current liabilities, which includes significant amounts of past due payables, exceeded its current assets by $4.7 million and the company has a shareholders' deficit totaling $2.6 million. The company has an accumulated deficit of approximately $52.0 million as of July 31, 2007, as well as a working capital deficit of approximately $10.3 million. In addition, a significant amount of the company's trade accounts payable and accrued liabilities are past due. RASC SERIES 2003-KS3: Moody's Cuts Ratings on Two Trust Classes --------------------------------------------------------------- Moody's Investors Service downgraded 5 classes issued by RASC Series 2003-KS3 and RASC Series 2003-KS6 Trusts. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The current pool factor for each transaction as of December remittance reports are: 5.59% for RASC Series 2003-KS3 , and 4.77% for RASC Series 2003-KS6. Complete rating actions are: Issuer: RASC Series 2003-KS3 Trust -- Class M-1, downgraded to Baa3 previously Aa2; -- Class M-2, downgraded to Ba2 previously A2; Issuer: RASC Series 2003-KS6 Trust -- Class M-1, downgraded to Baa2 previously Aa2; -- Class M-2, downgraded to B1 previously Baa1; -- Class M-3, downgraded to B2 previously Baa2. RASC SERIES 2003-KS6: Moody's Lowers Ratings on Three Classes ------------------------------------------------------------- Moody's Investors Service downgraded 5 classes issued by RASC Series 2003-KS3 and RASC Series 2003-KS6 Trusts. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The current pool factor for each transaction as of December remittance reports are: 4.77% for RASC Series 2003-KS6, and 5.59% for RASC Series 2003-KS3 . Complete rating actions are: Issuer: RASC Series 2003-KS6 Trust -- Class M-1, downgraded to Baa2 previously Aa2; -- Class M-2, downgraded to B1 previously Baa1; -- Class M-3, downgraded to B2 previously Baa2. Issuer: RASC Series 2003-KS3 Trust -- Class M-1, downgraded to Baa3 previously Aa2; -- Class M-2, downgraded to Ba2 previously A2. RAMP SERIES 2003-RS9: Moody's Junks Ratings on Two Classes ---------------------------------------------------------- Moody's Investors Service downgraded 6 classes issued by RAMP Series 2003-RS9. The actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The underlying assets consist of fixed-rate mortgage in group I and adjustable-rate mortgage loans in group II; the current pool factor for each group is 29.35% and 8.35% respectively. The loans in both groups were acquired by Residential Funding Corporation through their Negotiated Conduit Asset Program. Complete rating actions are: Issuer: RAMP Series 2003-RS9 Trust -- Class M-I-3, downgraded to Baa3 previously Baa1; -- Class M-II-1, downgraded to A2 previously Aa2; -- Class M-II-2, downgraded to Baa3 previously A2; -- Class M-II-3, downgraded to B1 previously A3; -- Class M-II-4, downgraded to Caa1 previously Baa1; -- Class M-II-5, downgraded to C previously Baa2. RES-CARE INC: S&P Holds BB+ Rating on Amended $250 Mil. Facility ---------------------------------------------------------------- Standard & Poor's Ratings Services said that senior secured bank loan rating on special-needs social services provider Res-Care Inc.'s amended $250 million revolving bank loan facility remains 'BB+'. The recovery rating on the senior secured facility is '1', indicating the expectation of a very high (90%-100%) recovery of principal in the event of default. The amendment increased the revolver capacity to $250 million (from its previous amount of $200 million), and allows for a further $50 million accordion feature. If the company were to add the $50 million of additional capacity, S&P would reassess its ratings on the facility. RICHARD SMITH: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Richard Jay Smith Victoria Marie Smith aka Victoria Harper 387 Meathward Circle Moore, SC 29369 Bankruptcy Case No.: 08-00017 Chapter 11 Petition Date: January 2, 2008 Court: District of South Carolina (Spartanburg) Judge: Helen E. Burris Debtor's Counsel: Robert H. Cooper, Esq. 3523 Pelham Road, Suite B Greenville, SC 29615 Tel: (864) 271-9911 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ C.B.&T. Visa Credit Card $26,155 Attention: Bank Card Center P.O. Box 120C Columbus, GA 31902 H.S.B.C. Bank Credit Card $20,341 P.O. Box 80037 Salinas, CA 93912 Capital One Credit Card $14,290 Attention: Bankruptcy Department P.O. Box 85147 Richmond, VA 23285 W.F.N.N.B./Express Credit Card $1,976 N.C.C. Business Services, Inc. Collection Account $1,812 Wachovia Line of Credit $1,500 Palisade Collection Collection Account $1,279 Applied Card Bank Credit Card $906 Capital One Credit Card $825 Midland Credit Management Collection Account $795 Merrick Bank Credit Card $709 Marlin Intergrated Collection Account $604 Palisade Collection Collection Account $572 Capital One Credit Card $543 Friedmans Jewelers (N.C.O.) Collection Account $501 H.S.B.C. Bank Credit Card $765 C.C.B. Recovery Department Credit Card $278 First Premier Credit Card $247 C.B.C.S. Medical Collection $238 RITE AID: Reports Sales of $2.201 Billion in December 2007 ---------------------------------------------------------- Rite Aid Corporation reported Thursday sales results for December. The acquired Brooks Eckerd stores are excluded from the same store sales calculation but will be included in same store sales twelve months after the close of the acquisition, which will be in June 2008. Total sales include all of the stores operated during the period, including stores acquired in the Brooks Eckerd acquisition on June 4, 2007. Monthly Sales For the four weeks ended Dec. 29, 2007, same store sales decreased 0.5% over the prior-year period. Pharmacy same store sales were flat, which included an approximate 443 basis points negative impact from new generic introductions. Front-end same store sales decreased 1.2%. Total drugstore sales for the four-week period increased 47.5% to $2.201 billion compared to $1.492 billion for the same period last year. Prescription revenue accounted for 61.8% of drugstore sales, and third party prescription revenue represented approximately 96.1% of pharmacy sales. Year-to-Date Sales Same store sales for the 43-week period ended Dec. 29, 2007, increased 1.2%, consisting of a 1.6% pharmacy same store sales increase and a 0.4% increase in front-end same store sales. Total drugstore sales for the 43 weeks ended Dec. 29, 2007, increased 37.1% to $19.710 billion from $14.374 billion in last year's like period. Prescription revenue accounted for 66.4% of total drugstore sales, and third party prescription revenue was approximately 95.9% of pharmacy sales. 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, operating 5,088 stores on Dec. 29, 2007, in 31 states and the District of Columbia. * * * To date, Rite Aid Corp. still carries Standard & Poor's Ratings Services 'B' long term foreign and local issuer credit ratings which were placed on May 8, 2007. Outlook is Stable. RITE AID: To Exit Las Vegas Market; Sells Prescription Files ------------------------------------------------------------ Rite Aid Corporation said it will terminate its operation of the 28 Rite Aid stores in the Las Vegas, Nevada area and has signed an agreement to sell patient prescription files of the 27 stores in the Las Vegas metro market to Walgreens. Terms of the transaction were not disclosed. Rite Aid said it is in the process of also selling the prescription files of the one store it operates in Mesquite, Nevada and will also close that store. Rite Aid said it will continue to operate its remaining store in Nevada in Gardnerville, which is close to the border of California where Rite Aid has more than 600 stores. Rite Aid said Las Vegas was a non-core market for the company that has not been contributing to overall results. The company hasn't opened a new store in the Las Vegas area since 1999. Transfer of the prescription files to nearby Walgreens will take place over the next week, and customers whose prescriptions are being transferred will be notified by letter as well as signage in the stores. Rite Aid said it would work closely with Walgreens to make sure the transfer of all the prescriptions goes smoothly so as not to disrupt serving patients. Rite Aid said it was working with interested parties on selling or assigning the leases on the 28 buildings. The company said it will close the stores, which are located in Las Vegas, North Las Vegas, Henderson and Mesquite, over the next three months as it sells or liquidates non-prescription merchandise. About Rite Aid Headquartered in Camp Hill, Pa., Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * To date, Rite Aid Corp. still carries Standard & Poor's Ratings Services 'B' long term foreign and local issuer credit ratings which were placed on May 8, 2007. Outlook is Stable. RITE AID: Declares Series E and I Preferred Stock Dividends ----------------------------------------------------------- Rite Aid Corporation's Board of Directors has declared a cash dividend of $0.875 per share on its 7.0% Series E Mandatory Convertible Preferred Stock for the period commencing on Nov. 1, 2007 through Jan. 31, 2008. The dividend is payable on Feb. 1, 2008 to shareholders of record as of Jan. 15, 2008. Rite Aid's Board of Directors has declared a cash dividend of $0.3438 per share on its 5.5% Series I Mandatory Convertible Preferred Stock for the period commencing on Nov. 1, 2007 through Jan. 31, 2008. The dividend is payable on Feb. 1, 2008 to shareholders of record as of Jan. 15, 2008. About Rite Aid Headquartered in Camp Hill, Pa., Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * To date, Rite Aid Corp. still carries Standard & Poor's Ratings Services 'B' long term foreign and local issuer credit ratings which were placed on May 8, 2007. Outlook is Stable. SCRIPPS VINEYARDS: Case Summary & Seven Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Scripps Vineyards Villas, L.L.C. 484 Prospect Street La Jolla, CA 93037 Bankruptcy Case No.: 08-10035 Chapter 11 Petition Date: January 2, 2008 Court: Central District Of California (Riverside) Judge: Peter Carroll Debtor's Counsel: Michael B. Reynolds, Esq. Snell & Wilmer, L.L.P. 600 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Tel: (714) 427-7000 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New West Deigns, Inc. trade $13,286 Attention: Shannon Van Dyke 30 Rancho Circle Lake Forest, CA 92630 The Gas Co. debt unknown P.O. Box C. Monterey Park, CA 91756 Coachella Valley Water debt unknown District P.O. Box 5000 Coachella, CA 92246 City of Coachella unknown Imperial Irrigation District unknown Burrtec Waste & Recycling unknown Yosemite Water unknown SMART BALANCE: S&P Revises Outlook to Stable from Negative ---------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Paramus, New Jersey-based Smart Balance Inc. to stable from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B-' corporate credit rating. "The revised outlook is based on expected improvement in credit protection measures and expected increased cushion on the company's bank financial covenants," said Standard & Poor's credit analyst Rick Joy. Smart Balance received more than $76 million in cash proceeds from the redemption of its public warrants in December 2007, and has earmarked a substantial portion for debt reduction. In addition, recent conversion of the company's series A convertible preferred stock ($138.5 million) will provide for further improvement in credit measures over the near term. Lower debt balances and the corresponding future reduction in interest expense should also result in adequate cushion on Smart Balance's financial covenants in 2008. "We expect the company will continue to grow its sales and market share, apply warrant proceeds to debt reduction, and sustain the expected near-term improvement in credit protection measures," said Mr. Joy. Standard & Poor's ratings on Smart Balance reflect the company's leveraged capital structure, narrow product focus, customer and supplier concentration, and small size relative to its financially stronger and larger competitors. These factors are somewhat offset by the company's participation in the faster growing "better for you" segment of the packaged food industry. STATE STREET: To Set $279MM 4th Qtr. Reserve for Legal Claims ------------------------------------------------------------- State Street Corporation said it will record a net charge, after taxes, in the fourth quarter of 2007 of $279 million. The purpose of the charge is to establish a reserve to address legal exposure and other costs associated with the underperformance of certain active fixed-income strategies managed by State Street Global Advisors, the company's investment management arm, and customer concerns as to whether the execution of these strategies was consistent with the customers' investment intent. As a consequence of the unprecedented events in the credit markets over the past six months, these strategies were adversely impacted by exposure to, and the lack of liquidity in, sub-prime mortgage markets. In aggregate, the reserve will be $618 million on a pre-tax basis. The impact to earnings of the net charge, after taking into account the tax effect of the reserve and associated lower incentive compensation cost, will be $279 million. Ronald E. Logue, chairman and chief executive officer of State Street said, "We have reviewed the actively managed fixed-income strategies at SSgA that contained investments backed by sub-prime mortgages. Based on our review and discussions with certain customers who were invested in these strategies, we have established this reserve to address legal exposure and other costs relating to these strategies." Mr. Logue continued, "State Street values its reputation as a trusted fiduciary to institutions around the world and recognizes the critical importance of preserving this reputation with its customers. Some of our customers that were invested in the active fixed-income strategies have raised concerns that we intend to address. Nevertheless, we will continue to defend ourselves vigorously against inappropriate claims, including those that seek recovery of investment losses arising solely from changes in market conditions. With this reserve, SSgA can continue its focus on delivering the highest quality of service to its customers and on steadily expanding its business." Earnings per share for 2007 are expected to be between $3.42 and $3.45 per share, and return on equity is expected to be approximately 13%, all on a GAAP basis. On an operating basis, which excludes the impact of the charge, the merger and integration costs associated with State Street's acquisition of Investors Financial in July 2007, and, for 2006, the effect of 2006 tax adjustments of $65 million, 2007 earnings per share is expected to be between $4.54 and $4.57 per share and return on equity is expected to be approximately 17.5%. Both operating earnings per share and return on equity for 2007 are expected to be above the ranges provided on Oct. 15, 2007. The outlook for full-year earnings per share on an operating basis compares to 2006 results of $3.46 per share. The company continues to expect to exceed the year-over-year revenue growth range of 20% to 22% provided on Oct. 15, 2007. CDOs in Default Jody Shenn of Bloomberg News relates that State Street Corp. is among 28 managers of mortgage-linked collateralized debt obligations deemed at risk of being unable to fully pay off their most-senior classes. About $64 billion of CDOs have experienced events of default since mid-October after a slump in the credit quality of their holdings, Bloomberg says, citing data sent to clients by Wachovia Corp. analyst Justin Pauley. State Street Global Advisors managed three of the 54 CDOs that have experienced default events, caused by downgrades of their collateral exceeding a certain level, the Wachovia report said, as cited by Bloomberg. Pension Fund Losses Vikas Bajaj of The New York Times adds to this report that State Street is facing lawsuits from five clients who claim they had lost tens of millions of dollars in State Street funds that they were told would be largely invested in risk-free debt. According to The NY Times, at least four of the lawsuits -- stemming from mortgage investments State Street made for pension fund clients -- assert that the company breached its fiduciary duty under a pension law by investing in securities that did not fit the risk tolerance of its clients. About State Street Global Advisors State Street Global Advisors -- http://www.ssga.com/-- the investment management arm of State Street Corporation, delivers investment strategies and integrated solutions to clients worldwide across every asset class, investment approach and style. With $2.0 trillion in assets under management as of Sept. 30, 2007, State Street Global Advisors has investment centers in Boston, Hong Kong, London, Milan, Montreal, Munich, Paris, Singapore, Sydney, Tokyo and Zurich, and offices in 25 cities worldwide. About State Street Corp. State Street Corporation (NYSE: STT) -- http://www.statestreet.com/-- provides financial services to institutional investors including investment servicing, investment management and investment research and trading. With $15.1 trillion in assets under custody and $2.0 trillion in assets under management at September 30, 2007, State Street operates in 26 countries and more than 100 geographic markets worldwide. STATE STREET: James Phalen Back as Investment Arm's CEO ------------------------------------------------------- State Street Corporation disclosed in a press statement that James S. Phalen, currently executive vice president and head of international operations for investment servicing and investment research and trading, is returning to State Street Global Advisors -- a State Street Corp. investment management arm -- as interim president and chief executive officer. Mr. Phalen, age 57, succeeds William W. Hunt who has resigned from State Street. Mr. Phalen will report to Ronald E. Logue, chairman and chief executive officer of State Street. The company has initiated a global search for SSgA's new CEO, which will focus on both internal and external candidates. "Our business continues to be very strong, with revenue growth expected to be in excess of 30 percent in 2007 compared to 2006. We also continue to expect to exceed our ranges for operating earnings per share and return on equity," said Mr. Logue. "We remain committed to the active investment management business and have made changes to the investment teams to address the underperformance experienced in the active fixed income strategies exposed to sub-prime mortgages. We are very fortunate to have an experienced executive like Jim Phalen to step in and lead the business and work alongside SSgA's strong management team. His deep understanding of State Street's customers will allow a seamless transition in his interim role." In his current role, Mr. Phalen is responsible for State Street's investment services and investment research and trading operations outside of North America and is a member of State Street's Operating Group, the company's most senior strategy and policy- making team. He spent more than five years at SSgA as a member of its Executive Management Group managing significant portions of SSgA's business. In 2000, having overseen the combination of SSgA and Citigroup's retirement business to form CitiStreet, he became CitiStreet's CEO. He returned to State Street in 2005 and was appointed head of State Street's investment servicing business in North America before assuming his international role in 2007. "I welcome this opportunity to return to SSgA and to work directly again with many of my longstanding colleagues," said Mr. Phalen. "SSgA has an exceptional team of professionals, and I look forward to helping them continue to build on their track record of growth and industry innovation." About State Street Global Advisors State Street Global Advisors -- http://www.ssga.com/-- the investment management arm of State Street Corporation, delivers investment strategies and integrated solutions to clients worldwide across every asset class, investment approach and style. With $2.0 trillion in assets under management as of Sept. 30, 2007, State Street Global Advisors has investment centers in Boston, Hong Kong, London, Milan, Montreal, Munich, Paris, Singapore, Sydney, Tokyo and Zurich, and offices in 25 cities worldwide. About State Street Corp. State Street Corporation (NYSE: STT) -- http://www.statestreet.com/-- provides financial services to institutional investors including investment servicing, investment management and investment research and trading. With $15.1 trillion in assets under custody and $2.0 trillion in assets under management at September 30, 2007, State Street operates in 26 countries and more than 100 geographic markets worldwide. STATE STREET: Earns $358 Million in Third Quarter ------------------------------------------------- State Street Corporation reported net income of $358.0 million in the third quarter ended Sept. 30, 2007, compared with net income of $278.0 million in the same period last year. Earnings in the third quarter of 2007 include $141.0 million of merger and integration costs associated with the July 2, 2007, acquisition of Investors Financial Services Corp. On an operating basis, which excludes these costs, net earnings are $449.0 million. Revenue of $2.240 billion in the third quarter of 2007 is up 48%, or $725.0 million, compared to $1.515 billion in the year-ago quarter. Total expenses in the third quarter of 2007 are $1.689 billion. Excluding merger and integration costs associated with the Investors Financial acquisition, expenses are $1.548 billion, up 42%, or $458.0 million, compared to $1.090 billion in the year-ago quarter. For the third quarter of 2007, return on shareholders' equity is 12.6%, compared to 16.4% in the third quarter of 2006. The return on shareholders' equity reflects the increase in shareholders' equity due to the shares issued to shareholders of Investors Financial, net of shares repurchased in the quarter. Excluding the impact of the merger and integration costs, return on equity is 15.8%. Ronald E. Logue, State Street's chairman and chief executive officer, said, "Our core revenue was strong across both investment servicing and investment management with significant new business from existing and new customers globally. On a year-over-year basis, excluding $221.0 million in revenue during the third quarter from the acquired Investors Financial business, revenue increased $512.0 million, or 34%. "Servicing and management fees performed particularly well, up 34%, including Investors Financial, from last year's third quarter. We won $825.0 billion of assets in new business in servicing and $26.0 billion of net new business in asset management. Net interest revenue, also including Investors Financial, is up $198.0 million, or 74%. Net interest margin is 1.73%. Excluding merger and integration costs associated with the acquisition, we achieved significant positive operating leverage compared both to the year-ago quarter and to the second quarter." Commenting on the impact of recent market activity affecting fixed-income investments, Logue added, "The fixed-income markets have experienced unprecedented disruption in this past quarter. We believe we are well positioned with both our portfolio and our asset-backed commercial paper conduits. While liquidity in the fixed income market remains challenging, our concentration in high-quality assets in our own portfolios as well as in the conduits, have limited the impact of this disruption on our business. "We believe that we weathered the disruption in the fixed-income market well--without significantly affecting State Street's results. We're disappointed in the performance of a small number of fixed-income strategies at State Street Global Advisors which performed below our expectation." Third Quarter Results vs. Year-ago Quarter Total revenue in the third quarter increased 47.9% to $2.240 billion, compared to last year's third quarter and total operating expenses, excluding $141.0 million of merger and integration costs, grew 42.0% to $1.548 billion over the same period. As a result, excluding merger and integration costs, State Street generated about 580 basis points of positive operating leverage. Servicing fees are up 37%, to $937.0 million from $685.0 million in last year's third quarter. The increase is attributable to business from customers added from the Investors Financial acquisition, business from new and existing customers, and higher average equity market valuations. Total assets under custody are $15.1 trillion at Sept. 30, 2007, up 34%, compared with $11.3 trillion at Sept. 30, 2006. Daily average values for the S&P 500 Index are up 16%, for the MSCI(R) EAFE Index(SM) are up 20%, and for the NASDAQ are up 22% during the third quarter of 2007 from the year-ago quarter. Investment management fees, generated by State Street Global Advisors, are $299.0 million, up 26% from $238.0 million in last year's third quarter. Management fees reflect continued new business and an increase in average month-end equity valuations, partially offset by lower performance fees. Total assets under management are $2.0 trillion at Sept. 30, 2007, up 22%, compared to $1.6 trillion at Sept. 30, 2006. Trading services revenue, which includes foreign exchange trading revenue and brokerage and other fees is $320.0 million for the quarter, up 87% from $171.0 million a year ago. The increase is driven by improved volumes and higher FX volatility. Higher brokerage and other fee revenue is due to the impact of the Currenex acquisition, increased transition management, and strong trading volumes. Securities finance revenue is $165.0 million in the quarter, up 90% compared to $87.0 million in the year-ago quarter, reflecting an improvement in spreads and an increase in volume due to disruption in the fixed income markets. Processing fees and other revenue are down 6%, or $4.0 million, at $61.0 million, compared to $65.0 million a year ago, due to a reduction in the fee income from the asset- backed commercial paper program primarily due to disruption in the fixed-income markets as well as the consolidation of tax-exempt investments onto the balance sheet at the end of the third quarter of 2006, partially offset by revenue from the Investors Financial acquisition. Net interest revenue on a fully taxable-equivalent basis is $481.0 million, an increase of $206.0 million, or 75% from $275.0 million a year ago. The increase in net interest revenue is due to a favorable mix of non-US deposits, the impact of the Investors Financial acquisition, and the improved yields from reinvested assets. Net interest margin increased to 1.73% from 1.22% a year ago. Total expenses in the third quarter are $1.689 billion. Excluding merger and integration costs, total expenses in the third quarter of 2007 increased from $1.090 billion to $1.548 billion, up $458.0 million, or 42.0%, from the year-ago quarter primarily due to the inclusion of Investors Financial's operating expenses as a result of the acquisition. Baseline expenses increased 26%, while the remainder of the increase was due to the acquired Investors Financial business. Salaries and benefits expenses are up 43% to $916.0 million, primarily attributable to additions to headcount resulting from the Investors Financial acquisition, incentive compensation due to improved year-to-date performance, and increases in benefits. The increase in expenses also includes higher transaction processing services, up 36% to $165.0 million, due to higher volumes. Expenses for information systems and communications increased $24.0 million, or 20%, to $145.0 million. Occupancy expense increased 20%, or $18.0 million, to $109.0 million due to costs associated with the acquired Investors Financial business. Other expenses are up 81% at $213.0 million due primarily to costs associated with the acquired Investors Financial business, as well as increased securities processing costs. The effective tax rate for the quarter is 35.0% compared with 34.6% in the third quarter of last year. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $139.888 billion in total assets, $93.001 billion in total deposits, $35.637 in other liabilities, and $11.250 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2007, are available for free at http://researcharchives.com/t/s?26ca About State Street Corp. State Street Corporation (NYSE: STT) -- http://www.statestreet.com/ -- provides financial services to institutional investors including investment servicing, investment management and investment research and trading. With $15.1 trillion in assets under custody and $2.0 trillion in assets under management at September 30, 2007, State Street operates in 26 countries and more than 100 geographic markets worldwide. STATE STREET: $279MM After-Tax Charge Cues Fitch's Rating Cuts -------------------------------------------------------------- Fitch Ratings revised the Rating Outlook on State Street Corporation to Negative from Stable and has downgraded the bank's Individual Rating to `B' from `A/B.' Fitch has affirmed all of State Street's other outstanding ratings. This rating action follows State Street's announcement that it will record a $279 million after-tax charge to establish a $618 million reserve to cover legal exposure and other costs related to the underperformance of several of State Street Global Advisors' actively managed fixed income funds, specifically those that contained investments backed by subprime mortgages. Following a review of and discussions with certain customers invested in these funds, State Street determined that the company had potential legal exposure to some of its investors in these funds. Fitch has downgraded State Street's Individual Rating since operational losses of this magnitude are not consistent with the previous Individual Rating of 'A/B'. Fitch believes that there were deficiencies in the control environment that allowed the potential exposure to develop. Management has instituted a company-wide review process to detect and eliminate any similar weak control issues. The Rating Outlook revision to Negative indicates the potential negative impact on business volume if customers lose confidence in State Street's risk control capabilities. This risk is highest in State Street's other investment management businesses, though it could potentially affect the servicing business as well. Fitch will monitor future business trends carefully over the intermediate term to determine whether additional rating actions are warranted. Fitch has affirmed State Street's long- and short-term Issuer Default Ratings and other outstanding debt ratings in light of the company's strong franchise and good earning capacity. Liquidity at the bank level is judged good. While the parent currently has an acceptable level of financial flexibility for its current long-term and short-term ratings, Fitch expects management to accumulate resources at the parent level to be able to deal with any future contingencies. Fitch has downgraded these ratings: State Street Corporation -- Individual to `B' from 'A/B'. State Street Bank and Trust Company -- Individual to `B' from 'A/B. Fitch has also affirmed and revised the Rating Outlook on these ratings to Negative from Stable: State Street Corporation -- Long-term IDR 'AA-'; -- Long-term senior 'AA-'; -- Long-term subordinated 'A+'; -- Short-term IDR 'F1+'; -- Short-term debt 'F1+'; -- Support '5'; -- Support Rating Floor 'NF'. State Street Bank and Trust Company -- Long-term IDR 'AA-'; -- Long-term deposits 'AA'; -- Long-term subordinated 'A+'; -- Short-term IDR 'F1+'; -- Short-term deposits 'F1+'; -- Support '2'; -- Support Rating Floor 'BBB+'. State Street Capital I, State Street Capital IV, Investors Capital Trust I -- Trust preferred securities `A+'. STATE STREET: Moody's Holds B+ Bank Financial Strength Rating ------------------------------------------------------------- Moody's Investors Service affirmed State Street Bank & Trust Company's ratings, at B+ for financial strength and Aa1 for deposits. The rating agency also affirmed the Aa3 rating on senior debt of the holding company, State Street Corporation. Moody's, however, placed a negative outlook on all related entities. The rating actions followed STT's announcement that it will take an after-tax charge of $279 million that will significantly reduce net income in the fourth quarter 2007. The affirmation was based on Moody's view of a limited near-term negative effect on STT's financial fundamentals. STT's main earnings driver is its strong position as one of the largest securities servicers, a franchise that contributes the bulk of the company's net income. According to Moody's, the fourth quarter charges -- partly to build a litigation reserve -- will cause a drop in STT's capital position. Although most consolidated and bank-only capital ratios remain amply above "well capitalized" thresholds, the Tier-1 leverage ratios have little such cushion. A comparatively modest dividend payout ratio should help to replenish capital to previous levels in relatively short order. Moody's believes that despite the confluence of negative events -- the previously highlighted ABCP liquidity concerns followed by these asset management-related charges -- depositors and bondholders remain well protected. In assigning a negative outlook, on the other hand, Moody's noted the discrepancies between STT's clients' investment directives and the firm's investment strategies that imply a lapse in controls and a risk governance failure at State Street Global Advisors, STT's asset management arm. The negative outlook also reflects the reputational vulnerability of the asset management franchise and any potential spillover into STT's other businesses. "This is the second major reputational issue that STT has experienced in the last six months," said Rosemarie Conforte, Moody's Senior Vice President. "The company has a comparatively large exposure to ABCP conduits that it sponsors and STT's liquidity and capital potentially came under pressure when the conduits faced funding stress in the third quarter 2007." Moody's added that the longer-term impact on the State Street franchise, if any, is difficult to quantify. If there is evidence of risk management weakness, any lapses in internal controls are not fully addressed and remedied, or reputational fallout proves to be significant, Moody's could take a further negative rating action. If, on the other hand, the franchise proves to be resilient, all other credit aspects being equal, Moody's could return the outlook to stable. State Street Corporation, headquartered in Boston Massachusetts, reported assets of approximately $140 billion at Sept. 30, 2007. STATE STREET: S&P Says Ratings Unaffected by After-Tax Charge ------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on State Street Corp. (AA-/Stable/A-1+) are not immediately affected by the $279 million after-tax charge in fourth-quarter 2007. The charge was to establish a reserve for legal and other costs related to the execution and underperformance in certain active fixed-income portfolios managed by State Street Global Advisors (SSgA). While active fixed income represents less than 2% of the $2.0 trillion of assets under management, S&P is concerned that SSgA's reputation in the market could be tarnished, which could impair its ability to attract new customers. At this time, S&P does not expect State Street's asset-servicing business, with $15.1 trillion of assets under custody, to be adversely affected by the problems at SSgA. Notwithstanding the size of the $618 million reserve (in the context of the relatively small active fixed-income portfolios), State Street will be profitable in fourth-quarter and full-year 2007. S&P also expects management to remain committed to maintaining a solid capital foundation. STIEFEL LABS: S&P Holds 'B+' Corporate Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Coral Gables, Florida-based specialty pharmaceuticals Stiefel Laboratories Inc. to stable from positive. At the same time, S&P affirmed the 'B+' corporate credit rating on Stiefel and the 'BB-' senior secured debt rating and '2' recovery rating on Stiefel's senior secured first-lien credit facility. "The actions reflect Stiefel's more leveraged financial profile following its issuance of $500 million of preferred stock to Blackstone Group and our belief that Stiefel will be increasingly acquisitive as it seeks to expand its portfolio," explained Standard & Poor's credit analyst Arthur Wong. The low speculative-grade ratings on Stiefel reflect the company's significant debt leverage and aggressive financial policies, offset by its diverse drug portfolio. Privately held Stiefel is the fourth-largest player in the dermatology market, with more than $800 million in annual sales. The company has a relatively diverse product portfolio, especially when compared to many other 'B+' rated peers. Stiefel's top three products-- Duac, Soriatane, and Olux--collectively account for roughly 37% of total sales. This concentration is relatively low when compared with other pharmaceutical companies rated in the 'B' category, which tend to be more reliant on fewer products. SUNDALE LTD: Court Extends Schedules-Filing Period to January 11 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida extended the deadline for Sundance Ltd. to file its Schedules of Assets and Liabilities, Statement of Financial Affairs, and Payroll and Sales Tax Reports until Jan. 11, 2008. The previous deadline to file its Schedules expired on Dec. 27, 2007. The Debtor has assembled the majority of the information necessary to file its Schedules, Statement of Financial Affairs, and tax reports. However, the gathering of information is taking longer than expected due to intervening holidays. In addition, the Debtor's management has been attending to numerous matters with respect to the bankruptcy cases. Headquartered in Miami, Florida, Sundale Ltd. fka Sundale Associates Ltd. is an operative builder. The company filed for Chapter 11 protection on Dec. 12, 2007 (S.D. Fla. Case No. 07- 21016). Peter D. Russin, Esq., at Meland, Russin & Budwick PA, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets between $50 million and $100 million and debts between $10 million and $50 million. SUSQUEHANNA AREA: Fitch Cuts Rating on $59.7MM Bonds to BB+ ----------------------------------------------------------- Fitch Ratings has downgraded the underlying rating on Susquehanna Area Regional Airport Authority's approximately $133.5 million of outstanding senior airport system revenue bonds (senior bonds) to 'BBB-' from 'BBB' and downgrades the rating on the authority's $59.7 million of outstanding subordinate airport system revenue bonds (subordinate bonds) to 'BB+' from 'BBB-'. With these rating actions, the senior and subordinate lien bonds that were previously placed on Rating Watch Negative in January 2007 is resolved. The Rating Outlook on all liens is Stable, reflecting Fitch's expectation that passenger traffic, while exposed to some volatility has a stable base level of demand with some possibility to grow in the near and medium term. The downgrade of the senior lien bonds, which are secured by a pledge of airport system net revenues and an irrevocable commitment of passenger facility charge receipts, to 'BBB-' reflects Harrisburg International Airport exposure to a fundamental change in U.S. airline industry service patterns to small and medium sized airports. With the majority of legacy airlines, notably US Airways, diverting mainline aircraft to larger city pairs, and low cost airlines now deploying assets to proven markets rather than secondary airports, the prospects for material increases in service and/or enplanements at this airport are dim. While regional affiliates of the legacy carriers, which currently dominate the airport, are expected to maintain a stable schedule to support their respective legacy partners, the airport's terminal infrastructure, expanded and redeveloped at a cost of $233 million and financed with proceeds of the series 2003 and 2004 bonds, is underutilized as it was designed to support larger passenger volumes. As a result, the airport's cost structure has absorbed bond debt service without benefiting from increases in passenger related revenues. This structural imbalance has created well above industry average airline costs per enplanement (approximately $16.68 for fiscal 2007) and is a major impediment to attracting a low cost carrier which could potentially generate the traffic volume for which the terminal was built. An investment grade rating on the senior lien bonds is still warranted due to the stable base of origin & destination demand served by the airport, including passenger traffic generated by state government and area corporations and universities; the ability of airport management in a crisis to raise rates and charges to meet bondholder covenants; and minimal future capital needs, with no additional debt planned. While the subordinate debt remains outstanding (through fiscal 2018), the senior lien position remains significantly over collateralized relative to its subordinate counterpart. Thereafter, coverage of senior lien debt service will likely be driven down and the authority will need to implement timely increases in its rates and charges to meet the 1.25 times rate covenant as annual obligations gradually escalate. The downgrade of the subordinate lien bonds, which are secured by a subordinate pledge of airport system net revenues and receipts under a Federal Aviation Administration Airport Improvement Program Letter of Intent, to 'BB+' is based on the substantial leverage carried by this lien and the significant reliance on LOI payments to meet debt service. This reliance is now further exacerbated by the materially weakened backup pledge of airport system net revenues which would be called upon in the event LOI payments were delayed. The subordinate lien bonds have always been highly leveraged and dependent on the offset of federal Letter of Intent monies. While the authority has generally received LOI monies on or ahead of schedule the significant reliance on these funds, which will run through 2010, makes timely debt service payments highly vulnerable to any delay or interruption in these payments. Subordinate net revenues of the airport system do remain available to meet debt obligations through final maturity. However, as most net revenues will be required to meet operating expenses and senior lien obligations, the strength of the subordinate pledge is substantially weaker than when Fitch first rated the lien in 2003. In 2006, the authority circumvented the legal requirements of the bond documents when it drew from both the senior and subordinate bond debt service reserve funds without regard to lien position. These draws highlighted structural weaknesses of the documents. Management indicates that all reserves are now fully funded and that authority budgeting practices are better aligned to match document requirements. Fitch's ratings assume the legal documents will be strictly followed by the authority. For the nine months ended Sept. 30, 2007, authority operating revenues are outpacing operating expenses, and Fitch views the authority's budgeted 37% operating margin for full fiscal year as achievable. In addition to prudent expenditure management and timely increases in rates and charges, passenger volumes have increased steadily through November 2007, with total enplanements up approximately 11% over the corresponding time period in 2006; however, passenger traffic is still below originally forecast levels. Fitch views both the operational and financial improvement cautiously, noting that expenses are expected to increase in 2008 and without stable air service and related enplanements, the ability of the airport to generate needed non- airline revenues could be pressured. The authority expects debt service coverage in 2007 to be adequate, equal to 2.74x for the senior bonds and 1.24X for total obligations. Both coverage levels exceed the required rate covenants of 1.25x for the senior bonds and 1.1x for all debt. TARRANT COUNTRY: Moody's Retains 'Ca' Rating on Revenue Bonds ------------------------------------------------------------- Moody's Investor's Service affirmed the underlying Ca rating on Tarrant County Housing Finance Corporation's Multifamily Housing Revenue Bonds (Crossroads Apartment Project d/b/a The Brentwood Apartments) Senior Series 2001A. The senior series bonds continue to be MBIA insured and carry a Aaa insured rating. At this time Moody's also affirms the C rating on the Subordinate Series 2001C bonds. The outlook on all tranches of debt has been changed to stable from negative. Legal security: Special obligation of the issuer. Bonds are secured by rental revenue and any funds pledged to bondholders under the trust indenture. Recent developments: Moody's has discussed the current physical and financial health of the Brentwood property (formerly Crossroads at Cooks Meadows) with MBIA. MBIA and new property management, Pacific West Management, have undertaken certain physical improvements to the property, with other rehab projects still underway. As a result of these capital improvements, the property has once again been certified by the local public housing authority as acceptable housing for voucher holders. According to unaudited financial statements, revenue has improved somewhat in 2007, mainly from gains to occupancy. Outlook The outlook on the rating of the bonds is stable as the new property management and MBIA work together to improve occupancy levels at Crossroads. Considering MBIA's current commitment to the project, Moody's believes that the financial position of the project will continue to be stable in the near term. TELLURIDE ENT: Chap. 11 Case Converted To Ch. 7 Liquidation ----------------------------------------------------------- The Honorable Karen Jennemann of the U.S. Bankruptcy Court for the Middle District of Florida converted Telluride Enterprises LLC and affiliate PBC Investments LLC's Chapter 11 bankruptcy cases into a Chapter 7 liquidation proceeding, the Orlando Business Journal reports. In addition, the Journal says, Judge Jenneman gave the go signal to ASTAR Falcon Finance I LLC, whom the Telluride owes $9.8 million, to proceed with foreclosing the Debtors' properties. Based in Palm Bay, Florida, Telluride Enterprises, LLC and PBC Investments, LLC filed for Chapter 11 protection on Oct. 11, 2007 (Bankr. M.D. Fla. Case No. 07-04920 and 07-04919). Richard C. Prosser, Esq., at Stichter, Riedel, Blain & Prosser P.A., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $1 million to $100 million. TENASKA OKLAHOMA: S&P Retains Rating Despite Unscheduled Outage --------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Kiowa Power Partners LLC (KPP BBB-/Stable/--) and Tenaska Oklahoma I L.P. (TOILP; BB-/Stable/--) will remain unchanged despite an unscheduled outage in Unit 2 (a GE 7FA gas turbine-generator) of KPP's Power Block 2 (one of two 610 MW blocks consisting of two GE 7FA combustion units and a GE 100 MW steam turbine-generator). During scheduled maintenance in November, cracks were found in the R1 rotating blades of the compressor. Diagnosis concluded that offsite repair was required and a replacement was installed to minimize downtime. Previous outages at Kiowa occurred in the first quarter of 2005 (Power Block 1) and the third quarter of 2004 (Power Block 2). The most recent outage affected the only 7FA turbine that was not replaced in 2005. As a result, an unscheduled outage lasted for approximately three and a half weeks, and the unit was returned to service in December. Standard & Poor's expects that debt service coverage ratios (DSCRs) will fall to approximately 1.44x for the year, based on KPP's estimate of the net effect of expenses and availability penalties resulting from the outage. Availability penalties have a front-loaded structure and partial earn-back should increase availability payments in early 2008 through the end of the contract year under KPP's offtake agreement with Coral Power LLC, a subsidiary of Coral Energy Holding L.P. The lower DSCRs will not restrict dividend payments to TOILP, which are needed to service debt. Standard & Poor's could revise the outlook on KPP and TOILP to negative or lower ratings if continued poor operating performance results in DSCRs significantly and consistently below 1.50x, or if the net financial impact of the outage proves to be greater than anticipated. THOMAS MORLEY: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Thomas A. Morley 975 Ranch Road Copper Canyon, TX 76226 Bankruptcy Case No.: 08-40012 Chapter 11 Petition Date: January 2, 2008 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Robert T. DeMarco, Esq. Boyd Veigel, P.C. 218 East Lousiana P.O. Box 1179 McKinney, TX 75070 Tel: (972) 562-9700 Fax: (972) 208-4603 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million The Debtor did not file a list of its largest unsecured creditors. TRUMP ENT: New Credit Facility Cues S&P to Remove "BB-" Rating -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' bank loan rating and '1' recovery rating on Trump Entertainment Resorts Holdings L.P.'s $500 million credit facility. This follows TER's recent announcement that the company has entered into a new credit facility with Beal Bank and Beal Bank Nevada. In addition to funding the construction of the new tower at the Trump Taj Mahal Casino Resort, a portion of the proceeds from the new facility will be used to repay all outstanding debt under the previously existing credit facility. Through the new credit facility, TER has addressed some of its near-term liquidity challenges, principally through the elimination of financial covenants in the new credit agreement. In addition to the $393.25 million of borrowings under the new facility, the company may also borrow up to $100 million under a delayed-draw term loan provision. While S&P expects the delayed- draw term loan provision to provide TER with sufficient liquidity through the end of 2008, after its expiration the company will rely primarily on internally generated cash to meet its liquidity needs unless it puts a revolving credit facility in place by that time. Therefore, as the year progresses and the expiration of the delayed-draw term loan approaches, S&P will continue to evaluate TER's liquidity position. S&P expects that adequate funding is in place to complete construction of the new tower at the Taj Mahal, as well as other announced renovation-related spending projects. Moreover, the addition of 786 new hotel rooms--about half of which are planned to open by Labor Day 2008--is expected to boost cash flow. However, S&P's negative rating outlook on the company reflects ongoing construction and ramp-up-related risks associated with the new Taj Mahal tower, and concerns about the continuing competitive operating environment in Atlantic City. Ratings List Trump Entertainment Resorts Holdings L.P. Corporate Credit Rating B/Negative/-- Second-Lien Notes B (Recov Rtg: 4) Rating Withdrawn Trump Entertainment Resorts Holdings L.P. To From -- ---- Secured Loan NR BB- (Recov Rtg: 1) VONAGE HOLDINGS: Inks Pact Implementing MOU on Sprint's Lawsuit --------------------------------------------------------------- Vonage Holdings Corp. disclosed in a regulatory filing with the Securities and Exchange Commission that on Dec. 28, 2007, it entered into a settlement agreement with Sprint Communications Company L.P., effective Oct. 27, 2007, to implement the terms of a binding memorandum of understanding entered into by the parties on Oct. 7, 2007. Background Pursuant to the terms of the MOU: On Oct. 19, 2007, the company paid Sprint the sum of $80 million. On Nov. 16, 2007, the parties filed a joint motion for dismissal with prejudice, dismissing all claims and counterclaims in the patent infringement lawsuit Sprint filed against the company in the United States District Court for the District of Kansas. On Nov. 19, 2007, the parties filed a joint motion for dismissal with prejudice, dismissing all claims and counterclaims against Sprint in the case of Digital Packet Licensing Inc. v. SBC Internet Services, Inc. et al., pending in the United States District Court for the Northern District of Texas, which alleged patent infringement against Sprint. Cross-License The agreement provides that the company will receive a non- exclusive, fully paid, non-refundable, non-sublicensable, non- transferable license in the United States to all of Sprint's patents in its Voice over Packet patent portfolio in a field of use covering: (i) voice over internet protocol services in which the user accesses the Company's VoIP network over a data connection; (ii) related network architectures; and (iii) related customer equipment. Sprint will obtain, pursuant to the terms of the agreement, a license to all of the company's patents issued in the future for VoP technology, which license will expire when Sprint's license to the company or its successors is terminated. Previous Settlement The agreement provides that within 21 days of the execution of the agreement, Sprint, at its option, may elect to accept the terms and conditions of a settlement agreement that the company entered into on Oct. 25, 2007, with Verizon Services Corp. in the matter of Verizon Servs. Corp. v. Vonage Holdings Corp. et al., Case No. 06-0682, in the United States District Court for the Eastern District of Virginia, as those terms and conditions are reasonably conformed to Sprint's circumstances, in lieu of the terms and conditions of the agreement. However, Sprint will not be entitled to the financial terms of the Verizon Agreement for any funds paid to Verizon after the one-year period following the execution of the agreement. Transferability The agreement includes certain restrictions on the transferability of the license granted by Sprint to the company. If the company is acquired by AT&T or Verizon or any successor, then the acquiring company will only obtain a license for a portion of Sprint's VoP patent portfolio, which would include those patents that were the subject of the company's litigation with Sprint. Furthermore, the license to any telecom company would only cover the company's existing customer base and would terminate if the telecom company asserts any patent infringement claim against Sprint, its affiliates or certain Sprint strategic partners. If the company is acquired by an entity that is not a telecom company, then the acquiring company would obtain a license for all of the Sprint patents within its VoP portfolio for its existing customer base as adjusted for the company's historical growth rate. However, if the acquiring company is an entity that has less than 10% of the company's VoP customers falling within the field of use at the time of acquisition, the license would cover the entire customer base of the combined entity. Unless Sprint has first filed a patent infringement suit against the acquiring company, the acquiring company's license terminates if it or any affiliated entity asserts a patent infringement action against Sprint, its affiliates and certain Sprint strategic partners. The agreement contains additional restrictions on transfer, including restrictions on subsequent transfers by acquiring parties and transfers to parties against whom Sprint has filed a patent infringement suit. Covenant Not to Sue Pursuant to the terms of the agreement, each party agreed not to assert infringement claims against the other party for any party's current commercial business activities as of the date of the agreement or previously provided commercial business activities. The company also agreed not to assert any other infringement action against Sprint unless Sprint first files a patent infringement claim against the company for activities not licensed or not covered by the agreement. The covenants not to sue are non-transferable. The agreement terminates on May 5, 2014. 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. VYTERIS INC: Sept. 30 Balance Sheet Upside-Down by $16.3 Million ---------------------------------------------------------------- Vyteris Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $9.8 million in total assets, $26.1 million in total liabilities, and $16.3 million in total stockholders' equity. The company reported a net loss of $39.6 million on total revenues of $787,383 for the third quarter ended Sept. 30, 2007, compared with a net loss of $4.2 million on total revenues of $604,719 in the same period last year. Revenues for the three-month period ended Sept. 30, 2007, were primarily derived from reimbursement of product development costs with Ferring. Revenues in the comparable period in the prior year were principally derived from reimbursement of costs under the same development and marketing agreement. Total costs and expenses increased to $29.3 million during the three months ended Sept. 30, 2007, from $3.8 million in the same period last year. The bulk of the increase was due to increases in general and administrative, sales and marketing, as well as a non-cash warrant expense of $17.1 million during the three months ended Sept. 30, 2007, compared to $-0- in 2006, representing the estimated fair value of the 10,500,000 warrants issued to financial consultants. Liquidity At Sept. 30, 2007, the company had $6.2 million in cash and cash equivalents. In 2007, the company raised a total of $22.9 million. Net proceeds were $20.5 million, with finder's fees and other legal costs of $2.4 million recorded as a reduction of equity as a cost of the transaction. The company also borrowed $400,000 from Spencer Trask Specialty Group LLC in the first quarter of 2007 pursuant to a senior secured promissory note. 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?26be Going Concern Doubt Amper, Politziner & Mattia P.C., in Edison, N. J., expressed substantial doubt about Vyteris Holdings (Nevada) Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses and dependence upon outside financing to fund operations. About Vyteris Inc. Based in Fair Lawn, N.J., Vyteris Inc. (OTC BB: VYHN.OB) -- http://www.vyteris.com/-- fka. Vyteris Holdings (Nevada) Inc., has developed and produced the first FDA - approved electronically controlled transdermal drug delivery system that delivers drugs through the skin comfortably, without needles. This platform technology can be used to administer certain therapeutics either directly to the skin or into the bloodstream. In January 2005, Vyteris Inc. received approval from the United States Food and Drug Administration for its manufacturing facility and processes for LidoSite. Vyteris Inc. holds over 60 U.S. patents relating to the delivery of drugs across the skin using a mild electric current and operates in one business segment. WARNER CHILCOTT: Good Financial Profile Cues S&P's Pos. Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on specialty drug manufacturer Warner Chilcott Corp. to positive from stable. The ratings, including B+ corporate credit rating, were affirmed. "The outlook revision on the company reflects its solid operational track record and improving financial profile over the past two years," said Standard & Poor's credit analyst Arthur Wong. Mr. Wong added, "While a number of Warner's products face possible generic competition in the near term, the company's ability to successfully navigate product line extensions and make smart acquisitions provide us with comfort that management will be able to refresh its portfolio effectively. In addition, the company's diverse, high-margin product portfolio and the complexity of its vulnerable franchises mitigates this risk, and should continue to provide a healthy cash flow stream." WEEKS STREET: Section 341(a) Meeting Scheduled for January 16 ------------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of Weeks Street LLC's creditors on Jan. 16, 2008, at 11:30 a.m., at the U.S. Trustee's Office, 280 South First Street, Room 268, in San Jose, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Weeks Street LLC filed for Chapter 11 protection on Dec. 13, 2007 (Bankr. N.D. Calif. Case No. 07-54183). Stanley A. Zlotoff, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. WELLS FARGO: Fitch Affirms Ratings on 49 Certificate Classes ------------------------------------------------------------ Fitch Ratings has affirmed 49, downgraded 2 and placed 5 RMBS Classes on Rating Watch Negative of these Wells Fargo Mortgage Backed Securities pass-through certificates: Wells Fargo 2004-4 -- 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 affirmed at 'B'. Wells Fargo 2004-7 -- Class A affirmed at 'AAA'. Wells Fargo 2004-8 -- Class A affirmed at 'AAA'. Wells Fargo 2006-15 -- 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 rated 'BB', is placed on Rating Watch Negative; -- Class B-5 downgraded to 'CCC/DR2' from 'B'. Wells Fargo 2006-16 -- 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 affirmed at 'B'. Wells Fargo 2006-18 -- 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', is placed on Rating Watch Negative. Wells Fargo 2006-19 -- 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 affirmed at 'B'. Wells Fargo 2006-20 -- 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 affirmed at 'B'. Wells Fargo 2006-AR18 Group 1 -- Class I-A affirmed at 'AAA'; -- Class I-B-1 affirmed at 'AA'; -- Class I-B-2 affirmed at 'A'; -- Class I-B-3 affirmed at 'BBB'; -- Class I-B-4 affirmed at 'BB'; -- Class I-B-5 rated 'B', placed on Rating Watch Negative. Wells Fargo 2006-AR18 Group 2 -- Class II-A affirmed at 'AAA'; -- Class II-B-1 affirmed at 'AA'; -- Class II-B-2 affirmed at 'A'; -- Class II-B-3 affirmed at 'BBB'; -- Class II-B-4 rated 'BB', is placed on Rating Watch Negative; -- Class II-B-5 downgraded to 'CCC/DR2' from 'B'. Wells Fargo 2006-AR19 -- 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', is placed on Rating Watch Negative. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $8.87 billion of outstanding certificates. The downgrades affect approximately $5.63 million of the outstanding certificates. The placement on Rating Watch Negative of certain classes affects approximately $12.96 million of outstanding certificates. The negative rating actions reflect deterioration in the relationship between CE and future loss expectations. As of the November 2007 distribution date, for the 2006-15, 2006-18, 2006- AR18 Group 1, 2006-AR18 Group 2, and 2006-AR19 transactions, approximately 0.44%, 0.23%, 0.63%, 0.85% and 0.47%, respectively, are more than 60 days delinquent with no losses to date. All the transactions are seasoned between 12 (2006-18, 2006-19, 2006-20 and 2006-AR19) and 43 (2006-1, 2006-2, 2006-3, 2006-AR2 and 2006-AR3) months. The pool factors (current principal balance as a percentage of original) range approximately from 62% (2004-4) to 94% (2006-19). The underlying collateral for Wells Fargo Asset Securities Corp. transactions consists of prime adjustable-rate mortgage loans secured primarily by one- to four-family residential properties. All of the mortgage loans were generally originated in conformity with underwriting standards of Wells Fargo Home Mortgage, Inc. Wells Fargo Bank, N.A., rated 'RMS1' by Fitch, is the master servicer for all of the above transactions. WELLS FARGO: Fitch Holds 'CCC' Rating on Class B-5 Loan ------------------------------------------------------- Fitch Ratings has taken rating actions on these three Wells Fargo Alternative Loan Trust pass-through certificates: Wells Fargo Alt 2002-1 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'BB-'; -- Class B-5 affirmed at 'CCC/DR3'. Wells Fargo Alt 2003-1 -- 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 remains at 'CC/DR4'. Wells Fargo Alt 2005-1 -- 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', is placed on Rating Watch Negative. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $233.7 billion of outstanding certificates. The assignment of Rating Watch Negative to the B-5 class of 2005-1 affects $621,912 of outstanding certificates and reflects deterioration in the relationship between CE and future loss expectations. As of the November 2007 distribution date, approximately 3.83 % of the pool is more than sixty days delinquent with 0.02% losses to date for the Alt 2005-1 transaction. As of the November distribution date, the transactions are seasoned 63, 51 and 33 months for Alt 2002-1, Alt 2003-1 and Alt 2005-1, respectively. The pool factors are approximately 7%, 38% and 60% for Alt 2002-1, Alt 2003-1 and Alt 2005-1, respectively. The underlying collateral for Wells Fargo Asset Securities Corp. transactions consists of conventional, fixed interest rate, monthly pay, fully amortizing, one- to four-family, residential first mortgage loans. All of the mortgage loans were generally originated in conformity with underwriting standards of Wells Fargo Home Mortgage, Inc. Wells Fargo Bank, N.A., rated 'RMS1' by Fitch, is the master servicer for all of the above transactions. WHEELING-PITTSBURGH: Posts $56.5 Million Net Loss in 3rd Quarter ---------------------------------------------------------------- Wheeling-Pittsburgh Corp. reported a net loss of $56.5 million in the third quarter ended Sept. 30, 2007, compared with net income of $17.4 million in the same period last year. Net sales for the third quarter of 2007 totaled $393.0 million as compared to net sales of $482.7 million for the third quarter of 2006. Net sales for the third quarter of 2007 included $5.6 million from the sale of excess raw materials and net sales for the third quarter of 2006 included $15.7 million from the sale of coke to the company's joint venture partner. Net sales of steel products for the third quarter of 2007 totaled $387.4 million on steel shipments of 557,809 tons, or $695 per ton. Net sales of steel products for the third quarter of 2006 totaled $467.0 million on steel shipments of 609,730 tons, or $766 per ton. Cost of sales for the third quarter of 2007 totaled $409.6 million as compared to cost of sales of $427.4 million for the third quarter of 2006. Cost of sales for the third quarter of 2007 included the cost of excess raw materials sold of $6.1 million and cost of sales for the third quarter of 2006 included the cost of coke sold of $14.1 million. Depreciation expense for the third quarter of 2007 amounted to $10.0 million as compared to $9.3 million for the third quarter of 2006. Selling, general and administrative expense for the third quarter of 2007 amounted to $18.9 million as compared to $20.8 million for the third quarter of 2006. Selling, general and administrative costs decreased principally due to a decrease in real and personal property taxes resulting from changes in local tax law and the deconsolidation of MSC. Interest expense for the third quarter of 2007 amounted to $10.9 million as compared to $6.8 million for the third quarter of 2006. Average indebtedness outstanding for the third quarter of 2007 approximated $467.6 million as compared to $398.6 million for the third quarter of 2006, and the average rate of interest on all debt outstanding approximated 7.7% during the third quarter of 2007 as compared to 6.8% during the third quarter of 2006. Other loss for the third quarter of 2007 totaled $104,000 as compared to other income of $4.7 million for the third quarter of 2006. Other income consists primarily of equity earnings from affiliates and interest and other income. A provision for income taxes of $196,000 was provided during the third quarter of 2007 resulting from a return-to-accrual adjustment related to the year ended December 31, 2006. Otherwise, no benefit for income taxes was provided during the third quarter of 2007 as it was not more likely than not that the tax benefit associated with the losses incurred would result in a reduction of future income taxes payable. The provision for income taxes for the third quarter of 2006 totaled $6.3 million. As of Jan. 1, 2007, the accounts of Mountain State Carbon LLC were no longer included in the company's consolidated financial statements. As a result, no minority interest was recorded during the third quarter of 2007. The minority interest in the loss of MSC for the third quarter of 2006 totaled $472,000. Liquidity and Capital Resources At Sept. 30, 2007, the company had liquidity and capital resources of $38.6 million, consisting of cash and cash equivalents of $10.4 million and $28.2 million of availability under its amended and restated $225.0 million revolving credit facility. Balance Sheet At Sept. 30, 2007, the company's consolidated balance sheet showed $1.03 billion in total assets, $889.4 million in total liabilities, and $137.5 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?26ce Going Concern Doubt PricewaterhouseCoopers LLP, in Pittsburgh, expressed substantial doubt about Wheeling Pittsburgh Corp.'s ability to continue as a going concern on Aug. 9, 2007, in its report on the consolidated financial statements included it the company's 10K/A for the year ended Dec. 31, 2006. The auditing firm reported that the company has suffered losses from operations and had negative operating cash flows in the first half of 2007. About Wheeling-Pittsburgh Headquartered in Wheeling, West Virginia, Wheeling-Pittsburgh Corp. (NasdaqGM: WPSC) -- http://www.wpsc.com/-- through Wheeling-Pittsburgh Steel Corp., its wholly-owned principal operating subsidiary, produces flat rolled steel products for converters and processors and steel service centers, and the construction, agriculture and container industries. In addition, the company produces hot rolled steel products. On Nov. 27, 2007, the company consummated its business combination with Esmark Steel Service Group Inc. As a result of mergers in which they were the surviving corporations, ESSG and the company became wholly owned subsidiaries of Esmark Incorporated. YRC WORLDWIDE: Declining Credit Profile Cues Fitch's Rating Cut --------------------------------------------------------------- Fitch Ratings has downgraded its ratings on YRC Worldwide Inc. and its Roadway LLC and USF Corp. subsidiaries: YRC Worldwide Inc. -- Issuer Default Rating to 'BB+' from 'BBB-'; -- Senior unsecured to 'BB+' from 'BBB-'; -- Senior unsecured credit facilities to 'BB+' from 'BBB-'. Roadway LLC -- IDR to 'BB+' from 'BBB-'; -- Senor unsecured to 'BB+' from 'BBB-'. USF Corp. -- IDR to 'BB+' from 'BBB-'; -- Senior unsecured to 'BB+' from 'BBB-'. Fitch's ratings apply to approximately $1.2 billion in consolidated unsecured debt and a $950 million unsecured revolving credit facility. The Rating Outlook is Negative. The ratings for YRCW, along with its Roadway and USF subsidiaries, reflect the meaningful decline in the company's credit profile as the U.S. trucking market continues to experience very weak market conditions. Fitch's Jan. 2, 2008 announcement that the company will be taking a $650 million to $750 million after-tax impairment charge to write down the value of goodwill and other intangible assets recorded in conjunction with the USF acquisition, along with writedowns of the fair values of the USF and Roadway trade names, heightens concern that future financial performance of these operating units will not meet prior projections. Although the ratings of trucking issuers incorporate an anticipation of some volatility in credit metrics as the strength of the U.S. economy changes, Fitch now expects that YRCW's credit profile will remain inconsistent with its prior 'BBB-' IDR over a prolonged period. The U.S. less-than-truckload market environment has weakened considerably in the past year and a half, as declining volumes have combined with industry overcapacity to put heavy pressure on pricing. In the face of this market weakness, YRCW has not experienced the same level of unit pricing decline as some competitors. However, volumes in both the National Transportation and Regional Transportation segments have weakened considerably, and Fitch expects the company's near-term financial performance to fall short of earlier expectations. With a relatively high fixed-cost structure, YRCW and its LTL peers are particularly sensitive to volume volatility, and the negative margin effect of this operating leverage in a declining demand environment can be seen in YRCW's operating ratio, which increased to 96.4% in the third quarter of 2007 versus 93.1% in the prior year period. The company has made progress on a set of initiatives to improve annual operating earnings by $100 million, but weaker than expected revenue driven by a long period of weakness in the U.S. economy could offset a significant portion of this benefit over the near term. Although YRCW's cash on-hand is expected to decline, liquidity will likely be sufficient to meet near-term obligations. In August, YRCW entered into new credit facilities consisting of a $950 million revolver and a $150 million term loan. In December 2007, proceeds from the term loan were used to prepay YRCW's $150 million floating-rate notes that would have come due in May. In addition to entering into the new credit facilities, YRCW simultaneously upsized its asset-backed securitization facility by $50 million to a total of $700 million, further increasing liquidity. The ABS facility is secured by receivables of the Yellow Transportation, Roadway Express, USF Holland and USF Reddaway operating units. As of Sept. 30, 2007, the revolver had $479 million of availability after drawn amounts and outstanding letters of credit. At the same time, the ABS facility had $189 million in availability after drawn amounts and facility usage for YRCW's captive insurance company. The Negative Rating Outlook reflects Fitch's concerns that ongoing weakness in the U.S. economy could put added pressure on YRCW's near-term financial performance and drive further declines in the company's credit metrics. In particular, slowness in the U.S. manufacturing, residential construction and retail industries will contribute to weak freight demand, potentially through 2008. Should YRCW be forced to increase leverage significantly to fund working capital requirements or take other actions that have a material negative effect on the company's credit profile, Fitch may downgrade the ratings further. * Ontario Gets Series of Tax Breaks Beginning January 1 ------------------------------------------------------- The McGuinty government is strengthening Ontario's economic advantage by providing a series of tax breaks for businesses that took effect Jan. 1, 2008. In the 2007 Economic Outlook and Fiscal Review, the government proposed new tax initiatives that would provide $1.1 billion in provincial tax relief for businesses over three years. The measures would further enhance Ontario's tax competitiveness and stimulate growth through increased investment and job creation. "Although the economy has proven to be resilient, the McGuinty government recognized the need for immediate tax relief in some sectors. Areas, such as manufacturing, forestry, agriculture and tourism, face serious challenges," said Finance Minister Dwight Duncan. "To support these sectors and all of Ontario's businesses, we've proposed a number of tax breaks - some are retroactive to January 2007 while others will begin in the New Year." Tax breaks include: -- eliminating the Capital Tax for businesses primarily engaged in manufacturing and resource activities; -- increasing the Ontario Film and Television Tax Credit rate to 35% from 30%; and -- increasing the Ontario Production Services Tax Credit rate to 25% from 18%. Some of the proposed tax reductions are retroactive to Jan. 1, 2007, including: -- providing a 21-per-cent Capital Tax rate cut for all businesses, on the way to full elimination in 2010; and -- increasing the small business deduction threshold to $500,000 from $400,000. The government is also proposing to extend by one year the phase- out of the provincial tax credit for investments in Labor Sponsored Investment Funds, to the end of the 2011 tax year. The maximum investment amount would increase to $7,500 from $5,000 beginning in the 2007 tax year, providing about $38 million in additional financial assistance over three years. "The people of Ontario are counting on us to move Ontario forward - and that is what we are doing," said Duncan. "Our government has recognized the needs of our business sector, and we've taken action to continue our province's economic success." * Patrick J. Trostle Joins Jenner & Block-New York as Partner ------------------------------------------------------------- Patrick J. Trostle has joined Jenner & Block LLP as partner in the firm's New York office. Previously a partner in a major international law firm, Mr. Trostle brings with him more than 14 years' experience in high-profile workout and restructuring matters, representing institutional parties in complex chapter 11 reorganizations and international insolvency cases. "Patrick's depth and experience dealing with bankruptcy matters will be a tremendous asset to the Firm and to our clients," Daniel R. Murray, chair of the firm's bankruptcy, workout and corporate reorganization practice, said. "We are delighted that he is joining our growing practice." Mr. Trostle has represented creditors and debtors in complex restructurings both in and out of court. He has served as counsel to numerous secured creditors, including the DIP lenders in the Levitz and Heating Oil Partners chapter 11 cases and the prepetition lenders in the Tweeter and Enesco chapter 11s. Mr. Trostle has also represented official unsecured creditors' committees, including those in the NRG Energy and Loewen chapter 11 cases. He has represented numerous ad hoc creditors' committees, including bondholders in the Cenargo and Teleglobe cross-border cases and aircraft creditors in the Northwest Airlines and Atlas Air chapter 11 cases. Among Mr. Trostle's debtor representations are NII Holdings in its chapter 11 case and Comdisco as special foreign counsel in its chapter 11. Mr. Trostle was appellate counsel in several bankruptcy-related cases before the United States Supreme Court, including NextWave and Hen House, and he was a member of the appellate team that represented E. Pierce Marshall in the Anna Nicole Smith bankruptcy case. Mr. Trostle was recently a partner at Bingham McCutchen. He was an associate at Paul, Weiss, Rifkind, Wharton & Garrison, and he served as a law clerk for the United States Bankruptcy Court in the Southern District of New York. Mr. Trostle earned his law degree from Vermont Law School in 1992 and his B.A. with honors from Trinity College in 1989. He also attended the University of Oxford. About Jenner & Block Jenner & Block LLP -- http://www.jenner.com/-- has a substantial transactional and corporate practice, which focuses on mergers and acquisitions, securities, finance, private equity, real estate, tax, environmental, insurance, commercial law, technology, intellectual property, bankruptcy and reorganization, labor and employment, executive compensation, government contacts, health care and associations. Founded in 1914, Jenner & Block has more than 460 attorneys located in Chicago, Dallas, New York and Washington, DC. * Fitch Identifies 11 US CMBS Transactions Exposed to Centro ------------------------------------------------------------ Fitch Ratings has identified these eleven U.S. CMBS transactions as having exposure to Centro NP: --GE 2005-C2; --JPM 2004-CB9; --JPM 2004-PNC1; --JPM 2006-CIBC17; --JPM 2006-LDP7; --JPM 2006-LDP9; --JPM 2007-CB20; --JPM 2007-LDP10; --MLCFC 2006-1; --MLMT 2004-MKB1; --MLMT 2006-C1. Fitch downgraded Centro to 'CCC' and kept its ratings on Rating Watch Negative on Dec. 19, 2007 as a result of ongoing concerns surrounding the ability of the company to refinance over $2.3 billion of indebtedness by Feb. 15, 2008. This indebtedness is separate from the 13 loans in 11 Fitch rated U.S. CMBS transactions. Fitch will closely monitor the performance of the Centro-related loans in Fitch rated U.S. CMBS transactions. All of the loans are fixed rate, interest only and backed by portfolios of retail properties. The loans remain current and have scheduled maturities from November 2008 through November 2016. The first scheduled maturity occurs in the MLMT 2004-MKB1 transaction and represents 8.2% of the outstanding transaction balance. The loans in each transaction are held by bankruptcy remote single purpose entities mitigating the potential risk of bankruptcy consolidation. Fitch's ratings on the above U.S. CMBS transactions in question is based on the performance of the underlying collateral and not the financial strength of the borrower, as such Fitch does not expect any potential rating changes as a result of the Centro NP downgrade. * Losses and Delinquencies Cues S&P's Rating Cuts on 16 Classes --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 16 classes of U.S. residential mortgage-backed securities from 10 transactions backed by prime jumbo mortgage collateral. At the same time, S&P removed one of the 16 lowered ratings from CreditWatch with negative implications. Additionally, S&P affirmed its ratings on 150 classes from various transactions, including those with lowered ratings. Lastly, one rating remains on CreditWatch negative. The lowered ratings are based on the negative relationship between recent realized losses and the level of delinquencies in each transaction's delinquency pipeline over the past six months. Cumulative losses in these transactions range from 0.00% to 4.07% of the original pool balances. Severe delinquencies (90-plus days, foreclosure, and REOs) range from 0.00% to 11.42% of the current pool balances. Standard & Poor's removed one rating from CreditWatch negative because S&P lowered it to 'CCC'. The rating affirmations are based on credit support percentages that are sufficient to maintain the current ratings on the securities. Subordination provides credit support for these transactions. The collateral backing these transactions consists of prime jumbo, first-lien mortgage loans secured by one- to four- family residential properties. Ratings Lowered Rating ------ Issuer Class To From ------ ----- -- ---- Bear Stearns ARM Trust 2001-4 B-2 A AA+ Bear Stearns ARM Trust 2001-4 B-3 CCC B Bear Stearns ARM Trust 2004-8 I-B-5 CCC B Bear Stearns ARM Trust 2004-8 II-B-4 B BB GMACM Mortgage Loan Trust 2003-J5 B-2 D B GreenPoint Mortgage Securities Inc. 2003-1 B-2 D CCC IndyMac INDX Mortgage Loan Trust 2004-AR4 B-4 B BB IndyMac INDX Mortgage Loan Trust 2004-AR4 B-5 CCC B MASTR Adjustable Rate Mortgages Trust 2004-1 B-4 B BB MASTR Adjustable Rate Mortgages Trust 2004-1 B-5 CCC B Mortgage Pass-Through Trust 2004-HYB3 B-4 CCC B Structured Asset Securities Corporation Assistance Loan Trust 2003-AL2 B5 D CCC Structured Asset Securities Corp. Series 2004-18H B4 B BB Washington Mutual MSC Mortgage Pass-Through Certificates Series 2004-RA4 Trust C-B-2 BB BBB Washington Mutual MSC Mortgage Pass-Through Certificates Series 2004-RA4 Trust C-B-3 CCC B Rating Lowered and Removed from CreditWatch Rating ------ Issuer Class To From ------ ----- -- ---- CSFB Mortgage Backed Trust Series 2004-1 D-B-5 CCC B-/Watch Neg Ratings Remaining on CreditWatch GreenPoint Mortgage Securities Inc. Mortgage-backed pass-through certificates Series Class Rating ------ ----- ------ 2003-1 B-1 B/Watch Neg Ratings Affirmed Banc of America Funding Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2002-1 A-1, A-5, A-WIO, A-PO, B-1, B-2, B-3 AAA Bear Stearns ARM Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2001-4 I-A, II-A, B-1 AAA 2004-8 I-1-A-1, I-1-A-2, I-1-A-3, I-2-A-1 AAA 2004-8 I-3-A-1, I-4-A-1 AAA 2004-8 II-A-1 AAA 2004-8 I-B-1 AA+ 2004-8 I-B-2 A+ 2004-8 I-B-3 BBB 2004-8 I-B-4 BB 2004-8 II-B-1 AA 2004-8 II-B-2 A 2004-8 II-B-3 BBB 2004-8 II-B-5 CCC Credit Suisse First Boston Mortgage Securities Corp. Mortgage-backed pass-through certificates Series Class Rating ------ ----- ------ 2002-30 I-A-1, I-P, I-X, II-A-3, II-A-5, II-P AAA 2002-30 II-X, D-B-1 AAA 2002-30 D-B-2 AA+ 2002-30 D-B-3 BBB- CSFB Mortgage Backed Trust Mortgage-backed pass-through certificates Series Class Rating ------ ----- ------ 2004-1 I-A-1, I-A-2, I-A-3, II-A-1, AAA 2004-1 II-A-2, III-A-1, IV-A-1, V-A-1, I-P AAA 2004-1 D-P-I, D-P-2, I-X, D-X-1, D-X-2 AAA 2004-1 D-B-1 AA+ 2004-1 D-B-2 AA- 2004-1 D-B-3 A- 2004-1 D-B-4 BB GMACM Mortgage Loan Trust 2003-J5 Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2003-J5 A-1, A-2, A-3, IO AAA 2003-J5 M-1 AA 2003-J5 M-2 A 2003-J5 M-3 BBB 2003-J5 B-1 BB GreenPoint Mortgage Securities Inc. Mortgage-backed pass-through certificates Series Class Rating ------ ----- ------ 2003-1 A-1 AAA 2003-1 M-1 AA 2003-1 M-2 A 2003-1 M-3 BBB IndyMac INDX Mortgage Loan Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2004-AR4 1-A, 2-A, 3-A, A-R AAA 2004-AR4 B-1 AA 2004-AR4 B-2 A 2004-AR4 B-3 BBB MASTR Adjustable Rate Mortgages Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2004-1 1-A-1, 2-A-1, 2-A-X, 3-A-1, 3-A-2, 3-A-3 AAA 2004-1 3-A-X, 4-A-1, 4-A-2, 4-A-X, 5-A-1, 5-A-X AAA 2004-1 6-A-1 AAA 2004-1 B-1, B-1-X AA+ 2004-1 B-2 AA- 2004-1 B-3 BBB+ Mortgage Pass-Through Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2004-HYB3 1A, 2-A, 3-A AAA 2004-HYB3 M AA 2004-HYB3 B-1 A 2004-HYB3 B-2 BBB 2004-HYB3 B-3 BB Structured Asset Securities Corp. Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2002-21A 1-A1,1-A3, 2-A1, 2-A2, 4-A1, 4-A2, 5-A1 AAA 2002-21A B1-I, B1-I-X, B1-II AA+ 2002-21A B2-I, B2-I-X, B2-II AA 2002-21A B3 A+ 2004-18H A-3, A-4, A-5, A-IO1, A-IO2 AAA 2004-18H B1 AA 2004-18H B2 A 2004-18H B3 BBB 2004-18H B5 CCC Structured Asset Securities Corp. Assistance Loan Trust Asset-Backed Securities Series Class Rating ------ ----- ------ 2003-AL2 A, APO, AIO AAA 2003-AL2 B1 AA 2003-AL2 B2 A 2003-AL2 B3 BBB 2003-AL2 B4 BB Washington Mutual MSC Mortgage Pass-Through Certificates Series Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2004-RA4 1-A, II-A, III-A, C-X, I-P, A-P, R AAA 2004-RA4 C-B-1 AA 2004-RA4 C-B-4 CCC * S&P Cuts 89 Tranches' Ratings from 22 U.S. Cash Flow and CDOs --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 89 tranches from 22 U.S. cash flow and hybrid collateralized debt obligation (CDO) transactions and placed its ratings on seven other tranches on CreditWatch with negative implications. The downgraded tranches have a total issuance amount of $3.683 billion. At the same time, S&P affirmed its ratings on another 53 tranches from these transactions. All of the downgraded tranches come from mezzanine structured finance CDO of asset-backed securities, high-grade SF CDO of ABS, or CDO of CDO transactions collateralized either directly or indirectly by U.S. residential mortgage-backed securities. The ratings on 34 of the downgraded tranches remain on CreditWatch with negative implications, indicating a significant likelihood of further downgrades. 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 1,180 tranches from 378 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 666 ratings from 155 transactions are currently on CreditWatch negative for the same reasons. In all, the affected tranches represent an issuance amount of $70.912 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 U.S. RMBS assets and CDOs. Rating and CreditWatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- 888 Tactical Fund Ltd. A2 AA+/Watch Neg AAA/Watch Neg 888 Tactical Fund Ltd. A3 BBB+/Watch Neg AAA/Watch Neg 888 Tactical Fund Ltd. A4 BB-/Watch Neg AA/Watch Neg 888 Tactical Fund Ltd. B CC A/Watch Neg 888 Tactical Fund Ltd. C CC BBB/Watch Neg ACA ABS 2007-3 Ltd. A-1LA A-/Watch Neg AAA/Watch Neg ACA ABS 2007-3 Ltd. A-1LB CCC/Watch Neg AA/Watch Neg ACA ABS 2007-3 Ltd. A-2L CC A+/Watch Neg ACA ABS 2007-3 Ltd. A-3L CC A-/Watch Neg ACA ABS 2007-3 Ltd. A-4L CC BBB+/WatchNeg Belle Haven ABS CDO 2005-1 Ltd. A-2 AAA/Watch Neg AAA Belle Haven ABS CDO 2005-1 Ltd. B AA/Watch Neg AA Belle Haven ABS CDO 2005-1 Ltd. C A/Watch Neg A Belle Haven ABS CDO 2005-1 Ltd. D-1 BB+/Watch Neg BBB/Watch Neg Belle Haven ABS CDO 2005-1 Ltd. D-2 BB+/Watch Neg BBB/Watch Neg Class V Funding III Ltd. A-2 A+/Watch Neg AAA/Watch Neg Class V Funding III Ltd. A-3 BBB-/Watch Neg AAA/Watch Neg Class V Funding III Ltd. A-4 B/Watch Neg AA/Watch Neg Class V Funding III Ltd. B CCC-/Watch Neg A/Watch Neg Class V Funding III Ltd. C CC BBB/Watch Neg Class V Funding III Ltd. Q com nts CC BBB-/WatchNeg Duke Funding IX Ltd. B BBB-/Watch Neg BBB/Watch Neg E*Trade ABS CDO IV Ltd. A-1B-2 AAA/Watch Neg AAA E*Trade ABS CDO IV Ltd. A-2 AA+/Watch Neg AAA E*Trade ABS CDO IV Ltd. B BBB-/Watch Neg AA/Watch Neg E*Trade ABS CDO IV Ltd. C CCC-/Watch Neg BBB/Watch Neg E*Trade ABS CDO IV Ltd. D CC BB+/Watch Neg E*Trade ABS CDO IV Ltd. Pref shrs CC B/Watch Neg Fourth Street Fndg Ltd. A-3 AA+ AAA Fourth Street Fndg Ltd. B A+ AA Fourth Street Fndg Ltd. C BBB+ AA-/Watch Neg Fourth Street Fndg Ltd. D BBB- A/Watch Neg Fourth Street Fndg Ltd. E B BBB/Watch Neg Fourth Street Fndg Ltd. F CCC BBB-/WatchNeg Grand Avenue CDO III Ltd. B AA- AA/Watch Neg Grand Avenue CDO III Ltd. C-1 A- A/Watch Neg Grand Avenue CDO III Ltd. C-2 BBB+ A-/Watch Neg Grand Avenue CDO III Ltd. D BBB- BBB/Watch Neg GSC ABS Funding 2006-3g Ltd. C BBB- A/Watch Neg GSC ABS Funding 2006-3g Ltd. D CCC- BBB/Watch Neg Highridge ABS CDO I Ltd. A-1AD AAA/Watch Neg AAA Highridge ABS CDO I Ltd. A-2 AA+/Watch Neg AAA/Watch Neg Highridge ABS CDO I Ltd. A-3 AA+/Watch Neg AAA/Watch Neg Highridge ABS CDO I Ltd. B AA-/Watch Neg AA/Watch Neg Highridge ABS CDO I Ltd. C A/Watch Neg AA-/Watch Neg Highridge ABS CDO I Ltd. D BB+/Watch Neg A/Watch Neg Highridge ABS CDO I Ltd. E CCC-/Watch Neg BBB/Watch Neg IMAC CDO 2006-1 Ltd. E BBB+/Watch Neg A/Watch Neg IMAC CDO 2006-1 Ltd. F BB/Watch Neg BBB/Watch Neg IMAC CDO 2006-1 Ltd. G B+/Watch Neg BBB-/WatchNeg Lexington Capital Fndg Ltd. D BBB- BBB/Watch Neg Lexington Capital Fndg Ltd. E BB+ BB+/Watch Neg Libertas Preferred Fndg IV Ltd A-3 AA+ AAA Libertas Preferred Fndg IV Ltd A-4 AA AAA Libertas Preferred Fndg IV Ltd B A+ AA Libertas Preferred Fndg IV Ltd C BBB- A/Watch Neg Libertas Preferred Fndg IV Ltd D BB- BBB/Watch Neg Libertas Preferred Fndg IV Ltd E B- BBB-/WatchNeg MKP CBO V Ltd. A-2 AA+/Watch Neg AAA MKP CBO V Ltd. B A-/Watch Neg AA MKP CBO V Ltd. C BBB+/Watch Neg A MKP CBO V Ltd. D BBB-/Watch Neg A- MKP CBO V Ltd. E B/Watch Neg BBB/Watch Neg MKP CBO V Ltd. F CCC-/Watch Neg BBB-/WatchNeg MKP CBO VI Ltd. A-1 AAA/Watch Neg AAA MKP CBO VI Ltd. A-2 AA+/Watch Neg AAA/Watch Neg MKP CBO VI Ltd. B CCC-/Watch Neg BBB+/WatchNeg MKP CBO VI Ltd. C CC BB/Watch Neg MKP CBO VI Ltd. D CC B/Watch Neg Pinetree CDO Ltd. A-3 A/Watch Neg A Pinetree CDO Ltd. B BB/Watch Neg BBB/Watch Neg Plettenberg Bay CDO Ltd. A-1 AA+ AAA Plettenberg Bay CDO Ltd. A-2 A+ AA/Watch Neg Plettenberg Bay CDO Ltd. B BBB- A-/Watch Neg Plettenberg Bay CDO Ltd. C BB- BBB/Watch Neg Plettenberg Bay CDO Ltd. D CCC BBB-/WatchNeg Plettenberg Bay CDO Ltd. Income nts CC BB+ Port Jackson CDO 2007-1 Ltd. A-2 AA+ AAA/Watch Neg Port Jackson CDO 2007-1 Ltd. A-3 AA AAA/Watch Neg Port Jackson CDO 2007-1 Ltd. B BBB AA/Watch Neg Port Jackson CDO 2007-1 Ltd. C BB+ A/Watch Neg Port Jackson CDO 2007-1 Ltd. D B BBB/Watch Neg Rockville CDO I Ltd. E BB BBB/Watch Neg South Coast Fndg IX Ltd. A1B AA AAA South Coast Fndg IX Ltd. A2 BBB+ AAA/Watch Neg South Coast Fndg IX Ltd. B CCC+ A/Watch Neg South Coast Fndg IX Ltd. C CC BB/Watch Neg South Coast Fndg IX Ltd. D CC B-/Watch Neg South Coast Fndg IX Ltd. E CC CCC+/WatchNeg South Coast Fndg IX Ltd. F CC CCC/Watch Neg Stockton CDO Ltd. C BBB+ A/Watch Neg Stockton CDO Ltd. D-1 BBB- BBB+/WatchNeg Stockton CDO Ltd. D-2 BB BBB/Watch Neg Stockton CDO Ltd. D-3 B+ BBB-/WatchNeg Stockton CDO Ltd. E B BB+/Watch Neg West Trade Funding CDO III Ltd. A-4 AA+ AAA/Watch Neg West Trade Funding CDO III Ltd. E BB/Watch Neg BBB/Watch Neg Ratings Affirmed Transaction Class Rating ----------- ----- ------ 888 Tactical Fund Ltd. A1 AAA 888 Tactical Fund Ltd. S AAA ACA ABS 2007-3 Ltd. Combo notes AAA ACA ABS 2007-3 Ltd. X AAA Belle Haven ABS CDO 2005-1 Ltd. A-1 AAA Class V Funding III Ltd. A-1 AAA Class V Funding III Ltd. S AAA Duke Funding IX Ltd. A1 AAA Duke Funding IX Ltd. A2F AA Duke Funding IX Ltd. A2V AA E*Trade ABS CDO IV, Ltd. A-1A AAA E*Trade ABS CDO IV, Ltd. A-1B-1 AAA Fourth Street Funding, Ltd. A-1 AAA Fourth Street Funding, Ltd. A-2 AAA Grand Avenue CDO III Ltd. A-1 AAA Grand Avenue CDO III Ltd. A-2 AAA Grand Avenue CDO III Ltd. A-3 AAA GSC ABS Funding 2006-3g Ltd. A-1-a AAA GSC ABS Funding 2006-3g Ltd. A-1-b AAA GSC ABS Funding 2006-3g Ltd. A-1LT AAA GSC ABS Funding 2006-3g Ltd. A-2 AAA GSC ABS Funding 2006-3g Ltd. B AA IMAC CDO 2006-1 Ltd. A-1 AAA IMAC CDO 2006-1 Ltd. A-2 AAA IMAC CDO 2006-1 Ltd. B AAA Lexington Capital Funding Ltd. A-1ANV AAA Lexington Capital Funding Ltd. A-1AV AAA Lexington Capital Funding Ltd. A-1B AAA Lexington Capital Funding Ltd. A-2 AAA Lexington Capital Funding Ltd. B AA Lexington Capital Funding Ltd. C A Libertas Preferred Funding IV Ltd. A-1 AAA Libertas Preferred Funding IV Ltd. A-2 AAA MKP CBO V Ltd. A-1 AAA Pinetree CDO Ltd. A-1J AAA Pinetree CDO Ltd. A-1S AAA Pinetree CDO Ltd. A-2 AA Plettenberg Bay CDO Ltd. S AAA Port Jackson CDO 2007-1 Ltd. A-1 AAA Rockville CDO I Ltd. A-1 AAA Rockville CDO I Ltd. A-2 AAA Rockville CDO I Ltd. A-3 AAA Rockville CDO I Ltd. B AA Rockville CDO I Ltd. C AA- Rockville CDO I Ltd. D A- South Coast Funding IX Ltd. A1A AAA Stockton CDO Ltd. A-1 AAA Stockton CDO Ltd. A-2 AAA Stockton CDO Ltd. A-3 AAA Stockton CDO Ltd. B AA West Trade Funding CDO III Ltd. A-1 AAA West Trade Funding CDO III Ltd. A-2 AAA West Trade Funding CDO III Ltd. A-3 AAA Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Duke Funding IX Ltd. A3F A/Watch Neg Duke Funding IX Ltd. A3V A/Watch Neg Highridge ABS CDO I Ltd. A-1AT AAA/Watch Neg IMAC CDO 2006-1 Ltd. C AA/Watch Neg IMAC CDO 2006-1 Ltd. D AA-/Watch Neg West Trade Funding CDO III Ltd. B AA/Watch Neg West Trade Funding CDO III Ltd. C AA-/Watch Neg West Trade Funding CDO III Ltd. D A/Watch Neg * BOND PRICING: For the Week of Dec. 31, 2007 - Jan. 4, 2008 ------------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- Acme Metals Inc 12.500% 08/01/02 0 Albertson's Inc 6.520% 04/10/28 74 Albertson's Inc 6.530% 04/10/28 74 Albertson's Inc 6.560% 07/26/27 75 Albertson's Inc 6.570% 02/23/28 74 Albertson's Inc 6.630% 06/02/28 75 Alesco Financial 7.625% 05/15/27 69 Allegiance Tel 12.875% 05/15/08 1 Alltel Corp 6.800% 05/01/29 69 Ambac Inc 6.150% 02/15/37 75 Ambassadors Intl 3.750% 04/15/27 71 AMD 6.000% 05/01/15 69 AMD 6.000% 05/01/15 69 Amer & Forgn Pwr 5.000% 03/01/30 59 Amer Pad & Paper 13.000% 11/15/05 0 Americredit Corp 0.750% 09/15/11 71 Americredit Corp 2.125% 09/15/13 63 Americredit Corp 2.125% 09/15/13 65 Amer Color Graph 10.000% 06/15/10 54 Ames True Temper 10.000% 07/15/12 55 Antigenics 5.250% 02/01/25 62 Arvinmeritor Inc 4.000% 02/15/27 71 Arvinmeritor Inc 4.000% 02/15/27 72 At Home Corp 4.750% 12/15/06 0 Ata Holdings 12.125% 06/15/10 0 Atherogenics Inc 1.500% 02/01/12 8 Atherogenics Inc 4.500% 03/01/11 36 Atlantic Coast 6.000% 02/15/34 2 Bank New England 8.750% 04/01/99 8 Bank New England 9.500% 02/15/96 14 Bank New England 9.875% 09/15/99 9 Bankunited Cap 3.125% 03/01/34 63 BBN Corp 6.000% 04/01/12 0 Bearingpoint Inc 2.500% 12/15/24 59 Bearingpoint Inc 2.750% 12/15/24 57 Beazer Homes USA 4.625% 06/15/24 70 Beazer Homes USA 6.500% 11/15/13 72 Beazer Homes USA 6.875% 07/15/15 71 Beazer Homes USA 8.125% 06/15/16 74 Bon-Ton Stores 10.250% 03/15/14 73 Borden Inc 7.875% 02/15/23 69 Bowater Inc 6.500% 06/15/13 73 Budget Group Inc 9.125% 04/01/06 0 Buffet Inc 12.500% 11/01/14 31 Builders Transport 6.500% 05/01/11 0 Burlington North 3.200% 01/01/45 55 Calpine Gener Co 11.500% 04/01/11 17 Cell Genesys Inc 3.125% 11/01/11 74 Central Tractor 10.625% 04/01/07 0 Charming Shoppes 1.125% 05/11/14 71 Charter Comm Inc 6.500% 10/01/27 59 Charter Comm Hld 10.000% 05/15/11 73 CIH 9.920% 04/01/14 59 CIH 10.000% 05/15/14 59 CIH 11.125% 01/15/14 60 CIT Group Inc 6.100% 03/15/67 73 Claire's Stores 9.250% 06/01/15 67 Claire's Stores 10.500% 06/01/17 53 Clear Channel 4.900% 05/15/15 74 Clear Channel 5.500% 12/15/16 73 Clear Channel 7.250% 10/15/27 73 Collins & Aikman 10.750% 12/31/11 0 Columbia/HCA 7.500% 11/15/95 74 Complete Mgmt 8.000% 08/15/03 0 Complete Mgmt 8.000% 12/15/03 0 Compucredit 3.625% 05/30/25 46 CompuCredit 5.875% 11/30/35 43 Constar Intl 11.000% 12/01/12 75 Countrywide Cap 8.050% 06/15/27 55 Countrywide Finl 4.500% 06/15/10 72 Countrywide Finl 5.250% 05/11/20 72 Countrywide Finl 5.250% 05/27/20 72 Countrywide Finl 5.750% 01/24/31 73 Countrywide Finl 5.800% 06/07/12 72 Countrywide Finl 5.800% 01/27/31 73 Countrywide Finl 6.000% 03/16/26 73 Countrywide Finl 6.000% 11/14/35 74 Countrywide Finl 6.000% 12/14/35 73 Countrywide Finl 6.000% 02/08/36 73 Countrywide Finl 6.250% 05/15/16 57 Countrywide Home 4.000% 03/22/11 72 Countrywide Home 4.125% 09/15/09 72 Countrywide Home 5.625% 07/15/09 75 Countrywide Home 6.000% 05/16/23 74 Countrywide Home 6.000% 07/23/29 74 Crown Cork & Seal 8.125% 06/15/16 73 Custom Food Prod 8.000% 02/01/07 0 Dana Corp 5.850% 01/15/15 72 Dana Corp 6.500% 03/15/08 70 Dana Corp 6.500% 03/01/09 69 Dana Corp 7.000% 03/15/28 72 Dana Corp 7.000% 03/01/29 72 Dana Corp 9.000% 08/15/11 67 Decode Genetics 3.500% 04/15/11 68 Decode Genetics 3.500% 04/15/11 64 Delta Air Lines 8.000% 12/01/15 61 Delta Mills Inc 9.625% 09/01/07 15 Delphi Corp 6.197 11/15/33 35 Delphi Corp 6.500% 08/15/13 59 Delphi Corp 8.250% 10/15/33 38 Dura Operating 8.625% 04/15/12 10 Dura Operating 9.000% 05/01/09 0 Empire Gas Corp 9.000% 12/31/07 0 Encysive Pharma 2.500% 03/15/12 50 Epix Medical Inc 3.000% 06/15/24 68 Exodus Comm Inc 4.750% 07/15/08 0 Exodus Comm Inc 11.625% 07/15/10 0 Falcon Products 11.375% 06/15/09 0 Fedders North Am 9.875% 03/01/14 7 Finova Group 7.500% 11/15/09 16 Finlay Fine Jwly 8.375% 06/01/12 56 Ford Motor Cred 5.650% 01/21/14 73 Ford Motor Cred 5.750% 01/21/14 72 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 5.750% 02/20/14 71 Ford Motor Cred 5.900% 02/20/14 74 Ford Motor Cred 6.000% 03/20/14 72 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 11/20/14 70 Ford Motor Cred 6.000% 11/20/14 72 Ford Motor Cred 6.000% 11/20/14 70 Ford Motor Cred 6.000% 01/20/15 69 Ford Motor Cred 6.000% 02/20/15 72 Ford Motor Cred 6.050% 02/20/14 73 Ford Motor Cred 6.050% 04/21/14 72 Ford Motor Cred 6.050% 12/22/14 70 Ford Motor Cred 6.050% 12/22/14 72 Ford Motor Cred 6.050% 12/22/14 70 Ford Motor Cred 6.050% 02/20/15 72 Ford Motor Cred 6.100% 02/20/15 71 Ford Motor Cred 6.150% 12/22/14 71 Ford Motor Cred 6.200% 04/21/14 73 Ford Motor Cred 6.200% 03/20/15 72 Ford Motor Cred 6.250% 04/21/14 73 Ford Motor Cred 6.250% 01/20/15 70 Ford Motor Cred 6.250% 03/20/15 74 Ford Motor Cred 6.300% 05/20/14 75 Ford Motor Cred 6.300% 05/20/14 73 Ford Motor Cred 6.500% 02/20/15 74 Ford Motor Cred 6.500% 03/20/15 73 Ford Motor Cred 6.650% 06/20/14 75 Ford Motor Cred 6.800% 06/20/14 75 Ford Motor Cred 6.800% 03/20/15 73 Ford Motor Cred 6.850% 05/20/14 74 Ford Motor Cred 7.250% 07/20/17 74 Ford Motor Cred 7.250% 07/20/17 71 Ford Motor Cred 7.350% 09/15/15 75 Ford Motor Cred 7.500% 08/20/32 72 Ford Motor Co 6.375% 02/01/29 65 Ford Motor Co 6.500% 08/01/18 72 Ford Motor Co 6.625% 02/15/28 65 Ford Motor Co 6.625% 10/01/28 66 Ford Motor Co 7.125% 11/15/25 66 Ford Motor Co 7.400% 11/01/46 68 Ford Motor Co 7.450% 07/16/31 73 Ford Motor Co 7.500% 08/01/26 70 Ford Motor Co 7.700% 05/15/97 67 Ford Motor Co 7.750% 06/15/43 68 Franklin Bank 4.000% 05/01/27 69 General Motors 6.750% 05/01/28 65 General Motors 7.375% 05/23/48 65 General Motors 7.400% 09/01/25 71 General Motors 8.100% 06/15/24 73 Georgia Gulf Crp 10.750% 10/15/16 75 GMAC 5.250% 01/15/14 69 GMAC 5.350% 01/15/14 71 GMAC 5.700% 06/15/13 73 GMAC 5.700% 10/15/13 74 GMAC 5.700% 12/15/13 70 GMAC 5.750% 01/15/14 71 GMAC 5.850% 05/15/13 75 GMAC 5.850% 06/15/13 75 GMAC 5.850% 06/15/13 73 GMAC 5.850% 06/15/13 73 GMAC 5.900% 12/15/13 72 GMAC 5.900% 01/15/19 63 GMAC 5.900% 01/15/19 68 GMAC 5.900% 02/15/19 61 GMAC 5.900% 10/15/19 60 GMAC 6.000% 02/15/19 66 GMAC 6.000% 02/15/19 64 GMAC 6.000% 02/15/19 65 GMAC 6.000% 03/15/19 66 GMAC 6.000% 03/15/19 74 GMAC 6.000% 03/15/19 61 GMAC 6.000% 03/15/19 66 GMAC 6.000% 03/15/19 62 GMAC 6.000% 04/15/19 64 GMAC 6.000% 09/15/19 64 GMAC 6.000% 09/15/19 60 GMAC 6.050% 08/15/19 61 GMAC 6.050% 08/15/19 60 GMAC 6.050% 10/15/19 61 GMAC 6.100% 09/15/19 61 GMAC 6.125% 10/15/19 61 GMAC 6.150% 12/15/13 74 GMAC 6.150% 08/15/19 63 GMAC 6.150% 09/15/19 64 GMAC 6.150% 10/15/19 67 GMAC 6.200% 11/15/13 75 GMAC 6.200% 04/15/19 64 GMAC 6.250% 07/15/19 73 GMAC 6.250% 12/15/18 68 GMAC 6.250% 01/15/19 65 GMAC 6.250% 04/15/19 62 GMAC 6.250% 05/15/19 65 GMAC 6.250% 07/15/19 62 GMAC 6.300% 10/15/13 74 GMAC 6.300% 08/15/19 64 GMAC 6.300% 08/15/19 69 GMAC 6.350% 04/15/19 65 GMAC 6.350% 07/15/19 64 GMAC 6.350% 07/15/19 63 GMAC 6.400% 12/15/18 63 GMAC 6.400% 11/15/19 64 GMAC 6.400% 11/15/19 65 GMAC 6.500% 06/15/18 64 GMAC 6.500% 11/15/19 68 GMAC 6.500% 12/15/19 66 GMAC 6.500% 12/15/18 69 GMAC 6.500% 05/15/19 69 GMAC 6.500% 01/15/20 65 GMAC 6.500% 02/15/20 64 GMAC 6.550% 12/15/19 65 GMAC 6.600% 08/15/16 70 GMAC 6.600% 05/15/18 67 GMAC 6.600% 06/15/19 66 GMAC 6.600% 06/15/19 64 GMAC 6.650% 06/15/18 66 GMAC 6.650% 10/15/18 67 GMAC 6.650% 10/15/18 71 GMAC 6.650% 02/15/20 64 GMAC 6.700% 05/15/14 75 GMAC 6.700% 05/15/14 73 GMAC 6.700% 06/15/18 68 GMAC 6.700% 06/15/18 68 GMAC 6.700% 11/15/18 66 GMAC 6.700% 06/15/19 66 GMAC 6.700% 12/15/19 66 GMAC 6.750% 07/15/16 70 GMAC 6.750% 08/15/16 71 GMAC 6.750% 09/15/16 71 GMAC 6.750% 06/15/17 73 GMAC 6.750% 03/15/18 66 GMAC 6.750% 07/15/18 68 GMAC 6.750% 09/15/18 66 GMAC 6.750% 10/15/18 66 GMAC 6.750% 11/15/18 68 GMAC 6.750% 05/15/19 69 GMAC 6.750% 05/15/19 67 GMAC 6.750% 06/15/19 70 GMAC 6.750% 06/15/19 67 GMAC 6.750% 03/15/20 75 GMAC 6.800% 09/15/18 65 GMAC 6.800% 10/15/18 66 GMAC 6.850% 05/15/18 75 GMAC 6.875% 08/15/16 70 GMAC 6.875% 07/15/18 69 GMAC 6.900% 06/15/17 69 GMAC 6.900% 07/15/18 71 GMAC 6.900% 08/15/18 72 GMAC 6.950% 06/15/17 73 GMAC 7.000% 06/15/17 68 GMAC 7.000% 07/15/17 69 GMAC 7.000% 02/15/18 66 GMAC 7.000% 02/15/18 69 GMAC 7.000% 02/15/18 69 GMAC 7.000% 03/15/18 70 GMAC 7.000% 05/15/18 72 GMAC 7.000% 08/15/18 69 GMAC 7.000% 09/15/18 70 GMAC 7.000% 02/15/21 65 GMAC 7.000% 09/15/21 67 GMAC 7.000% 09/15/21 68 GMAC 7.000% 06/15/22 66 GMAC 7.000% 11/15/23 69 GMAC 7.000% 11/15/24 66 GMAC 7.000% 11/15/24 67 GMAC 7.000% 11/15/24 66 GMAC 7.050% 03/15/18 69 GMAC 7.050% 03/15/18 70 GMAC 7.050% 04/15/18 69 GMAC 7.125% 10/15/17 71 GMAC 7.150% 09/15/18 68 GMAC 7.150% 01/15/25 67 GMAC 7.150% 03/15/25 70 GMAC 7.200% 10/15/17 71 GMAC 7.200% 10/15/17 71 GMAC 7.250% 09/15/17 74 GMAC 7.250% 09/15/17 72 GMAC 7.250% 09/15/17 72 GMAC 7.250% 09/15/17 72 GMAC 7.250% 01/15/18 73 GMAC 7.250% 04/15/18 70 GMAC 7.250% 04/15/18 72 GMAC 7.250% 08/15/18 71 GMAC 7.250% 09/15/18 70 GMAC 7.250% 01/15/25 68 GMAC 7.250% 02/15/25 70 GMAC 7.250% 03/15/25 68 GMAC 7.300% 12/15/17 72 GMAC 7.300% 01/15/18 72 GMAC 7.300% 01/15/18 72 GMAC 7.375% 11/15/16 74 GMAC 7.375% 04/15/18 70 GMAC 7.400% 12/15/17 71 GMAC 7.500% 11/15/16 75 GMAC 7.500% 08/15/17 72 GMAC 7.500% 11/15/17 71 GMAC 7.500% 03/15/25 74 GMAC 7.750% 10/15/17 74 GMAC 8.000% 10/15/17 75 GMAC 8.000% 11/15/17 74 Gulf States STL 13.500% 04/15/03 0 Harrahs Oper Co 5.625% 06/01/15 73 Harrahs Oper Co 5.750% 10/01/17 69 Harrahs Oper Co 6.500% 06/01/16 74 Headwaters Inc 2.500% 02/01/14 74 Headwaters Inc 2.500% 02/01/14 73 Hercules Inc 6.500% 06/30/29 74 Herbst Gaming 7.000% 11/15/14 59 Herbst Gaming 8.125% 06/01/12 64 Hills Stores Co 12.500% 07/01/03 0 Hilton Hotels 7.500% 12/15/17 74 Hines Nurseries 10.250% 10/01/11 75 HNG Internorth 9.625% 03/15/06 19 Huntington Natl 5.375% 02/28/19 74 Ion Media 11.000% 07/31/13 55 Iridium LLC/CAP 10.875% 07/15/05 1 Iridium LLC/CAP 11.250% 07/15/05 2 Iridium LLC/CAP 13.000% 07/15/05 1 Iridium LLC/CAP 14.000% 07/15/05 1 JP Morgan Chase 12.000% 07/31/08 62 K Hovnanian Entr 6.250% 01/15/15 68 K Hovnanian Entr 6.250% 01/15/16 67 K Hovnanian Entr 6.375% 12/15/14 68 K Hovnanian Entr 6.500% 01/15/14 70 K Hovnanian Entr 7.500% 05/15/16 68 K Hovnanian Entr 7.750% 05/15/13 55 K Hovnanian Entr 8.000% 04/01/12 71 K Hovnanian Entr 8.625% 01/15/17 72 K Hovnanian Entr 8.875% 04/01/12 57 K Mart Funding 8.800% 07/01/10 9 Kaiser Aluminum 9.875% 02/15/02 0 Kaiser Aluminum 12.750% 02/01/03 4 Kimball Hill Inc 10.500% 12/15/12 32 Kmart Corp 8.540% 01/02/15 0 Kmart Corp 9.350% 01/02/20 5 Kmart Corp 9.780% 01/05/20 0 Knight Ridder 4.625% 11/01/14 75 Knight Ridder 5.750% 09/01/17 73 Knight Ridder 6.875% 03/15/29 69 Lehman Bros Holding 9.500% 05/01/08 75 Leiner Health 11.000% 06/01/12 65 Liberty Media 3.250% 03/15/31 74 Liberty Media 3.750% 02/15/30 57 Liberty Media 4.000% 11/15/29 63 Lifecare Holding 9.250% 08/15/13 65 Magna Entertainm 7.250% 12/15/09 72 Majestic Star 9.750% 01/15/11 69 McSaver Financl 7.400% 02/15/02 0 McSaver Financl 7.875% 08/01/03 1 MediaNews Group 6.375% 04/01/14 62 Meritage Corp 7.000% 05/01/14 72 Meritage Homes 6.250% 03/15/15 69 Metaldyne Corp 11.000% 06/15/12 60 Movie Gallery 11.000% 05/01/12 29 Mrs Fileds 9.000% 03/15/11 74 Muzak LLC 9.875% 03/15/09 53 Natl Steel Corp 8.375% 08/01/06 0 Neff Corp 10.000% 06/01/15 54 New Orl Grt N RR 5.000% 07/01/32 60 New Plan Realty 6.900% 02/15/28 41 New Plan Realty 7.680% 11/02/26 41 North Atl Trading 9.250% 03/01/12 71 Northern Pacific RY 3.000% 01/01/47 51 Northern Pacific RY 3.000% 01/01/47 51 Northwest Steel & Wire 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 58 Nutritional Src 10.125% 08/01/09 2 Nuveen Invest 5.500% 09/15/15 69 Oakwood Homes 8.125% 03/01/19 0 Ocwen Financial 3.250% 08/01/24 72 Omnicare Inc 3.250% 12/15/35 73 Oscient Pharma 3.500% 04/15/11 44 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 9.125% 04/15/17 7 Pac-West Telecom 13.500% 02/01/09 4 Pac-West Telecom 13.500% 02/01/09 1 Palm Harbor 3.250% 05/15/24 72 Pegasus Satellite 12.375% 08/01/08 0 Phar-Mor Inc 11.720% 12/31/49 0 Piedmont Aviat 10.250% 01/15/49 0 Pierre Foods Inc 9.875% 07/15/12 70 Pixelworks Inc 1.750% 05/15/24 71 Pope & Talbot 8.375% 06/01/13 17 Pope & Talbot 8.375% 06/01/13 19 Portola Packagin 8.250% 02/01/12 74 Primus Telecom 3.750% 09/15/10 59 Primus Telecom 8.000% 01/15/14 55 Propex Fabrics 10.000% 12/01/12 40 PSInet Inc 10.000% 02/15/05 0 PSInet Inc 10.5000% 12/01/06 0 Radnor Holdings 11.000% 03/15/10 0 Railworks Corp 11.500% 04/15/09 0 Rait Financial 6.875% 04/15/27 65 Rayovac Corp 8.500% 10/01/13 65 Read-Rite Corp 6.500% 09/01/04 0 Realogy Corp 12.375% 04/15/15 75 Realogy Corp 12.375% 04/15/15 61 Restaurant Co 10.000% 10/01/13 71 Residential Cap 6.000% 02/22/11 61 Residentail Cap 6.375% 06/30/10 66 Residential Cap 6.500% 06/01/12 63 Residential Cap 6.500% 04/17/13 61 Residential Cap 6.875% 06/30/15 60 Rite Aid Corp. 6.875% 08/15/13 70 Rite Aid Corp. 7.700% 02/15/27 67 RJ Tower Corp. 12.000% 06/01/13 4 S3 Inc 5.750% 10/01/03 0 ServiceMaster Co 7.100% 03/01/18 67 ServiceMaster Co 7.250% 03/01/38 70 ServiceMaster Co 7.450% 08/15/27 72 Six Flags Inc 4.500% 05/15/15 71 Six Flags Inc 9.625% 06/01/14 74 SLM Corp 4.700% 12/15/28 69 SLM Corp 4.800% 12/15/28 61 SLM Corp 5.000% 06/15/19 73 SLM Corp 5.000% 06/15/19 71 SLM Corp 5.000% 09/15/20 68 SLM Corp 5.000% 12/15/28 71 SLM Corp 5.050% 03/15/23 73 SLM Corp 5.190% 04/24/19 73 SLM Corp 5.200% 03/15/28 65 SLM Corp 5.250% 03/15/28 75 SLM Corp 5.250% 12/15/28 61 SLM Corp 5.350% 06/15/28 69 SLM Corp 5.400% 03/15/23 66 SLM Corp 5.400% 03/15/28 70 SLM Corp 5.400% 06/15/30 67 SLM Corp 5.450% 06/15/28 72 SLM Corp 5.450% 06/15/28 64 SLM Corp 5.500% 03/15/19 73 SLM Corp 5.500% 06/15/29 72 SLM Corp 5.500% 06/15/29 64 SLM Corp 5.500% 06/15/29 66 SLM Corp 5.500% 06/15/29 64 SLM Corp 5.500% 03/15/30 66 SLM Corp 5.500% 06/15/30 65 SLM Corp 5.500% 06/15/30 66 SLM Corp 5.500% 06/15/30 68 SLM Corp 5.500% 06/15/30 64 SLM Corp 5.500% 12/15/30 69 SLM Corp 5.550% 06/15/25 71 SLM Corp 5.550% 06/15/28 72 SLM Corp 5.550% 03/15/29 74 SLM Corp 5.600% 03/15/22 72 SLM Corp 5.600% 12/15/28 71 SLM Corp 5.600% 03/15/29 63 SLM Corp 5.600% 03/15/29 70 SLM Corp 5.600% 06/15/29 66 SLM Corp 5.600% 12/15/29 66 SLM Corp 5.600% 12/15/29 68 SLM Corp 5.625% 01/25/25 71 SLM Corp 5.650% 06/15/22 72 SLM Corp 5.650% 06/15/22 72 SLM Corp 5.650% 03/15/29 63 SLM Corp 5.650% 03/15/29 75 SLM Corp 5.650% 03/15/29 70 SLM Corp 5.650% 12/15/29 71 SLM Corp 5.650% 12/15/29 67 SLM Corp 5.650% 12/15/29 68 SLM Corp 5.650% 03/15/30 66 SLM Corp 5.650% 09/15/30 74 SLM Corp 5.650% 03/15/32 71 SLM Corp 5.700% 03/15/29 64 SLM Corp 5.700% 03/15/29 67 SLM Corp 5.700% 03/15/29 65 SLM Corp 5.700% 03/15/29 68 SLM Corp 5.700% 12/15/29 75 SLM Corp 5.700% 03/15/30 66 SLM Corp 5.700% 03/15/32 72 SLM Corp 5.750% 03/15/29 70 SLM Corp 5.750% 03/15/29 73 SLM Corp 5.750% 03/15/29 67 SLM Corp 5.750% 06/15/29 71 SLM Corp 5.750% 09/15/29 67 SLM Corp 5.750% 12/15/29 68 SLM Corp 5.750% 12/15/29 68 SLM Corp 5.750% 12/15/29 67 SLM Corp 5.750% 12/15/29 66 SLM Corp 5.750% 03/15/30 65 SLM Corp 5.750% 03/15/30 68 SLM Corp 5.750% 06/15/32 72 SLM Corp 5.750% 06/15/32 72 SLM Corp 5.800% 12/15/29 70 SLM Corp 5.800% 03/15/32 72 SLM Corp 5.800% 03/15/32 72 SLM Corp 5.800% 03/15/32 68 SLM Corp 5.850% 09/15/29 72 SLM Corp 5.850% 09/15/29 67 SLM Corp 5.850% 12/15/31 70 SLM Corp 5.850% 03/15/32 73 SLM Corp 5.850% 03/15/32 73 SLM Corp 5.850% 03/15/32 73 SLM Corp 5.850% 06/15/32 73 SLM Corp 5.850% 06/15/32 73 SLM Corp 6.000% 06/15/26 74 SLM Corp 6.000% 06/15/26 69 SLM Corp 6.000% 12/15/26 73 SLM Corp 6.000% 12/15/26 75 SLM Corp 6.000% 03/15/27 73 SLM Corp 6.000% 12/15/28 70 SLM Corp 6.000% 12/15/28 75 SLM Corp 6.000% 03/15/29 70 SLM Corp 6.000% 06/15/29 70 SLM Corp 6.000% 06/15/29 75 SLM Corp 6.000% 06/15/29 70 SLM Corp 6.000% 09/15/29 71 SLM Corp 6.000% 09/15/29 73 SLM Corp 6.000% 09/15/29 71 SLM Corp 6.000% 06/15/31 68 SLM Corp 6.000% 12/15/31 61 SLM Corp 6.000% 12/15/31 67 SLM Corp 6.000% 03/15/37 73 SLM Corp 6.000% 03/15/37 73 SLM Corp 6.000% 03/15/37 73 SLM Corp 6.050% 12/15/26 72 SLM Corp 6.050% 12/15/31 72 SLM Corp 6.100% 09/15/31 75 SLM Corp 6.100% 12/15/31 69 SLM Corp 6.150% 09/15/29 71 SLM Corp 6.200% 09/15/26 75 SLM Corp 6.200% 12/15/31 69 SLM Corp 6.250% 06/15/29 71 SLM Corp 6.250% 06/15/29 70 SLM Corp 6.250% 06/15/29 71 SLM Corp 6.250% 09/15/29 70 SLM Corp 6.250% 09/15/29 73 SLM Corp 6.300% 09/15/31 74 SLM Corp 6.350% 06/15/31 74 SLM Corp 6.400% 09/15/31 72 SLM Corp 6.450% 09/15/31 70 SLM Corp 6.500% 09/15/31 72 Spacehab Inc 5.500% 10/15/10 50 Spansion Llc 2.250% 06/15/16 53 Special Devises 11.375% 12/15/08 66 Spectrum Brands 7.375% 02/01/15 73 Standard Pac Corp 6.000% 10/01/12 61 Standard Pac corp 6.250% 04/01/14 65 Standard Pacific 6.500% 08/15/10 67 Standard Pac Corp 6.875% 05/15/11 67 Standard Pacific 7.000% 08/15/15 66 Standard Pac corp 7.750% 03/15/13 66 Standard Pacific 9.250% 04/15/12 46 Stanley-Martin 9.750% 08/15/15 65 Station Casinos 6.500% 02/01/14 74 Station Casinos 6.625% 03/15/18 69 Station Casinos 6.875% 03/01/16 72 Tekni-Plex Inc 12.750% 06/15/10 69 Teligent Inc 11.500% 12/01/07 0 Tenet Healthcare 6.875% 11/15/31 74 Times Mirror Co 6.610% 09/15/27 56 Times Mirror Co 7.250% 03/01/13 69 Times Mirror Co 7.250% 11/15/96 52 Times Mirror-New 7.500% 07/01/23 59 Tom's Foods Inc 10.500% 11/01/04 1 Tops Appliance 6.500% 11/30/03 0 Tousa Inc 7.500% 03/15/11 8 Tousa Inc 7.500% 01/15/15 8 Tousa Inc 9.000% 07/01/10 43 Tousa Inc 9.000% 07/01/10 42 Tousa Inc 10.375% 07/01/12 8 Toys R Us 7.375% 10/15/18 71 Trans Mfg Oper 11.250% 05/01/09 60 TransTexas Gas 15.000% 03/15/05 0 Tribune Co 4.875% 08/15/10 68 Tribune Co 5.250% 08/15/15 56 Trism Inc 12.000% 02/15/05 0 True Temper 8.375% 09/15/11 61 TXU Corp 6.500% 11/15/24 73 TXU Corp 6.550% 11/15/34 72 United Air Lines 9.210% 01/21/17 0 United Air Lines 9.300% 03/22/08 50 United Air Lines 10.850% 02/19/15 31 Universal Standard 8.250% 02/01/06 0 US Air Inc. 10.250% 01/15/49 0 US Air Inc. 10.300% 07/15/49 0 US Air Inc. 10.550% 01/15/49 0 US Air Inc. 10.550% 01/15/49 0 S Air Inc. 10.700% 01/01/49 0 US Air Inc. 10.700% 01/15/49 0 US Air Inc. 10.750% 01/15/49 0 US Air Inc. 10.800% 01/01/49 0 US Air Inc. 10.800% 01/01/49 0 US Air Inc. 10.800% 01/01/49 0 US Air Inc. 10.900% 01/01/49 0 US Air Inc. 10.900% 01/01/49 0 Vertis Inc 10.875% 06/15/09 61 Vesta Insur Grp 8.750% 07/15/25 2 Vicorp Restaurant 10.500% 04/15/11 64 Vion Pharm Inc 7.750% 02/15/12 67 Visteon Corp 7.000% 03/10/14 74 Wachovia Corp 9.250% 04/10/08 41 Wachovia Corp 12.500% 03/05/08 43 Washington Mutual Pfd 6.534% 03/29/49 59 Washington Mutual Pfd 6.895% 06/29/49 60 WCI Communities 4.000% 08/05/23 70 WCI Communities 6.625% 03/15/15 50 WCI Communities 7.875% 10/01/13 54 WCI Communities 9.125% 05/01/12 56 Werner Holdings 10.000% 11/15/07 0 Westpoint Steven 7.875% 06/15/05 0 William Lyon 7.500% 02/15/14 59 William Lyon 7.625% 12/15/12 62 William Lyon 10.750% 04/01/13 61 Wimar Op LLC/Fin 9.625% 12/15/14 62 Winstar Comm Inc 12.500% 04/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 Winstar Comm 14.000% 10/15/05 0 Wornick Co 10.875% 07/15/11 64 Young Broadcasting 8.750% 01/15/14 71 Zif Davis Media 12.000% 08/12/09 22 ********* 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 2008. 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 ***