/raid1/www/Hosts/bankrupt/TCR_Public/080130.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, January 30, 2008, Vol. 12, No. 25
Headlines
94/BELLEVILLE: Files List of 10 Largest Unsecured Creditors
94/BELLEVILLE: Section 341(a) Meeting Scheduled for February 4
AFFILIATED COMPUTER: Moody's Keeps Ba2 Credit Rating After Review
AMERICAN CAPITAL: Voluntary Chapter 11 Case Summary
AMERICAN HOME: Court Approves Muldoon Murphy as Special Counsel
AMERICAN HOME: Maricopa County Wants Location of Assets Disclosed
AMERICAN HOME: U.S. Trustee Objects to Non-Performing Loans Sale
AMERICAN LAFRANCE: Wants Court Approval on Cash Collateral Access
AMERICAN LAFRANCE: Wants Interim Approval on $10MM DIP Financing
AMERISOURCEBERGEN CORP: Earns $109 Mil. in Quarter Ended Dec. 31
BEAR STEARNS: S&P Maintains 'BB' Rating on Class II-B Certificates
BERRY PLASTICS: S&P Retains Low-B Ratings on Captive Plastics Buy
BLACKBOARD INC: Earns $3.3 Million in 2007 Third Quarter
CALPINE CORP: Gets $253.6MM Bid from FirstEnergy for Fremont Plant
CARDIOVASCULAR DIAGNOSTIC: Voluntary Chapter 11 Case Summary
CBA COMMERCIAL: S&P's Rating on Class M-8 Certs. Tumbles to 'D'
CHIQUITA BRANDS: Reviews Capital Structure, Considers Refinancing
CHIQUITA BRANDS: Soliciting Consents to Amend Indenture Terms
CHIQUITA BRANDS: S&P's Ratings Unmoved by Capital Structure Review
CLASS V FUNDING: Moody's Slashes Rating on $45 Mil. Notes to Ba1
CLAYTON HOLDINGS: Cooperates in New York AG's Probe on Banks
CLEAR CHANNEL: S&P Retains Negative CreditWatch on B+ Rating
CLEVELAND UNLIMITED: Moody's Cuts Corporate Credit Rating to Caa2
COMUNITY LENDING: Court OKs Murray & Murray as Bankruptcy Counsel
COMUNITY LENDING: Section 341(a) Meeting Scheduled for February 6
COUNTRYWIDE FIN'L: "Fear" May Have Prompted BofA Merger, WSJ Says
COUNTRYWIDE FINANCIAL: CEO Gives Up Severance Pay of $37 Million
CYGNAL TECHNOLOGIES: Wants CCAA Protection Extended to March 21
DELPHI CORP: Court Allows Committee Participation in Exit Loan
DELPHI CORP: Court Grants Final Approval of MDL Settlements
DELTA FINANCIAL: Court Approves De Minimis Assets Sale Procedures
DELTA FINANCIAL: Wants Court Okay on Unencumbered Loans Sale
DURA AUTOMOTIVE: Seeks Court Consent for $170MM Replacement Loan
FANNIE MAE: Eroding Credit Support Prompts S&P's Three Rating Cuts
FORD MOTOR: At Ease with Tata Motors' Jaguar Brand Acquisition
FOX TROT: Declining Credit Quality Prompts Moody's Rating Review
FRIEDMAN'S INC: Judge Sontchi Converts Case to Chapter 11
FRIEDMAN'S INC: Case Summary & 40 Largest Unsecured Creditors
G REIT INC: Transfers Remaining Assets to the Liquidating Trust
GEORGIA GULF: S&P Downgrades Ratings on Projected Weak Liquidity
GOLDEN NUGGET: Moody's Places Ratings on Review for Possible Cuts
GOODMAN GLOBAL: Obtains Requisite Consents to Amend Indentures
GSAMP TRUST: S&P Cuts Ratings on Two Certs. on Eroding Performance
HDB LLC: Case Summary & Two Largest Unsecured Creditors
INTERSTATE BAKERIES: Court Approves Amended Disclosure Statement
INVERNESS MEDICAL: Inks Agreement to Acquire Matria Healthcare
INVERNESS MEDICAL: Moody's Reviews Ratings on Matria Deal
INVERNESS MEDICAL: S&P Holds Low-B Ratings on $1.2BB Matria Deal
IWT TESORO: Court Approves $12.6 Million Sale to New Stream
JEFFRY REUTER: Case Summary & 19 Largest Unsecured Creditors
KELLWOOD CO: To Hasten Sun Capital's Tender Offer Completion
KELLWOOD CO: Moody's Puts All Ratings on Review for Possible Cuts
KIT PACK: Case Summary & 20 Largest Unsecured Creditors
LANDRY'S RESTAURANTS: Receives $1.3 Billion Buyout Offer from CEO
LANDRY'S RESTAURANT: $1.3 Bil. Offer Cues Moody's Ratings Review
LANDRY'S RESTAURANTS: S&P Places All Ratings Under Negative Watch
LASATA VIII: Case Summary & Largest Unsecured Creditor
LAWRENCE BUILDING: Case Summary & Six Largest Unsecured Creditors
LEDCO LIMITED: CAW Demands Severance Pay After Bankruptcy Filing
LUBBOCK HOUSING: Moody's Slices Ratings on Revenue Bonds to Ba3
MARKOV CDO: Eight Classes of Notes Acquire S&P's Junk Ratings
MASTR SECURITIES: S&P Cuts 25 Classes' Ratings on Weak Performance
MATRIA HEALTHCARE: Inks Merger Agreement with Inverness Medical
MATRIA HEALTHCARE: Inverness Deal Prompts Moody's Ratings Reviews
MERITAGE MORTGAGE: Four Classes Get S&P's Junk Ratings on Losses
MID OCEAN: S&P Junks Ratings on Notes Amounting to $169.16 Million
MORGAN STANLEY: Fitch Cuts Rating on Class B-4 Certs. to B from BB
MOVIE GALLERY: Court Moves Exclusive Plan-Filing Period to June 13
MOVIE GALLERY: Disclosure Statement Hearing Adjourned to Feb. 5
MOVIE GALLERY: Wants to Perform Under Plan Support Pact w/ Sopris
NCO GROUP: S&P Holds 'B+' Rating and Says Outlook is Negative
NEXINNOVATIONS INC: Tech Data's Claims to be Settled by April 18
ORBIT BRANDS: Wants Court to Dismiss Chapter 11 Case
PEGASUS WIRELESS: Case Summary & Five Largest Unsecured Creditors
PERFORMANCE TRANSPORTATION: Reed Smith Okayed as Special Counsel
PETROLEUM DEVELOPMENT: Earns $4.5 Million in 2007 Third Quarter
PHARMED GROUP: Court Authorizes $1.2MM Asset Sale to Invatec
PIKE NURSERY: Files Schedules of Assets and Liabilities
PIONEER NATURAL: Moody's Maintains 'Ba1' Corporate Family Rating
PRC LLC: Seeks to Hire Jenner & Block as Special Conflicts Counsel
PRC LLC: Wants to Hire CXO LLC as Restructuring Advisors
PRC LLC: Wants Court Nod on Evercore Group as Investment Bankers
PROPEX INC: Section 341(a) Creditors Meeting Scheduled for March 4
PROPEX INC: U.S. Trustee Appoints Five-Member Creditors' Committee
RESIDENTIAL ASSET: S&P Cuts Ratings on Four Certificate Classes
RJO HOLDINGS: Moody's Withdraws Ratings Due to Business Reasons
ROCK-TENN CO: Earns $17.5 Million in Quarter Ended December 31
ROCKFORD PRODUCTS: Section 341(a) Meeting Scheduled for March 13
ROCKFORD PRODUCTS: Chapter 7 Trustee Taps McGreevy as Counsel
SALANDER-O'REILLY: CRO Wants RFR's Motion to Seize Mansion Denied
SCOTTS MIRACLE: Posts $56.8MM Net Loss in Qtr. Ended December 29
SEARS HOLDINGS: Names W. Bruce Johnson as Interim CEO
SEARS HOLDINGS: CEO's Planned Departure Won't Affect S&P's Ratings
SMURFIT-STONE: Incurs $103 Million Net Loss in Year Ended Dec. 31
SOFA EXPRESS: Gets Final OK to Access Wells Fargo's DIP Financing
SOFA EXPRESS: Wants Court to Set March 31 as Claims Bar Date
SOUTHAVEN POWER: Court Okays Bidding Procedure for Sale of Assets
SOUTHAVEN POWER: Exclusive Plan Filing Period Extended to April 14
SPORTSTUFF INC: Section 341(a) Creditors' Meeting Set for Feb. 1
ST PAUL HOUSING: S&P Alters Outlook to Positive; Holds BB+ Rating
STACEY HENRIKSON: Case Summary & 30 Largest Unsecured Creditors
STRUCTURED FINANCE: Moody's Cuts Rating on $15 Million Notes
TEKNI-PLEX INC: Moody's Junks Ratings on $150 Mil. Senior Notes
TLC VISION: Moody's Revises Outlook from Stable to Negative
TOUSA INC: Inks Deal with Senior Noteholders, Files for Chapter 11
TOUSA INC: Case Summary & 49 Largest Unsecured Creditors
TOUSA INC: Bankruptcy Filing Prompts Fitch's 'D' Rating
TOUSA INC: Bankruptcy Filing Spurs Moody's Default Rating
TOUSA INC: Wilmington Says It Has No Credit Exposure
TYSON FOODS: Earns $34 Million in Quarter Ended December 29
VICTOR PLASTICS: Wants to Hire Ravich Meyer as Bankruptcy Counsel
VICTOR PLASTICS: Taps Morris-Anderson as Consultants
WELLCARE HEALTH: Moody's Cuts Senior Debt Rating to Ba2
WHOLE FOODS: Moody's Withdraws Low-B Ratings For Business Reasons
WILLIAMS PARTNERS: Moody's Lifts Senior Unsecured Rating to Ba2
WIN WIN GAMING: Case Summary & 20 Largest Unsecured Creditors
* Fitch Lifts 237 and Holds 24 Ratings on Tobacco Settlement Bonds
* Fitch Says CMBS Servicer Will Undergo First Time Testing
* S&P Cuts Ratings on 29 Class Certificates from 10 Series
* S&P Takes Rating Actions on Various U.S. Synthetic CDOs
* Upcoming Meetings, Conferences and Seminars
*********
94/BELLEVILLE: Files List of 10 Largest Unsecured Creditors
-----------------------------------------------------------
94/Belleville Restaurant, Inc. submitted to the U.S. Bankruptcy
Court for the Eastern District of Michigan its list of 10 largest
unsecured creditors, disclosing:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Oakland Commerce Bank $483,000
c/o William Rheaume, Esq.
200 North Washington Square
Lansing, MI 48933
Puka Capital Funding, LLC $480,000
c/o David Warren
30665 Northwestern Highway
Suite 200
Farmington, MI 48334
State of Michigan Taxes $124,419
Department of Treasury
Collection Division
P.O. Box 77437
Detroit, MI 48277
DTE Energy Trade $33,000
Receivables Control Corp. $3,384
Van Buren Charter Township Taxes $1,570
ITW Food Equipment Group Trade $739
American Credit Association Trade $691
Detroit Newspaper Partnership Trade $365
Internal Revenue Service Tax Obligations Unknown
Based in Belleville, Michigan, 94/Belleville Restaurant, Inc. owns
and operates restaurants. The company filed for Chapter 11
protection on Jan. 2, 2008 (Bankr. E.D. Mich. Case No. 08-40012).
Robert N. Bassel, Esq. represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed estimated assets and liabilities of $1 million to
$100 million.
94/BELLEVILLE: Section 341(a) Meeting Scheduled for February 4
--------------------------------------------------------------
The U.S. Trustee for Region 9 will convene a meeting of
94/Belleville Restaurant, Inc.'s creditors on Feb. 4, 2008, at
2:30 p.m., at the 211 West Fort Street Building, Room 315 E, in
Detroit, Michigan.
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 Belleville, Michigan, 94/Belleville Restaurant, Inc. owns
and operates restaurants. The company filed for Chapter 11
protection on Jan. 2, 2008 (Bankr. E.D. Mich. Case No. 08-40012).
Robert N. Bassel, Esq. represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed estimated assets and liabilities of $1 million to
$100 million.
AFFILIATED COMPUTER: Moody's Keeps Ba2 Credit Rating After Review
-----------------------------------------------------------------
Moody's Investors Service confirmed Affiliated Computer Services'
Ba2 corporate family rating with a stable rating outlook. This
rating confirmation concludes a review for possible downgrade
initiated on March 20, 2007, which was prompted by the company's
announcement that founder and chairman Darwin Deason and private
equity fund Cerberus Capital Management had proposed to buy the
company. The ratings of ACS remained under review for possible
downgrade following Cerberus' withdrawal of its offer on Oct. 31,
2007, as the termination triggered a public dispute between the
chairman and the former outside directors. The recent resignation
of all five former outside directors, at Mr. Deason's request,
ended the dispute.
Resolution of the board dispute has reduced near-term uncertainty
given the potential distraction to the ongoing business that a
protracted fight could have caused. Nevertheless, the
independence and effectiveness of the new board's oversight
remains a key corporate governance concern.
ACS' Ba2 rating is supported by the company's size and
profitability, as measured by its adjusted pretax income
($464 million for the twelve months ended September 2007) and
returns on assets (4.2% adjusted for pensions and leases).
Moody's believes that ACS' pretax income and returns will remain
within ranges appropriate for the Ba2 rating given the company's
relatively sizeable offshore employee footprint (over 30% of
commercial business employees domiciled offshore) and continued
growth in the higher margin BPO markets (about 75% of total
revenues) and government business segment (about 40% of total
revenues). Although ACS' organic growth has slowed from mid-teens
prior to 2005 to the low to mid single digits, its contract
renewal rate remains strong at 94% in 2007. Furthermore, Moody's
believes that bookings level should improve over the next twelve
months as the disruptions of the past year have subsided with
management now focused on stabilizing and growing the business.
The Ba2 rating is constrained by the company's financial leverage
(as measured by free cash flow to adjusted debt) and interest
coverage (as measured by its EBITDA less capital expenditures to
interest expense), which collectively compare to business services
peers rated in the Ba3 category. The rating is further
constrained by management's aggressive financial policies,
corporate governance concerns, the company's sluggish bookings
growth rates, legal overhang related to prior improper stock
options granting practices, and sizable capital expenditures as a
percentage of EBITDA (about 45% on a Moody's adjusted basis).
The stable outlook reflects the company's relatively steady
internal revenue growth and solid operating margins, which are
supported by its competitively well-positioned and relatively
diversified BPO business portfolio. The stable outlook assumes
that the likelihood of another potential leverage buy-out in the
current market is low and that new business awards will improve
due to renewed management focus on business fundamentals.
Ratings confirmed /assessments revised:
-- Corporate family rating, Ba2
-- $500 million Senior Secured Notes due 2010 and 2015, Ba2,
LGD 4, 53%
-- $1800 million Senior Secured Term Loan facility due 2013,
Ba2, LGD 3, 43%
-- $1000 million Senior Secured Revolving Credit Facility, Ba2,
LGD 3, 43%
Rating revised:
-- Probability of default rating to Ba2 from Ba3
-- Rating assigned:
-- Speculative grade liquidity rating of SGL-1
Headquartered in Dallas, Texas, ACS, with $5.9 billion LTM
revenues during the twelve months ended Sept. 30, 2007, is a
leading provider of business process outsourcing and I/T
outsourcing to commercial clients as well as state and local
governments.
AMERICAN CAPITAL: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: American Capital Enterprises Corp.
12854 Stonebrook Drive
Davie, FL 33330
Bankruptcy Case No.: 08-01007
Type of Business: The Debtor develops residential homes.
Chapter 11 Petition Date: January 28, 2008
Court: Middle District of Florida (Fort Myers)
Judge: Alexander L. Paskay
Debtor's Counsel: David Marshall Brown, Esq.
33 Northeast 2nd Street,
Suite 208
Fort Lauderdale, FL 33301
Tel: (954) 765-3166
Fax: (954) 765-3382
Total Assets: $1,000,000
Total Debts: $800,000
The Debtor does not have any creditors who are not insiders.
AMERICAN HOME: Court Approves Muldoon Murphy as Special Counsel
---------------------------------------------------------------
American Home Mortgage Investment Corp. obtained permission from
the U.S. Bankruptcy Court for the District of Delaware that to
employ Muldoon Murphy & Aguggia LLP as special counsel, nunc pro
tunc to Dec. 15, 2007, in connection with the Debtors' sale of
American Home Bank, a non-debtor subsidiary and a United States
federally chartered thrift bank.
James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor
LLP, in Wilmington, Delaware, relates that the contemplated sale
of the Thrift involves special and complex regulatory matters,
which Muldoon Murphy specialized. He notes that the Thrift sale
will require counsel, who is familiar with the federal banking and
acquisition of control laws and the processes and procedures of
the regulatory agencies that oversee the Thrift, the Office of
Thrift Supervision and the Federal Deposit Insurance Company.
As special counsel, Muldoon Murphy will:
-- provide information and advise the Debtors with respect
to the interpretation and application of the federal
banking laws and regulations, including those relating to
the acquisition of control of the Thrift;
-- review and advise the Debtors with respect to the federal
acquisition of control laws and regulations as applied to
specific circumstances, including an analysis of any
regulatory interpretations that might apply to those
circumstances; and
-- prepare and review, if requested, any regulatory notices
or applications that may be required to facilitate the
Thrift Sale and will serve as the Debtors' liaison with
the banking regulators, including the OTS and the FDIC.
Muldoon Murphy will be paid on an hourly basis, plus
reimbursement of actual and necessary expenses. Muldoon Murphy's
rates are subject to periodic adjustment to reflect economic and
other conditions, Mr. Patton discloses. He informs the Court that
the current hourly rates of (i) the firm's attorneys range from
$215 to $495, and (ii) its paralegals range from $160 to $180.
Muldoon Murphy's attorneys assigned to the Debtors are:
Name Hourly Rate
---- -----------
Paul M. Aguggia $495
Christina M. Gattuso $415
Kelli Provenzano $215
Muldoon Murphy estimates that its fee, excluding disbursement and
other charges, for its proposed services will be $75,000.
However, that amount is meant only as an estimate, and the firm
provides no guarantees as to the total amount of its fees.
Christina M. Gattuso, Esq., a member of Muldoon Murphy, assures
the Court that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
About American Home Mortgage Investment
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for
chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos.
07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A.
Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway,
Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy
Solutions LLC acts as the Debtors' claims and noticing agent. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
LLP as its counsel. As of March 31, 2007, American Home
Mortgage's balance sheet showed total assets of $20,553,935,000,
total liabilities of $19,330,191,000. The Debtors' exclusive
period to file a plan expires on March 3, 2008. (American Home
Bankruptcy News, Issue No. 23, Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: Maricopa County Wants Location of Assets Disclosed
-----------------------------------------------------------------
The Maricopa County Treasurer complained with the U.S. Bankruptcy
Court for the District of Delaware that American Home Mortgage
Investment Corp.'s proposed plan of sale for each proposed auction
of assets fails to provide the locations of the assets to be sold.
The Maricopa County Treasurer asserted Claim No. 2211 for $5,395
in relation to its secured liens on certain personal property
taxes.
Maricopa County also notes that the Debtors' request fails
to (i) adequately provide information regarding their intentions
as to what they should do with unsold assets, and (ii) identify
the locations of the assets that remain unsold.
Before any transfer of the Debtors' personal property located in
Maricopa County, Arizona, all taxes associated with each of the
personal property must be paid in full, the Maricopa County
Treasurer argues. Because interests continues to accrue on the
obligations until they are paid in full, Maricopa County says
that it should be immediately paid from all sale proceeds.
Maricopa County, therefore, asks the Court to require the Debtors
to:
-- identify the location of the Assets in the Plan; and
-- provide clear information regarding the Debtors'
intentions regarding the Unsold Assets should DoveBid
Inc., elect not to attempt to sell the Unsold Assets in a
subsequent sale.
Maricopa County further requests that its secured tax claims be
immediately paid from the sale proceeds.
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for
chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos.
07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A.
Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway,
Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy
Solutions LLC acts as the Debtors' claims and noticing agent. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
LLP as its counsel. As of March 31, 2007, American Home
Mortgage's balance sheet showed total assets of $20,553,935,000,
total liabilities of $19,330,191,000. The Debtors' exclusive
period to file a plan expires on March 3, 2008. (American Home
Bankruptcy News, Issue No. 23, Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN HOME: U.S. Trustee Objects to Non-Performing Loans Sale
----------------------------------------------------------------
Kelly Beaudin Stapleton, the United States Trustee for Region 3,
objects to American Home Mortgage Investment Corp. motion filed
with the U.S. Bankruptcy Court for the District of Delaware to
sell pools of mortgages in which borrowers are behind in their
payments and owe $164,000,000 in principal on the loans.
Ms. Stapleton relates that on Jan. 10, 2008, she was informed by
the Debtors' counsel that the Debtors, after consulting with Bank
of America, N.A., in its capacity as administrative agent, J.P.
Morgan Chase Bank, N.A., and the Official Committee of Unsecured
Creditors, have elected to abandon the open auction process
described in their request in favor of a "sealed bid" process.
"Putting the merits of the amended sale procedures aside, notice
of the Debtors' revised procedures should be given to parties in
interest and a new objection deadline should be established, given
that the relief presently requested is materially different than
the relief sought in the Motion," Ms. Stapleton tells the Court.
Even with the move to a "sealed bid" process, the Debtors
continue to seek authority to award an expense reimbursement to
select bidders, Ms. Stapleton notes. She says that interested
bidders will deliver "indicative" bids to the Debtors and the
Debtors may award an expense reimbursement of up to $150 per loan
for one bid in each of the three loan pools, provided that the
expense reimbursement does not exceed 1% of the bid.
The Debtors' proposal is materially different than the typical
situation where a debtor-in-possession negotiates the terms of an
asset purchase agreement with a "stalking horse" bidder, and
seeks bid protections to draw other bidders to an open auction
process, Ms. Stapleton contends.
Under the procedures in the request, and the Debtors' revisions in
the procedures, it is unclear how the protected bids will attract
other bids or induce qualified bidders to put their best foot
forward, she continues.
Accordingly, Ms. Stapleton tells the Court that she leaves the
Debtors to their burden to establish that the proposed expense
reimbursement will benefit the bankruptcy estates, citing Calpine
Corp. v. O'Brien Environmental Energy, Inc. (In re O'Brien
Environmental Energy, Inc.), 181 F.3d 527 (3d Cir. 1999).
About American Home
Based in Melville, New York, American Home Mortgage Investment
Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage
real estate investment trust engaged in the business of investing
in mortgage-backed securities and mortgage loans resulting from
the securitization of residential mortgage loans originated and
serviced by its subsidiaries.
American Home Mortgage and seven affiliates filed for
chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos.
07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A.
Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway,
Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy
Solutions LLC acts as the Debtors' claims and noticing agent. The
Official Committee of Unsecured Creditors selected Hahn & Hessen
LLP as its counsel. As of March 31, 2007, American Home
Mortgage's balance sheet showed total assets of $20,553,935,000,
total liabilities of $19,330,191,000. The Debtors' exclusive
period to file a plan expires on March 3, 2008. (American Home
Bankruptcy News, Issue No. 23, Bankruptcy Creditors' Service,
Inc., http://bankrupt.com/newsstand/or 215/945-7000).
AMERICAN LAFRANCE: Wants Court Approval on Cash Collateral Access
-----------------------------------------------------------------
American LaFrance LLC asks the United States Bankruptcy Court for
the District of Delaware for permission to use the cash collateral
of its prepetition lenders.
The authority to use cash collateral is necessary for the Debtor
to maintain business relationships and confidence with vendors,
suppliers and customers, to satisfy other working capital and
operational needs, to meet ongoing business payroll disbursements,
and to maintain employee morale, Christopher A. Ward, Esq., at
Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington,
Delaware, the Debtor's proposed local counsel, relates.
Mr. Ward notes that prior to Jan. 28, 2008, the Debtor entered
into a credit agreement with Patriarch Partners Agency Services,
LLC, as administrative agent for a group of lenders, which
provides:
Category Aggregate Amount
-------- ----------------
Term loans $37,000,000
Revolving credit facility 68,500,000
Delayed draw term loans 41,000,000
The Prepetition Credit Agreement will mature on Dec. 14, 2010.
To secure its performance under the Prepetition Credit Agreement,
the Debtor granted a first-priority lien and security interest in
substantially all of its assets to the Prepetition Lenders.
As of the bankruptcy filing date, the aggregate amount due to the
Prepetition Lenders under the Prepetition Credit Agreement was
$150,241,313 in unpaid principal and $4,225,767 in accrued but
unpaid interest, plus all other fees, costs and obligations of
the Debtor.
As adequate protection for Prepetition Lenders' interests in the
cash collateral, the Debtor proposes to grant the Prepetition
Lenders valid perfected and unavoidable first-priority
replacement liens in all of its properties and assets. If the
replacement liens are insufficient, the Prepetition Lenders will
be granted superpriority administrative expense status and all
other benefits and protections allowable under Section 507(b) of
the Bankruptcy Code, junior only in right to any superpriority
claims granted to the DIP Lenders.
The Debtor prepared a 13-week budget detailing its anticipated
cash receipts and expenditures.
A full-text copy of the Debtor's Cash Flow Forecast commencing as
of the week ending Feb. 1, 2008, through and including the week
ending May 1, 2008, is available for free at:
http://researcharchives.com/t/s?2781
Headquartered in Summerville, South Carolina, American LaFrance
LLC -- http://www.americanlafrance.com/-- is one of the oldest
fire apparatus manufacturers and one of the top six suppliers of
emergency vehicles in North America. Thee company filed for
Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No.
08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at
Haynes and Boone LLP, is the Debtor's proposed Lead Counsel.
Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, is the Debtor's proposed local counsel. When the
Debtor filed for protection against its creditors, it listed
assets and liabilities of between $100 Million and $500 Million.
The Debtor's exclusive period to file a plan expires on May 27,
2008. (American LaFrance Bankruptcy News, Issue No. 1; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
AMERICAN LAFRANCE: Wants Interim Approval on $10MM DIP Financing
----------------------------------------------------------------
American LaFrance LLC asks the United States Bankruptcy Court for
the District of Delaware for authority to obtain postpetition
financing of up to $10,000,000 on an interim basis, and
$50,000,000 on a final basis, from Zohar CDO 2003-1 Limited,
Zohar II 2005-1 Limited, Zohar III and Patriarch Partners Agency
Services LLC, as agent for the DIP Lenders.
American LaFrance LLC, tells the Court that it needs a reliable
source of financing to alleviate potential cash flow difficulties
that may arise with operations and reassure suppliers, customers,
employees and taxing authorities of its continued viability
during its Chapter 11 case.
The Debtor anticipates using the proposed DIP Financing to fund
its day-to-day operations and to preserve value of its bankrupt
estate.
The proceeds of the DIP Facility will be applied:
* first, to permanently reduce the debt outstanding under the
Prepetition Claim Documents, plus any accrued interest; and
* second, to permanently reduced the debt outstanding under
the DIP Credit Documents, plus any accrued interest.
The DIP Obligations will be secured by all of the Debtor's
properties and assets, including causes of action under Chapter 5
of the Bankruptcy Code.
The payment of the DIP Loans will be subject to an interest per
annum equal to LIBOR plus 8%.
Priority and Liens
All direct borrowings under the DIP Facility and the DIP
Obligations will be at all times subject to the Carve-Out
Expenses and will be, pursuant to Section 364 of the Bankruptcy
Code:
(a) entitled to superpriority claim status;
(b) secured by valid and perfected first-priority liens
superior to all other liens in all of the Debtor's
unencumbered property as of the Petition Date;
(c) secured by valid and perfected second-priority liens in
all of the Debtor's property as of the Petition Date; and
(d) secured by a senior valid and perfected liens in all of
the Debtor's property, which are subject to the
Prepetition Lenders' lien and the liens of other parties
that are avoidable for any reason.
Carve-Out
The DIP Lenders' Superpriority Claim and Liens will be subject
only to the right of the payment of the Carve-Out expenses, which
are:
(a) statutory fees payable to the U.S. Trustee pursuant to
Section 1930(a)(6) of the Judicial and Judiciary
Procedures Code;
(b) fees payable to the Clerk of the Bankruptcy Court;
and
(c) unpaid and outstanding fees and expenses incurred as of
the Petition Date and approved by the Court of (i) the
professionals retained by the Debtor of up to $950,000;
and (ii) the professionals retained by a statutory
committee in the Debtor's cases of up to $200,000.
Maturity Date
The DIP Facility will mature on the earliest of:
(i) May 1, 2008;
(ii) the date the Debtor terminates the commitment of the DIP
Lenders to make the Postpetition Loan;
(iii) the date the DIP Agent terminates the commitment of the
DIP Lenders to make the Postpetition Loan upon the
occurrence of a Postpetition Default;
(iv) the effective date of a confirmed plan of reorganization
for the Debtor; or
(v) the date on which the Bankruptcy Court approves the
extension of any other credit facility to the Debtor.
The DIP Facility is also subject to customary events of default,
including failure of the Debtor to pay any principal of the DIP
Loans as they become due and payable.
Investigation Period
Other than the Debtor, all parties-in-interest will have 60 days
from the entry of a DIP Order to file a complaint with the Court,
asserting a claim or cause of action arising out of the
Prepetition Claim Documents, or otherwise challenging the
validity and priority of the Prepetition Lenders' liens.
The Debtor agrees to pay for all costs and expenses incurred by
the DIP Agent in connection with the preparation, negotiation and
execution of the DIP Credit Agreement.
A full-text copy of the Debtor's DIP Credit Agreement is
available for free at:
http://researcharchives.com/t/s?2782
Absent immediate access to the postpetition financing, the Debtor
asserts that it may be forced to cease operations immediately,
which would cause significant harm to its creditors, employees
and other parties-in-interest. "Such a sudden shutdown would
materially impair the value of ALF's business in the event of a
proposed sale or other disposition," Christopher A. Ward, Esq.,
at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in
Wilmington, Delaware, the Debtor's proposed local counsel, says.
About American LaFrance LLC
Headquartered in Summerville, South Carolina, American LaFrance
LLC -- http://www.americanlafrance.com/-- is one of the oldest
fire apparatus manufacturers and one of the top six suppliers of
emergency vehicles in North America. Thee company filed for
Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No.
08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at
Haynes and Boone LLP, is the Debtor's proposed Lead Counsel.
Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, is the Debtor's proposed local counsel. When the
Debtor filed for protection against its creditors, it listed
assets and liabilities of between $100 Million and $500 Million.
The Debtor's exclusive period to file a plan expires on May 27,
2008. (American LaFrance Bankruptcy News, Issue No. 1; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
AMERISOURCEBERGEN CORP: Earns $109 Mil. in Quarter Ended Dec. 31
----------------------------------------------------------------
AmerisourceBergen Corporation reported that in its fiscal year
2008 first quarter ended Dec. 31, 2007, net income was
$109.8 million on $17.3 billion total revenues. Net income for
the quarter ended Dec. 31, 2006, was $122.1 million.
Operating revenue in the quarter increased 3.5% to $16.2 billion.
Fiscal First Quarter Highlights
* Operating revenue of $16.2 billion, up 3.5%.
* Net $0.04 per diluted share benefit from a $10 million
litigation settlement and special items.
* Cash used in operations of $101 million.
* $311 million of share repurchases.
"In the December quarter, we delivered solid performance in our
core businesses in a quarter that was a tough comparison with last
year, and we look forward to stronger performance for the
remainder of the 2008 fiscal year," said R. David Yost,
AmerisourceBergen's President and Chief Executive Officer. "With
a seasonally strong March quarter ahead, our increased sales
momentum over the remainder of the fiscal year and the ongoing
benefit from our share repurchase program, we continue to expect
fiscal year 2008 diluted earnings per share to be 13% to 20
percent ahead of last year, excluding PharMerica Long-Term Care
and special items in fiscal 2007. Our balance sheet continues to
be strong and our financial flexibility remains significant."
Consolidated Results
Consolidated operating income in the fiscal 2008 first quarter
decreased 7% to $195.0 million, due primarily to the inclusion of
$9.1 million of operating income in the previous year's first
quarter from PharMerica LTC, which was spun off to shareholders in
July 2007, and the disappointing performance of its workers'
compensation business PMSI in this first quarter. Operating
income was positively impacted by a $10 million settlement of
litigation with a major competitor related to sales activities
involving an independent retail group purchasing organization, as
well as by $1.4 million representing the net positive impact from
pharmaceutical manufacturer antitrust litigation and facility
consolidation, employee severance and other costs.
Fiscal Year 2008 Expectations
"Remaining unchanged for fiscal year 2008, is our expected free
cash flow in the range of $450 million to $525 million, which
includes capital expenditures in the $125 million range, and our
anticipated spending of $400 million to $500 million to repurchase
our common shares," Mr. Yost said.
PMSI Sale
AmerisourceBergen is pursuing the sale of PMSI so that it can
focus on its core pharmaceutical distribution and related services
businesses. The company, which is being assisted by Citi, has
solicited buyers and is currently reviewing initial bids for the
business.
About AmerisourceBergen
Headquartered in Valley Forge, Pennsylvania, AmerisourceBergen
Corporation (NYSE:ABC) -- http://www.amerisourcebergen.com/-- is
one of the pharmaceutical services companies serving the United
States, Canada and selected global markets. AmerisourceBergen's
service solutions range from pharmacy automation and
pharmaceutical packaging to pharmacy services for skilled nursing
and assisted living facilities, reimbursement and pharmaceutical
consulting services, and physician education. AmerisourceBergen
employs more than 14,000 people.
* * *
To date, AmerisourceBergen still holds Moody's Investor Services'
Ba1 long term corporate family and Ba1 probability of default
ratings. The outlook is positive.
BEAR STEARNS: S&P Maintains 'BB' Rating on Class II-B Certificates
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on all 14
classes of asset-backed certificates from Bear Stearns Asset
Backed Securities Trust 2005-SD3.
The affirmations reflect current and projected credit support
percentages that are sufficient to support the certificates at the
current rating levels. Monthly excess interest for this
transaction has exceeded monthly net losses for both loan groups
for each of the past six months. As of the December remittance,
cumulative losses for series 2005-SD3 were 0.92% of the original
principal balance, total delinquencies were 17.26% of the current
principal balance, and severe delinquencies were 11.16% as of the
December 2007 remittance period.
A combination of subordination, excess spread, and
overcollateralization provide primary credit support for this
transaction. The collateral consists primarily of fixed- and
adjustable-rate, scratch-and-dent mortgage loans, secured by first
liens on one- to four-family residential properties.
Ratings Affirmed
Bear Stearns Asset Backed Securities Trust 2005-SD3
Asset-backed Certificates
Class Rating
----- ------
I-A, II-A-1, II-A-1 AAA
I-M-1, II-M-1 AA
I-M-2, II-M-2 A
I-M-3 A-
I-M-4 BBB+
I-M-5, II-M-3 BBB
I-M-6, II-M-4 BBB-
II-B BB
BERRY PLASTICS: S&P Retains Low-B Ratings on Captive Plastics Buy
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' first-lien
and 'B' second-lien senior secured debt ratings on Berry Plastics
Corp. S&P removed the first- and second-lien senior secured debt
ratings from CreditWatch, where they were placed with negative
implications on Jan. 3, 2008, following the company's announced
acquisition of Captive Plastics Inc. Pro forma for the debt-
financed acquisition, total debt (adjusted to include capitalized
operating leases and unfunded postretirement liabilities) was
about $3.9 billion at Sept. 29, 2007.
"The ratings affirmation reflects our expectation that the
issuance of additional debt to fund Berry's acquisition of
privately held Captive Holdings Inc., parent of Captive Plastics
Inc., will not diminish recovery prospects for the outstanding
first- and second-lien debt in the post-acquisition capital
structure," said Standard & Poor's credit analyst Liley Mehta.
Berry has obtained financing commitments to fund the acquisition
for about $500 million in cash, and expects it to close in the
first quarter of 2008, subject to customary closing conditions.
Captive manufactures blow-molded bottles and injection-molded
closures for the food, health care, spirits, and personal care
markets at 13 plants in the U.S.
The rating on Berry Plastics Group Inc. reflects the company's
highly leveraged financial profile, which offsets the company's
fair business profile with large market shares in niche segments,
a well-diversified customer base, and strong customer
relationships.
With about $3.5 billion in annual sales pro forma for the Captive
acquisition, Berry ranks among the largest packaging companies in
North America, with leading positions in both the rigid and
flexible plastic packaging segments.
BLACKBOARD INC: Earns $3.3 Million in 2007 Third Quarter
--------------------------------------------------------
Blackboard Inc. reported net income of $3.3 million for the third
quarter ended Sept. 30, 2007, compared to a net loss of
$4.8 million for the third quarter of 2006. Non-GAAP adjusted net
income for the third quarter of 2007, which excludes the
amortization of acquisition-related intangible assets, net of
taxes, was $6.6 million, compared to non-GAAP adjusted net loss of
$846,000 for the third quarter of 2006.
Total revenue for the quarter ended Sept. 30, 2007, was
$61.6 million, an increase of 22.0% over the third quarter of
2006. Product revenues for the quarter were $54.0 million, an
increase of 24.0% over the third quarter of 2006, while
professional services revenues for the quarter were $7.6 million,
an increase of 9.0% over the third quarter of 2006.
"During the quarter, we realized strong revenue and earnings
performance and generated operating cash flow in excess of
$38.0 million," said Michael Chasen, chief executive officer and
president of Blackboard Inc. "These results combined with our
outlook for the fourth quarter put us on track to have another
record year with revenue expected to exceed $237.0 million and
cash flow of approximately $60.0 million. Our continued financial
success is giving us the opportunity to invest more meaningfully
in our business, particularly in ongoing product development and
client support."
Liquidity and Capital Resources
At Sept. 30, 2007, the company had cash and cash equivalents
totalling $208.0 million, as compared to $30.8 million at Dec. 31,
2006. The increase in cash and cash equivalents was primarily due
to a convertible debt offering in which the company issued and
sold $165.0 million aggregate of the 3.25% Convertible Senior
Notes due 2027.
The company used a portion of the proceeds to terminate and
satisfy in full its existing indebtedness outstanding pursuant to
the senior secured credit facilities agreement, entered into in
connection with the acquisition of WebCT, of $19.4 million and to
pay all fees and expenses incurred in connection with the
termination.
The Notes bear interest at a rate of 3.25% per year on the
principal amount, accruing from June 20, 2007. Interest is
payable semi-annually on January 1 and July 1, commencing on
Jan. 1, 2008. The Notes will mature on July 1, 2027, subject to
earlier conversion, redemption or repurchase.
Balance Sheet
At Sept. 30, 2007, the company's consolidated financial statements
showed $493.3 million in total assets, $318.9 million in total
liabilities, and $174.4 million in total liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?277c
About Blackboard Inc.
Headquartered in Washington D.C., Blackboard Inc. (Nasdaq: BBBB)
-- http://www.blackboard.com/-- is a provider of enterprise
software applications and related services to the education
industry. Founded in 1997, Blackboard's software applications are
used by colleges, universities, K-12 schools and other education
providers, as well as textbook publishers and student-focused
merchants that serve education providers and their students.
* * *
As reported in the Troubled Company Reporter on Jan, 16, 2008,
Standard & Poor's Ratings Services said its ratings and outlook on
Blackboard Inc. (B+/Positive/--) would not be affected by the
company's announced acquisition of The NTI Group Inc., a provider
of mass notification systems to schools, for $182 million, of
which $132 million will be in cash and the remaining amount will
be in common stock.
CALPINE CORP: Gets $253.6MM Bid from FirstEnergy for Fremont Plant
------------------------------------------------------------------
Calpine Corporation and its affiliated debtors and debtors in
possession has successfully completed a Court-approved bidding
process for a partially completed power plant located in Fremont,
Ohio (the Fremont Project). Pursuant to a sale auction held
Jan. 28, 2008, Calpine received a high bid of $253.6 million from
FirstEnergy Generation Corp.
The high bid exceeds the initially proposed sale price of
$124 million as established by an Asset Purchase Agreement dated
Nov. 16, 2007 between Calpine and American Municipal Power --
Ohio, Inc. Calpine will seek final approval for the sale from the
U.S. Bankruptcy Court for the Southern District of New York on
Jan. 30, with closing anticipated to occur in February 2008.
"The Fremont Project was determined to be a non-strategic asset in
the context of our successful Chapter 11 restructuring," according
to Robert P. May, Calpine's Chief Executive Officer. "We are
extremely pleased with the bidding results for the divestiture of
this asset and are now looking ahead to emerging from bankruptcy
in the very near future as a stronger and more competitive power
company."
The Fremont Project is a partially completed natural gas-fueled
power plant located in Fremont, (Sandusky County) Ohio. Fremont
is a clean and highly efficient combined-cycle generating facility
capable of generating 550- megawatts of baseload capacity and up
to 700-megawatts of total capacity. Calpine initiated
construction activities at the site in 2001 but subsequently
placed the project on hold due to adverse market conditions.
About Calpine Corporation
Based in San Jose, California, Calpine Corporation (OTC Pink
Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers
and communities with electricity from clean, efficient, natural
gas-fired and geothermal power plants. Calpine owns, leases and
operates integrated systems of plants in 21 U.S. states and in
three Canadian provinces. Its customized products and services
include wholesale and retail electricity, gas turbine components
and services, energy management and a wide range of power plant
engineering, construction and maintenance and operational
services.
The company and its affiliates filed for chapter 11 protection on
Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard
M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq.,
Kirkland & Ellis LLP, represents the Debtors in their
restructuring efforts. Michael S. Stamer, Esq., at Akin Gump
Strauss Hauer & Feld LLP, represents the Official Committee of
Unsecured Creditors. As of Nov. 31, 2007, the Debtors disclosed
total assets of $18,212,000,000, total liabilities not subject to
compromise of $11,024,000,000, total liabilities subject to
compromise of $11,859,000,000 and stockholders' deficit of
$4,675,000,000.
On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC,
and Silverado Geothermal Resources, Inc., filed voluntary chapter
11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198).
On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another
affiliate, also filed a voluntary chapter 11 petition (Bankr.
S.D.N.Y. Case No. 07-12967).
On June 20, 2007, the Debtors filed their Chapter 11 Plan and
Disclosure Statement. On Aug. 27, 2007, the Debtors filed their
Amended Plan and Disclosure Statement. Calpine filed a Second
Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a
Third Amended Plan. On Sept. 25, 2007, the Court approved the
adequacy of the Debtors' Disclosure Statement and entered a
written order on September 26. On Dec. 19, 2007, the Court
confirmed the Debtors' Plan. (Calpine Bankruptcy News, Issue No.
79; Bankruptcy Creditors' Service Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).
* * *
As reported in the Troubled Company Reporter on Jan. 11, 2008,
Moody's Investors Service assigned a B2 Corporate Family Rating
and a B2 Probability of Default Rating to Calpine Corporation in
conjunction with the company's plan to exit bankruptcy in early
2008. Moody's also assigned B2 to the company's $7.3 billion
senior secured term loan and revolving credit facility, the
majority of which will be used as the company's primary exit
financing to help satisfy approximately $8.2 billion of secured
and other claims to be settled in cash, as well as to pay other
related expenses. The rating outlook for Calpine is stable.
CARDIOVASCULAR DIAGNOSTIC: Voluntary Chapter 11 Case Summary
------------------------------------------------------------
Debtor: Cardiovascular Diagnostic Image
P.O. Box 651068
Miami, FL 33265
Bankruptcy Case No.: 08-10900
Type of Business: The Debtor is a full-service, insured diagnostic
facility, with three centrally located
facilities. See http://www.cardiodximage.com/
Chapter 11 Petition Date: January 28, 2008
Court: Southern District of Florida (Miami)
Judge: Robert A. Mark
Debtor's Counsel: Eduardo A. Exposito, Esq.
10726 Northwest 58 Street
Doral, FL 33178
Tel: (786) 336-8488
Estimated Assets: Unstated
Estimated Debts: Unstated
The Debtor did not file a list of its 20 largest unsecured
creditors.
CBA COMMERCIAL: S&P's Rating on Class M-8 Certs. Tumbles to 'D'
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
M-8 commercial mortgage pass-through certificate from CBA
Commercial Assets 2005-1 to 'D' from 'CCC-'.
The downgrade of the class M-8 certificate reflects a $292,995
principal loss to the outstanding principal balance of the
security due to the liquidation of one asset that was with the
special servicer, Midland Loan Services Inc. The 414 & 416 2nd
St. asset had a total exposure of $427,855 and was secured by a
20-unit multifamily property built in 1920 in Yakima, Washington.
According to the Jan. 25, 2008, trustee remittance report, the
property was liquidated, resulting in a $312,200 realized loss to
the trust. The remaining $19,205 portion of the realized loss was
allocated to the unrated class M-9 certificate, reducing its
principal balance to zero.
CHIQUITA BRANDS: Reviews Capital Structure, Considers Refinancing
-----------------------------------------------------------------
Chiquita Brands International Inc. is reviewing its capital
structure. It is considering options including a potential
amendment or refinancing of its senior secured credit facility and
a convertible note offering, which is intended to lower the
company's interest expense, extend maturities and provide
additional covenant flexibility.
The company's total debt at year end 2007 was $814 million,
compared to $1.029 billion a year ago, with minimal mandatory
principal repayment obligations during the next three years. The
company remained in compliance with its covenants under its
existing debt facilities at Dec. 31, 2007, and expects to remain
in compliance.
The company reported liquidity that included cash in excess of
$70 million, compared to $65 million at year-end 2006, as well as
$169 million of availability under its current revolving credit
facility. The company remained in compliance with its covenants
under its existing debt facilities at Dec. 31, 2007, and expects
to remain in compliance with them.
The current secured credit facility includes a Term Loan C, which
had a balance outstanding of $326 million at Dec. 31, 2007, and a
$200 million revolving credit facility used for
seasonal working capital needs.
As of Dec. 31, 2007, the revolving credit facility was undrawn and
had availability of $169 million after outstanding letters of
credit.
As part of its proposed refinancing, the parent company, Chiquita
Brands International Inc., may consider issuing convertible senior
unsecured notes, the proceeds of which would be used to partially
prepay the existing Term Loan C.
In connection with the proposed refinancing, the company is
seeking consent from holders of its 7-1/2% senior notes due in
2014, in order to amend the terms of the indenture under which the
notes were issued. Consummation of the refinancing is subject to
a number of market and other conditions.
No assurance can be given that any such amendment or refinancing
of the company's capital structure can or will be completed on
terms that are acceptable to the company, if at all.
About Chiquita Brands International Inc.
Cincinnati, Ohio-based Chiquita Brands International, Inc.
(NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes
fresh food products including bananas and nutritious blends of
green salads. The company markets its products under the
Chiquita(R) and Fresh Express(R) premium brands and other related
trademarks. Chiquita employs approximately 25,000 people
operating in more than 70 countries worldwide, including Belgium,
Columbia, Germany, Panama, Philippines, among others.
CHIQUITA BRANDS: Soliciting Consents to Amend Indenture Terms
-------------------------------------------------------------
Chiquita Brands International Inc. disclosed solicitation of
consents to amend the terms of the indenture for its 7-1/2%
senior notes due 2014, in connection with a proposed refinancing
of its senior credit facility that is intended to lower its
interest expense, extend maturities and provide additional
covenant flexibility.
The purpose of the consent solicitation is to amend provisions in
the indenture governing the Notes regarding the company's ability
to incur certain liens.
The record date for the consent solicitation is the close of
business, New York City time, on Jan. 25, 2008. The consent
solicitation will expire at 5:00 p.m., New York City time, on
Monday, Feb. 4, 2008, unless extended. The company is offering a
consent fee of $20 per $1,000 of principal amount of Notes to each
holder of record as of the record date who has delivered a valid
consent prior to the Expiration Time.
The company's obligations to accept consents and pay a consent fee
is conditioned, among other things, on the receipt of consents to
the amendments from holders of at least a majority in aggregate
principal amount of Notes, the consummation of a senior unsecured
convertible indebtedness transaction raising gross proceeds of not
less than $125 million on or before
Feb. 15, 2008, and other conditions.
Questions from holders regarding the consent solicitation or
requests for additional copies of the Consent Solicitation
Statement, the Consent Form or other related documents should be
directed to the information agent for the consent solicitation:
Global Bondholder Services Corporation
Suite 723, 65 Broadway
New York, NY 10006
Tel (866) 873-6300 (toll free)
(212) 430-3774 (call collect)
or
Morgan Stanley & Co. Incorporated
Solicitation Agent
Tel (800) 624-1808 (toll free)
About Chiquita Brands International Inc.
Cincinnati, Ohio-based Chiquita Brands International Inc.
(NYSE: CQB) -- http://www.chiquita.com/-- markets and distributes
fresh food products including bananas and nutritious blends of
green salads. The company markets its products under the
Chiquita(R) and Fresh Express(R) premium brands and other related
trademarks. Chiquita employs approximately 25,000 people
operating in more than 70 countries worldwide, including Belgium,
Columbia, Germany, Panama, Philippines, among others.
CHIQUITA BRANDS: S&P's Ratings Unmoved by Capital Structure Review
------------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on Chiquita Brands International Inc. (B-/Negative/--)
remain unchanged following the company's announcement that it is
reviewing its capital structure. Chiquita may amend or refinance
its senior secured credit facility, and may issue a convertible
note offering (of at least $125 million) to repay a portion of the
existing term loan C ($326 million was outstanding at Dec. 31,
2007). In connection with the proposed refinancing, Chiquita is
seeking consent from holders of the $250 million 7.5% senior notes
due 2014 to amend the terms of the indenture. These actions are
intended to reduce the company's interest expense, extend
maturities, and provide additional covenant flexibility.
The company was in compliance with covenants under its existing
credit facility at Dec. 31, 2007, and expects to remain in
compliance. Liquidity is currently adequate, with cash in excess
of $70 million and $169 million available on the $200 million
revolver (reflecting $31 million of letters of credit outstanding)
at Dec. 31, 2007. S&P will review the company's capital structure
and financing proposals when and if they occur. While Chiquita
expects operating income to improve in 2008, the company continues
to face a difficult operating environment that includes higher
industry and other costs, such as fuel, raw product, materials and
production.
CLASS V FUNDING: Moody's Slashes Rating on $45 Mil. Notes to Ba1
----------------------------------------------------------------
Moody's Investors Service downgraded ratings of five classes of
notes issued by Class V Funding II, Ltd., and left on review for
possible further downgrade ratings of four of these classes of
notes. The notes affected by this rating action are:
Class Description: $68,000,000 Class A-2A Second Priority Senior
Secured Floating Rate Notes Due 2046
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Baa3, on review for possible downgrade
Class Description: $68,000,000 Class A-2B Second Priority Senior
Secured Floating Rate Notes Due 2046
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Baa3, on review for possible downgrade
Class Description: $ 45,000,000 Class B Third Priority Secured
Floating Rate Notes Due 2046
-- Prior Rating: Aa2, on review for possible downgrade
-- Current Rating: Ba1, on review for possible downgrade
Class Description: $ 7,000,000 Class C Fourth Priority Secured
Floating Rate Notes Due 2046
-- Prior Rating: Aa3, on review for possible downgrade
-- Current Rating: Ba2, on review for possible downgrade
Class Description: $ 26,000,000 Class D Fifth Priority Mezzanine
Secured Floating Rate Deferrable Notes Due 2046
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: Ca
The rating actions reflect deterioration in the credit quality of
the underlying portfolio, as well as the occurrence on Jan. 22,
2008, as reported by the Trustee, of an event of default caused by
a failure of the Class A/B/C Overcollateralization Ratio to be
greater than or equal to the required amount pursuant Section
5.1(i) of the Indenture dated May 18, 2006.
Class V Funding II, Ltd. is a collateralized debt obligation
backed primarily by a portfolio of CDO securities.
Recent ratings downgrades on the underlying portfolio caused
ratings-based haircuts to affect the calculation of
overcollateralization. Thus, the Class A/B/C
Overcollateralization Ratio failed to meet the required level.
As provided in Section 5.1 of the Indenture during the occurrence
and continuance of an Event of Default, holders of Notes may be
entitled to direct the Trustee to take particular actions with
respect to the Collateral Debt Securities and the Notes.
The rating downgrades taken reflect the increased expected loss
associated with each tranche. Losses are attributed to diminished
credit quality on the underlying portfolio. The severity of
losses of certain tranches may be different, however, depending on
the timing and choice of remedy to be pursued by certain
Noteholders. Because of this uncertainty, the ratings assigned to
Class A-2A, Class A-2B, Class B, and the Class C Notes remain on
review for possible further action.
CLAYTON HOLDINGS: Cooperates in New York AG's Probe on Banks
------------------------------------------------------------
Clayton Holdings Inc. has agreed to cooperate with the
investigation of the office of the New York Attorney General on
the role of banks in the current subprime mortgage market crisis,
the Wall Street Journal reports.
Attorney General Andrew Cuomo had issued subpoenaes to several
due-diligence firms which included Clayton, the WSJ adds. The
company has agreed to provide information as well as testimony.
In return, the WSJ relates, the company would be immune from
prosecution.
Citing an interview with company chairman and CEO Frank P.
Filipps, WSJ says that the company has submitted due-diligence
reports it made to clients for the years 2005 to 2007.
The probe, according to reports, aims to look in the issue of
whether banks provided enough disclosures for investors, as well
as credit rating agencies, on the loan packages offerd as
securities.
About Clayton Holdings Inc.
Headquartered in Shelton, Connecticut, Clayton Holdings Inc., --
http://www.clayton.com/-- is an information and analytics
company serving capital markets firms, lending institutions, fixed
income investors and loan servicers with a full suite of
information-based analytics, specialty consulting and outsourced
services. Clayton's services include due diligence analytics,
conduit support services, professional staffing, compliance
products and services, credit risk management and surveillance and
specialized loan servicing services.
* * *
As reported in the Troubled Company Reporter on Dec. 11, 2007,
Moody's Investors Service downgraded Clayton Holdings Inc.'s
senior secured bank credit facility and corporate family ratings
to B1 from Ba3. The ratings remain under review for downgrade.
Standard & Poor's Ratings Services revised its outlook on Clayton
Holdings Inc. to negative from stable. Ratings on the company,
including the 'B+' corporate credit rating, are affirmed.
CLEAR CHANNEL: S&P Retains Negative CreditWatch on B+ Rating
------------------------------------------------------------
Standard & Poor's Ratings Services said its ratings on Clear
Channel Communications Inc., including the 'B+' corporate credit
rating, remain on CreditWatch with negative implications. S&P
originally placed them on CreditWatch on Oct. 26, 2006, following
the company's announcement that it was exploring strategic
alternatives to enhance shareholder value.
"The company's pending LBO, led by Thomas H. Lee Partners L.P. and
Bain Capital Partners LLC, received FCC approval on Jan. 24,
2008," explained Standard & Poor's credit analyst Michael Altberg.
The consummation of the merger is subject to certain conditions,
including the divestiture of grandfathered radio stations, in
approximately 42 markets, that no longer comply with FCC multiple
ownership rules. Clear Channel expects to obtain $18.525 billion
of new senior secured credit facilities and $2.6 billion of new
senior unsecured notes in association with financing the merger.
Upon close of the transaction, and barring any material changes
due to the divestiture of certain assets or change in financing
terms, S&P expects to lower Clear Channel's long-term corporate
credit rating to 'B' from 'B+'. At the same time, S&P expects to
lower its rating on the company's $6.32 billion of existing senior
unsecured notes, or $4.9 billion assuming the successful tender of
its 7.65% senior notes due 2010 and 8% senior notes due 2008 at
its subsidiary, to 'CCC+' (two notches below the expected
corporate credit rating) from 'B-'. Based on the company's
proposed financing, it will roll over existing senior unsecured
debt into the new capital structure, but this debt will be
structurally subordinate to both proposed new bank debt and new
senior unsecured notes. The new bank debt and the new senior
unsecured notes will benefit from upstream operating company
guarantees, while the existing senior notes will not.
Revenue and EBITDA increased 5.5% and 4.8%, respectively, for the
third quarter of 2007, as a 1% decline in radio revenue was more
than offset by 14% growth in outdoor advertising. S&P is
concerned about the negative secular trends facing the radio
industry. S&P believes Clear Channel has the ability to slightly
outperform the industry due to its significant geographic and
format diversity, offering some insulation from economic downturn
and providing advertisers with a broader distribution platform.
Still, S&P believes that it will be increasingly difficult for the
company to achieve meaningful EBITDA growth in the radio segment
over the intermediate term. Growth fundamentals in outdoor
advertising remain strong, and are not subject to the same
competition that radio is from alternative media such as the
Internet. S&P believes domestic outdoor operations may benefit as
the penetration of digital displays grows, and international
profitability may gradually increase with continued investments in
emerging markets.
S&P will continue to monitor developments surrounding the closing
of the proposed merger, in addition to the company's progress in
planned asset sales. At the time of closing, S&P expects to
assign ratings to Clear Channel's proposed senior secured credit
facilities and proposed new senior unsecured debt.
CLEVELAND UNLIMITED: Moody's Cuts Corporate Credit Rating to Caa2
-----------------------------------------------------------------
Moody's Investors Service downgraded the rating for the secured
bonds rating of Cleveland Unlimited Inc. (Revol) to Caa2 from
Caa1. Moody's also downgraded Revol's corporate family rating to
Caa2 from Caa1, its probability of default rating to Caa3 from B3,
and changed the outlook to negative. The downgrades reflect
heightened default risk, prospects for less than full recovery in
a distress scenario, and weak liquidity. Revol's SGL-4 liquidity
rating, which Moody's affirmed, continues to capture the latter
factor.
This action concludes the review commenced Nov. 15, 2007,
following the company's disclosure of a potential restatement of
financial results and Moody's view that Revol's operating
prospects have deteriorated, contributing to weak fundamentals for
its prior rating category. Revol has not filed financial
statements for the September 2007 quarter and has not sought
waivers from bondholders for this breach of the financial
reporting covenant. The negative outlook incorporates concerns
over the lack of reliable financial information, weak liquidity
and the potential for further problems to emerge.
A summary of this actions are:
Cleveland Unlimited, Inc.
-- Senior Secured Bonds, Downgraded to Caa2 from Caa1, LGD3, 35%
-- Corporate Family Rating, Downgraded to Caa2 from Caa1
-- Probability of Default Rating, Downgraded to Caa3 from B3
-- Outlook, Changed To Negative From Rating Under Review
The combination of the delinquent filing and weak liquidity
increase default risk, contributing to the downgrade of the PDR
rating to Caa3. Revol violated the financial reporting covenant
in its indentures, and bondholders could accelerate the
$150 million obligation (which the company does not have committed
resources to satisfy). Even if the company secures waivers or
becomes current with its filings, its liquidity position will
nonetheless remain weak, which leaves it in a tenuous position to
service current debt and payment obligations and continue the
ordinary course of operations. With no committed external
sources, Revol relies on its limited cash balance (approximately
$24 million as of June 30, 2007) and internally generated cash.
The company consumed approximately $20 million of cash (GAAP
operating cash flow less capital expenditures) in the trailing
twelve months through June 30, 2007, and its path to sustained
free cash flow generation remains uncertain. Revol has recently
curtailed capital expenditures to conserve cash, but Moody's does
not consider the current trend sustainable. The potential
restatement and filing delays will likely lead to higher
professional and legal fees, exacerbating the weak liquidity
position.
The downgrade of the corporate family rating to Caa2 also
incorporates weak fundamental performance, including slowing
industry subscriber growth and continued high churn, which have
contributed to Revol's inability to grow revenue and enhance
margins as originally forecast. However, the higher corporate
family rating (Caa2) relative to the Caa3 probability of default
rating highlights Moody's view of higher than average recovery,
based primarily on spectrum value (albeit likely insufficient to
provide full recovery to debt holders).
Management currently believes a restatement of its financial
results is possible. The company has not provided updated
financial information beyond its June 2007 quarterly report, nor
has it provided any scope or magnitude of any potential
restatement. The ratings and negative outlook incorporate this
limited financial information. If the company does not provide
additional clarity, Moody's will also evaluate the ability to
maintain ratings. Revol has not replaced its Chief Financial
Officer, who resigned in August 2007 (although the company
retained the services of a financial consultant), and its
previously appointed accounting firm has suspended its audit
engagement until the completion of an investigation by the Audit
Committee into various accounting matters.
Based in Independence, Ohio, Cleveland Unlimited, Inc. is a
provider of wireless telecommunications service in Ohio. Its
revenue for the 12 months ended June 30, 2007, was approximately
$130 million.
COMUNITY LENDING: Court OKs Murray & Murray as Bankruptcy Counsel
-----------------------------------------------------------------
ComUnity Lending, Inc. and L.E.S. Liquidation Inc. obtained
permission from the U.S. Bankruptcy Court for the Northern
District of California to employ Murray & Murray P.C., as their
general bankruptcy counsel.
Murray & Murray is expected to:
a) provide aid and assistance in the administration of the
their Chapter 11 case;
b) advise the Debtors concerning their rights and
responsibilities under the U.S. Bankruptcy Code;
c) provide continued representation in all negotiations and
proceedings involving creditors and other parties-in-
interest;
d) assist in the formulation of a disclosure statement
regarding their Chapter 11 plan;
e) assist in the formulation of a viable plan of
reorganization;
f) assist in the confirmation of a Chapter 11 plan; and
g) represent the Debtors in all other legal aspects as
necessary and appropriate.
John Walshe Murray, Esq., a shareholder at Murray & Murray, told
the Court that the firm's professionals bill:
Designation Hourly Rate
----------- -----------
John Walshe Murray, Esq. $550
Law Clerks/Paralegals $150
Mr. Murray assured the Court that the firm is disinterested as
that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.
Mr. Murray can be contacted at:
John Walshe Murray, Esq.
Murray & Murray P.C.
19400 Stevens Creek Boulevard, Suite 200
Cupertino, CA 95014-2548
Tel: (650) 852-9000; (408) 907-9200
Fax: (650) 852-9244
http://www.murraylaw.com/
Based in San Jose, California, ComUnity Lending, Inc. --
http://www.comunitylending.com-- is a mortgage lender, with
mortgage programs of up to $1,500,000. The company and its
affiliate, L.E.S. Liquidation Inc., filed for Chapter 11
protection on Jan. 4, 2008 (Bankr. N.D. Calif. Case Nos. 08-50030
and 08-50031). John Walshe Murray, Esq. represents the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, ComUnity Lending listed estimated
assets and liabilities of $10 million to $50 million.
COMUNITY LENDING: Section 341(a) Meeting Scheduled for February 6
-----------------------------------------------------------------
The U.S. Trustee for Region 17 will convene a meeting of ComUnity
Lending, Inc. and its debtor-affiliate's creditors on
Feb. 6, 2008, at 10:30 a.m., at the Office of the U.S. Trustee,
Room 130, 280 South First Street, 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.
Based in San Jose, California, ComUnity Lending, Inc. --
http://www.comunitylending.com-- is a mortgage lender, with
mortgage programs of up to $1,500,000. The company and its
affiliate, L.E.S. Liquidation Inc., filed for Chapter 11
protection on Jan. 4, 2008 (Bankr. N.D. Calif. Case Nos. 08-50030
and 08-50031). John Walshe Murray, Esq. represents the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, ComUnity Lending listed estimated
assets and liabilities of $10 million to $50 million.
COUNTRYWIDE FIN'L: "Fear" May Have Prompted BofA Merger, WSJ Says
-----------------------------------------------------------------
Fear of investigations by government regulators may have prompted
Countrywide Financial Corp. to ink a deal with Bank of America
Corp., James R. Hagerty and Joann S. Lublin of the Wall Street
Journal reports citing people familiar with the situation.
As reported in the Troubled Company Reporter on Jan. 15, 2008, the
company signed a definitive agreement to sell its business to Bank
of America Corporation in an all-stock transaction worth
approximately $4 billion. Under the terms of the agreement,
shareholders of Countrywide would receive .1822 of a share of Bank
of America stock in exchange for each share of Countrywide.
The company, WSJ adds, was facing probes from attorney-general
offices in the states of California, Illinois and Florida for its
lending practises. The company is also facing lawsuits by
shareholders.
About Countrywide Financial
Based in Calabasas, California, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- is a diversified
financial services provider and a member of the S&P 500, Forbes
2000 and Fortune 500. Through its family of companies,
Countrywide originates, purchases, securitizes, sells, and
services residential and commercial loans; provides loan closing
services such as credit reports, appraisals and flood
determinations; offers banking services which include depository
and home loan products; conducts fixed income securities
underwriting and trading activities; provides property, life and
casualty insurance; and manages a captive mortgage reinsurance
company.
* * *
As reported in the Troubled Company Reporter on Jan. 15, 2008,
Moody's placed the ratings of Countrywide Financial Corporation
and its subsidiaries under review for upgrade. CFC and
Countrywide Home Loans senior debt is rated Baa3 and short-term
debt is rated Prime-3. Countrywide Bank FSB's bank financial
strength rating is C-, deposits are rated Baa1 and short-term debt
Prime-2. All long and short-term ratings are placed under review
for possible upgrade.
COUNTRYWIDE FINANCIAL: CEO Gives Up Severance Pay of $37 Million
----------------------------------------------------------------
Countrywide Financial Corp.'s CEO, Angelo Mozilo, gave up his
severance pay of approximately $37.5 million as he prepares to
step out of the company, Alex Veiga of the Associated Press
reports.
Mozilo also forfeited various other benefits, and his annual
compensation of $400,000, pursuant to an agreement to serve the
company as a consultant after his retirement, says the AP. Still,
the CEO will receive around $44.4 million in retirement benefits
and deferred compensation from the company.
Mozilo had been criticized recently over the size of the payout he
would allegedly receive, in connection with Bank of America
Corp.'s acquisition of the company. As reported in the Troubled
Company Reporter on Jan. 15, 2008, the mortgage company signed a
definitive agreement to sell its business to Bank of America in an
all-stock transaction worth approximately $4.1 billion.
However, the company said in a statement that Mozilo will not be
receiving any payments relating to the acquisition.
According to the AP, Mozilo's decision comes as inquiry over
executive compensation intensifies at some of the nation's largest
-- and troubled -- financial institutions.
Damon Silvers, associate general counsel at an executive pay
tracking institution, told the AP that by saying no to the
severance benefit, Mozilo "seems to recognize that there's
something wrong with this picture." Silvers was alluding to
objections raised last year about the mortgage firm not disclosing
its financial woes to investors, the AP relates.
About Countrywide Financial
Based in Calabasas, California, Countrywide Financial Corporation
(NYSE: CFC) -- http://www.countrywide.com/-- is a diversified
financial services provider and a member of the S&P 500, Forbes
2000 and Fortune 500. Through its family of companies,
Countrywide originates, purchases, securitizes, sells, and
services residential and commercial loans; provides loan closing
services such as credit reports, appraisals and flood
determinations; offers banking services which include depository
and home loan products; conducts fixed income securities
underwriting and trading activities; provides property, life and
casualty insurance; and manages a captive mortgage reinsurance
company.
* * *
As reported in the Troubled Company Reporter on Jan. 15, 2008,
Moody's placed the ratings of Countrywide Financial Corporation
and its subsidiaries under review for upgrade. CFC and
Countrywide Home Loans senior debt is rated Baa3 and short-term
debt is rated Prime-3. Countrywide Bank FSB's bank financial
strength rating is C-, deposits are rated Baa1 and short-term debt
Prime-2. All long and short-term ratings are placed under review
for possible upgrade.
CYGNAL TECHNOLOGIES: Wants CCAA Protection Extended to March 21
---------------------------------------------------------------
Cygnal Technologies Corporation and its wholly-owned subsidiaries,
Cygnal Technologies Ltd. and Accord Communications Ltd., working
with their counsel, the Monitor and other interested parties, have
finalized a joint plan of arrangement to be dated Jan. 29, 2008
and intend to file the Plan with the Ontario Superior Court of
Justice in the Applicants' proceedings under the Companies'
Creditors Arrangement Act.
Cygnal also intends to seek orders from the Court to, among other
things:
(i) extend to March 21, 2008 the period of the Court-ordered
stay of proceedings against the Applicants in their CCAA
Proceedings;
(ii) establish a further process to supplement the existing
Court-ordered process by which certain creditors of the
Applicants must prove their claims in the CCAA Proceedings;
and
(iii) set the date for the Applicants' creditor meetings to
consider and approve the Plan.
In addition, Cygnal disclosed that PricewaterhouseCoopers Inc.
filed its third report to the Court.
Plan of Arrangement
If authorized by the Court, the Applicants intend to present the
Plan to affected creditors for their consideration at the creditor
meetings. The Applicants may at any time before and during the
meetings of affected creditors amend, modify or supplement the
Plan, provided that such amendments are made available to affected
creditors at or prior to the meetings. The purpose of the Plan is
to provide for the distribution of cash and, if applicable,
promissory notes to affected creditors in compromise and
settlement of their claims; the cancellation, in effect, of all
existing common shares of Cygnal pursuant to articles of
reorganization; and the issuance of new common shares in the
capital of Cygnal to an affiliate of Laurus Master Fund, Ltd.,
Cygnal's principal secured lender, in consideration for the funds
needed to make the cash distributions to affected creditors under
the Plan.
For the purposes of voting on the Plan, creditor claims will be
divided into three classes: affected claims against Cygnal,
affected claims against Cygnal Quebec and affected claims against
Accord. At the effective time of the Plan, each affected claim
will be compromised and thereafter each affected creditor will
receive a distribution of cash and/or promissory notes on the
following basis: an affected creditor may elect to receive
(i) the lesser of the amount of its claim and $2,500,
(ii) the amount of its pro rata share of approximately
$1,947,553 (after payment of all Small Claim Amounts and
subject to adjustment in certain circumstances), and
(iii) 75% of its Pro Rata Share and a promissory note issued by
the applicable Applicant in a principal amount equal to 75%
of its Pro Rata Share.
An affected creditor that fails to make an election will be deemed
to have elected to receive, in the case of a claim of less than
$25,000, the Small Claims Amount, and in the case of any other
claim, its Pro Rata Share.
Under the Plan, all of Cygnal's issued common shares and warrants
and options to purchase common shares of Cygnal, that are
outstanding immediately prior to the effective time of the Plan
will, in effect, be cancelled without payment of any
consideration.
Implementation of the Plan is subject to the satisfaction of
certain conditions, including approval of the Plan by affected
creditors of each class; issuance of a sanction order by the
Court; and arrangements having been made with Laurus to repay the
Applicant's obligations under its pre-filing credit agreement with
Laurus and the DIP term sheet. As soon as practicable after the
satisfaction of the conditions, Cygnal will file articles of
reorganization and seek to obtain a certificate of amendment with
respect thereto.
Under the terms of the Plan, Cygnal maintains the right to exclude
one or both of Cygnal Quebec and Accord from the Plan, including
if the affected creditors of either subsidiary do not approve the
Plan. In that event, affected creditors of the applicable
subsidiary will not receive any distribution under the Plan.
As of the effective time, all affected creditors will be deemed to
release the Applicants; the former and current directors, officers
and employees of the Applicants; any person who might claim
contribution or indemnification against or from the Applicants;
and the current and former legal counsel and other professional
advisors of the Applicants and each of their former and current
directors, officers and employees from any claims relating to the
Applicants, the Plan or the CCAA Proceedings.
The Plan is the result of more than two months of review and
analysis in which management has been assisted by the Monitor.
Negotiations were held with various key parties, including
representatives of Laurus and certain large affected creditors.
Management has concluded that it is unable to identify any
purchasers for the business or assets of the Applicants as an
alternative to the Plan.
The Board of Directors of Cygnal has reviewed the Plan and
believes that it represents a fair and equitable treatment of the
affected creditors of the Applicants given their relative
priorities and the limited alternatives. The Board believes that
if the Plan is not approved the likely result will be a
liquidation of the Applicants' assets by a receiver and/or a
trustee pursuant to the Bankruptcy and Insolvency Act (Canada).
The Monitor has also confirmed that it is of the view that the
alternative to implementation of the Plan is likely receivership
or bankruptcy. In the Monitor's view, the Plan will produce a
more favourable result, overall, for the affected creditors of the
Applicants than a liquidation of Applicants' assets based upon a
range of estimated recoveries.
Monitor's Third Report
The Monitor's Third Report informs the Court of the Monitor's and
the Applicant's activities since the Monitor's report dated
December 10, 2007. Copies of the Monitor's Third Report are
available online at http://www.pwc.com/car-cygnal/
About Cygnal Technologies
Based in Markham, Ontario, Cygnal Technologies Corporation
(TSX: CYN) -- http://www.cygnal.ca/-- provides network
communications solutions including the design, integration,
installation, maintenance and management of wired and wireless
solutions and networks. Cygnal supports end-user customers and
business partners through 12 offices across Canada, including
Vancouver, Edmonton, Calgary, Winnipeg, London, Burlington,
Toronto, Ottawa, Montreal, Quebec City and Halifax.
In November 2007, the Ontario Superior Court of Justice granted
an Order under the Companies' Creditors Arrangement Act.
DELPHI CORP: Court Allows Committee Participation in Exit Loan
--------------------------------------------------------------
The Honorable Robert Drain of the U.S. Bankruptcy Court for the
Southern District of New York permits members of the Official
Committee of Unsecured Creditors and the Official Committee of
Equity Security Holders appointed in the bankruptcy cases of
Delphi Corp. and its debtor-affiliates to participate in any
syndicate of lenders assembled to provide exit financing
facilities for the Debtors' emergence from Chapter 11.
The Court directs all interested Statutory Committee members to:
(a) to make advanced written disclosure of their participation
in the Exit Loan Syndication to the Debtors, counsel to
each of the Statutory Committees, and the U.S. Trustee;
(b) withhold any information with his or her institution, or
any lender or other party involved in the Exit Financing,
related to the Debtors' or Statutory Committees' strategy
regarding the Exit Financing; and
(c) abstain from any direct negotiations with the Debtors or
the Statutory Committees on the Exit Financing.
Participating Statutory Committee members will be screened on an
ongoing basis from any information relating to the Debtors' or
the Statutory Committees' strategy regarding, and any
deliberations by the applicable Statutory Committee in any
respect thereon, the Exit Financing, Judge Drain rules.
Nothing in the Court's order relieves any member of the Statutory
Committees from its obligations under any applicable securities
laws, Judge Drain clarifies.
As reported in the Troubled Company Reporter on Jan. 9, 2008, the
Debtors reduced their Exit Financing from the Court-approved $6.8
billion to $6.1 billion. The
reduced facilities include:
(a) $1.6 billion in an asset-backed revolving credit
facility;
(b) $3.7 billion in a first-lien term loan facility; and
(c) $825 million in a second lien term loan facility.
About Delphi Corp.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
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 Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 108; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2008,
Moody's Investors Service assigned ratings to Delphi Corporation
for the company's financing for emergence from Chapter 11
bankruptcy protection: Corporate Family Rating of (P)B2;
$3.7 billion of first lien term loans, (P)Ba3; and $0.825 billion
of 2nd lien term debt, (P)B3. In addition, a Speculative Grade
Liquidity rating of SGL-2 representing good liquidity was
assigned. The outlook is stable.
As reported in the Troubled Company Reporter on Jan. 11, 2008,
Standard & Poor's Ratings Services expects to assign its 'B'
corporate credit rating to Troy, Michigan-based automotive
supplier Delphi Corp. upon the company's emergence from Chapter 11
bankruptcy protection, which may occur by the end of the first
quarter of 2008. S&P expects the outlook to be negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the company's
proposed $3.7 billion senior secured first-lien term loan; and a
'B-' issue rating (one notch below the corporate creditrating),
and '5' recovery rating to the company's proposed $825 million
senior secured second-lien term loan.
DELPHI CORP: Court Grants Final Approval of MDL Settlements
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
entered a final order on Jan. 25, 2008, approving the
Multidistrict Litigation Settlements among the Debtors, General
Motors Corp., and the lead plaintiffs in securities actions and
lawsuits brought under the Employee Retirement Income Security Act
consolidated before the U.S. District Court for the Eastern
District Of Michigan, Southern Division.
Pursuant to the MDL Settlements, the Debtors agreed to grant the
Lead Plaintiffs and ERISA Plaintiffs claims under their First
Amended Joint Plan of Reorganization. The Lead Plaintiffs are
the holders of Section 510(b) Note Claims under the Plan, while
the ERISA Plaintiffs are the holders of the Section 510(b) Equity
Claims. In exchange, the Lead Plaintiffs and the ERISA Plaintiffs
will release the Debtors from any and all claims in connection
with the Securities Litigation.
The Hon. Robert Drain authorizes the Debtors to release any and
all of their claims against the current and former officers and
directors of Delphi Corp. that relate to or arise out of any
alleged violations of the federal securities laws during the
period March 7, 2000, through March 3, 2005, inclusive.
Judge Drain permits the Debtors and the other MDL Settlement
parties to make nonmaterial modifications to the MDL Settlements
without further Court order provided that the Official Committee
of Unsecured Creditors and the Official Committee of Equity
Security Holders do not lodge an objection to any proposed
modification within five business days' notice.
About Delphi Corp.
Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS:
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 Court approved Delphi's First Amended Joint Disclosure
Statement and related solicitation procedures for the solicitation
of votes on the First Amended Plan on Dec. 20, 2007. The Court
confirmed the Debtors' First Amended Plan on Jan. 25, 2008.
(Delphi Bankruptcy News, Issue No. 109; Bankruptcy Creditors'
Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2008,
Moody's Investors Service assigned ratings to Delphi Corporation
for the company's financing for emergence from Chapter 11
bankruptcy protection: Corporate Family Rating of (P)B2;
$3.7 billion of first lien term loans, (P)Ba3; and $0.825 billion
of 2nd lien term debt, (P)B3. In addition, a Speculative Grade
Liquidity rating of SGL-2 representing good liquidity was
assigned. The outlook is stable.
As reported in the Troubled Company Reporter on Jan. 11, 2008,
Standard & Poor's Ratings Services expects to assign its 'B'
corporate credit rating to Troy, Michigan-based automotive
supplier Delphi Corp. upon the company's emergence from Chapter 11
bankruptcy protection, which may occur by the end of the first
quarter of 2008. S&P expects the outlook to be negative.
In addition, Standard & Poor's expects to assign these
issue-level ratings: a 'B+' issue rating (one notch above the
corporate credit rating), and '2' recovery rating to the company's
proposed $3.7 billion senior secured first-lien term loan; and a
'B-' issue rating (one notch below the corporate creditrating),
and '5' recovery rating to the company's proposed $825 million
senior secured second-lien term loan.
DELTA FINANCIAL: Court Approves De Minimis Assets Sale Procedures
-----------------------------------------------------------------
Delta Financial Corp. and its debtor-affiliates obtained approval
from the U.S. Bankruptcy Court for the District of Delaware,
pursuant to procedures by which they may sell de minimis assets.
The Debtors will sell some of the assets which are unnecessary for
the continued operation of their businesses and are of relatively
de minimis value compared to the total asset base.
Proposed Procedures
The De Minimis Sale Procedures will apply only to each asset
whose cash and other consideration totals not more than $100,000.
The Debtors will be allowed to sell assets that are encumbered by
liens or encumbrances other interests only if those liens and
other interests are capable of monetary satisfaction or the
holders consent to the sale. The Debtors will be permitted to
sell assets co-owned by a Debtors and a third party, only if the
sale does not violate Section 363(h) of the Bankruptcy Code.
After the Debtors enter into a contract or contracts
contemplating a de minimis asset sale, the Debtors will serve a
notice of the proposed sale to:
1. the U.S. Trustee for the District of Delaware;
2. counsel to any statutory committees appointed in the
Chapter 11 cases; and
3. all known parties holding or asserting liens on or other
interests in the assets that are subject of the proposed
sale and their respective counsel, if known; otherwise
referred as "interested parties."
Interested parties will have 10 calendar days from the service of
the sale notice to file and serve any objections to the sale. The
Debtors will also file the notice with the Court.
The sale notice will include:
a. a description of the assets proposed to be sold and
their locations;
b. the identity of the non-debtor purchaser or other party
or parties to the sale and any relationship with the
Debtors;
c. the identities of any parties holding liens on or other
interests in the assets and a statement indicating that
all the liens or interests are capable of monetary
satisfaction;
d. the major economic terms and conditions of the sale; and
e. instructions consistent with the objection procedures.
The Debtors may consummate a sale prior to expiration of the
applicable notice period if the Debtors obtain each interested
party's written consent.
If any significant economic terms of a sale are amended after
transmittal of the notice, but before the expiration of the
notice period, the Debtors must send a revised notice to all the
interested parties describing the proposed sale, as amended. If a
revised notice is required, the notice period will be extended for
an additional five calendar days.
On or before the 15th day of every calendar month, the Debtors
will file with the Court, and serve upon all parties requesting
notice in the cases, a report summarizing any de minimis sale
that were consummated during the immediately preceding calendar
month. Each monthly report will include with respect to each of
the sale:
(i) a description of the assets proposed to be sold and
their locations;
(ii) the identity of the non-debtor purchaser or other party
or parties to the sale and any relationship with the
Debtors;
(iii) the identities of any parties holding liens on or other
interests in the assets and a statement indicating that
all the liens or interests are capable of monetary
satisfaction; and
(iv) the major economic terms and conditions of the sale.
Any objections to a sale must be in writing, filed with the Court
and served on the interested parties and counsel to the Debtors to
be received by all the parties before the end of the notice
period. Each objection must specify its grounds. If an
objection is properly filed:
a. the objection will be deemed a request for a hearing
which will be held at the next scheduled omnibus hearing
that is not less than 10 days after the service of the
objection; and
b. the sale may not proceed absent withdrawal of the
objection or Court order approving the sale.
If no objection is filed consistent with the Sale Procedures, the
Sale will be deemed final and fully authorized by the Court.
All buyers will take assets sold pursuant to the De Minimis Sale
Procedures "as is" and "where is," without any representations or
warranties from the Debtors as to the quality or fitness of the
assets. Buyers will, however, take title to the assets free and
clear of all liens, encumbrances, claims and other interests.
About Delta Financial
Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) --
http://www.deltafinancial.com/-- is a Woodbury, New York-based
specialty consumer finance company that originates, securitizes
and sells non-conforming mortgage loans.
The company filed a chapter 11 petition on December 17, 2007
(Bankr. D. Del. Lead Case No. 07-11880). On the same day, three
affiliates filed separate chapter 11 petitions -- Delta Funding
Corp., Renaissance Mortgage Acceptance Corp., and Renaissance
R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to
07-11883).
The Debtors selected Morrison & Foerster LLP as their general
bankruptcy counsel and David B. Stratton, Esq. and James C.
Carignan, Esq. at Pepper Hamilton LLP as their counsel. The
Debtors hired AlixPartners LLP as their claims agent. The
Debtors' amended consolidated quarterly financial condition as of
Sept. 30, 2007, showed $7,223,528,000 in total assets and
$7,108,232,000 in total liabilities. The Debtors' petition listed
D.B. Structured Products Inc. as their largest unsecured creditor
holding a $19,500,000 claim.
The Debtors' exclusive period to file a plan expires on
April 15, 2008. (Delta Financial Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service Inc.http://bankrupt.com/newsstand/
or 215/945-7000).
DELTA FINANCIAL: Wants Court Okay on Unencumbered Loans Sale
------------------------------------------------------------
Delta Financial Corp. and its debtor-affiliates seeks permission
from the U.S. Bankruptcy Court for the District of Delaware to
sell unencumbered loans through a Court-sanctioned bidding
protocol.
The Loans consist of 20 unencumbered performing loans with an
aggregate unpaid principal balance of $3,600,000 and
14 unencumbered non-performing loans with an aggregate unpaid
principal balance of $2,200,000.
The Debtors, with the assistance of their financial advisors and
after significant deliberation and consultation with the Official
Committee of Unsecured Creditors, have concluded that pooling the
Performing Loans and the Non-Performing creates the greatest
likelihood of obtaining the maximum return for these estates.
To maximize the realizable value of the Loans for the benefit of
the Debtors' estates, creditors and other interested parties, the
Debtors contemplate a process pursuant to which Qualified Bids for
each pool of Loans will be solicited, followed by a period of due
diligence and, ultimately, solicitation of sealed, final bids.
Upon Court approval of the Debtors' request, the Debtors will
notify key constituents and all parties known to have expressed a
bona fide interest in acquiring the Loans about the proposed
bidding process. The Debtors requested that any objection to the
proposed sale be sent by 12:00 p.m. (prevailing Eastern Time) on
Jan. 23, 2008.
The Debtors propose to accept indicative bids and formal,
binding, unconditional, irrevocable final bids. The purpose of
the Indicative Bids will be to allow the Debtors, in consultation
with the Committee, to determine which, if any, of the bidders
submitting should be entitled to receive an expense
reimbursement.
The Debtors request that all Indicative Bids be submitted in
writing so that they are actually received no later than 12:00
p.m. (prevailing Eastern Time) on Jan. 29, 2008, and that all
Final Bids must be submitted in writing so that they are actually
received no later than 12:00 p.m. (prevailing Eastern Time) on
Feb. 13, 2008.
Expense Reimbursement
The Debtors, in consultation with the Committee, anticipate
hiring an independent third-party consultant to perform file
review and prepare a report to be made available to qualified
bidders with respect to the Loans in order to assist bidders with
accessing information in a manner that will be cost-effective and
expeditious for the estates, as well as the relevant bidders.
The Debtors seek authority to select no more than three
designated Qualified Indicative Bidders for each pool of Assets
who will be entitled to be paid the reasonable costs and expenses
in connection with the due diligence process of that bidder in an
amount not to exceed $150.00 for each Loan in the pool of Assets
for which that bidder has submitted a Qualified Indicative Bid.
The Expense Reimbursement will be payable only from the proceeds
received from the Sale of the specific pool of Assets for which
the Qualified Final Bidder submitted the Qualified Final Bid.
James C. Carignan, Esq., at Pepper Hamilton LLP, in Wilmington,
Delaware, explains that the Expense Reimbursement brings
motivated bidders into the sale process, and allows the bidders
to conduct due diligence and be compensated for the costs of the
due diligence, but only if a reasonable Qualified Indicative Bid
is ultimately made. The Debtors believe that this will
buildmomentum in the sale process, which is critical in this
competitive and disjointed
market.
Mr. Carignan tells the Court that the Expense Reimbursement will
almost certainly be de minimus when compared to the Successful
Bid; likely amounting to less than $15,000 in the aggregate for
all pools of Loans.
About Delta Financial
Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) --
http://www.deltafinancial.com/-- is a Woodbury, New York-based
specialty consumer finance company that originates, securitizes
and sells non-conforming mortgage loans.
The company filed a chapter 11 petition on December 17, 2007
(Bankr. D. Del. Lead Case No. 07-11880). On the same day, three
affiliates filed separate chapter 11 petitions -- Delta Funding
Corp., Renaissance Mortgage Acceptance Corp., and Renaissance
R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to
07-11883).
The Debtors selected Morrison & Foerster LLP as their general
bankruptcy counsel and David B. Stratton, Esq. and James C.
Carignan, Esq. at Pepper Hamilton LLP as their counsel. The
Debtors hired AlixPartners LLP as their claims agent. The
Debtors' amended consolidated quarterly financial condition as of
Sept. 30, 2007, showed $7,223,528,000 in total assets and
$7,108,232,000 in total liabilities. The Debtors' petition listed
D.B. Structured Products Inc. as their largest unsecured creditor
holding a $19,500,000 claim.
The Debtors' exclusive period to file a plan expires on
April 15, 2008. (Delta Financial Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service Inc.http://bankrupt.com/newsstand/
or 215/945-7000).
DURA AUTOMOTIVE: Seeks Court Consent for $170MM Replacement Loan
----------------------------------------------------------------
DURA Automotive Systems, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware's permission
to obtain $170 million replacement financing and amend their
$300 million existing postpetition financing facility.
The Debtors have obtained commitments from Ableco Finance LLC on
Jan. 21, 2008, for a Replacement Term Loan DIP Facility, which
would
(i) extend the maturity date of DIP loans by six months to
July 31, 2007, and
(ii) would allow the Debtors to enter into a replacement
facility in order borrow $170 million to pay off
$104.5 million due under the existing term loan facility,
and pay outstanding balance under its DIP revolver and pay
fees and expenses associated with the replacement term loan
facility.
Immediately after seeking for Chapter 11 protection, and in order
to fund their operations while in bankruptcy, the Debtors obtained
Court permission to enter into with Goldman Sachs Capital Partners
L.P., General Electric Capital Corporation, and other lender
parties:
-- up to $130 million asset based revolving credit facility,
subject to borrowing base and availability terms, with a
$5 million sublimit for letters of credit; and
-- up to $170 million Fixed Asset Facilities consisting of:
* up to $150 million tranche B term loan; and
* up to $20 million pre-funded synthetic letter of credit
facility.
Due to their failure to obtain confirmation of their Joint Plan of
Reorganization by their mid-December 2007 target, the Debtors had
obtained an extension of their Existing DIP Facilities until
Jan. 31, 2008. The Debtors missed their target mainly because of
its failure to obtain full syndication of its $425 million exit
financing, due to tighter credit conditions.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A.,
in Wilmington, Delaware, relates that the Debtors have been
working with a number of potential replacement DIP lenders to
solicit proposals for potential replacement DIP facilities. These
efforts culminated in the Debtors obtaining a commitment letter
from Ableco Finance on Jan. 21, 2008 for the Replacement Term Loan
DIP Facility.
The parties are negotiating and finalizing a form of the
Replacement Term Loan DIP Facility based on the existing Term Loan
DIP Facility, i.e., premised substantially on "stepping into the
shoes" of the lenders under the existing Term Loan DIP Facility,
along with the pledge of 100% of the stock of the Debtors' foreign
non-debtor subsidiaries, an increase from the existing pledge of
66% under the existing Term Loan DIP Facility.
The material terms of the Revolver DIP Amendments are:
Term Description
---- -----------
Aggregate
Commitments Reduced to $90 million.
New Maturity Date July 31, 2008.
Interest Rate Subject to pending negotiations.
New Collateral Enhanced Foreign Stock Pledge.
Other Terms Certain additional terms, including
Revolver DIP Facility covenants, are
being negotiated and finalized.
Carve-out Subject to pending negotiations.
The salient terms of the Replacement Term Loan DIP Facility are:
Term Description
---- -----------
Fees $1,275,000 commitment fee, $1,275,000
closing fee, and reasonable
out-of-pocket fees and expenses incurred
by Ableco, including already-paid
$175,000 advance expense deposit.
Interest Rate The Term Loan will bear interest at the
rate per annum equal to (i) the Reference
Rate plus 7% of which 3% will be paid-in-
kind or (ii) the 30-, 60- or 90-day LIBOR
plus 10% of which 3% will be paid-in-
kind. Interest will be payable monthly
in arrears.
"Reference Rate" means the rate of
interest publicly announced from time to
time by JPMorgan Chase in New York, New
York as its reference rate, base rate or
prime rate, provided that at no time will
the Reference Rate be less than 6.75%
"LIBOR" means the London Interbank Rate,
provided that at no time will the LIBOR
rate referred to above be less than
3.75%. All interest and fees will be
computed on the basis of a year of 360
days for the actual days elapsed. If any
Event of Default occurs and is
continuing, interest will accrue at a
rate per annum equal to 2% above the rate
previously applicable to the obligation,
payable on demand.
Total Facility $170 million -- approximately $105 million
to replace existing Term Loan DIP
Facility, approximately $45 million
additional term loan financing for paying
down the Revolver DIP Facility, and a
$20 million synthetic letter of credit
facility.
Interim Facility Same as total facility.
New Maturity Date July 31, 2008
Use of Proceeds To (i) repay the Debtors' existing
debtor-in-possession term loan of
approximately $104.5 million and replace
the existing debtor-in-possession
synthetic letter of credit facility; (ii)
fund general corporate needs, including
working capital needs; and (iii) pay fees
and expenses related to this transaction
and the Chapter 11 cases.
New Collateral Enhanced Foreign Stock Pledge.
Covenants Customary covenants.
Events of Default Customary events of default.
Curve-out Subject to pending negotiations.
Mr. DeFranceschi relates that the credit market conditions in
which the Debtors are seeking to extend and amend postpetition
secured financing facilities have deteriorated markedly since
November 2006, when the Court entered the Final DIP Order. As a
result, the cost of obtaining DIP financing has increased
substantially, he avers.
Mr. DeFranceschi adds that the Debtors will suffer immediate and
irreparable harm if the Court does not authorize them to enter
into the Replacement Term Loan DIP Facility on an interim basis
prior to the Jan. 31, 2008, maturity date of the existing DIP Term
Loan Facility. On Jan. 31, the Debtors' obligations under the
existing DIP Term Loan Facility would become immediately due and
payable, and the existing DIP Term Loan lenders would be entitled
to exercise all remedies available to them under the Final DIP
Order.
About DURA Automotive
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. 44; Bankruptcy Creditors' Service Inc.,
http://bankrupt.com/newsstand/or 215/945-7000).
FANNIE MAE: Eroding Credit Support Prompts S&P's Three Rating Cuts
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of guaranteed REMIC pass-through certificates issued by
Fannie Mae REMIC Trust's series 2002-W1 and 2003-W10. At the same
time, S&P affirmed its ratings on 83 classes from seven Fannie Mae
REMIC Trust transactions.
The downgrades reflect the erosion of the classes' credit support
as the transactions consistently realize monthly net losses.
Cumulative realized losses for collateral group one from series
2002-W1 constituted 0.29% of original pool balance, with total
delinquencies of 38.62% as of the December 2007 remittance period.
Likewise, cumulative realized losses for collateral group three
from series 2003-W10 constituted 0.31%, with total delinquencies
of 54.65%. Collateral group one from series 2002-W1 is 69 months
seasoned and has a pool factor of 17.67%. Collateral group three
from series 2003-W10 is 53 months seasoned and has a pool factor
of 27.24%.
The affirmations reflect adequate actual and projected credit
support, despite relative high delinquencies. As of the December
2007 remittance period, total delinquencies ranged from 38.62% for
collateral group two from series 2002-W1 to roughly 56% for
collateral group one from series 2003-W4. Cumulative realized
losses, as a percentage of the original pool balance, ranged from
0.04% for collateral group three from series 2002-W1 to 0.69% for
collateral group two from series 2003-W4.
Subordination and a guarantee of principal and interest payments
to the senior classes provide credit support for these
transactions. The collateral consists of fixed- or adjustable-
rate, first-lien, reperforming mortgage loans, with maturities of
30 years.
Ratings Lowered
Fannie Mae REMIC Trust
Guaranteed Remic Pass-through Certificates
Rating
------
Series Class To From
------ ----- -- ----
2002-W1 B-4 D B
2003-W10 3B-3 CCC BB
2003-W10 3B-4 D B
Ratings Affirmed
Fannie Mae REMIC Trust
Guaranteed Remic Pass-through Certificates
Series Class Rating
------ ----- ------
2002-W1 1A-4, 1A-IO, 2A, 2A-IO, 3A AAA
2002-W1 M, 3M AA
2002-W1 B-1, 3B-1 A
2002-W1 B-2, 3B-2 BBB
2002-W1 B-3, 3B-3 BB
2002-W1 3B-4 B
2002-W6 3M AA
2002-W6 3B-1 A
2002-W6 3B-2 BBB
2002-W6 3B-3 BB
2002-W6 3B-4 B
2003-W1 M AA
2003-W1 B-1 A
2003-W1 B-2 BBB
2003-W1 B-3 BB
2003-W4 IM, IIM AA
2003-W4 IB-1, IIB-1 A
2003-W4 IB-2, IIB-2 BBB
2003-W4 IB-3, IIB-3 BB
2003-W4 IB-4, IIB-4 B
2003-W10 2M, 3M AA
2003-W10 2B-1, 3B-1 A
2003-W10 2B-2, 3B-2 BBB
2003-W10 2B-3 BB
2003-W10 2B-4 B
2004-W14 M AA
2004-W14 B-1 A
2004-W14 B-2 BBB
2004-W14 B-3 BB
2004-W14 B-4 B
2004-W3 A-2, A-3, A-4, A-5, A-6, A-7 AAA
2004-W3 A-8, A-11, A-15, A-16, A-17 AAA
2004-W3 A-18, A-19, A-20, A-21, A-28 AAA
2004-W3 A-29, A-30, A-31, A-32, A-33 AAA
2004-W3 A-34, A-36, A-37, A-38, A-39 AAA
2004-W3 IO-1, IO-2, IO-3, PO, 2A-IO AAA
2004-W3 3A-1 AAA
2004-W3 M AA
2004-W3 B-1 A
2004-W3 B-2 BBB
2004-W3 B-3 BB
2004-W3 B-4 B
FORD MOTOR: At Ease with Tata Motors' Jaguar Brand Acquisition
--------------------------------------------------------------
Ford Motor Company anticipates a return of its Jaguar brand to
profitability once it is sold, together with the Land Rover brand,
to preferred bidder Tata Motors Ltd., insisting that its
management is at ease at Tata Motor's operational capabilities,
John Griffiths of the Financial Times in London reports citing
Ford Director of Design Ian Callum.
As reported in the Troubled Company Reporter on Jan. 4, 2008,
Lewis Booth, executive vice president for Ford of Europe and
Premier Automotive Group (Chairman - Jaguar, Land Rover, Volvo and
Ford of Europe) stated that Ford is committed to focused detailed
talks with Tata Motors on the potential sale of its Jaguar and
Land Rover brands. He related that while no final decision has
been made, Ford will proceed with further substantive discussions
with Tata Motors over the coming weeks with a view to securing an
agreement that is in the best interests of all parties concerned.
Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) --
http://www.ford.com/-- manufactures or distributes automobiles in
200 markets across six continents. With about 260,000 employees
and about 100 plants worldwide, the company's core and affiliated
automotive brands include Ford, Jaguar, Land Rover, Lincoln,
Mercury, Volvo, Aston Martin, and Mazda. The company provides
financial services through Ford Motor Credit Company.
The company has operations in Japan in the Asia Pacific region.
In Europe, the company maintains a presence in Sweden, and the
United Kingdom. The company also distributes its brands in
various Latin American regions, including Argentina and Brazil.
* * *
As reported in the Troubled Company Reporter on Nov. 19, 2007,
Moody's Investors Service affirmed the long-term ratings of Ford
Motor Company (B3 Corporate Family Rating, Ba3 senior secured,
Caa1 senior unsecured, and B3 probability of default), but changed
the rating outlook to Stable from Negative and raised the
company's Speculative Grade Liquidity rating to SGL-1 from SGL-3.
Moody's also affirmed Ford Motor Credit Company's B1 senior
unsecured rating, and changed the outlook to Stable from Negative.
These rating actions follow Ford's announcement of the details of
the newly ratified four-year labor agreement with the UAW.
FOX TROT: Declining Credit Quality Prompts Moody's Rating Review
----------------------------------------------------------------
Moody's Investors Service confirmed the ratings on these notes
issued by Fox Trot CDO Ltd.:
Class Description: Maximum CP Principal Component Amount of CP
Notes
-- Prior Rating: P-1, on review for possible downgrade
-- Current Rating: P-1
The confirmation of the rating reflects a series of modifications
made by the Issuer to the Liqudity Agreement governing the
issuance of the CP notes. Although there are currently no CP
notes outstanding, the Issuer is still capable of issuing the CP
notes in the future as provided by the underlying transaction
documents.
In addition, Moody's Investors Service downgraded these notes
issued by Fox Trot CDO Ltd. and left them on review for further
possible downgrade:
Class Description: $40,000,000 Class A Senior Secured Floating
Rate Notes Due 2051
-- Prior Rating: Aaa, on review for possible downgrade
-- Current Rating: Aa2, on review for possible downgrade
Class Description: $36,000,000 Class B Senior Secured Floating
Rate Notes Due 2051
-- Prior Rating: Aa2, on review for possible downgrade
-- Current Rating: Aa3, on review for possible downgrade
Class Description: $19,000,000 Class C Deferrable Secured Floating
Rate Notes Due 2051
-- Prior Rating: A2, on review for possible downgrade
-- Current Rating: Baa3, on review for possible downgrade
Class Description: $15,000,000 Class D Deferrable Secured Floating
Rate Notes Due 2051
-- Prior Rating: Baa2, on review for possible downgrade
-- Current Rating: Caa1, on review for possible downgrade
According to Moody's, these rating actions reflect the
deterioration in the credit quality of the underlying collateral
pool consisting of residential mortgage-backed securities and
collateral debt obligation securities.
FRIEDMAN'S INC: Judge Sontchi Converts Case to Chapter 11
---------------------------------------------------------
The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for
the District of Delaware converted Friedman's Inc.'s involuntary
Chapter 7 case to a Chapter 11 bankruptcy proceeding.
On Jan. 22, 2008, Rosy Blue, Inc.; Rosy Blue Jewelry Inc.; Jay
Gems, Inc., dba Jewelmark; Simply Diamonds Inc.; and Paul Winston-
Eurostar LLC, filed an involuntary Chapter 7 petition against
Friedman's. The parties declared claims aggregating
$9,081,199.07.
In its request, the Debtor cited that Section 706(a) of the
Bankruptcy Code provides that a debtor may convert a case under
Chapter 7 to one under Chapter 11 at "any time."
The Debtor also said that it had filed a list of its 20 largest
unsecured creditors and estimates that funds will be available for
distribution to unsecured creditors.
Unit's Chapter 11 Filing
On Jan 28, 2008, the same date as the conversion, Friedman's
wholly-owned subsidiary, Crescent Jewelers, filed a voluntary
petition under Chapter 11 of the Bankruptcy Code. Crescent
Jewelers was acquired by Friedman's in 2006 while Crescent was
undergoing its own bankruptcy proceeding.
Financial Problems
In documents filed with the Court, Friedman's disclosed that along
with Crescent Jewelers, on May 11, 2007, they entered into a
$127.5 million senior credit facility with The CIT Group/Business
Credit, Inc., as administrative agent for a group of lenders, in
exchange for a security interest in substantially all of the
Debtors' assets. Thereafter, in September 2007, Friedman's
provided a second lien on substantially all of its assets to
Harbinger Distressed Investment Master Fund, Ltd., in exchange for
a $10 million term loan.
During 2007 however, the two companies revenues failed to meet
expectations and also experienced declining store revenues. This
resulted in the Debtors' infrastructure and expenses becoming
disproportionate to revenues.
First Chapter 11 Filing
As reported in the Troubled Company Reporter on Dec. 14, 2005,
consistent with the Plan confirmed by the U.S. Bankruptcy Court
for the Southern District of Georgia, Friedman's previously
outstanding common stock was canceled and a New common stock was
been issued under an Investment Agreement with Friedman's Plan
sponsor, Harbinger. In exchange for the conversion of all
of Harbinger's Chapter 11 claims and other interests in Friedman's
and an additional $25 million incremental equity investment under
the Investment Agreement made as part of the Plan closing,
Harbinger received substantially all of the capital stock of
reorganized Friedman's.
About Friedman's Inc.
Friedman's Inc. -- http://www.friedmans.com/-- is the parent
company of a group of companies that operate fine jewelry stores
located in strip centers and regional malls in the southeastern
United States. Friedman's and eight its affiliates filed for
chapter 11 protection on Jan. 14, 2005 (Bankr. S.D. Ga. Case No.
05-40129). On Sept. 22, 2005, the Bankruptcy Court entered an
order approving the Debtors' Disclosure Statement explaining their
Amended Joint Plan of Reorganization. On Nov. 23, 2005, the Court
confirmed the Debtors' Amended Plan and that Plan became effective
on Dec. 9, 2005. As of Jan. 28, 2008, Friedman's operated 388
stores in 19 states with over 2,890 employees.
Crescent Jewelers -- http://www.crescentonline.com/-- the largest
jewelry retailer on the West Coast, filed for Chapter 11
protection on Aug. 12, 2004 (Bankr. N.D. Calif. Case No.
04-44416). On June 15, 2006, the California Bankruptcy Court
approved Crescent Jewelers' Second Amended Disclosure Statement
its Second Amended Plan of Reorganization. The Court confirmed
that Plan on July 13, 2006. Crescent Jewelers was acquired by
Friedman's and became a wholly-owned subsidiary in 2006. As of
Jan. 28, 2008, Crescent Jewelers operated 85 stories in 3 states
with over 600 employees.
In Jan. 22, 2008, five parties, which declared claims aggregating
$9,081,199.07, filed an involuntary Chapter 7 petition against
Friedman's. The parties that filed the involuntary petition were
Rosy Blue, Inc.; Rosy Blue Jewelry Inc.; Jay Gems, Inc., dba
Jewelmark; Simply Diamonds Inc.; and Paul Winston-Eurostar LLC.
The two Rosy Blue parties was represented by Lawrence L. Ginsburg,
Esq., at Moses & Singer LLP. The three remaining parties were
represented by Mona A. Parikh, Esq., at Cross & Simon, LLC. Paul
Winston also had Charlene D. Davis, Esq., at The Bayard Firm.
FRIEDMAN'S INC: Case Summary & 40 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Friedman's Inc.
4550 Excel Parkway, Suite 100
Addison, TX 75001
Bankruptcy Case No.: 08-10161
Debtor-affiliate filing separate Chapter 11 petition on Jan. 22,
2008:
Entity Case No.
------ --------
Crescent Jewelers 08-10179
Type of Business: Friedman's Inc. is the parent company of a group
of companies that operate fine jewelry stores
located in strip centers and regional malls in
the southeastern United States.
Friedman's and eight its affiliates filed for
chapter 11 protection on Jan. 14, 2005 (Bankr.
S.D. Ga. Case No. 05-40129). On Sept. 22, 2005,
the Bankruptcy Court entered an order approving
the Debtors' Disclosure Statement explaining
their Amended Joint Plan of Reorganization. On
Nov. 23, 2005, the Court confirmed the Debtors'
Amended Plan and that Plan became effective on
Dec. 9, 2005.
Crescent Jewelers, the largest jewelry retailer
on the West Coast, filed for Chapter 11
protection on Aug. 12, 2004 (Bankr. N.D. Calif.
Case No. 04-44416). On June 15, 2006, the
California Bankruptcy Court approved Crescent
Jewelers' Second Amended Disclosure Statement
its Second Amended Plan of Reorganization. The
Court confirmed that Plan on July 13, 2006.
Crescent Jewelers was acquired by Friedman's and
became a wholly-owned subsidiary in 2006.
In Jan. 22, 2008, five parties, which declared
claims aggregating $9,081,199.07, filed an
involuntary Chapter 7 petition against
Friedman's. The parties that filed the
involuntary petition were Rosy Blue, Inc.; Rosy
Blue Jewelry Inc.; Jay Gems, Inc., dba
Jewelmark; Simply Diamonds Inc.; and Paul
Winston-Eurostar LLC.
As of Jan. 28, 2008, Friedman's operated 388
stores in 19 states with over 2,890 employees
while Crescent Jewelers operated 85 stories in 3
states with over 600 employees.
See http://www.friedmans.com/and
http://www.crescentonline.com/
Date of Conversion to Chapter 11: January 28, 2008
Court: District of Delaware (Delaware)
Debtors' Counsel: Athanasios E. Agelakopoulos, Esq.
Kilpatrick Stockton LLP
Suite 2800
1100 Peachtree Street, NE
Atlanta, GA 30309
Tel: (404) 815-6038
Fax: (404) 541-4756
Jason M. Madron, Esq.
Michael Joseph Merchant, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
Tel: (302) 651-7595
Fax: (302) 651-7701
Consolidated financial condition of Friedman's Inc. and Crescent
Jewelers as of Dec. 28, 2007:
Total Assets: $245,787,000
Total Debts: $171,877,000
A. Friedman's Inc.'s List of its 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Sumit Diamond Corporation $7,516,204
592 Fifth Avenue, 4th Floor
New York, NY 10036
Rosy Blue Inc. $6,264,903
529 5th Avenue, 15th Floor
New York, NY 10017
Masterpiece Diamond LLC $3,638,681
240 West 35th Street, Suite 1200
New York, NY 10001
N.E.W. Customer Service Company $2,548,272
22660 Executive Drive
Sterling, VA 20166
Verigold Jewelry, Inc. $2,222,392
501 Madison Avenue, 9th Floor
New York, NY 10022
Paul Winston/Eurosta $1,862,415
151 West 46th Street
New York, NY 10036
Andin Int'l $1,538,760
P.O. Box 847966
Boston, MA 02284
Clover Corp. $1,254,577
P.O. Box 798069-Dept. 1
Saint Louis, MO 63179
Sieche & Co., Inc. $1,248,776
15 West 37th Street
New York, NY 10018
Bulova Corp. $1,230,386
P.O. Box 36138
Newark, NJ 07188
Vijay Gold $976,026
1212 Avenue of the Americas, 9th Floor
New York, NY 10036
Fantasy Diamond $813,860
P.O. Box 95838
Chicago, IL 60694
GoldStar Jewellery $768,602
20 West 37th Street, 7th Floor
New York, NY 10016
Citizen Watch Co. $698,678
1000 West 190th Street
Torrance, CA 90502
IVIE & Associates, Inc. $656,883
P.O. Box 975060
Dallas, TX 75397
Royal Chain $617,650
2 West 46th Street
New York, NY 10036
Frederick Goldman $556,379
P.O. Box 5869
Hicksville, NY 11802
Seiko Time $488,850
1111 MacArthur Boulevard
Mahwah, NJ 07430
LORENZO USA (DIAMOND) $476,225
c/o IJC
P.O. Box 80491
Seattle, WA 98108
Grant Thornton LLP $463,289
33911 Treasury Center
Chicago, IL 60694
B. Crescent Jewelers' List of its 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
IVIE & Associates $276,756
P.O. Box 975060
Dallas, TX 75397
Buntin Advertising, Inc. $146,895
1001 Hawkins Street
Nashville, TN 37203
Give Something Back Business Products $42,790
P.O. Box 89-4135
Los Angeles, CA 90189
FEDEX $27,339
AT&T $25,683
International Packaging $23,406
HighCotton $22,651
ADT Security Systems $11,418
Office of the U.S. Trustee $10,000
Genuine Jewel $8,792
Johnson & Son Mfg. $8,093
NationService, Inc. $7,736
Megapath, Inc. $7,497
Vu's Jewelers $5,271
Arrow Financial Services, LLC $5,263
PlayNetwork, Inc. $4,926
Verizon California $4,776
K.V. Jeweler $4,495
MBA of California $4,359
PG&E $4,015
G REIT INC: Transfers Remaining Assets to the Liquidating Trust
---------------------------------------------------------------
Gary H. Hunt, W. Brand Inlow, Edward A. Johnson, D. Fleet Wallace
and Gary T. Wescombe, the trustees of the G REIT Liquidating Trust
disclosed that G REIT Inc. transferred its remaining assets to,
and its remaining liabilities were assumed by, the Liquidating
Trust in accordance with the company's Plan of Liquidation and
Dissolution and an Agreement and Declaration of Trust. The
company's stock transfer books were closed as of Jan. 22, 2008.
The company filed a Form 15 with the Securities and Exchange
Commission to terminate the registration of the company's common
stock under the Securities Exchange Act of 1934 and that
the company will cease filing reports under that act.
However, the Trustees will issue to beneficiaries of the
Liquidating Trust and file with the SEC annual reports on Form 10-
K and current reports on Form 8-K.
Upon the formation of the Liquidating Trust, each stockholder of
the company on the Record Date automatically became the
holder of one unit of beneficial interest in the Liquidating Trust
for each share of the company's common stock then held of record
by such stockholder.
In accordance with the Plan of Liquidation, all outstanding
shares of the company's common stock were deemed cancelled when
the assets and liabilities of the company were transferred to the
Liquidating Trust.
Stockholders were not required to take any action to receive
beneficial interests, and the rights of beneficiaries in their
beneficial interests are not represented by any form of
certificate or other instrument. The Trustees maintain a record
of the name and address of each beneficiary and
such beneficiary's aggregate units of beneficial interest in the
Liquidating Trust.
Subject to certain exceptions related to transfer by will,
intestate succession or operation of law, beneficial interests in
the Liquidating Trust are not transferable, nor does a beneficiary
have authority or power to sell or in any other manner dispose of
any such beneficial interests.
In addition, immediately before the transfer of the company's
assets and liabilities to the Liquidating Trust, the company's
operating partnership redeemed the special limited partner
interest held by Triple Net Properties LLC in exchange for the
right to receive 15% of certain distributions made by the company
and the Liquidating Trust after the company's stockholders have
received certain returns, as provided by the
partnership agreement.
After the redemption, the company owned 100% of the outstanding
partnership interests in the operating partnership. The
operating partnership was dissolved in connection with the
dissolution of the company, and all of its assets and liabilities
were distributed to the company.
The Liquidating Trust was organized for the purpose of winding up
the company's affairs and the liquidation of its assets. The
transfer of the company's assets and liabilities to the
Liquidating Trust should preserve the company's ability to have
deducted amounts distributed pursuant to the Plan of Liquidation
as dividends and thereby not be subject to federal
income tax on such amounts.
It is expected that from time to time the Liquidating Trust will
make distributions of its assets to beneficiaries,
but only to the extent that such assets will not be needed to
provide for the liabilities, including contingent liabilities,
assumed by the Liquidating Trust.
No assurances can be given as to the amount or timing of
any distributions by the Liquidating Trust.
For federal income tax purposes, on the date the assets and
liabilities of the company were transferred to the Liquidating
Trust, each stockholder of the company as of the Record Date was
treated as having received a pro rata share of the assets of the
company transferred to the Liquidating Trust, less such
stockholder's pro rata share of the liabilities of the
company assumed by the Liquidating Trust.
Accordingly, on that date each stockholder should recognize gain
or loss in an amount equal to the difference between (x) the fair
market value of such stockholder's pro rata share of the net
equity of the company transferred to the Liquidating Trust, and
(y) such stockholder's adjusted tax basis in the
shares of the company's common stock held by such stockholder on
the Record Date.
The Liquidating Trust is intended to qualify as a "liquidating
trust" for federal income tax purposes. As such, the Liquidating
Trust should not itself be subject to federal income tax.
Instead, each beneficiary, formerly stockholder, will take into
account in computing its taxable income, its pro rata share of
each item of income, gain, loss and deduction of the Liquidating
Trust, regardless of the amount or timing of
distributions made by the Liquidating Trust to beneficiaries.
Distributions, if any, by the Liquidating Trust to beneficiaries
generally should not be taxable to such beneficiaries. The
Trustees will furnish to beneficiaries of the Liquidating Trust a
statement of their pro rata share
of the assets transferred by the company to the Liquidating Trust,
less their pro rata share of the company's liabilities assumed by
the Liquidating Trust so that they may calculate their gain or
loss on the transfer.
On a yearly basis, the Trustees also will furnish to
beneficiaries a statement of their pro rata share of the items of
income, gain, loss, deduction and credit of the Liquidating Trust
to be included on their tax returns.
The state and local tax consequences of the transfer of assets to
the Liquidating Trust may be different from the federal income tax
consequences of such transfer. In addition, any items of income,
gain, loss, deduction or credit of the Liquidating Trust, and any
distribution made by the Liquidating Trust, may be treated
differently for state and local tax
purposes than for federal income tax purposes.
The tax summary above is for general informational purposes only
and does not address all possible tax considerations that may be
material to a stockholder of the company or a beneficiary of the
Liquidating Trust and does not constitute legal or tax advice.
Moreover, it does not deal with all tax aspects that might be
relevant to a stockholder of the company or a beneficiary of the
Liquidating Trust, in light of its personal circumstances, nor
does it deal with particular types of stockholders that
are subject to special treatment under the federal income tax
laws. To ensure compliance with requirements imposed by the
Internal Revenue Service, any tax information contained in this
press release is not intended or written to be used, and cannot be
used, for the purpose of (i) avoiding penalties under the Internal
Revenue Code or (ii) promoting, marketing or recommending to
another party any transaction or matter
addressed herein.
Beneficiaries of the Liquidating Trust are urged to consult with
their tax advisers as to the tax consequences to them of the
establishment and operation of, and distributions by, the
Liquidating Trust.
About G REIT Inc.
Headquartered in Santa Ana, California, G REIT Inc. is operating
under the plan of liquidation. On Dec. 19, 2005, the company's
board of directors approved a plan of liquidation which was
thereafter approved by its stockholders. The company's plan of
liquidation contemplates the orderly sale of all its assets, the
payment of its liabilities and the winding up of operations and
the dissolution of the company. The company has engaged Robert A.
Stanger & Co. Inc., or Stanger, to perform financial advisory
services in connection with its plan of liquidation, including
rendering opinions as to whether its net real estate liquidation
value range estimate and the company's estimated per share
distribution range are reasonable.
As of June 30, 2007, net assets in liquidation amounted to
$151,719,000.
GEORGIA GULF: S&P Downgrades Ratings on Projected Weak Liquidity
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on Georgia
Gulf Corp., including its corporate credit rating to 'B-' from
'B'. The outlook is negative. As of Sept. 30, 2007, Georgia Gulf
had approximately $1.67 billion in debt (adjusted for capitalized
operating leases and for the securitized sale of receivables).
"The downgrade reflects the increased likelihood that ongoing
weakness in the domestic economy and in the development of new
residential construction will persist throughout 2008, which could
further weaken the company's financial position and liquidity,"
said Standard & Poor's credit analyst Paul Kurias. "We are
particularly concerned that the company could be challenged to
meet its financial covenants, which tighten in 2008, unless
operating results improve."
Georgia Gulf's financial profile has deteriorated to a level no
longer consistent with the prior ratings. The key ratio of funds
from operations to total adjusted debt is in the mid-single-digit
area, compared to the 15% considered appropriate at the prior
ratings. In addition, S&P expects continuing PVC capacity
additions by competitors in the near term to contribute to a weak
market for Georgia Gulf. While S&P believes that Georgia Gulf
will be challenged to improve its capital structure this year, the
company has reduced debt and taken steps to improve its operating
results by implementing measures to reduce fixed costs and improve
productivity.
Atlanta, Georgia-based Georgia Gulf is an integrated producer of
chlorovinyl products, PVC building and home improvement products,
and aromatic chemicals with combined annual revenue as of
Sept. 30, 2007, of slightly more than $3 billion. In October
2006, Georgia Gulf acquired Royal Group for approximately
$1.6 billion in a debt-financed transaction.
GOLDEN NUGGET: Moody's Places Ratings on Review for Possible Cuts
-----------------------------------------------------------------
Moody's Investors Service placed the ratings of Landry's
Restaurant, Inc. and the Golden Nugget Inc. on review for possible
downgrade. Landry's speculative grade liquidity rating of SGL-4
remains unchanged. These actions follow the recent announcement
that the company's Chief Executive Officer, Tilman Fertitta, has
made an offer to acquire Landry's for approximately $23.50 per
share in cash, which values the acquisition at approximately
$1.3 billion. Moody's review will focus on the impact that an
acquisition - if ultimately consummated - could have on debt
protection metrics, liquidity, and overall business risk profile
of both companies.
Landry's ratings placed on review for possible downgrade are;
-- Corporate family rating at B2
-- Probability of default rating at B2
-- $300 million senior secured revolving credit facility at Ba2
-- $400 million, 9.5% guaranteed senior global notes at B3
Landry's rating affirmed is;
-- Speculative grade liquidity rating at SGL-4
Golden Nugget ratings placed on review for possible downgrade are;
-- Corporate family rating at B2
-- Probability of default rating at B2
-- $50 million guaranteed 1st lien revolving credit facility at
B1
-- $210 million guaranteed 1st lien term loan at B1
-- $120 million guaranteed 1st lien delayed-draw term loan at B1
-- $165 million guaranteed 2nd lien term loan at Caa1
The SGL-4 speculative grade liquidity rating reflects Landry's
weak liquidity due in part to the re-financing risk associated
with the company's $400 million of senior unsecured notes and
noteholders option to redeem the notes at 1% above par from
Feb. 28, 2009 to Dec. 15, 2011.
Landry's Restaurants, Inc., with headquarters in Houston, Texas,
owns and operates mostly casual dining restaurants under the trade
names Landry's Seafood House, Chart House, The Crab House,
Saltgrass Steak House, and Rainforest Cafe., in addition to the
Golden Nugget hotel and casinos in Nevada.
Golden Nugget, Inc, a wholly owned unrestricted subsidiary of
Landry's Restaurants, Inc., headquartered in Las Vegas Nevada,
owns and operates the Golden Nugget hotel, casino, and
entertainment resorts in downtown Las Vegas and Laughlin, Nevada.
GOODMAN GLOBAL: Obtains Requisite Consents to Amend Indentures
--------------------------------------------------------------
Goodman Global Inc.'s subsidiary, Goodman Global Holdings Inc.,
had received the requisite consents to adopt all of the proposed
amendments to the indentures related to its outstanding Senior
Floating Rate Notes due 2012 and its outstanding 7-7/8% Senior
Subordinated Notes due 2012, that have been the subject of its
consent solicitations and related cash tender offers.
As of 5:00 p.m., New York City time, on Jan. 24, 2008, the company
had received consents and validly tendered Notes in respect of
these principal amounts of Notes:
-- $179,160,000 of the Floating Notes or 99.92%; and
-- $398,223,000 of the Fixed Notes or 99.58%.
As a result of the receipt of the requisite consents, the company
has entered into supplemental indentures effecting the proposed
amendments with Wells Fargo Bank, National Association, the
trustee under each of the indentures.
The effectiveness of the amendments, which would eliminate most of
the restrictive covenants and certain events of default contained
in the indentures, are conditional upon the company accepting for
purchase the Notes validly tendered pursuant to the terms of the
Offer Documents.
In accordance with the terms of the Offer Documents, tendered
Notes may no longer be withdrawn and delivered consents may no
longer be revoked, unless the tender offers and the consent
solicitations are terminated without any Notes being purchased or
the Company is required by law to permit withdrawal or revocation.
Holders who have not yet tendered their Notes may tender until
8:00 a.m., New York City time, on February 8, 2008, unless
extended or earlier terminated by the Company. The Company
reserves the right to terminate, withdraw or amend the tender
offer and consent solicitation in respect of each series of Notes
at any time subject to applicable law.
The company's obligation to accept for purchase, and to pay for,
Notes of either series validly tendered and not withdrawn pursuant
to the tender offer and the consent solicitation is subject to the
satisfaction or waiver of certain conditions, including, but not
limited to, the consummation of the transactions contemplated by
the Merger Agreement and the entry into the new debt facilities
described in the Offer Documents.
The company intends to finance the purchase of the Notes and
related fees and expenses with a combination of available cash,
equity contributions by the investors in Chill Holdings Inc.
and/or debt financing received by Purchaser and its subsidiary
Chill Acquisition Inc., in connection with a Merger Agreement
entered on Oct. 21, 2007.
Pursuant to the Merger Agreement, Merger Sub will merge with and
into the company. The complete terms and conditions of the tender
offer and the consent solicitation are set forth in the Offer
Documents which are being sent to holders of each series of Notes.
The company has retained Barclays Capital Inc. to act as Dealer
Manager in connection with the tender offer and Solicitation Agent
in connection with the consent solicitation. Questions about the
tender offer and consent solicitation may be directed to Barclays
Capital Inc. at (866) 307-8991 (toll free) or (212) 412-4072
(collect).
Copies of the Offer Documents and other related documents may be
obtained from Global Bondholder Services Corporation, the
information agent for the tender offer and consent solicitation,
at (866) 470-4200 (toll free) or (212) 430-3774 (collect).
About Goodman Global
Headquartered in Houston, Texas, Goodman Global, Inc. (NYSE: GGL)
-- http://www.goodmanglobal.com/-- manufactures heating,
ventilation and air conditioning products for residential and
light-commercial use. Goodman's products are predominantly
marketed under the Goodman(R), Amana(R) and Quietflex(R) brand
names, and are sold through company-operated and independent
distribution networks with more than 800 distribution points
throughout North America.
* * *
As reported in the Troubled Company Reporter on Jan. 17, 2008,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Goodman Global Inc., the parent company of
Goodman Global Holdings Inc. (B+/Watch Neg/--). The outlook is
stable.
GSAMP TRUST: S&P Cuts Ratings on Two Certs. on Eroding Performance
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class B-3 and B-4 mortgage pass-through certificates from GSAMP
Trust 2005-SD1. At the same time, S&P affirmed its ratings on the
remaining six classes from this transaction.
The downgrades of class B-3 and B-4 reflect collateral performance
that has eroded available credit support during recent months.
Monthly realized losses for this transaction have exceeded excess
interest for five of the past six months. The failure of excess
interest to cover monthly losses has resulted in the deterioration
of overcollateralization (O/C). The O/C level for this
transaction is at approximately 63% of the targeted amount. The
high levels of total and severe (90-plus days, foreclosures, and
REOs) delinquencies in this transaction indicate that losses will
continue to outpace excess interest and further erode the credit
support. Cumulative losses for series 2005-SD1 were 3.57% of the
original principal balance, total delinquencies were 53.95% of the
current principal balance, and severe delinquencies were 39.28% as
of the December 2007 remittance period.
The affirmations reflect stable collateral performance as of the
December 2007 remittance period. Current and projected credit
support percentages are sufficient to support the certificates at
their current rating levels.
A combination of subordination, excess spread, and O/C provide
credit support for this transaction. The underlying collateral
for this series consists primarily of fixed- and adjustable-rate,
subprime mortgage loans secured by first or second mortgages, or
deeds of trust, on residential real properties or manufactured
homes.
Ratings Lowered
GSAMP Trust 2005-SD1
Mortgage Pass-through Certificates
Rating
------
Class To From
----- -- ----
B-3 BB BBB-
B-4 B BB+
Ratings Affirmed
GSAMP Trust 2005-SD1
Mortgage pass-through certificates
Class Rating
----- ------
A AAA
M-1 AA
M-2 A+
M-3 A-
B-1 BBB+
B-2 BBB-
HDB LLC: Case Summary & Two Largest Unsecured Creditors
-------------------------------------------------------
Debtor: H.D.B., L.L.C.
4350 South Arville
Building D, Suite 29B
Las Vegas, NV 89103
Bankruptcy Case No.: 08-10685
Chapter 11 Petition Date: January 28, 2008
Court: District of Nevada (las vegas)
Judge: Bruce A. Markell
Debtor's Counsel: Brett A. Axelrod, Esq.
Lewis and Roca, L.L.P.
3993 Howard Hughes Parkway,
Suite 600
Las Vegas, NV 89169
Tel: (702) 949-8200
Fax: (702) 216-6184
Total Assets: $50 Million to $100 Million
Total Debts: $50 Million to $100 Million
Debtor's Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Bergelectric Corp. mechanic's lien $26,301
Attention: Bonnie Bailey for labor and/or
650 Opper Street materials furnished
Escondido, CA 92029
Nevada Department of Taxation taxes for 2007-2008 $582
Bankruptcy Section fiscal year
555 East Washington,
Suite 1300
Las Vegas, NV 8915-0840
INTERSTATE BAKERIES: Court Approves Amended Disclosure Statement
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri in
Kansas City has approved Interstate Bakeries Corporation's
Disclosure Statement describing its Joint Amended Plan of
Reorganization, as amended on Jan. 25, 2008.
The Hon. Jerry W. Venters ruled that the First Amended Disclosure
Statement contains adequate information for the purpose of
soliciting creditor approval for the Debtors' First Amended Plan.
The Debtors expect that the Plan materials and ballots will be
mailed by Feb. 4, 2008, and must be returned by March 3. A
hearing to confirm the Plan is scheduled for March 12.
The cornerstone of the Amended Plan is (i) the commitment by
Silver Point Finance, L.L.C., to provide IBC with up to
$400 million in exit financing upon the company's emergence from
Chapter 11, and (ii) the agreement by holders of approximately 95%
of the company's prepetition senior credit facility to support the
Plan.
The Amended Plan calls for IBC lenders to receive a full recovery
of the $450 million the group is owed in the form of new stock.
Other creditors are slated to receive anywhere from 30 cents on
the dollar to nothing.
"We are pleased that the Court approved our Disclosure Statement,
as that means we continue to have a credible business plan capable
of paving our emergence from Chapter 11 and achieving sustainable
profitability," Chief Executive Officer Craig Jung said in a
statement. "The Court's approval of the Company's Disclosure
Statement also means that Silver Point's committed financing will
remain in place and available until March 14, 2008."
The Amended Plan, however, remains contingent on IBC reaching a
mutually acceptable agreement with the International Brotherhood
of Teamsters.
At the insistence of the Teamsters, IBC agreed to insert language
in its Amended Disclosure Statement that clarifies that IBC and
the Teamsters have not had substantive discussions since October
2007.
"Our sincere hope is that the Teamsters understand that management
continues to be available and open to reaching a mutually
acceptable agreement with Teamsters Union leadership, or
alternatively that a plan of reorganization is proposed that
provides the same or greater value to our constituents, has
committed financing, and has the support of all our unions," Mr.
Jung said.
IBC continues to believe that its Plan represents the best
alternative to maximize value for its constituents in the
bankruptcy process, build competitive advantage and secure jobs
for 24,000 IBC employees. At the same time, the company said it
continues to explore other alternatives to maximize creditor
recovery in the event a Plan of Reorganization that allows the
entire company to emerge from Chapter 11 as a single entity cannot
be implemented, including a potential sale of the company in its
entirety or in a series of transactions.
About IBC
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh-baked
bread and sweet goods, under various national brand names,
including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and
Drake's(R). Currently, IBC employs more than 25,000 people and
operates 45 bakeries, as well as approximately 800 distribution
centers and approximately 800 bakery outlets throughout the
country.
The company and eight of its subsidiaries and affiliates filed for
chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No.
04 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6% senior subordinated convertible notes due Aug. 15, 2014) in
total debts. The Debtors' filed their Chapter 11 Plan and
Disclosure Statement on Nov. 5, 2007. Their exclusive period to
file a chapter 11 plan expired on November 8. On January 25,
2008, the Debtors filed heir First Amended Plan and Disclosure
Statement.
IBC confirmed that it has not received any qualifying alternative
proposals for funding its plan of reorganization in accordance
with the Court-approved alternative proposal procedures. As a
result, no auction was held on Jan. 22, 2008, as would have been
required under those procedures. The deadline for submission of
alternative proposals was Jan. 15, 2008.
(Interstate Bakeries Bankruptcy News, Issue No. 86; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000).
INVERNESS MEDICAL: Inks Agreement to Acquire Matria Healthcare
--------------------------------------------------------------
Inverness Medical Innovations Inc., on Jan. 27, 2008, entered into
a definitive merger agreement pursuant to which Inverness will
acquire Matria Healthcare Inc. through a merger transaction.
Inverness hosted a conference call Monday, Jan. 28, 2008, to
discuss the merger and business overview.
The completion of the merger is subject to various closing
conditions, including obtaining the approval of Matria
shareholders and filings under the Hart-Scott-Rodino Antitrust
Improvements Act. It is expected to close in the second quarter
of 2008.
Terms of the Merger Agreement
Under the terms of the merger agreement, each issued and
outstanding share of Matria common stock (excluding shares owned
by Matria or Inverness) will be converted into the right to
receive (i) $6.50 in cash and (ii) $32.50 in Inverness convertible
preferred stock (convertible at $69.32 into shares of Inverness
common stock) or (at the election of Inverness) in cash. Cash
will be paid in lieu of fractional shares of preferred stock.
The parties to the merger agreement have agreed to prepare and
file documents with the Securities and Exchange Commission and a
Certificate of Designations of Series B Convertible Perpetual
Preferred Stock of Inverness Medical Innovations Inc. with the
Secretary of State of the State of Delaware. These documents will
contain the complete terms of the Inverness convertible preferred
stock.
Management Comments
Inverness Medical Chairman and CEO, Ron Zwanziger said in a
conference call Monday that, "Matria's position as the market
leader in health enhancement programs for employers will serve to
expand and diversify our health management customer base. They
are a leading provider of high-risk pregnancy management programs
which have been shown to reduce the length of time certain babies
spend in the NICU, where our Paradigm programs are focused.
Matria's Quality Oncology offerings can be combined with
Paradigm's corresponding services to further extend Inverness'
reach into the field of oncology."
"Finally, their specialized expertise in women's health will
complement and expand the use of Inverness' rapid diagnostics in
this area. Alere has a market leadership position in monitoring
patients with heart failure at home. Thus, with the purchase now
of Matria, Inverness will have market leading positions in women's
health, oncology and cardiology, three critical areas of strategic
focus for Inverness," Mr. Zwanziger said.
Ron Geraty, chief executive officer of Alere Medical commented,
"We have already made tremendous progress integrating the
management and operations of Alere and Paradigm. Similarly, we
will begin the integration of Alere with Matria immediately after
the close."
"We are confident that we will be successful in bringing a new
paradigm to healthcare within the next twelve to eighteen months.
While we will be treating the specifics of our program development
strategies confidentially, we expect the market to be quite
pleased with the results in the intermediate and long term, and
we're looking forward to implementing this action plan," Mr.
Geraty added.
Parker H. Petit, Chairman and CEO of Matria, stated "Teaming up
with Inverness represents a significant opportunity for Matria and
our patients, clients and partners. We have some very unique
opportunities to dramatically improve the interventions with
patients through the expanded products and services Matria can
offer as a result of this combination. We believe that Matria's
leadership in disease management and wellness supported by
technology and informatics assets will facilitate many of the
Inverness diagnostics initiatives. This combination should
significantly improve the health management of our patients."
About Matria Healthcare
Headquartered in Marietta, Georgia, Matria Healthcare Inc. --
http://www.matria.com/-- provides integrated comprehensive health
enhancement programs to health plans, employers and government
agencies. Matria develops better educated, motivated and self-
enabled healthcare consumers and supporting clinicians in managing
the care of their patients. Matria manages major chronic diseases
and episodic conditions including diabetes, congestive heart
failure, coronary artery disease, asthma, chronic obstructive
pulmonary disease, high-risk obstetrics, cancer, musculoskeletal
and chronic pain, depression, obesity, and other conditions.
Matria delivers programs that address wellness, healthy living,
productivity improvement and navigation of the healthcare system,
and provides case management of acute and catastrophic conditions.
Matria operates through nearly 50 offices around the United
States.
About Inverness Medical
Based in Waltham, Massachusetts, Inverness Medical Innovations
Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops,
manufactures and markets in vitro diagnostic products for the
over-the-counter pregnancy and fertility/ovulation test market and
the professional rapid diagnostic test markets.
INVERNESS MEDICAL: Moody's Reviews Ratings on Matria Deal
---------------------------------------------------------
Moody's Investors Service placed the long-term debt ratings of
Inverness Medical Innovations, Inc. and Matria Healthcare, Inc. on
review for possible downgrade. The review follows Inverness'
announcement that it entered into a definitive agreement to
acquire Matria for about $700 million of convertible preferred
stock and cash of about $140 million (or, at the election of the
acquirer, in cash only) and the assumption of approximately
$280 million of outstanding Matria debt.
The review of the ratings of Inverness will focus on both the
final details of the proposed financing and leverage implications
and, importantly, the strategic rationale for the transaction.
The review of the ratings of Matria incorporates risks that the
company's franchise may be affected by uncertainties relating to
the transaction, the potential for disruptive changes in
management or the possibility that the transaction is not
completed in a timely fashion. Moody's notes that Matria's
creditors are protected by a change of control provision that
would normally require the company's debt to be repaid upon a
change of control. If so, Matria's ratings will be confirmed and
withdrawn following repayment of the principal.
On Jan. 15, 2008, Matria announced that it had engaged The Maren
Group, LLC and Sun Trust Robinson Humphrey to act as advisors in
connection with the pursuit of strategic initiatives. The
acquisition of Matria complements the businesses that Inverness
recently acquired - Alere and Paradigm. Moody's anticipates that
Inverness will form a combined organization that focuses on health
management for a range of medical conditions as well as wellness
programs that would help leverage Inverness' proprietary
diagnostic products into the home.
Moody's understands that Inverness is currently exploring the
potential of forming a 50/50 joint venture for its health
management business with financial investors. Completion of the
proposed transaction will require approval by Matria's
shareholders and is expected in the second quarter of 2008. The
transaction values Matria at over 13 times EBITDA for the twelve
month period ended Sept. 30, 2007.
These ratings are placed under review for possible downgrade:
Inverness Medical Innovations:
-- B2 Corporate Family Rating;
-- B2 Probability of Default Rating;
-- B1 (LGD3/34%) rating on a $150 million Senior Secured
Revolver due 2013;
-- B1 (LGD3/34%) rating on a $900 million Senior Secured Term
Loan due 2014; and
-- Caa1 (LGD5/82%) rating on a $250 million Second Lien Term
Loan due 2015.
Matria Healthcare:-
-- B1 Corporate Family Rating;
-- B2 Probability of Default Rating;
-- B1 (LGD3/33%) rating on a $50 million Senior Secured
Revolver; and
-- B1 (LGD3/33%) rating on a $330 million Senior Secured Term
Loan.
Inverness Medical Innovations, based in Waltham, Massachusetts, is
a leading developer of point-of-care diagnostics, monitoring and
health management equipment and programs. Inverness' products, as
well as its new product development efforts, focus on infectious
disease, cardiology, oncology, drugs of abuse and women's health.
The company reported revenues of $709 million for the twelve
months ended Sept. 30, 2007.
Matria Healthcare, based in Marietta, Georgia, is a leading
provider of integrated comprehensive health enhancement programs
to health plans, employers and government agencies. Matria
manages major chronic diseases and episodic conditions including
diabetes, congestive heart failure, coronary artery disease,
asthma, chronic obstructive pulmonary disease, high-risk
obstetrics, cancer, musculoskeletal and chronic pain, depression,
obesity, and other conditions. The company reported revenues of
$352 million for the twelve months ended Sept. 30, 2007.
INVERNESS MEDICAL: S&P Holds Low-B Ratings on $1.2BB Matria Deal
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit, 'BB' senior secured and 'B-' subordinated debt ratings on
Waltham, Massachusetts-based Inverness Medical Innovations Inc.,
on its agreement to purchase a leading provider of disease
management service, Matria Healthcare Inc (B+/Stable/--) in a
transaction valued at $1.2 billion; the outlook is stable.
"This acquisition will have no effect on our ratings for Matria,
because Inverness plans to repay Matria's debt; our ratings on
Matria would be withdrawn at that time," said Standard & Poor's
credit analyst David Lugg.
The purchase of Matria's common shares will cost about
$900 million. A significant portion--$750 million of that value--
will be in the form of a convertible preferred stock, with the
remaining $150 million funded out of cash on hand at Inverness.
S&P views the preferred stock as an intermediate equity content
hybrid security, with characteristics of both debt and equity.
Such securities are counted as 50% debt and 50% equity in S&P's
leverage measures. Given that combined EBITDA for the two
companies is approximately $400 million, S&P estimates that pro
forma leverage for Inverness will be about 4.4x. This compares
favorably with S&P's estimated leverage of Sept. 30, 2007, of 6.7x
and reflects both this acquisition and the contributions of almost
$1 billion of seven other acquisitions completed between Sept. 30
and the end of 2007. Leverage could further be reduced if the
company is successful in forming a joint venture with a financial
partner for its three disease management businesses. However,
credit will be considered for that transaction when, and if, it
occurs.
S&P's ratings on Inverness continue to reflect its high leverage,
appetite for acquisitive growth, emerging position as a leading
supplier of rapid diagnostic tests and ready access to equity
capital. More recently, the company has broadened its base of
business by acquiring disease management service providers: Alere
Medical, ParadigmHealth, and now, Matria Healthcare. These
specialty providers of oncology, cardiovascular, and women's
health disease management services complement Inverness's focus on
developing rapid diagnostic test for these therapeutic areas.
However, the success of this unproven concept in health care
services and products is far from certain.
IWT TESORO: Court Approves $12.6 Million Sale to New Stream
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
has approved the sale of IWT Tesoro Corp. and its debtor-
affiliates' assets to stalking horse bidder New Stream Funding
LLC, Bill Rochelle of Bloomberg News reports. New Stream offered
$12.6 million for the Debtors' assets.
The auction, Mr. Rochelle relates, was cancelled due to lack of
competing bids.
I.W.T. Tesoro Corporation, fka Ponca Acquisition Company, --
http://www.iwttesoro.com/-- is headquartered in New York City.
The company and its subsidiaries distribute building materials,
specifically hard floor and wall coverings. They are wholesalers
and do not sell directly to any end user. Their products consist
of ceramic, porcelain and natural stone floor, wall and decorative
tile. They import a majority of these products from suppliers and
manufacturers in Europe, South America (Brazil), and the Near and
Far East. Their markets include the United States and Canada.
They also offer private label programs for branded retail sales
customers, buying groups, large homebuilders and home center store
chains.
The Debtor and its debtor-affiliates, International Wholesale
Tile, Inc. and American Gres, Inc., filed for Chapter 11
bankruptcy protection on Sept. 6, 2007 (Bankr. S.D. NY Lead Case
No. 07-12841). John K. Sherwood, Esq., at Lowenstein Sandler
P.C., represents the Official Committee of Unsecured Creditors.
As of June 30, 2007, the Debtors had total assets of $39,798,579
and total debts of $47,940,983.
JEFFRY REUTER: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------
Debtors: Jeffry J. Reuter
Shelley M. Reuter
dba Rock-N-Pines Holsteins, Inc.
29902 County West
Hazel Green, WI 53811
Bankruptcy Case No.: 08-10319
Type of Business: The Debtors operate a farm.
Chapter 11 Petition Date: January 28, 2008
Court: Western District of Wisconsin (Madison)
Judge: Robert D. Martin
Debtors' Counsel: J. David Krekeler, Esq.
Dane Co.
15 North Pinckney Street
P.O. Box 828
Madison, WI 53701-0828
Tel: (608) 258-8555
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtors' list of their 19 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Lavern Wilderhoft Farm related $17,590
2100 Valley Lane expense/repairs
Cuba City, WI 53807
Monsanto Company Dairy Business Farm related $13,636
800 North Lindbergh Boulevard expense/repairs
(B2SH)
Saint Louis, MO 63167
J. Gile Dairy Equipment Farm related $12,346
915 South Main Street expense/repairs
Cuba City, WI 53807
Alliant Energy $6,369.97 (Parlor); $8,786
$2,415.86
Money Judgment $2,567
CNH Capital Farm related $6,916
expense/repairs
Marshall Bros. Farm related $5,770
expense/repairs
Honkamp, Krueger & Co. Accounting fees $5,677
Grant Equipment Co., Inc. Farm related $4,176
expense/repairs
State Collection Service, Inc. Notice Only: $3,980
Collection agent for
Creditor on Account
No. 1246207
Chrysler Jeep Repairs $3,760
S. Kaiser Combining Farm related expense/ $3,533
repairs
Sam Propane Farm related expense/ $2,309
repairs
Steinhart's Farm Service, Inc. Farm related expense/ $2,025
repairs
AmeriGas Fuel/gas related $1,742
expense
Select Sire Farm related expense $1,484
Dubuque Radiological Assoc. PC Medical Related expense $1,443
Mowry Bros. LLC Farm related expense/ $950
repairs
Mast Water Technology Farm related expense/ $843
repairs
Flynn Ready-Mix Concrete Co. Farm related expense/ $641
repairs
KELLWOOD CO: To Hasten Sun Capital's Tender Offer Completion
------------------------------------------------------------
Kellwood Company intends to remove all impediments to the $21 per
share cash tender offer made by an affiliate of Sun Capital
Securities Group so that it can be consummated on Feb. 12, 2008,
if a majority of the shares are tendered. Sun Capital's $21 per
share cash tender offer, under its terms, is not subject to
financing or due diligence.
Prior to the expiration of Sun Capital's tender offer on
Feb. 12, 2008, Kellwood intends to rescind its debt tender offer,
give the requisite approvals under Delaware law and its charter,
and take action under its Shareholder Rights Plan, so that Sun
Capital's $21 per share cash tender offer can be consummated on
Feb. 12, 2008, if a majority of the shares are tendered.
Kellwood's board of directors is not taking any position on
whether or not stockholders should tender their shares into the
offer. Stockholders may now make their own decision on whether to
tender their shares. If a majority of shares, including Sun
Capital's existing holdings, are tendered on Feb. 12, 2008,
Kellwood believes that all conditions to the tender offer will
have been satisfied, and Sun Capital will be obligated to close
the tender.
Kellwood's board also stated that its financial advisors, Banc of
America Securities LLC and Morgan Stanley & Co. Incorporated, will
approach third parties who have contacted the company, and other
third parties, including Sun Capital, to seek an alternative
transaction with a value above $21 per share.
The company does not intend to disclose developments with respect
to this process. If the company makes a determination that a
transaction with such third party has a reasonable likelihood of
delivering value above $21 per share, Kellwood reserves the right
to not remove the impediments to Sun Capital's tender offer.
"While it is our strong preference to continue as an independent
company, we believe that stockholders should be able to make their
own decisions on a $21 per share cash offer that is not subject to
due diligence or financing," Robert C. Skinner, Jr., chairman,
president and chief executive officer, said.
The company has deferred the Distribution Date under its Rights
Agreement so that the preferred stock purchase rights are not
exercisable or transferable apart from the common stock at this
time.
Banc of America Securities LLC and Morgan Stanley & Co.
Incorporated are acting as financial advisors, and McDermott Will
& Emery LLP and Sonnenschein Nath & Rosenthal LLP are serving as
legal counsel, to Kellwood.
About Kellwood Company
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.
Smart Shirts is a manufacturer, marketer, seller and distributor
of woven and knit garments - men's shirts. While a manufacturer
for private brands, this business also designs, makes, and sells
licensed brands of men's shirts including Nautica, Claiborne,
Axcess A Claiborne Company, Concepts by Claiborne, O Oscar, an
Oscar de la Renta Company, and Perry Ellis. Smart Shirts has 14
manufacturing facilities located in the People's Republic of
China, Hong Kong, Sri Lanka and the Philippines.
KELLWOOD CO: Moody's Puts All Ratings on Review for Possible Cuts
-----------------------------------------------------------------
Moody's Investors Service placed all ratings of Kellwood Company
under review for a possible downgrade. LGD assessments are
subject to change.
The review for downgrade follows Kellwood's announcement that it
intends to remove all impediments to the $21.00 per share tender
offer made by an affiliate of Sun Capital Securities Corporation
so that the tender offer can be consummated on Feb. 12, 2008 if a
majority of the shares are tendered. The company has also stated
that its financial advisors will approach third parties to seek an
alternative transaction with a value above $21.00 per share.
Finally, the company has stated it intends to rescind its debt
tender offer so that Sun Capital's cash tender offer can be
consummated on Feb. 12, 2008 if a majority of shares are tendered.
Moody's review will focus on the potential adverse impact on
Kellwood's credit profile of a successful tender offer, which
could result in a significant increase in indebtedness, and any
other material change in the company's operating and financial
policies. The ratings could also be negatively impacted were
Kellwood to adopt a more aggressive financial policy in response
to shareholder pressure.
These ratings were placed under review for possible downgrade:
-- Corporate Family Rating at Ba3
-- Probability of Default Rating at Ba3
-- $140 million senior unsecured debentures due July 15, 2009 at
B1
-- $130 million senior unsecured debentures due Oct. 15, 2017
at B1
Based in St Louis, Missouri, Kellwood Company is a marketer of
apparel and consumer soft goods, specializing in branded as well
as private label products, marketed across a number of
distribution channels. The company's brand portfolio includes
"Sag Harbor", "Gerber", "Hanna Andersson" and "Vince". The
company reported revenues of $1.5 billion in its most recent
fiscal year, pro-forma for the recent divestiture of Smart Shirts.
KIT PACK: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Kit Pack Co.
aka K.P.C., Inc.
285 East Thorpe
Las Cruces, NM 88007
Bankruptcy Case No.: 08-10206
Type of Business: The Debtor is a privately-owned, prime
government contractor, approved by the
Department of Defense as a "small business". It
has supported a number of prime government
contractors in meeting the needs of aging
weapons systems since 1961 with kits and
assemblies. See http://www.kitpack.com/
Chapter 11 Petition Date: January 28, 2008
Court: District of New Mexico (Albuquerque)
Judge: James S. Starzynski
Debtor's Counsel: R. Trey Arvizu, III, Esq.
P.O. Box 1479
Las Cruces, NM 88004-1479
Tel: (575) 527-8600
Fax: (575) 527-1199
Total Assets: $4,272,880
Total Debts: $1,240,526
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Boeing Co. supplier of $95,783
Attention: Officer/Managing materials, goods
or General Agent and/or services
2201 Seal Beach Boulevard-
MC110-SD51
Seal Beach, CA 90740
Eaton Corp. supplier of $71,900
Attention: Officer/Managing materials, goods
or General Agent and/or services
P.O. Box 93531
Chicago, IL 60673-3531
Stillman Seal/Hutchinson Seal supplier of $30,544
de Mexico materials, goods
Attention: Officer/Managing and/or services
or General Agent
5075 Westheimer, Suite 1260 E
Houston, TX 77056
Huntington Valley Industries supplier of $24,143
materials, goods,
and/or services
Tyco Electronics/Raychem Corp. supplier of $21,660
materials, goods
and/or services
Barry Avenue Plating Co. supplier of $21,008
materials, goods
and/or services
Internal Revenue Service federal payroll taxes $19,655
and estimated
penalties
American Aerospace Technical supplier of $18,247
Castings materials, goods,
and/or services
Ancra International, L.L.C. supplier of $16,716
materials, goods
and/or services
American Express Corp. unsecured credit; $13,897
card debt
T.M.A., Inc. supplier of $12,292
materials, goods
and/or services
Net Shapes, Inc. supplier of $12,187
materials, goods,
and/or services
Badger TruckCenter supplier of $11,006
materials, goods
and/or services
General Packaging supplier of $9,576
materials, goods
and/or services
Bowman Plating Co.,Inc. supplier of $9,065
materials, goods
and/or services
Dixie Aerospace supplier of $8,501
materials, goods
and/or services
Industrial Metal Supply/ supplier of $9,954
Capitol Metals materials, goods
and/or services
Kaehr Corp. supplier of $9,011
materials, goods
and/or services
Nordam Group, Inc. supplier of $8,852
materials, goods,
and/or services
R.M. Personnel, Inc. supplier of $8,787
materials, goods
and/or services
LANDRY'S RESTAURANTS: Receives $1.3 Billion Buyout Offer from CEO
-----------------------------------------------------------------
Landry's Restaurants Inc. stated that its board of directors has
received a letter from Tilman J. Fertitta, chairman, president and
chief executive officer, proposing to acquire all of the company's
outstanding common stock for $23.50 per share in cash,
representing a 41% premium over the closing price of the company's
common stock on Jan. 25, 2008.
According to the proposal letter, Mr. Fertitta is confident that
he can obtain all the required financing to fund the transaction
given that he will be contributing all of his approximately 39%
equity ownership of the company, as well as additional substantial
cash equity.
The total value of the transaction is approximately $1.3 billion.
The company's board of directors has established a special
committee of independent directors to review the proposal. The
special committee has also been authorized to review any
alternative proposals that may be received by Landry's or the
special committee. The special committee is in the process of
hiring legal and financial advisors to advise it in its review of
this proposal or any other alternative proposals.
The special committee received the proposal on Jan. 27, 2008.
There can be no assurance that any agreement on financial or other
terms satisfactory to the special committee will be reached.
About Landry's Restaurants
Headquartered in Houston, Texas, Landry's Restaurants Inc.
(NYSE: LNY) -- http://www.landrysrestaurants.com/-- is a
restaurant and entertainment company engaged in the ownership and
operation of full-service, casual dining restaurants, primarily
under the names of Rainforest Cafe, Saltgrass Steak House,
Landry's Seafood House, The Crab House, Charley's Crab and The
Chart House. Its portfolio of restaurants consists of formats,
menus and price points that appeal to a wide range of markets and
customer tastes. It offers concepts ranging from steak and
seafood restaurants to casual theme-based restaurants. The
company is also engaged in the ownership and operation of select
hospitality businesses, including hotel and casino resorts that
provide dining, leisure and entertainment experiences.
LANDRY'S RESTAURANT: $1.3 Bil. Offer Cues Moody's Ratings Review
----------------------------------------------------------------
Moody's Investors Service placed the ratings of Landry's
Restaurant, Inc. and the Golden Nugget Inc. on review for possible
downgrade. Landry's speculative grade liquidity rating of SGL-4
remains unchanged. These actions follow the recent announcement
that the company's Chief Executive Officer, Tilman Fertitta, has
made an offer to acquire Landry's for approximately $23.50 per
share in cash, which values the acquisition at approximately
$1.3 billion. Moody's review will focus on the impact that an
acquisition - if ultimately consummated - could have on debt
protection metrics, liquidity, and overall business risk profile
of both companies.
Landry's ratings placed on review for possible downgrade are;
-- Corporate family rating at B2
-- Probability of default rating at B2
-- $300 million senior secured revolving credit facility at Ba2
-- $400 million, 9.5% guaranteed senior global notes at B3
Landry's rating affirmed is;
-- Speculative grade liquidity rating at SGL-4
Golden Nugget ratings placed on review for possible downgrade are;
-- Corporate family rating at B2
-- Probability of default rating at B2
-- $50 million guaranteed 1st lien revolving credit facility at
B1
-- $210 million guaranteed 1st lien term loan at B1
-- $120 million guaranteed 1st lien delayed-draw term loan at B1
-- $165 million guaranteed 2nd lien term loan at Caa1
The SGL-4 speculative grade liquidity rating reflects Landry's
weak liquidity due in part to the re-financing risk associated
with the company's $400 million of senior unsecured notes and
noteholders option to redeem the notes at 1% above par from
Feb. 28, 2009 to Dec. 15, 2011.
Landry's Restaurants, Inc., with headquarters in Houston, Texas,
owns and operates mostly casual dining restaurants under the trade
names Landry's Seafood House, Chart House, The Crab House,
Saltgrass Steak House, and Rainforest Cafe., in addition to the
Golden Nugget hotel and casinos in Nevada.
Golden Nugget, Inc, a wholly owned unrestricted subsidiary of
Landry's Restaurants, Inc., headquartered in Las Vegas Nevada,
owns and operates the Golden Nugget hotel, casino, and
entertainment resorts in downtown Las Vegas and Laughlin, Nevada.
LANDRY'S RESTAURANTS: S&P Places All Ratings Under Negative Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed all its ratings,
including the 'B' corporate credit rating, on Landry's Restaurants
Inc. and its unrestricted subsidiary, Golden Nugget Inc. on
CreditWatch with negative implications.
This action follows the announcement that the Houston, Texas-based
company's CEO, Tilman Fertitta, has made a proposal to purchase
all of Landry's outstanding common stock at $23.50 per share, a
41% premium over the closing price of $16.67 on Jan. 25, 2008.
The total value of the deal is approximately $1.3 billion and
roughly $380 million would be necessary to purchase the
outstanding equity.
"If accepted, the offer could increase financial risk at the
company given that part of the transaction would likely be
financed with additional debt," said Standard & Poor's credit
analyst Charles Pinson-Rose. Standard & Poor's will monitor the
buyout proposal and take the appropriate rating actions once more
information about the transaction is available.
LASATA VIII: Case Summary & Largest Unsecured Creditor
------------------------------------------------------
Debtor: Lasata VIII, L.L.C.
2179 Harbor Bay Parkway
Alameda, CA 94502
Bankruptcy Case No.: 08-40375
Type of Business: The Debtor develops real estate.
Chapter 11 Petition Date: January 28, 2008
Court: Northern District of California (Oakland)
Judge: Randall J. Newsome
Debtor's Counsel: Charles B. Greene, Esq.
84 West Santa Clara Street, Suite 770
San Jose, CA 95113
Tel: (408) 279-3518
Total Assets: $5,001,571
Total Debts: $3,240,587
Debtor's Largest Unsecured Creditor:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sobrante Vista, L.L.C. Unsecured loans $1,000,000
2179 Harbor Bay Parkway
Alameda, CA 94502
LAWRENCE BUILDING: Case Summary & Six Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: The Lawrence Building Co.
dba Lawrence Building Co.
890 Saratoga Avenue, Suite 200
San Jose, CA 95129
Bankruptcy Case No.: 08-50317
Type of Business: The Debtor is a real estate investment company.
See http://lawrencecompany.com/
Chapter 11 Petition Date: January 28, 2008
Court: Northern District of California (San Jose)
Judge: Arthur S. Weissbrodt
Debtor's Counsel: Charles B. Greene, Esq.
84 West Santa Clara Street, Suite 770
San Jose, CA 95113
Tel: (408) 279-3518
Total Assets: $1 Million to $10 Million
Total Debts: $1 Million to $10 Million
Debtor's Six Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Binder & Malter Attorney fees $19,500
2775 Park Avenue
Santa Clara, CA 95050
Sierra Engineering Group Engineer fees $11,856
1328 Decoto Road, Suite 120
Union City, CA 94587
Studio S Squared Architect Architect fees $11,180
19 North 2nd Street,
Suite 205
San Jose, CA 95113
A.E.L. Professionals Engineer fees $10,147
Boitano, Sargent C.P.A. fees $7,925
Adleson, Hess & Kelly Attorney fees $4,145
LEDCO LIMITED: CAW Demands Severance Pay After Bankruptcy Filing
----------------------------------------------------------------
The Canada Auto Workers has ended the occupation of Kitchener
tool-and-die company Ledco Limited after a second court injunction
Sunday afternoon.
Workers took over the plant Friday morning in a fight for
severance pay after the company filed for bankruptcy Thursday
night. At that time, the union was informed that the Ledco
workers would not receive their deserved severance pay.
Under the current bankruptcy laws, workers only receive severance
pay if money remains after all creditors have been paid. Some
workers in the plant had up to 40 years seniority. Workers were
informed of the closure Wednesday, effective immediately.
The 70 Ledco workers are represented by CAW Local 1524.
The CAW continues to press key Ledco customers General Motors,
Ford and Chrysler to recognize their responsibility for Ledco
workers severance pay.
Discussions have been ongoing since the beginning of the
occupation Friday.
Picketing outside the plant will continue throughout the week.
Hundreds of union and community members attended the round-the-
clock picket in support of Ledco workers over the weekend.
About Ledco Limited
Kitchener, Ontario-based The Levene Die Company, now known as
Ledco Limited, -- http://www.ledco.com/-- was founded in 1932 by
Harry Levene, who had immigrated from England with his father in
1913. It manufactures, exports and imports dies and tools, die
sets, jigs and fixtures, and molds. It has approximately 125
employees work at this location and generates sales between $10
million and $20 Million annually.
LUBBOCK HOUSING: Moody's Slices Ratings on Revenue Bonds to Ba3
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings for the Lubbock
Housing Finance Corporation Multi-family Revenue Refunding Bonds
(Las Colinas, Quail Creek and Parkridge Place Apartment projects),
Series 2002 A&B to Ba3 from Ba1 and has downgraded the rating to
B1 from Ba2 on the Subordinate Series 2002C bonds. The outlook
remains negative. The rating actions are based on Moody's review
of occupancy reports, audited 2007 financial statements and
unaudited financial statements for 2007. The downgrades and
negative outlook reflect a history of declining debt service
coverage and low occupancy.
All of the properties were built in 1983 and are located
approximately six miles southwest of the Lubbock central business
district. The neighborhood is largely residential, with
development along the South Loop 289 thoroughfare. Texas Tech
University is located within one to two miles of the submarket.
Legal Security: The bonds are limited obligations payable solely
from the revenues, receipts and security pledged in the Trust
Indenture.
Recent Developments/Results
Competition form newer complexes continues to have a negative
impact on occupancy at the projects. The weighted average
occupancy for the three properties is weak at 88% (December 2007).
Quail creek continues to perform well with 95% occupancy, while
Las Colinas and Parkridge are weaker with occupancies of 91% and
80% respectively.
The debt service coverage ration for 2006 was 1.02 for senior debt
and 0.98x for subordinate debt. However, debt service reserves
were not tapped on the subordinate debt as Moody's includes
deposits to the reserve and replacement fund. Interim 2007
statements demonstrate some improvement in the DSCR; however
Moody's views this improvement cautiously because audited NOI is
typically lower than that garnered form interim statements.
Moody's expects 2007 the DSCR to be modestly higher than the ratio
from 2006.
Outlook
The outlook for senior and subordinate debt is negative. The
outlook is based upon a weak financial position and low occupancy.
MARKOV CDO: Eight Classes of Notes Acquire S&P's Junk Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 10
classes of notes issued by Markov CDO I Ltd. Of the 10 lowered
ratings, seven remain on CreditWatch with negative implications,
and S&P removed three from CreditWatch negative. The downgrades
follow notification from the trustee of the controlling
noteholders' intent to liquidate the collateral and terminate the
CDO.
Standard & Poor's received a notice from the trustee dated
Jan. 22, 2008, stating that the controlling class was directing
the trustee to proceed with the sale/liquidation of the collateral
supporting the notes. This notice followed a previous notice
dated Nov. 16, 2007, declaring an event of default under section
5.2 of the indenture, dated May 1, 2007, as a result of the
failure to maintain the par coverage test.
This rating actions reflect Standard & Poor's opinion regarding
the impact on the transactions of a potential liquidation of the
collateral at the current depressed market prices. The
controlling class' election to liquidate the collateral at this
time may result in losses for all classes of notes. Therefore,
this rating actions are more severe than would be justified based
solely on the credit deterioration of the underlying collateral.
Markov CDO I Ltd. is a hybrid collateralized debt obligation
transaction collateralized mainly by subprime residential
mortgage-backed securities. State Street Global Advisors, a
division of State Street Bank and Trust Co., is the investment
manager.
Ratings Lowered and Remaining on CreditWatch Negative
Markov CDO I Ltd.
Rating
------
Class To From
----- -- ----
S BB/Watch Neg AAA/Watch Neg
A-0 BB/Watch Neg AAA/Watch Neg
A-1 CCC-/Watch Neg AA+/Watch Neg
A-2 CCC-/Watch Neg AA+/Watch Neg
A-3 CCC-/Watch Neg AA+/Watch Neg
B CCC-/Watch Neg A+/Watch Neg
RA notes CCC-/Watch Neg AA+/Watch Neg
Ratings Lowered and Removed From CreditWatch Negative
Markov CDO I Ltd.
Rating
------
Class To From
----- -- ----
C-1 CC BB/Watch Neg
C-2 CC BB/Watch Neg
C combo notes CC BB/Watch Neg
Other Outstanding Ratings
Class Rating
----- ------
D CC
E CC
D combo notes CC
MASTR SECURITIES: S&P Cuts 25 Classes' Ratings on Weak Performance
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 25
classes from 11 MASTR securities transactions. At the same time,
S&P affirmed its ratings on 107 classes from 15 MASTR deals.
The downgrades reflect recent collateral performance that has
eroded available credit support during recent months. As of the
December 2007 remittance period, cumulative losses ranged from
0.37% (2004-OPT2) to 1.5% (2003-WMC1) of the original principal
balances, while overcollateralization was below its target for all
11 deals. Serious delinquencies (90-plus days, foreclosures, and
REOs) ranged from 7.52% (2004-WMC1 series) to 16.23% (2004-WMC3
series) of the current principal balances.
The affirmations reflect stable collateral performance as of the
December 2007 remittance period. Current and projected credit
support percentages are sufficient at the current rating levels.
Credit support for the transactions is provided by subordination,
excess interest, and overcollateralization. The underlying
collateral backing the certificates consists primarily of fixed-
rate, first-lien mortgage loans secured by one- to four-family
residential properties. However, some transactions also have
adjustable-rate mortgages as a significant percentage of the
collateral.
Ratings Lowered
MASTR Asset Backed Securities Trust
Rating
------
Series Class To From
------ ----- -- ----
2002-OPT1 M-5 BBB- BBB
2003-OPT1 MV-5 B BBB-
2003-OPT1 MF-5 B BBB-
2003-OPT2 M-5 B BBB-
2003-WMC1 M-3 BBB- A-
2003-WMC1 M-4 BB- BBB+
2003-WMC1 M-5 B+ BBB
2003-WMC1 MV-6 B BBB-
2003-WMC1 MF-6 B BBB-
2004-FRE1 M-9 BB- BBB-
2004-FRE1 M-10 CCC BBB-
2004-HE1 M-9 BB+ BBB+
2004-HE1 M-10 B BBB
2004-HE1 M-11 B- BBB-
2004-OPT1 M-5 BB BBB
2004-OPT2 M-10 BB BBB+
2004-WMC1 M-5 BB BBB
2004-WMC1 M-6 CCC BB
2004-WMC1 M-7 CCC B
2004-WMC2 M-5 BB BBB
2004-WMC3 M-8 BB BBB
2004-WMC3 M-9 B BBB-
2004-WMC3 M-10 B- BBB-
2004-WMC3 M-11 CCC BB+
Ratings Lowered and Removed from CreditWatch
MASTR Asset Backed Securities Trust
Rating
------
Series Class To From
------ ----- -- ----
2002-OPT1 M-6 CCC B/Watch Neg
Ratings Affirmed
MASTR Asset Backed Securities Trust
Series Class Rating
------ ----- ------
2002-OPT1 M-2 AA+
2002-OPT1 M-3 A+
2002-OPT1 M-4 BBB+
2003-NC1 M-2 AAA
2003-NC1 M-3 AA+
2003-NC1 M-4 AA
2003-NC1 M-5 BBB
2003-NC1 M-6 BB+
2003-OPT1 M-1 AAA
2003-OPT1 M-2 AA+
2003-OPT1 M-3 AA
2003-OPT1 M-4 A+
2003-OPT2 M-1 AA
2003-OPT2 M-2 A
2003-OPT2 M-3 BBB+
2003-OPT2 M-4 BBB
2003-WMC1 M-1 AA
2003-WMC1 M-2 A
2003-WMC2 M-1 AA
2003-WMC2 M-2 A
2003-WMC2 M-3 A-
2003-WMC2 M-4 BB
2003-WMC2 M-5 B
2003-WMC2 M-6 CCC
2004-FRE1 M-3 AA-
2004-FRE1 M-4 A+
2004-FRE1 M-5 A
2004-FRE1 M-6 A-
2004-FRE1 M-7 BBB+
2004-FRE1 M-8 BBB
2004-HE1 A-1, A-4 AAA
2004-HE1 M-1, M-2, M-3 AA+
2004-HE1 M-4, M-5 AA
2004-HE1 M-6 AA-
2004-HE1 M-7 A+
2004-HE1 M-8 A
2004-OPT1 M-1 AA
2004-OPT1 M-2 A
2004-OPT1 M-3 A-
2004-OPT1 M-4 BBB+
2004-OPT1 M-6 B
2004-OPT1 M-7 CCC
2004-OPT2 A-1, A-2 AAA
2004-OPT2 M-1, M-2, M-3, M-4 AA+
2004-OPT2 M-5, M-6 AA
2004-OPT2 M-7 AA-
2004-OPT2 M-8 A
2004-OPT2 M-9 A-
2004-WMC1 M-1 AA
2004-WMC1 M-2 A
2004-WMC1 M-3 A-
2004-WMC1 M-4 BBB+
2004-WMC2 M-1 AA
2004-WMC2 M-2 A
2004-WMC2 M-3 A-
2004-WMC2 M-4 BBB+
2004-WMC3 M-1 AA+
2004-WMC3 M-2 AA
2004-WMC3 M-3 AA-
2004-WMC3 M-4 A+
2004-WMC3 M-5 A
2004-WMC3 M-6 A-
2004-WMC3 M-7 BBB+
MASTR Asset Securitization Trust
Series Class Rating
------ ----- ------
2002-NC1 M-2 AAA
2002-NC1 M-3 BBB+
2002-NC1 M-4 BBB-
2004-9 1-A-1, 2-A-1, 2-A-2, AAA
2-A-3, 2-A-4, 3-A-1,
3-A-2, 3-A-3, 3-A-4,
3-A-5, 3-A-6, 3-A-7,
4-A-1, 5-A-1, 6-A-1,
7-A-1, PO, 15-A-X
30-A-X, 8-A-2,
2004-9 15-B-1, 8-B-1 AA
2004-9 15-B-2, 8-B-2 A
2004-9 15-B-3, 8-B-3 BBB
2004-9 30-B-3 BBB-
2004-9 15-B-4, 30-B-4, 8-B-4 BB
2004-9 15-B-5, 30-B-5, 8-B-5 B
MATRIA HEALTHCARE: Inks Merger Agreement with Inverness Medical
---------------------------------------------------------------
Matria Healthcare Inc. on Jan. 27, 2008, entered into a definitive
merger agreement pursuant to which Inverness Medical Innovations
Inc. will acquire Matria through a merger transaction.
Inverness hosted a conference call Monday, Jan. 28, 2008, to
discuss the merger and business overview.
The completion of the merger is subject to various closing
conditions, including obtaining the approval of Matria
shareholders and filings under the Hart-Scott-Rodino Antitrust
Improvements Act. It is expected to close in the second quarter
of 2008.
Terms of the Merger Agreement
Under the terms of the merger agreement, each issued and
outstanding share of Matria common stock (excluding shares owned
by Matria or Inverness) will be converted into the right to
receive (i) $6.50 in cash and (ii) $32.50 in Inverness convertible
preferred stock (convertible at $69.32 into shares of Inverness
common stock) or (at the election of Inverness) in cash. Cash
will be paid in lieu of fractional shares of preferred stock.
The parties to the merger agreement have agreed to prepare and
file documents with the Securities and Exchange Commission and a
Certificate of Designations of Series B Convertible Perpetual
Preferred Stock of Inverness Medical Innovations Inc. with the
Secretary of State of the State of Delaware. These documents will
contain the complete terms of the Inverness convertible preferred
stock.
Management Comments
Inverness Medical Chairman and CEO, Ron Zwanziger said in a
conference call Monday that, "Matria's position as the market
leader in health enhancement programs for employers will serve to
expand and diversify our health management customer base. They
are a leading provider of high-risk pregnancy management programs
which have been shown to reduce the length of time certain babies
spend in the NICU, where our Paradigm programs are focused.
Matria's Quality Oncology offerings can be combined with
Paradigm's corresponding services to further extend Inverness'
reach into the field of oncology."
"Finally, their specialized expertise in women's health will
complement and expand the use of Inverness' rapid diagnostics in
this area. Alere has a market leadership position in monitoring
patients with heart failure at home. Thus, with the purchase now
of Matria, Inverness will have market leading positions in women's
health, oncology and cardiology, three critical areas of strategic
focus for Inverness," Mr. Zwanziger said.
Ron Geraty, chief executive officer of Alere Medical commented,
"We have already made tremendous progress integrating the
management and operations of Alere and Paradigm. Similarly, we
will begin the integration of Alere with Matria immediately after
the close."
"We are confident that we will be successful in bringing a new
paradigm to healthcare within the next twelve to eighteen months.
While we will be treating the specifics of our program development
strategies confidentially, we expect the market to be quite
pleased with the results in the intermediate and long term, and
we're looking forward to implementing this action plan," Mr.
Geraty added.
Parker H. Petit, Chairman and CEO of Matria, stated "Teaming up
with Inverness represents a significant opportunity for Matria and
our patients, clients and partners. We have some very unique
opportunities to dramatically improve the interventions with
patients through the expanded products and services Matria can
offer as a result of this combination. We believe that Matria's
leadership in disease management and wellness supported by
technology and informatics assets will facilitate many of the
Inverness diagnostics initiatives. This combination should
significantly improve the health management of our patients."
About Inverness Medical
Based in Waltham, Massachusetts, Inverness Medical Innovations
Inc. (AMEX: IMA) -- http://www.invernessmedical.com/-- develops,
manufactures and markets in vitro diagnostic products for the
over-the-counter pregnancy and fertility/ovulation test market and
the professional rapid diagnostic test markets.
About Matria Healthcare
Headquartered in Marietta, Georgia, Matria Healthcare Inc. --
http://www.matria.com/-- provides integrated comprehensive health
enhancement programs to health plans, employers and government
agencies. Matria develops better educated, motivated and self-
enabled healthcare consumers and supporting clinicians in managing
the care of their patients. Matria manages major chronic diseases
and episodic conditions including diabetes, congestive heart
failure, coronary artery disease, asthma, chronic obstructive
pulmonary disease, high-risk obstetrics, cancer, musculoskeletal
and chronic pain, depression, obesity, and other conditions.
Matria delivers programs that address wellness, healthy living,
productivity improvement and navigation of the healthcare system,
and provides case management of acute and catastrophic conditions.
Matria operates through nearly 50 offices around the United
States.
MATRIA HEALTHCARE: Inverness Deal Prompts Moody's Ratings Reviews
-----------------------------------------------------------------
Moody's Investors Service placed the long-term debt ratings of
Inverness Medical Innovations, Inc. and Matria Healthcare, Inc. on
review for possible downgrade. The review follows Inverness'
announcement that it entered into a definitive agreement to
acquire Matria for about $700 million of convertible preferred
stock and cash of about $140 million (or, at the election of the
acquirer, in cash only) and the assumption of approximately
$280 million of outstanding Matria debt.
The review of the ratings of Inverness will focus on both the
final details of the proposed financing and leverage implications
and, importantly, the strategic rationale for the transaction.
The review of the ratings of Matria incorporates risks that the
company's franchise may be affected by uncertainties relating to
the transaction, the potential for disruptive changes in
management or the possibility that the transaction is not
completed in a timely fashion. Moody's notes that Matria's
creditors are protected by a change of control provision that
would normally require the company's debt to be repaid upon a
change of control. If so, Matria's ratings will be confirmed and
withdrawn following repayment of the principal.
On Jan. 15, 2008, Matria announced that it had engaged The Maren
Group, LLC and Sun Trust Robinson Humphrey to act as advisors in
connection with the pursuit of strategic initiatives. The
acquisition of Matria complements the businesses that Inverness
recently acquired - Alere and Paradigm. Moody's anticipates that
Inverness will form a combined organization that focuses on health
management for a range of medical conditions as well as wellness
programs that would help leverage Inverness' proprietary
diagnostic products into the home.
Moody's understands that Inverness is currently exploring the
potential of forming a 50/50 joint venture for its health
management business with financial investors. Completion of the
proposed transaction will require approval by Matria's
shareholders and is expected in the second quarter of 2008. The
transaction values Matria at over 13 times EBITDA for the twelve
month period ended Sept. 30, 2007.
These ratings are placed under review for possible downgrade:
Matria Healthcare:-
-- B1 Corporate Family Rating;
-- B2 Probability of Default Rating;
-- B1 (LGD3/33%) rating on a $50 million Senior Secured
Revolver; and
-- B1 (LGD3/33%) rating on a $330 million Senior Secured Term
Loan.
Inverness Medical Innovations:
-- B2 Corporate Family Rating;
-- B2 Probability of Default Rating;
-- B1 (LGD3/34%) rating on a $150 million Senior Secured
Revolver due 2013;
-- B1 (LGD3/34%) rating on a $900 million Senior Secured Term
Loan due 2014; and
-- Caa1 (LGD5/82%) rating on a $250 million Second Lien Term
Loan due 2015.
Matria Healthcare, based in Marietta, Georgia, is a leading
provider of integrated comprehensive health enhancement programs
to health plans, employers and government agencies. Matria
manages major chronic diseases and episodic conditions including
diabetes, congestive heart failure, coronary artery disease,
asthma, chronic obstructive pulmonary disease, high-risk
obstetrics, cancer, musculoskeletal and chronic pain, depression,
obesity, and other conditions. The company reported revenues of
$352 million for the twelve months ended Sept. 30, 2007.
Inverness Medical Innovations, based in Waltham, Massachusetts, is
a leading developer of point-of-care diagnostics, monitoring and
health management equipment and programs. Inverness' products, as
well as its new product development efforts, focus on infectious
disease, cardiology, oncology, drugs of abuse and women's health.
The company reported revenues of $709 million for the twelve
months ended Sept. 30, 2007.
MERITAGE MORTGAGE: Four Classes Get S&P's Junk Ratings on Losses
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 15
classes of asset-backed certificates from three transactions. In
addition, Standard & Poor's placed four ratings from Meritage
Mortgage Loan Trust 2005-2 on CreditWatch with negative
implications. At the same time, S&P affirmed its ratings on the
remaining 18 classes from these transactions.
The downgrades reflect a reduction in credit enhancement as a
result of monthly realized losses, as well as a high number of
severe delinquencies relative to the current balance. As of the
December 2007 remittance date, cumulative realized losses, as a
percentage of the original pool balances, were 2.43% (Meritage
Mortgage Loan Trust 2004-2), 3.21% (Meritage Mortgage Loan Trust
2005-2), 1.56% (Fieldstone Mortgage Investment Trust 2004-4), and
0.40% (Securitized Asset Backed Receivables LLC Trust 2004-NC3).
Severe delinquencies (90-plus days, foreclosures, and REOs), as a
percentage of the current pool balances, were 29.4%, 30.31%,
31.37%, and 33.85%, respectively. Losses have outpaced excess
interest over the past six months by 3.4x (Meritage Mortgage Loan
Trust 2004-2), 2.0x (Meritage Mortgage Loan Trust 2005-2), 3.5x
(Fieldstone Mortgage Investment Trust 2004-4), and 1.6x
(Securitized Asset Backed Receivables LLC Trust 2004-NC3).
Overcollateralization (O/C) has been depleted completely for both
Meritage Mortgage Loan Trust transactions. Fieldstone Mortgage
Investment Trust 2004-4 only has $37,873 remaining in O/C, while
Securitized Asset Backed Receivables LLC Trust 2004-NC3 is 9 basis
points below target at $1,231,039. S&P placed its ratings on four
classes from Meritage Mortgage Loan Trust 2005-2 on CreditWatch
negative because many of the losses relative to the increasing
severe delinquencies have not yet been realized. Severe
delinquencies for this transaction have increased from
approximately $34,917,000 in January 2007 to approximately
$62,130,000 in December 2007. S&P will continue to monitor these
classes and will take further rating actions if projected credit
enhancement continues to erode.
The affirmations on the other classes reflect sufficient credit
enhancement available to support the current ratings. These
classes have actual and projected credit support percentages that
are in line with their original levels.
Subordination, O/C, and excess spread provide credit support for
these transactions. The collateral for these transactions
originally consisted primarily of fixed- and adjustable-rate
mortgage loans secured by first and second liens on real
properties, including single-family residences, two- to
four-family dwelling units, condominiums, planned unit
developments, and manufactured housing.
Ratings Lowered
Meritage Mortgage Loan Trust Series 2004-2
Rating
------
Class To From
----- -- ----
M4 A- AA-
M5 BBB+ A+
M6 BB BBB
M7 B BB
M8 CCC B
Fieldstone Mortgage Investment Trust Series 2004-4
Rating
------
Class To From
----- -- ----
M4 A- AA-
M5 BB A+
M6 B- A
Securitized Asset Backed Receivables LLC Trust Series 2004-NC3
Rating
------
Class To From
----- -- ----
M1 A AA+
M2 BB A+
M3 B A
B1 B A-
B2 CCC BBB+
B3 CCC BBB
B4 CCC BBB-
Ratings Placed on CreditWatch Negative
Meritage Mortgage Loan Trust Series 2005-2
Rating
------
Class To From
----- -- ----
M7 A/Watch Neg A
M8 BBB+/Watch Neg BBB+
M9 BB/Watch Neg BB
M10 B/Watch Neg B
Ratings Affirmed
Meritage Mortgage Loan Trust
Series Class Rating
------ ----- ------
2004-2 M1, M2 AA+
2004-2 M3 A
2004-2 M9, M10 CCC
2005-2 IA1, IIA2, IIA3 AAA
2005-2 M1, M2 AA+
2005-2 M3, M4 AA
2005-2 M5 AA-
2005-2 M6 A+
2005-2 M11 CCC
Fieldstone Mortgage Investment Trust Series 2004-4
Class Rating
----- ------
M2, M3 AA
M7 CCC
MID OCEAN: S&P Junks Ratings on Notes Amounting to $169.16 Million
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class A-1, A-1L, and A-2L notes issued by Mid Ocean CBO 2001-1
Ltd., a CDO of ABS transaction managed by Deerfield Capital
Management LLC. At the same time, S&P removed the lowered ratings
from CreditWatch with negative implications, where they were
placed June 13, 2007.
The downgrades reflect factors that have negatively affected the
credit enhancement available to support the notes since S&P placed
the ratings on CreditWatch. These factors include a further
deterioration in par value.
Standard & Poor's noted that the overcollateralization (O/C)
ratios for the transaction have suffered as a result of the par
erosion. Based on the Dec. 27, 2007, trustee report, the class A
O/C ratio was 92.45%, down from 95.54% at the time of the last
rating action in June 2007 and compared with a minimum ratio of
106%; the class B O/C ratio was 85.43%, down from 88.88% at the
time of the last rating action and compared with a minimum ratio
of 101%.
Ratings Lowered and Removed From CreditWatch Negative
Mid Ocean CBO 2001-1 Ltd.
Rating
------
Class To From Current balance (million)
----- -- ---- -------------------------
A-1 CCC- BBB/Watch Neg $29.08
A-1L CCC- BBB/Watch Neg $125.08
A-2L CC B+/Watch Neg $15.00
Other Outstanding Rating
Mid Ocean CBO 2001-1 Ltd.
Class Rating Current balance (million)
----- ------ -------------------------
B-1L CC $12.67
Industry/Asset Exposure* Percentage
------------------------ ------------
CMBS diversified 27.62%
RMBS A 16.08%
Manufactured housing 15.82%
ABS commercial 13.93%
RMBS B&C, HELs, HELOCs, & tax lien 12.05%
CDO 8.77%
U.S. Agency 5.41%
CMBS (large loan, single borrower, & property) 0.29%
ABS consumer 0.03%
* According to Standard & Poor's industry categorizations.
MORGAN STANLEY: Fitch Cuts Rating on Class B-4 Certs. to B from BB
------------------------------------------------------------------
Fitch Ratings has taken rating actions on these Morgan Stanley
Issues:
Series 2004-11AR, Group 1
-- Class 1-A affirmed at 'AAA';
-- Class 1-B-1 affirmed at 'AA';
-- Class 1-B-2 affirmed at 'A';
-- Class 1-B-3 affirmed at 'BBB'.
Series 2004-11AR, Groups 2-5
-- Classes 2-A, 3-A, 4-A, 5-A affirmed at 'AAA'.
Series 2005-1
-- Class A affirmed at 'AAA'.
Series 2005-3AR
-- 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 downgraded to 'B' from 'BB'.
The affirmations, affecting approximately $1.05 billion in
outstanding certificates, reflect adequate levels of credit
enhancement relative to expected losses. The downgrade, affecting
$7.8 million of outstanding certificates, reflects the
deterioration in the relationship of CE to future loss
expectations. For series 2005-3AR, the amount of loans with
serious delinquencies is 7.37% of the outstanding pool balance
while the CE for the affected B-4 bond is 2.08%. The transaction
has experienced 0.10% of loss to date and Fitch anticipates that
the high delinquencies will translate into even greater losses,
further reducing the CE of the subordinate classes.
The pools are seasoned between 30 months (2005-3AR) and 36 months
(2004-11AR) and have pool factors (current collateral balance as a
percentage of the initial balance) ranging from 26% (2004-11AR,
Group 1) to 71% (2005-1).
MOVIE GALLERY: Court Moves Exclusive Plan-Filing Period to June 13
------------------------------------------------------------------
The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the
Eastern District of Virginia extended, until June 13, 2008, the
exclusive period wherein Movie Gallery and its debtor-affiliates
can file a plan of reorganization.
Judge Tice also fixed the Debtors' deadline to solicit acceptances
of that plan on Aug. 13, 2008.
Counsel for the Debtors related that the sheer size and complexity
of the Debtors' bankruptcy cases provides sufficient cause to
extend the exclusive periods. Currently, the Debtors are paying
their postpetition obligations, as evidenced by the dearth of
administrative claims.
The Debtors maintained that an extended exclusive period will
enable them to focus on confirming the current consensual Plan and
negotiate outstanding issues without potential distraction of
competing plans.
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. (Movie Gallery Bankruptcy News Issue No. 16; Bankruptcy
Creditors' Service Inc.; http://bankrupt.com/newsstand/or
215/945-7000)
MOVIE GALLERY: Disclosure Statement Hearing Adjourned to Feb. 5
---------------------------------------------------------------
The Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the
Eastern District of Virginia adjourned, to Feb. 5, 2008, at 10:00
a.m., prevailing Eastern Time, the hearing to consider the
adequacy of the Disclosure Statement explaining Movie Gallery,
Inc. and its debtor-affiliates' plan of reorganization.
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 have until June 13, 2008 to file their plan
of reorganization. (Movie Gallery Bankruptcy News Issue No. 16;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
MOVIE GALLERY: Wants to Perform Under Plan Support Pact w/ Sopris
-----------------------------------------------------------------
Movie Gallery Inc. and its debtor-affiliates ask permission from
the Honorable Douglas O. Tice of the U.S. Bankruptcy Court for the
Eastern District of Virginia to perform under a plan support
agreement with Sopris Capital Advisors LLC.
The Plan Support Agreement is intended to further the Debtors'
attempts to negotiate a consensual Plan of Reorganization, in
light of the Debtors' Disclosure Statement and Plan filed on
December 22, 2007, Kimberly A. Pierro, Esq., at Kutak Rock LLP,
in Richmond, Virginia, says.
Essentially, the Plan Support Agreement provides that:
(a) Sopris, the first and second lien holders and the 11%
senior noteholders agree to support the Plan; and
(b) Sopris agrees to the Backstop Commitment in accordance
with the Plan and the Rights Offering Term Sheet.
Pursuant to the Plan Support Agreement and a separate
escrow agreement, Sopris has placed $50,000,000 into
escrow to secure the Backstop Commitment.
Sopris Capital holds the majority of the debt under the Second
Lien Credit Agreement and the 11% Senior Notes Indenture; the
first lien holders; the second lien holders; and the 11% senior
noteholders.
According to Ms. Pierro, securing the participation of the
consenting holders for a consensual Chapter 11 plan will allow
the Debtors to emerge from their cases successfully and
expeditiously and maximize value for the benefit of their estates
and creditors.
"By permitting the Debtors to perform under the Plan Support
Agreement, the Court will enable the Debtors to continue towards
confirmation and consummation of a Plan that is supported by the
consenting holders, who constitute several major constituencies
in the Chapter 11 cases," Ms. Pierro tells Judge Tice.
The Debtors have provided adequate and reasonable notice to
parties-in-interest regarding their request. Moreover, the Plan
Support Agreement was negotiated in good faith and at arm's-
length with the consenting holders, Ms. Pierro adds.
Ms. Pierro avers that through the Plan Support Agreement, the
Debtors can continue their current progress with respect to their
various constituencies. The Agreement, she continues, is also
deemed to help confirm the Plan for the Debtors to consummate in
a timely manner.
A full-text copy of the Plan Support Agreement is available for
free at http://researcharchives.com/t/s?277a
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 have until June 13, 2008 to file their plan
of reorganization. (Movie Gallery Bankruptcy News Issue No. 16;
Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/
or 215/945-7000)
NCO GROUP: S&P Holds 'B+' Rating and Says Outlook is Negative
-------------------------------------------------------------
Standard & Poor's Ratings Services removed its 'B+' long-term
counterparty credit rating on NCO Group Inc. from CreditWatch
Developing, where it was placed on Dec. 12, 2007. At the same
time, S&P affirmed its 'B+' rating on NCO and all associated issue
ratings. The outlook is negative.
"The outlook revision reflects our belief that the tougher
collection environment and the depreciating U.S. dollar may
continue to negatively affect NCO's results in 2008 and beyond,"
said Standard & Poor's credit analyst Rian Pressman.
These factors caused NCO to moderately underperform relative to
S&P's initial expectations when the rating was initially assigned
in late 2006.
This revised outlook does not reflect upon S&P's generally
positive opinion of NCO's pending acquisition of Outsourcing
Solutions Inc., a sizable competitor in the accounts receivable
management industry. This acquisition significantly expands NCO's
ARM business, where it is already the market leader. NCO's ARM
product mix, which is currently weighted heavily toward third-
party collections on a contingency-fee basis, will become more
balanced, given OSI's focus on managing early-stage delinquent
receivables, which is paid on an FTE (a fixed-fee per full-time
employee) basis. In addition, because OSI has only a nominal
portfolio of purchased receivables, the contribution to the
consolidated organization's EBITDA from portfolio management
activities will decline. S&P had previously cited the
disproportionately high contribution from this volatile business
as a negative ratings factor. S&P also views integration risk as
relatively low because there is little client overlap and good IT
compatibility between the two companies.
NCO's ownership group (One Equity Partners and certain members of
senior management) is contributing $210 million of additional
equity to the $325 million for OSI ($24 million of deal and
integration costs will also be incurred). Given the add-on term
loan of $139 million required to consummate the transaction, S&P's
expectations of leverage have changed. Per management
projections, S&P expects debt-to-EBITDA and EBITDA interest
coverage to approximate 4.3x and 2.3x, respectively, for 2008 on a
pro forma basis. (EBITDA has been adjusted for nonrecurring items
and assumed expense saves; nonrecourse debt and related interest
are not included.) Although these metrics are adequate for the
current rating, continued pressure on EBITDA because of the
factors discussed above may alter this conclusion.
The senior-secured bank loan and revolver (the original $465
million plus a $139 million add-on and $100 million, respectively)
are guaranteed by all material direct and indirect domestic
subsidiaries of the borrower (NCO Group Inc.), excluding those
that contain CarVal participation and international operations.
Approximately 26% of the total EBITDA, which S&P expects the
consolidated organization to generate, is forecast to be
attributed to these excluded subsidiaries, post-acquisition. The
senior unsecured and senior-subordinated notes ($165 million and
$200 million, respectively) are both subordinated in right of
payment to the senior-secured indebtedness.
S&P used an enterprise value approach to analyze the lenders'
recovery prospects, given the likelihood that the business would
retain value as an operating entity in the event of a bankruptcy.
A default on the company's debt obligations would most likely be
the result of financial pressures caused by the franchise's rapid
expansion, adverse operational issues, lost clients, competitive
pressures, or the mispricing of portfolio management purchases.
S&P's simulated default scenario also contemplates a fully drawn
revolving credit facility, a 200 basis point increase in LIBOR,
and a 200 bp increase to the borrower's cost of capital because of
credit deterioration. S&P used an EBITDA multiple of 4.0x to
determine an enterprise valuation. Based on this simulated
default scenario, lenders would be expected to realize a
substantial recovery (70%-90%) of principal for the secured bank
loan and revolver, which is reflective of a '2' recovery rating.
As a result, the rating on the bank facilities is one notch higher
than the counterparty credit rating, while the unsecured notes are
two notches lower.
The negative outlook reflects the potential for continued pressure
on results because of the difficult collections environment and
depreciating U.S. dollar. If these or other circumstances cause
NCO to underperform further, relative to S&P's expectations, the
rating will be lowered. If circumstances stabilize, the outlook
will be changed to stable.
NEXINNOVATIONS INC: Tech Data's Claims to be Settled by April 18
----------------------------------------------------------------
The Ontario Superior Court of Justice issued an order relating to
NexInnovations Inc.'s proposed plan of compromise and arrangement.
The Court rules that the reconciliation of Tech Data Canada
Corporation's claims against the Debtor in the amount of
$44,000,000, exclusive of debtor-in-possession funding, will be
completed by April 18, 2008.
The Court also confirms that the objection of Hubert Kelly in
respect of the additional compensation payable to Prowis Inc.,
chief restructuring officer, dated Nov. 21, 2007, are fully
operative and in full effect. The compensation provides for an
incentive fee of 15% of gross receipts collected after retirement
of the debt owed to Tech Data.
The Court further approves the resolution of outstanding issues by
the Debtor and Ernst & Young Inc., the Debtor's 2006 monitor, with
respect to the determination of the amounts payable to the
Creditor Payment Pool from the proceeds of accounts receivable at
the Plan Implementation Date. The resolution of issues is also
with respect to a lockbox account arrangements established in
connection with a Services Agreement between the Debtor and Tech
Data, in a letter dated Dec. 31, 2007.
Also, the court order declares that upon payment of the amounts
owed to the Creditor Payment Pool from the Lockbox, the Debtor
will be entitled to proceeds deposited to the Lockbox.
Lockbox Account and the Creditor Payment Pool
In its sixth report to the Court, the Debtor's 2007 monitor, Mintz
& Partners Limited, stated that pursuant to an initial order, the
Debtor's collection were required to be deposited to the Lockbox
Account. This was to control the collection of accounts
receivable and receipts from other realizations and the
disbursement of funds between the Creditor Payment Pool, Tech
Data, and the Debtor.
At the date of the initial order, the Lockbox Account has in
excess of $3,000,000 of funds subject to dispute between the
parties. The amount was subsequently reduced to about $2,000,000
as some funds were allocated between the parties.
The parties entered into a negotiated agreement with respect to
the disputed funfd, resulting in a proposed finaly payment to the
Creditor Payment Pool of $620,651.
Distribution of Tech Data
The 2007 monitor's sixth report further stated that pursuant to an
affidavit of Howard Tuffnail dated Sept. 27, 2007, Tech Data was
owed about $52,000,000, comprised of a term loan of about
$7,400,000 and trade debt of about $44,600,000.
Nex has executed a general security agreemetn, and a general
assignment of book debts dated as of Dec. 29, 2006, in favor of
Tech Data.
In a court order dated Nov. 21, 2007, and Nov. 24, 2007, the Court
ruled that the Debtor distribute to Tech Data the amounts of $8
million and $24,708, respectively.
Meanwhile, Tech Data told the Debtor that the amount it owed
during the the period Oct. 2, 2007, to Oct. 16, 2007, in DIP
financing and payments of guarantees is about $54,000,000.
In return, the Debtor and Tech Data informed the monitor that Tech
Data has received: (i) repayment of its DIP financing of about
$1,868,000, (ii) repayment of its term loan of about $8,024,708,
and (iii) transfers from the Lockbox Account of about $46,600,000.
Hence, Tech Data's receipts from the Debtor appear to exceed the
debt owed by the Debtor by about $2,490,000. No further transfers
were made after.
Payment of British Columbia's Claim
The 2007 monitor reported that the Debtor seeks the approval to
pay $255,982 to British Columbia in respect of provincial sales
tax. On Oct. 19, 2007, B.C. registered a lien against the Debtor's
estate in that same amount for provincial sales tax.
The Debtor's unsecured trade creditors number about 366 with
claims totaling about $2 million.
In its sixth report, the 2007 monitor said that it supports the
Debtor's motion for approval of the settlement agreement between
the Lockbox Parties. The 2007 monitor also supports distribution
to Tech Data subject to the creditor entering a reimbursement
agreement with the Debtor. With regards to the Debtor's payment
of the B.C. claim, the 2007 monitor said it takes no position.
About Tech Data
Tech Data Canada Corporation is a subsidiary of Tech Data
Corporation (NASDAQ GS: TECD) -- http://www.techdata.com/--
headquartered in Clearwater, Florida. Tech Data distributes IT
products, with more than 90,000 customers in over 100 countries.
The company's business model enables technology solution
providers, manufacturers and publishers to cost-effectively sell
to and support end users ranging from small-to-midsize businesses
to large enterprises. Ranked 109th on the FORTUNE 500(R), Tech
Data generated $21.4 billion in sales for its fiscal year ended
Jan. 31, 2007. The company and its subsidiaries operate 26
fulfillment centers in the U.S., Canada, Latin America, Europe and
the Middle East.
About NexInnovations
NexInnovations Inc., headquartered in Mississauga, Ontario, --
http://www.nexinnovations.com/-- is one of Canada's leading
online retailers of computer equipment. NexInnovations provides
computer hardware and services, including systems integration and
technical support. It sells and installs equipment and systems
from companies like Cisco, CA plc, IBM, and Microsoft.
NexInnovations, founded in 1978, was one of Canada's Top 100
Solution Providers, and according to that list, in 2005 the
company reported revenues between $500 million and $550 million.
For the fiscal year ended May 31, 2007, the Debtor had revenue of
about $350 million.
The Debtor previously filed for protection under the Companies'
Creditors Arrangement Act in August 2006 and was granted 30-day
period to allow the company time to restructure due to financial
difficulties. Ernst & Young Inc. was appointed monitor in the
2006 CCAA proceedings.
The Debtor sought for protection from its creditors under the CCAA
and ceased operations on Oct. 2, 2007. The Debtor's second filing
was intended to resolve its current financing difficulties and to
complete its 2006 Plan. Prowis Inc. serves as the Debtor's chief
restructuring officer upon the request of Tech Data Canada
Corporation, primary secured creditor. Mintz & Partners Ltd. was
appointed as the Debtor's 2007 monitor.
ORBIT BRANDS: Wants Court to Dismiss Chapter 11 Case
----------------------------------------------------
Orbit Brands Corp. aka orbitTRAVEL.com asks the U.S. Bankruptcy
Court for the Central District of California to dismiss its
Chapter 11 case, claiming that they have been unable to update its
Securities and Exchange Commission filings and file a disclosure
statement, Bill Rochelle of the Bloomberg News reports. However,
the Debtor has pledged to pay its creditors in full once the
bankruptcy case is dismiss.
In September 2006, Mr. Rochelle says, the Debtor had asked the
Court not to require them to file a disclosure statement because
its creditors would receive full payment. However, the judge
disagreed and directed them to file a disclosure statement.
A hearing, Mr. Rochelle relates, to consider the Debtor's
dismissal request is set for Feb. 14, 2008.
Orbit Brands Corporation focuses on the growth via the acquisition
and development of early stage high growth companies in the
technology, health and fitness, and consumer goods industries.
Three of Orbit Brands' creditors, represented by Simon J. Dunstan,
Esq., at Hughes & Dunstan, LLP, filed an involuntary chapter 11
petition against the company on June 25, 2004 (Bankr. C.D. Calif.,
L.A. Div., Case No. 04-24171. On Dec. 14, 2004, the Company
consented to entry of an order for relief by filing a voluntary
Chapter 11 petition. Orbit Brands said that it elected to file
for chapter 11 protection to bring a halt to vexatious litigation
in several states and to protect the interests of shareholders and
legitimate creditors.
PEGASUS WIRELESS: Case Summary & Five Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Pegasus Wireless Corp.
277 Royal Poinciana Way, Suite 153
Palm Beach, FL 33480
Bankruptcy Case No.: 08-10924
Type of Business: The Debtor designs, manufactures and markets
wireless hardware and software solutions for
broadband fixed, portable networking and
Internet access. It offers products to account
customers who either bundle the Debtor's
solution to their own products, or carry its
products under their own names by private
labeling or original equipment manufacturer
custom-designed products from the Debtor. See
http://www.pegasuswirelesscorp.com/
Chapter 11 Petition Date: January 28, 2008
Court: Southern District of Florida (West Palm Beach)
Judge: Paul G. Hyman, Jr.
Debtor's Counsel: Kevin C. Gleason, Esq.
4121 North 31 Avenue
Hollywood, FL 33021
Tel: (954) 893-7670
Total Assets: $6,000,000
Total Debts: $2,913,267
Debtor's Five Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Jasper C. Knabb $2,550,000
277 Royal Ponciana Way,
Suite 153
Palm Beach, FL 33480
Stephen H. Durland $148,000
277 Royal Poinciana Way,
Suite 153
Palm Beach, FL 33480
Cananwill, Inc. $111,059
Attention: Richard Davis, Esq.
Foley & Lardner
3235 Northwest 64th Street
Boca Raton, FL 33496
Pollard-Kelly Auditing $90,978
Services, Inc.
Bank of America $13,231
PERFORMANCE TRANSPORTATION: Reed Smith Okayed as Special Counsel
----------------------------------------------------------------
Performance Transportation Services Inc. and its debtor-affiliates
obtained authority from the U.S. Bankruptcy Court for the Western
District of New York to employ Reed Smith LLP as special counsel
in connection with labor union and pension plan matters.
The Debtor related that Reed Smith has extensive experience and
knowledge in the field of debtors' and creditors' rights, labor
union negotiations and pension plan issues in business
reorganizations under Chapter 11. Reed Smith also served as
special labor counsel to the Debtors in their previous bankruptcy
case.
Reed Smith is expected to:
a. advise and represent PTS with respect to all issues
involving or relating to its collective bargaining
agreements;
b. advise and represent PTS with respect to issues involving
or relating to all pension plans, health plans and other
employee benefits for both active and retired employees;
c. advise and represent PTS with respect to all issues
involving or relating to compensation of its hourly and
salaried workforce; and
d. perform all necessary or appropriate actions relating to
the services.
Jeffrey L. Cornish, president and chief executive officer of
Performance Logistics Group, Inc., tells the Court that the
Debtors will pay Reed Smith on an hourly basis in accordance with
its ordinary and customary hourly rates:
Professional Rate
------------ ----
Paul M. Singer $675
William Bevan III $500
Jeanne S. Lofgren $350
Partners $390 - $920
Associates and Counsel $260 - $575
Paralegals $125 - $310
Mr. Cornish disclosed that Reed Smith has waived a prepetition
claim for $4,052 against the Debtors.
Paul M. Singer, Esq., at Reed Smith LLP, assured the Court that
neither his firm nor any of its partners or associates, hold or
represent any interest adverse to the Debtors' estate in the
matters on which the firm is to be engaged. He also asserted that
the firm is a "disinterested person" as that phrase is defined in
Section 101(14) of the Bankruptcy Code.
Performance Transportation Services Inc. is the second largest
transporter of new automobiles, sport-utility vehicles and light
trucks in North America, and operates under three key
transportation business lines including: E. and L. Transport,
Hadley Auto Transport and Leaseway Motorcar Transport.
The company and 13 of its affiliates previously filed for Chapter
11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06-
00107). The Court confirmed the Debtors' plan on Dec. 21, 2006,
and that plan became effective on Jan. 29, 2007. Garry M. Graber,
Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day
represented the Debtors in their retructuring efforts. When the
Debtor filed for protection from their creditors it reported more
than $100,000,000 in total assets. It also disclosed owing more
than $100,000,000 to at most 10,000 creditors, including $708,679
to Broadspire and $282,949 to General Motors of Canada Limited.
The company and its debtor-affiliates filed their second Chapter
11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746
thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents
the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve
as the Debtors' local counsel. The Debtors' claims & balloting
agent is Kutzman Carson Consultants LLC. (Performance Bankruptcy
News, Issue No. 37; Bankruptcy Creditors' Services Inc.;
http://bankrupt.com/newsstand/or 215/945-7000).
PETROLEUM DEVELOPMENT: Earns $4.5 Million in 2007 Third Quarter
---------------------------------------------------------------
Petroleum Development Corporation reported net income of
$4.5 million on total revenues of $76.3 million for the third
quarter ended Sept. 30, 2007, compared with net income of
$210.9 million on total revenues of $70.8 million in the
corresponding period of 2006.
For the nine months ended Sept. 30, 2007, the company reported net
income of $25.0 million on total revenues of $210.1 million,
compared with net income of $229.8 million on total revenues of
$218.3 million in the same period of 2006.
Net income for the three and nine months ended Sept. 30, 2007,
declined significantly compared to the respective year ago period
results from operations due to the $328.0 million pretax gain
associated with the July 2006 sale of lease rights in the Piceance
Basin.
Adjusted cash flow from operations, a non-GAAP measure defined as
cash flow from operations before changes in assets and
liabilities, increased to $31.6 million in the third quarter from
$135,000 in 2006. The lower adjusted cash flow from operations in
the third quarter of 2006 reflects increased costs related to
exploring acquisition opportunities to utilize the funds received
from the leasehold sale.
Production for the third quarter was 7.7 Bcfe, up 78.9% from the
4.3 Bcfe produced in the third quarter of 2006. Total production
for the nine month period was 19.5 Bcfe compared to 12.2 Bcfe, a
60.2% increase.
The company added 94 development wells and one exploratory well
during the third quarter. One development well and the
exploratory well were dry holes. Totals for the year-to-date are
258 development and 6 gross exploratory wells including 8 gross
development dry holes and 5 dry exploratory wells. The company
attributes its production increases in 2007 to its active drilling
program, combined with production from acquisitions made with
proceeds from the 2006 lease sale.
"Our plan to convert the proceeds of last year's lease sale into
increased reserves and production continues to progress on
schedule," said Steven R. Williams, chairman and chief executive
officer. "We continue on pace to reach our 2007 guidance
production of 28 Bcfe. With the recent acquisition of the Castle
properties in Pennsylvania, we estimate our proved reserves to be
in excess of 650 Bcfe, and we fully expect our high quality
prospect inventory to allow us to continue to significantly exceed
industry growth norms in 2008 and beyond."
Net income for the quarter includes an unrealized derivative gain
of $3.8 million compared to a unrealized derivative gain of
$2.6 million in the prior year, and $5.3 million in exploratory
expense. Depreciation, depletion and amortization for the third
quarter increased to $20.4 million from $8.3 million in 2006 due
to the higher production, increased investment, and increased
leasehold acquisition costs.
EBITDA decreased from $348.9 million to $30.2 million in the third
quarter of 2007 compared to the same period in 2006. This
significant decline is again due to the gain from the leasehold
sale included in the 2006 data.
Oil and natural gas sales from the company's producing properties
for the three months ended Sept. 30, 2007, were up 45.3% to
$44.4 million compared to $30.6 million for the same prior year
period, an increase of $13.8 million.
Oil and natural gas sales from the company's producing properties
for the nine months ended Sept. 30, 2007, were up 35.4% to
$117.7 million compared to $86.9 million for the same prior year
period, an increase of $30.8 million. The sales increase was
related to increased volumes, primarily due to the company's
acquisitions from the fourth quarter 2006 and first quarter 2007,
and was partially offset by lower average natural gas and oil
sales prices.
Long-Term Debt
As of Sept. 30, 2007, the company has long term debt of
$172.0 million, compared to $117.0 million, excluding the overline
note, as of Dec. 31, 2006. The overline note in the amount of
$20.0 million, which was executed on Dec. 19, 2006, was repaid in
full on Jan. 31, 2007.
Balance Sheet
At Sept. 30, 2007, the company's consolidated financial statements
showed $933.7 million in total assets, $546.1 million in total
liabilities, $776,000 in minority interest in consolidated limited
liability company, and $386.8 million in total shareholders'
equity.
The company's consolidated balance sheet at Sept. 30, 2007, also
showed strained liquidity with $141.5 million in total current
assets available to pay $199.1 million in total current
liabilities.
Full-text copies of the company's consolidated financial
statements for the quarter ended Sept. 30, 2007, are available for
free at http://researcharchives.com/t/s?277b
About Petroleum Development
Headquartered in Bridgeport, West Virginia, Petroleum Development
Corporation (NASDAQ GSM: PETD) -- http://www.petd.com/-- is an
independent energy company engaged in the development, production
and marketing of natural gas and oil. Its operations are focused
in the Rocky Mountains with additional operations in the
Appalachian Basin and Michigan.
* * *
As reported in the Troubled Company Reporter on Jan. 16, 2008,
Moody's Investors Service assigned a B2 Corporate Family Rating to
Petroleum Development Corporation, a B3 (LGD 5; 77%) rating to its
pending $250 million offering of senior unsecured notes, a B2
Probability of Default Rating, and an SGL-3 Speculative Grade
Liquidity Rating. The rating outlook is stable.
PHARMED GROUP: Court Authorizes $1.2MM Asset Sale to Invatec
------------------------------------------------------------
The United States Bankruptcy Court for the Southern District
of Florida approved the sale of Pharmed Group Holdings Inc. and
its debtor-affiliates' remaining real property to Invatec Ltd. for
$1.2 million.
As reported in the Troubled Company Reporter on Jan. 15, 2008, the
Court approved the Debtors' bidding procedure for the sale of real
property to Invatec, subject to better and higher offer.
Headquartered in Miami, Florida, Pharmed Group Holdings Inc. --
http://www.pharmed.com/-- and its affiliates sends drugs and
medical supplies on Caribbean cruises. They distribute medical,
rehabilitative, and surgical supplies throughout the southeastern
U.S., as well as Caribbean, and Central and South American
countries. They deliver products made by Dynatronics, Welch
Allyn, and Smith & Nephew. In addition to their distribution
businesses, they make and distribute vitamins, minerals,
nutraceuticals, and dietary supplements.
The company and four debtor-affiliates filed for chapter 11
protection on Oct. 26, 2007 (Bankr. S.D. Fl. Case Nos. 07-19187
through 07-19191). Paul Steven Singerman, Esq., and Brian Rich,
Esq., at Berger Singerman PA, represent the Debtors. Trumbull
Group LLC serves as the Debtors' claims and noticing agent.
PIKE NURSERY: Files Schedules of Assets and Liabilities
-------------------------------------------------------
Pike Nursery Holding LLC delivered to the United States Bankruptcy
Court for the Northern District of Georgia its schedules of assets
and liabilities disclosing:
Name of Schedule Assets Liabilities
---------------- ----------- -----------
A. Real Property $12,290,000
B. Personal Property 20,535,851
C. Property Claimed
as Exempt
D. Creditors Holding $15,117,118
Secured Claims
E. Creditors Holding 1,467,274
Unsecured Priority
Claims
F. Creditors Holding 14,977,855
Unsecured Nonpriority
Claims
----------- -----------
TOTAL $32,825,851 $31,562,277
Based in Norcross, Georgia, Pike Nursery Holdings LLC operates
plant nurseries in 22 locations at Georgia, North Carolina, and
Alabama. Due to drought and further water supply restrictions,
the Debtor filed for Chapter 11 protection on Nov. 14, 2007
(Bankr. N.D. Ga. Case No. 07-79129). J. Robert Williamson, Esq.,
at Scroggins and Williamson, represents the Debtor in its
restructuring efforts. The Debtor chose BMC Group as its claims,
noticing, and balloting agent. Jeffrey N. Pomerantz, Esq. and
Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP,
represent the Official Committee of Unsecured Creditors. When
the Debtor filed for protection from its creditors, it listed
estimated assets and debts of $1 million to $100 million.
PIONEER NATURAL: Moody's Maintains 'Ba1' Corporate Family Rating
----------------------------------------------------------------
Moody's confirmed Pioneer Natural Resources' (PXD) Ba1 corporate
family rating, Ba1 probability of default rating, Ba1 (LGD 4; 56%)
senior unsecured note ratings, and assigned a negative rating
outlook. These actions remove PXD from an extended review for
downgrade.
The review for downgrade spanned PXD's transforming asset
rationalization program, its effort to reduce unit high full-cycle
costs, its formulation and execution of its large share buyback
program and its plans to form and take public two master limited
partnerships. Assets contributed to an MLP would comprise
portions of PXD's lowest risk assets that also produce a
disproportionate amount of its free cash flow. PXD debt investors
would no longer be directly supported by those assets and
structurally advantaged debt would likely also be incurred on the
MLP's assets. PXD would divest low risk free cash flow, that
otherwise could be used directly for debt reduction or
reinvestment to, instead, distribute that cash flow as yield to
public MLP unit holders. PXD would receive its share of
distributions on its own holdings of MLP units.
The rating confirmation partly reflects the reduced expected scale
of PXD's potential MLP's, reducing the scale of uncertainty posed
by the MLP's. The MLP's inject uncertainty concerning the risk
mix of remaining assets as well as its use of MLP IPO proceeds.
The confirmation also reflects emerging sound production trends
and the nearing of completion of PXD's Alaskan Oooguruk and
Tunisian developments, with the degree of production response
being the key remaining risk. An adjunct to that is PXD's
statement that it will reduce capital spending by roughly one
third in 2008, to a level roughly equal to expected cash flow,
with a significant majority of that spending focused on lower risk
development projects, including an estimated 550 - 600 development
wells.
However, the negative outlook stems from Moody's need to assess
PXD's risk mix of reserves after it release its 2007 10-K; the
quality of 2007 reserve replacement volumes; the resulting
components of its reserve replacement costs; and the 2008 outlook
at the time. In 2006, PXD's core U.S. organic reserve replacement
costs were notably very high and would need to decline in order to
average out to a level of capital reinvestment efficiency that is
compatible with a Ba1 rating. Added to fairly high production
costs, PXD has displayed high unit full-cycle costs relative to
its wellhead price realizations. While exacerbated by heavy
capital spending on already booked proved reserves, due to
concentrating its drilling activity on its high 39% proportion of
proved undeveloped reserves, PXD's multi-year average of U.S,
drillbit reserve replacement costs still has not been competitive.
Moody's anticipates sector-wide positive price revisions of oil
reserves. Accordingly, Moody's would assess the degree to which
PXD reduced reserve replacement costs with strong new extensions
and discoveries, versus reserves added by price-driven revisions
of existing reserves. To assess PXD's progress in reducing
reserve replacement costs, Moody's will also assess the degree to
which changes in the proportion of PUD reserves, relative to total
proved reserves, affected reserve replacement volumes and unit
costs.
The negative outlook also reflects Moody's view that stock buyback
activity may remain a material element of PXD's effort to generate
competitive shareholder returns as would the significant
potential, in Moody's view, for leveraged acquisitions. After
completing its $1 billion 2006 buyback program, PXD established
$750 million program for 2007, of which the great majority has yet
to be used.
Nevertheless, the ratings are supported by an improving underlying
production trend, with 2007 production up from 2006 and 2006
production up 7% over pro forma 2005, coupled with a supportive
oil price outlook, expirations of legacy below market hedges, and
declining volumetric production payments. It is reasonable to
conclude that PXD's 2008 production will get a bump up from heavy
2006 and 2007 capital outlays, though the relative success and
timeliness of PXD's expected mid-2008 start-up of Oooguruk will
play a significant roll in its ability to hit its organic
production growth targets.
Further ratings support reflects that PXD's 2008 capital spending
is currently planned to be in the vicinity of 2008 cash flow after
having far overspent cash flow in 2007. After the divestiture of
its high risk GOM prospects, PXD capital spending patterns display
reduced reinvestment risk, being focused on onshore activity.
Moody's believes that PXD, has reconfigured itself to a more
durable (though higher cost) reserve and production portfolio from
which to attempt growth.
PXD has executed a very major portfolio transition to a lower risk
base. In Moody's view, it needs to demonstrate sustainable
production trends at competitive replacement costs on its
remaining largely mature higher cost asset base to retain a Ba1
rating. To attain a stable outlook, PXD will need to demonstrate
sound production trends and competitive patterns of:
(i) organic (drillbit) finding and development costs,
(ii) organic reserve and production replacement,
(iii) total unit full-cycle costs, and
(iv) leveraged unit cash operating margin coverage of organic
and total reserve replacement costs.
Should PXD execute an IPO of Pioneer Southwest Energy Partners MLP
and use debt at the MLP, that debt will be consolidated into PXD's
total debt.
In 2007, PXD far outspent cash flow, making the harvest from that
capital spending particularly important this year. The core to
PXD's credit strength remains its U.S. operations. Drillbit
reserve replacement costs in the U.S. at 2006 levels would erode
credit strength. PXD's 2006 U.S. drillbit reserve replacement
costs were a very high $39/boe and its organic replacement of U.S.
production with U.S. reserves was a low 70%. PXD's worldwide 2006
drillbit finding and development costs were also insupportably
high at $36/boe. While Moody's cannot yet deconstruct the
components and quality of PXD's public reserve replacement volume
and cost guidance, PXD indicating nearly a 50% reduction in 2007
reserve replacement costs.
Consolidated 2006 all-sources reserve replacement costs (including
acquisitions and foreign reserve additions) were more competitive
at just over $18/boe. However the lower cost acquisition
component of that number partly reflected purchases of less
prolific, lower asset value, mature properties, some of which
contained high proportions of PUD. Their production components
also incur higher production costs. Much of PXD's organic outlays
are devoted to locations already booked as PUD reserves, which
contributed to high 2006 organic reserve replacement costs but
that reduced preceding year's reserve replacement costs.
The ratings remain constrained by the cumulative impact of
comparatively high unit full-cycle costs, high organic reserve
replacement costs, low productivity relative to the scale of the
company's reserve base, and below average cash flow coverage of
sustaining capital spending. The full-cycle cost structure, the
production rate, and the production costs of its property base
indicate a need for below average leverage relative to a given
rating. PXD has a high organic reserve replacement cost outlook
and will need to demonstrate that its 2007 capital spending
program can generate its target production growth at sufficiently
competitive costs and margins.
PXD operates primarily in North America with over 96% of its
proved reserves and just under 90% of its production concentrated
in the U.S., with the remainder in Tunisia and South Africa. Core
production holdings are the Spraberry trend oil field (West
Texas), the Hugoton natural gas field (Southwest Kansas), the West
Panhandle natural gas field (Texas Panhandle), the Raton Basin
coal bed methane natural gas field (Southern Colorado), and the
Pawnee and Edwards Reef Trend natural gas holdings (South Texas).
PXD has a small holding in the Barnett Shale. Almost 40% of 2008
capital spending is targeted for the Spraberry, 20% for the
Edwards Trend, 14% for the Raton Basin, 15% for Tunisia, 7% for
Oooguruk, and 4% for the Barnett Shale.
PXD is headquartered in Irving, Texas.
PRC LLC: Seeks to Hire Jenner & Block as Special Conflicts Counsel
------------------------------------------------------------------
PRC LLC and its debtor-affiliates ask permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Jenner & Block LLP, as their special conflicts counsel as of the
date of bankruptcy.
The Debtors selected Jenner & Block because of its extensive
experience and knowledge in the field of debtors' and creditors'
rights and business reorganizations under Chapter 11 of the
Bankruptcy Code. The Debtors add that the firm has acted as
conflicts counsel in several cases.
As conflicts counsel, Jenner & Block will represent the Debtors
on matters that may not be appropriately handled by Weil Gotshal
& Ganges, LLP, the Debtors' primary bankruptcy counsel.
According to the Debtors, Weil Gotshal is unable to represent the
Debtors in any matters concerning Verizon Communications, Inc.,
or its affiliates due to a conflict of interest.
Weil Gotshal currently represents WorldCom, Inc., and its debtor-
affiliates in their Chapter 11 cases, which were purchased by
Verizon Communications in 2005.
The Debtors propose that Jenner & Block be paid on an hourly
basis and be reimbursed for the expenses it may incur for any
related works undertaken. The hourly rates of attorneys working
for the firm are:
Designation Hourly Rate
----------- -------------
Partners $525 - $1,000
Associates $325 - $495
Paralegals $220 - $260
Daniel R. Murray, Esq., at Jenner & Block, in Chicago, Illinois,
assures the Court that his firm is a disinterested person" as
that phrase is defined in Section 101(14) of the Bankruptcy Code,
as modified by Section 1107(b).
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC --
http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-focused,
Fortune 500 U.S. corporations and delivers these services through
a global network of call centers in the U.S., Philippines, India,
and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of Access
Direct Telemarketing, Inc., each of which is a debtor and debtor-
in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring and
turnaround advisor. Additionally, Evercore Group LLC provides
investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31, 2007
showed total assets of $354,000,000 and total debts of
$261,000,000. (PRC LLC Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
PRC LLC: Wants to Hire CXO LLC as Restructuring Advisors
--------------------------------------------------------
PRC LLC and its debtor-affiliates asks authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
CXO LLC, to provide them with a chief restructuring officer and
temporary staff in accordance with Section 363 of the U.S.
Bankruptcy Code.
H. Philip Goodeve, the Debtors' chief financial officer, says the
CXO Professionals are well-qualified to act on the Debtors'
behalf, and are also familiar with the Debtors' businesses and
financial affairs.
Pursuant to the parties' agreement dated Jan. 20, 2008, Stephen R.
Dube, a principal at CXO, will serve as chief restructuring
officer to to assist the Debtors. Pursuant to an engagement
letter, the CXO Professionals will:
(i) be engaged solely by the Debtors and will take direction
from the Debtors' board;
(ii) provide crisis and turnaround management services; and
(iii) assist in the direction and management of the Debtors'
restructuring efforts.
Before the bankruptcy filing, the Debtors advanced $200,000 to CXO
for fees and expenses and also paid the pro-rata share of
$200,000 per month for services rendered prepetition. The
Debtors propose to pay a $200,000 aggregate flat monthly fee to
CXO for services rendered during the first full month after the
Petition Date.
For the second and third months after the filing of bankruptcy,
the Monthly Fee will be reduced to $175,000 per month and
thereafter reduced further to $150,000 per month for any and all
subsequent months. The monthly fee is a standard fee for work of
this nature and is set at a level designed to fairly compensate
CXO for the restructuring advisory and consulting services that
they provide to the Debtors, Mr. Goodeve says.
Mr. Dube assures the Court that neither CXO nor any professional
employee or independent contractor of CXO has any connection with
or any interest adverse to the Debtors, their creditors, or any
other party-in-interest. Mr. Dube says the firm is a
"disinterested person," as that term is defined in Section
101(14) of the Bankruptcy Code.
The additional CXO Professionals are:
1. Robert Gary, Finance;
2. John Ofenloch, Finance and bankruptcy administration;
3. Michael Katzenstein, Strategic planning; and
4. Brian Kushner, Strategic planning.
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC --
http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-focused,
Fortune 500 U.S. corporations and delivers these services through
a global network of call centers in the U.S., Philippines, India,
and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of Access
Direct Telemarketing, Inc., each of which is a debtor and debtor-
in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring and
turnaround advisor. Additionally, Evercore Group LLC provides
investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31, 2007
showed total assets of $354,000,000 and total debts of
$261,000,000. (PRC LLC Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
PRC LLC: Wants Court Nod on Evercore Group as Investment Bankers
----------------------------------------------------------------
PRC LLC and its debtor-affiliates seek permission from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Evercore Group LLC as their investment bankers and financial
advisors.
H. Philip Goodeve, PRC LLC's Chief Financial Officer, says that
Evercore is familiar with the Debtors' businesses, financial
affairs, and capital structure. Since the firm's initial
retention in November 2007, Evercore has worked closely with the
Debtors' management, creditors, other professionals and advisors
in exploring various restructuring alternatives and otherwise
assisting in preparing for the bankruptcy filing.
The Debtors will look to Evercore to, among others:
-- review and analyze the Debtors' business, operations, and
financial projections;
-- evaluate the Debtors' potential debt capacity in light of
its projected cash flows;
-- assist in determining a capital structure for the Debtors,
and a range of values for the Debtors on a going concern
basis;
-- advise the Debtors on tactics and strategies for
negotiating with certain creditors;
-- render financial advice to the Debtors and participate in
meetings or negotiations with certain creditors or rating
agencies or other appropriate parties in connection with
any restructuring;
-- advise the Debtors on the timing, nature, and terms of new
securities, other consideration or other inducements to be
offered pursuant to a restructuring;
-- advise and assist the Debtors in evaluating potential
financing transactions; and
-- assist the Debtors in identifying and evaluating candidates
for a potential sale transaction, advise the Debtors in
connection with negotiations, and aid in the consummation
of a sale transaction.
The Debtors will pay Evercore a $125,000 monthly fee. Following
the sixth month of the engagement, the monthly fee will be
lowered to $100,000 for each successive month thereafter.
Evercore will also receive a consummation fee, payable upon the
consummation of any Restructuring -- but not both:
(a) $1,800,000 if the Restructuring is confirmed within six
months of the Debtors' filing for bankruptcy; or
(b) $1,300,000 if any other Restructuring is confirmed later.
The firm will be paid a Sale Transaction Fee if a Sale
Transaction is consummated. The fee is equal to a portion of the
Aggregate Consideration of a Sale Transaction:
Aggregate Consideration Percentage Fee
----------------------- --------------
Less than $100 million 0.75%
$100 to $140 million 1.00%
Greater than $140 million 1.25%
If the Aggregate Consideration is less than $100,000,000 then the
Sale Transaction Fee should equal $1,000,000. Any Sale
Transaction Fee paid will be credited against any Consummation
Fee payable. The credit will only apply to the extent that the
fees fees are approved in entirety by the Court.
The firm will get a Financing Fee, payable upon consummation of
any financing. The fee is equal to a portion of the total gross
proceeds of a financing:
Security Issued Percentage Fee
--------------- --------------
Senior Secured Debt 1.00%
Senior Debt 1.75%
Subordinated Debt 2.25%
Convertible Debt 2.50%
Preferred Stock
(convertible or otherwise) 3.75%
Common Stock 4.25%
Any Financing Fee paid will be credited against any Consummation
Fee payable. The credit will only apply to the extent that the
fees are approved in entirety by the Court.
Stephen Sieh, a Managing Director at Evercore, assures the Court
that neither Evercore nor any professional employee of Evercore
has any connection with or any interest adverse to the Debtors,
their creditors, or any other party-in-interest. Mr. Sieh says
the firm is a "disinterested person," as that term is defined in
Section 101(14) of the Bankruptcy Code.
About PRC LLC
Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC --
http://www.prcnet.com/-- is a leading provider of customer
management solutions. PRC markets its services to brand-focused,
Fortune 500 U.S. corporations and delivers these services through
a global network of call centers in the U.S., Philippines, India,
and the Dominican Republic.
PRC is the sole member of each of PRC B2B, LLC, and Precision
Response of Pennsylvania, LLC, and the sole shareholder of Access
Direct Telemarketing, Inc., each of which is a debtor and debtor-
in-possession in PRC's joint Chapter 11 cases.
Panther/DCP Intermediate Holdings, LLC, is the sole member of
PRC.
PRC, together with its operating subsidiaries PRC B2B, Access
Direct, and PRC PA, is a leading provider of complex,
consultative, outsourced services in the Customer Care and Sales
& Marketing segments of the business process outsourcing
industry. Since 1982, the company has acquired and grown
customer relationships for some of the world's largest and most
brand-focused corporations in the financial services, media,
telecommunications, transportation, and retail industries.
The company and four of its affiliates filed for Chapter 11
protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08-
10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP,
represents the Debtors in their restructuring efforts. The
Debtors chose Stephen Dube, at CXO LLC, as their restructuring and
turnaround advisor. Additionally, Evercore Group LLC provides
investment and financial counsel to the Debtors.
The Debtors' consolidated financial condition as of Dec. 31, 2007
showed total assets of $354,000,000 and total debts of
$261,000,000. (PRC LLC Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
PROPEX INC: Section 341(a) Creditors Meeting Scheduled for March 4
------------------------------------------------------------------
Richard F. Clippard, the United States Trustee for Region 8,
will convene a meeting of the creditors of Propex, Inc.,
and its debtor subsidiaries at 10:00 a.m., on March 4, 2008, at
Basement Room 18, U. S. Bankruptcy Court, at 31 East 11th Street,
in Chattanooga, Tennessee.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.
Attendance by the Debtors' creditors at the meeting is welcome,
but not required. The Sec. 341(a) meeting offers the creditors a
one-time opportunity to examine the Debtors' representative under
oath about the Debtors' financial affairs and operations that
would be of interest to the general body of creditors.
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It is produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249).
The debtors' has selected Edward L. Ripley, Esq., Henry J. Kaim,
Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston,
Texas, to represent them. As of Sept. 30, 2007, the debtors'
balance sheet showed total assets of $585,700,000 and total debts
of $527,400,000. (Propex Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
PROPEX INC: U.S. Trustee Appoints Five-Member Creditors' Committee
------------------------------------------------------------------
Richard F. Clippard, the United States Trustee for Region 8,
appoints five members to the Official Committee of Unsecured
Creditors of the Chapter 11 cases of Propex, Inc., and its
affiliates.
The Creditors Committee members are:
1. Wilmington Trust Company
Attn: James J. McGinley, Managing Director
520 Madison Avenue, 33rd floor
New York, N.Y. 10022
Tel No.: 212-415-0522
Fax No.: 212-415-0513
Cell No.: 917-446-0136
2. Pension Benefit Guaranty Corporation
Attn: Christopher Gran, Financial Analyst
1200 K Street, N.W., Suite 240
Washington, D. C 20005
Tel no.: 202-326-4070 ext. 3405
or 800-400-7242 ext. 3405
3. TOTAL PETROCHEMICALS USA, Inc.
Attn: Joel Anderson, Corporate Credit Manager
1201 Louisiana Street, Suite 1800
Houston, TX 77002
Tel No.: 713-483-5271
Fax No.: 713-483-5759
4. BP Corporation North America Inc.
Attn: Matt Linford
4101 Winfield Road
Warrenville, IL 60504
Tel No.: 630-821-3227
Fax No.: 630-821-3420
5. SMH Capital Advisors, Inc.
Attn: Stephen Cooke
4800 Overton Plaza, Suite 300
Fort Worth, TX 76109
Tel No.: 817-731-9559 ext. 248
Fax No.: 817-731-4641
The U.S. Trustee has scheduled an Organizational Meeting of the
Committee for Wednesday, January 30, 2008, at 1:30 p.m., at the
Miller & Martin Conference Room, 5th Floor, Volunteer Building,
at 832 Georgia Avenue, in Chattanooga, Tennessee.
Headquartered in Chattanooga, Tennessee, Propex Inc. --
http://www.propexinc.com/-- produces geosynthetic, concrete,
furnishing, and industrial fabrics and fiber. It is produces
primary and secondary carpet backing. Propex operates in North
America, Europe, and Brazil.
The company and its debtor-affiliates filed for Chapter 11
protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249).
The debtors' has selected Edward L. Ripley, Esq., Henry J. Kaim,
Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston,
Texas, to represent them. As of Sept. 30, 2007, the debtors'
balance sheet showed total assets of $585,700,000 and total debts
of $527,400,000. (Propex Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
RESIDENTIAL ASSET: S&P Cuts Ratings on Four Certificate Classes
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on four
classes of mortgage pass-through certificates from Residential
Asset Securitization Trust 2004-A6's series 2004-F. At the same
time, S&P removed the rating on one of the downgraded
classes from CreditWatch, where it was placed with negative
implications on Nov. 26, 2007. Furthermore, S&P affirmed its
ratings on the remaining four classes from this transaction.
The downgrades of classes B-1, B-2, B-3, and B-4 from series 2004-
F reflect a steady increase in the amount of loans in the severe
delinquency (90-plus days, foreclosures, and REOs) pipeline. Over
the past six remittance periods, the balance of loans that are
severely delinquent has risen by $2.665 million to $3.036 million,
an increase of approximately 718%. Based on the delinquency
pipeline, losses are projected to further reduce credit
enhancement levels.
The affirmations reflect current and projected credit support
percentages that are sufficient to support the certificates at the
current rating levels. Cumulative losses for series 2004-F were
0.003% of the original principal balance, total delinquencies were
3.95% of the current principal balance, and severe delinquencies
were 2.49% of the current principal balance as of the December
2007 remittance period.
Subordination is the primary source of credit support for this
transaction. The underlying collateral for this series consists
primarily of Alternative-A, fixed-rate, fully amortizing
conventional mortgage loans secured by first liens on one- to
four-family residential properties.
Ratings Lowered
Residential Asset Securitization Trust 2004-A6
Rating
------
Series Class To From
------ ----- -- ----
2004-F B-1 BBB AA
2004-F B-2 B+ A
2004-F B-3 B BBB
Rating Lowered and Removed From CreditWatch Negative
Residential Asset Securitization Trust 2004-A6
Rating
------
Series Class To From
------ ----- -- ----
2004-F B-4 B- BB/Watch Neg
Ratings Affirmed
Residential Asset Securitization Trust 2004-A6
Series Class Rating
------ ----- ------
2004-F A-1, PO, A-X AAA
2004-F B-5 CCC
RJO HOLDINGS: Moody's Withdraws Ratings Due to Business Reasons
---------------------------------------------------------------
Moody's Investors Service affirmed and withdrew its ratings and
outlook on RJO Holdings Corp. Prior to the ratings withdrawal,
the rating outlook was negative. Moody's has withdrawn the
ratings for business reasons.
The last rating action on RJO was on Dec. 11, 2007 when Moody's
downgraded the corporate family rating to B3 from B2 and changed
the outlook to negative from stable.
These ratings were withdrawn:
-- Corporate Family Rating: B3
-- $385 Million 7-Year First-Lien Term Loan: B3
-- $50 Million 6-Year First-Lien Revolving Credit Facility: B3
-- $150 Million 8-Year Second-Lien Term Loan: Caa1
RJO Holdings Corp. is a holding company whose principal
subsidiary, R.J. O'Brien & Associates, Inc., is among the largest
US independent futures brokerage firms and is a full clearing
member of all the major US futures exchanges. For the year ended
Dec. 31, 2006, the company reported revenues of $325 million and
over $2.1 billion in total segregated customer assets.
ROCK-TENN CO: Earns $17.5 Million in Quarter Ended December 31
--------------------------------------------------------------
Rock-Tenn Company reported net income of $17.5 million for the
quarter ended Dec. 31, 2007, compared to $15.1 million for the
prior year quarter.
Income for the first quarter of fiscal 2008 included pre-tax
restructuring and other costs of $3 million related to the
decision to close the Chicopee, Massachusetts folding carton
plant.
The closing of the Chicopee plant takes advantage of low cost
production capacity resulting from the company's acquisition
related capital investments in one of the plants it acquired from
Gulf States in 2005 and furthers the company's strategy of
concentrating production in facilities with cost positions. Rock-
Tenn's pre-tax restructuring and other costs were
$0.5 million for the first quarter of fiscal 2007.
"Strong sales growth in our consumer packaging, corrugated
packaging and merchandising display segments drove our 27.5%
increase in adjusted net income per share," James A. Rubright,
Rock-Tenn company's chairman and chief executive officer, stated.
"Operating efficiencies flowing from our commitment to performance
excellence in our consumer packaging segment enabled us to achieve
the return on sales target of 5% that we established when we
acquired the Gulf States assets in 2005."
Net cash provided by operating activities in the first quarter of
fiscal 2008 was $22.3 million compared to $32.3 million in the
prior year quarter. The decrease was due to the reduction of non-
debt current liabilities.
As Dec. 31, 2007, the company's balance sheet reflected total
assets of $1.8 billion, total liabilities of $1.2 billion and
total shareholders equity of $0.6 billion.
Dividend Payment
Rock-Tenn reported that its board of directors declared a dividend
of $0.10 per share on its Class A Common Stock to shareholders of
record at the close of business on Feb. 5, 2008. The dividend
will be paid on Feb. 18, 2008.
About Rock-Tenn Company
Headquartered in Norcross, Georgia, Rock-Tenn Company (NYSE:RKT) -
http://www.rocktenn.com/-- manufactures packaging products,
paperboard and merchandising displays. The company has annual net
sales of approximately $2.3 billion and operating locations in the
United States, Canada, Mexico, Chile and Argentina. The company
operates in four segments: packaging products, paperboard,
merchandising displays, and corrugated packaging.
* * *
As reported by the Troubled Company Reporter on Jan 15, 2008,
Standard & Poor's Ratings Services placed its 'BB+' corporate
credit rating on Norcross, Georgia-based Rock-Tenn Co. on
CreditWatch with negative implications. At the same time, S&P
placed the 'BB-' rating on Rock-Tenn's existing senior unsecured
notes on CreditWatch with developing implications.
ROCKFORD PRODUCTS: Section 341(a) Meeting Scheduled for March 13
----------------------------------------------------------------
The U.S. Truste for Region 11 will convene a meeting of creditors
of Rockford Products Corp. on March 13, 2008, at 9:30 a.m., at 308
West States Street, Room 40 in Rockford, Illinois.
This is the first meeting of the Debtors' creditors following a
conversion of their chapter 11 bankruptcy case to a chapter 7
liquidation proceeding, as granted by the Court on Dec. 21, 2007.
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.
About Rockford Products Corporation
Headquartered in Tempe, Arizona, Rockford Products Corporation
(NASDAQ:ROFO) -- http://www.rockfordproducts.com/and
http://www.rockfordinternational.com/-- originally formed in
1929, manufactures, sources and distributes high quality, cold
formed steel components, fasteners and other related products to
Tier 1 and 2 suppliers to automobile manufacturers, the automotive
aftermarket and non-automotive customers. Most of Rockford
Products' manufacturing and distribution operations are located in
Rockford, Illinois, where Rockford Products leases three
facilities with a combined area of 988,000 square feet. Rockford
Products currently has 516 employees. Annual revenues for
Rockford Products amounted to around $100 million in fiscal 2006.
The Debtor and its debtor-affiliate, Rockford Products Global
Services Inc., filed Chapter 11 bankruptcy protection on
July 25, 2007 (Bankr. N.D. Ill. Case No. 07-71768 and 07-71769).
Thomas J. Augspurger, Esq. at LeBoeuf, Lamb, Greene & MacRae LLP
represents the Debtors in their restructuring efforts. BMC Group
act as the Debtors' claims, noticing, and balloting agent.
Lawyers at Greenberg Traurig LLP serve as counsel to the Official
Committee of Unsecured Creditors. The Debtors schedules disclose
total assets of $49,002,753 and total liabilities of $40,438,278.
As reported in the Troubled Company Reporter on Dec. 21, 2007,
The U.S. Bankruptcy Court converted Rockford Products' Chapter 11
case into a Chapter 7 liquidation proceeding.
ROCKFORD PRODUCTS: Chapter 7 Trustee Taps McGreevy as Counsel
-------------------------------------------------------------
Daniel M. Donahue, the Chapter 7 Trustee for Rockford Products
Corp.'s case, asks the United States Bankruptcy Court for the
Northern District of Illionois for permission to employ McGreevy
Williams P.C. as his counsel.
McGreevy Williams will:
a) advise and consult with the Trustee concerning questions
arising in the conduct of the administration of the estate
and concerning applicant's rights and remedies with respect
to possibel preferences and other estate assets and claims
of the secured, preferred and unsecured creditors and other
parties of interest;
b) appear, defend and represent the Trustee's interest in suits
arising in or relating to this case; and
c) assist in the preration of pleadings, motions, notices and
orders required orderly administration of the estate.
The firm's professionals will bill between $150 and $250 per hour
for this engagement.
To the best of the Trustee's knowledge the firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.
About Rockford Products Corporation
Headquartered in Tempe, Arizona, Rockford Products Corporation
(NASDAQ:ROFO) -- http://www.rockfordproducts.com/and
http://www.rockfordinternational.com/-- originally formed in
1929, manufactures, sources and distributes high quality, cold
formed steel components, fasteners and other related products to
Tier 1 and 2 suppliers to automobile manufacturers, the automotive
aftermarket and non-automotive customers. Most of Rockford
Products' manufacturing and distribution operations are located in
Rockford, Illinois, where Rockford Products leases three
facilities with a combined area of 988,000 square feet. Rockford
Products currently has 516 employees. Annual revenues for
Rockford Products amounted to around $100 million in fiscal 2006.
The Debtor and its debtor-affiliate, Rockford Products Global
Services Inc., filed Chapter 11 bankruptcy protection on
July 25, 2007 (Bankr. N.D. Ill. Case No. 07-71768 and 07-71769).
Thomas J. Augspurger, Esq. at LeBoeuf, Lamb, Greene & MacRae LLP
represents the Debtors in their restructuring efforts. BMC Group
act as the Debtors' claims, noticing, and balloting agent.
Lawyers at Greenberg Traurig LLP serve as counsel to the Official
Committee of Unsecured Creditors. The Debtors schedules disclose
total assets of $49,002,753 and total liabilities of $40,438,278.
As reported in the Troubled Company Reporter on Dec. 21, 2007,
The U.S. Bankruptcy Court converted Rockford Products' Chapter 11
case into a Chapter 7 liquidation proceeding.
SALANDER-O'REILLY: CRO Wants RFR's Motion to Seize Mansion Denied
-----------------------------------------------------------------
Joseph Sarachek, chief restructuring officer of the Salander-
O'Reilly Galleries LLC, wants the U.S. Bankruptcy Court for the
Southern District of New York to deny RFR Realty LLC's request to
take the gallery's rented mansion, Philip Boroff writes for
Bloomberg News.
RFR Realty, run by art collector and developer Aby Rosen, asserts
that the gallery has failed to pay its rent on time that led to
the termination of a lease contract with the landlord, Bloomberg
says, citing court filings. RFR demands that the Debtors pay
$795,698 for rent accrued since November 2007, Bloomberg relates.
Sometime in October 2007, prior to the Debtors' bankruptcy filing,
the Hon. Arlene Bluth of the Court of New York ordered the Debtors
to pay RFR Realty $749,211 in back rent and allowed RFR Realty to
take possession of the townhouse, Bloomberg notes.
The Hon. Cecelia Morris will convene a hearing on Jan. 31, 2008,
for considering approval of the sale of the Debtors' current
residence, the townhouse. The Salander couple are expected to
relocate to another house they own in Millbrook, New York,
Bloomberg reveals.
As reported in the Troubled Company Reporter on Jan. 23, 2008,
Lawrence Salander has agreed to transfer 231 art works from his
residences to gallery or at a warehouse. The gallery's chief
restructuring officer has picked out the art works from Mr.
Salander's Manhattan and country residences he believes is owned
by the gallery.
However, the agreement between the owner and CRO doesn't determine
who owns the art works. The Bankruptcy Court has been tasked to
reconcile who owns what.
About Salander-O'Reilly
Established in 1976, New York-based Salander-O'Reilly Galleries
LLC -- http://www.salander.com/-- exhibits and manages fine art
from renaissance to contemporary. On Nov. 1, 2007, three
creditors filed an involuntary chapter 7 petition against the
gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners,
Carol F. Cohen of Two Swans Farm, Cavallon Family LP, and Richard
Ellenberg, disclosed total claims of more than $5 million. Amos
Alter, Esq., at Troutman Sanders LLP and John Koegel, Esq., at The
Koegel Group LLP represent the petitioners.
On Nov. 9, 2007, the Debtor's case was converted to a chapter 11
proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Alan D. Halperin,
Esq., at Halperin Battaglia Raicht, LLP, represents the gallery.
Salander-O'Reilly Galleries is owned by Lawrence B. Salander and
his wife, Julie D. Salander, of Millbrook, New York. The couple
also has membership interests in galleries including non-debtor
entities, Renaissance Art Investors and Salander Decorative Arts
LLC. The couple filed for chapter 11 protection on Nov. 2, 2007
(Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq.
and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P.
Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors
in their restructuring efforts. When they filed for bankruptcy,
Mr. and Mrs. Salander listed assets and debts between $50 million
and $100 million.
Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly
Galleries' manager and turned over the control to Triax Capital
Advisors LLC, an independent turnaround firm.
SCOTTS MIRACLE: Posts $56.8MM Net Loss in Qtr. Ended December 29
----------------------------------------------------------------
The Scotts Miracle-Gro Company reported a seasonal net loss of
$56.8 million for three months ended Dec. 29, 2007, compared with
a loss of $59.4 million for the same period a year ago.
During the second quarter of 2007, the company recapitalized,
increasing its long-term borrowings by more than $750 million to
fund a share repurchase and special one-time dividend.
On a pro forma basis -- which assumes the recapitalization had
occurred at the beginning of fiscal 2007 -- the company's loss in
the first quarter of fiscal 2007 would have been
$68.6 million.
"We had a strong start to the year with good sales growth
throughout the business and control over expenses," said Jim
Hagedorn, chairman and chief executive officer. "We are well
positioned as we prepare for the beginning of the lawn and garden
season. We continue to see strong support from our retail
partners, and we remain confident that consumers will
remain committed to the category and to our brands."
"Consumer purchases of lawn fertilizer improved 7% in the
quarter, which reinforces our confidence that consumers remain
engaged in the category in spite of the economic concerns,"
Mr. Hagedorn said. "We also saw a nearly 60 percent year-over-
year improvement in grass seed purchases and a 10 percent
improvement in growing media."
"With the launch of new products this year, and a larger
investment in both marketing and sales support, we remain
confident that sales this year can grow 6% to 8% and that
operating profits will improve by as much as 6%," Dave Evans,
chief financial officer, said.
"Due to the incremental interest expense impact of our
recapitalization in mid-2007 and our decision to make investments
in several long-term projects this year we remain committed to our
guidance that adjusted net income for fiscal 2008 will be flat to
slightly down from 2007 levels," added
Mr. Evans.
Entering fiscal 2008, the company changed its reporting segments
to Global Consumer, Global Professional, Scotts LawnService well
as Corporate and Other. Historical financial results for these
segments are included in the financial tables that accompany this
release.
At Dec. 29, 2007, the company's balance sheet showed total assets
of $2.41 billion, total liabilities of $1.99 billion and total
shareholders' equity of $0.42 billion.
About Scotts Miracle-Gro
Headquartered in Marysville, Ohio, The Scotts Miracle-Gro Company
(NYSE: SMG) -- http://www.scotts.com/-- through its wholly-owned
subsidiary, The Scotts Company LLC, is a marketer of branded
consumer products for lawn and garden care, with products for
professional horticulture as well. The company has more than
6,000 associates.
The company's brands are Scotts(R), Miracle-Gro(R) and Ortho(R)
brands are market-leading in their categories, as is the consumer
Roundup(R) brand, which is marketed in North America and most of
Europe exclusively by Scotts and owned by Monsanto. The company
also owns Smith & Hawken, a brand of garden-inspired products that
includes pottery, watering equipment, gardening tools, outdoor
furniture and live goods, and Morning Song, a brand in the wild
bird food market. In Europe, the company's brands include
Weedol(R), Pathclear(R), Evergreen(R), Levington(R), Miracle-
Gro(R), KB(R), Fertiligene(R) and Substral(R).
* * *
As reported in the Troubled Company Reporter on Jan. 19, 2007,
Standard & Poor's Ratings Services affirmed its ratings, including
the 'BB' corporate credit rating, on lawn and garden care products
supplier The Scotts Miracle-Gro Co. The outlook is negative.
SEARS HOLDINGS: Names W. Bruce Johnson as Interim CEO
-----------------------------------------------------
Sears Holdings Corporation's board of directors appointed W. Bruce
Johnson, executive vice president, supply chain and operations, to
the additional role of interim chief executive officer and
president. Mr. Johnson will replace Aylwin B. Lewis, currently
president and chief executive officer, who will leave the company
as of Feb. 2, 2008, at the end of the company's fiscal year. Mr.
Lewis will also step down from the Sears Holdings board of
directors at that time. Sears will immediately commence a formal
search to identify a permanent chief executive officer.
"We've accomplished a great deal under Aylwin's leadership and we
are very grateful for his commitment to Sears during a critical
time in the company's history," Edward S. Lampert, chairman of
Sears Holdings said. "Aylwin played a key role in the integration
of Kmart and Sears and in implementing important initiatives to
enhance the profitability of the combined business. His hard
work, dedication and enthusiasm have been a great example for our
associates and we wish him great success in the future."
"Thanks to the many talented associates who serve our millions of
Sears Holdings customers, we have made great progress since the
Sears-Kmart merger was completed and I am proud of our
accomplishments so far," Mr. Lewis said. "There are many steps
yet to take, and I'm confident that with the strong leadership and
culture of learning the company will be successful."
"We are entering a new phase in Sears' evolution as a multi-
channel retailer, as reflected by the new operational structure we
recently announced, and the board has determined that now is the
right time to put in place new leadership to take the company
forward," Mr. Lampert continued. "As we realign Sears into five
different types of focused business units, we will be redefining
how our leaders operate by giving them greater autonomy and
accountability for their businesses. We intend to put in place an
operating model that allows managers to act with the flexibility
and speed required in today's dynamic and highly competitive
marketplace.
"We are fortunate that we have such a strong interim CEO in Bruce
Johnson. Bruce is an experienced retail executive, who among
other accomplishments has effectively integrated and improved our
supply chain and increased our direct sourcing of product. In his
new role, Bruce will oversee the separate business units and will
work to move our company forward quickly in achieving the benefits
of this more efficient organizational structure."
Mr. Lampert will lead the board's search for a permanent chief
executive officer and will continue to focus on identifying and
attracting talented executives to the company. Following the
appointment of Mr. Johnson, Mr. Lampert will no longer have any
direct reports. Mr. Johnson will continue to be a member of the
Office of the Chairman.
Mr. Johnson joined Kmart in 2003 as senior vice president --
supply chain and operations and at the time of the merger was
appointed executive vice president -- supply chain and operations
for the combined company. He was named to the Office of the
Chairman in 2005 and took on store operations in 2006.
"I am excited to be taking on this role and I am focused on
continuing to transform Sears into a stronger, more efficient
company. While Sears and our industry are facing many challenges,
I believe that we are taking all the right steps to build a great
retailer. We remain focused on ensuring that our expense base is
appropriate for the size of our business and we continue to test
new ideas, learn from the results, and aggressively roll out new
initiatives that we believe will succeed and make a difference,"
said Mr. Johnson.
Mr. Johnson joined Kmart from Carrefour SA, where he was director,
organization and systems and a member of the management board. In
this role, he had global responsibilities for supply chain,
information technology, store organization and internet based
business-to-business activities. Prior to this, Mr. Johnson spent
16 years at Colgate-Palmolive Company in various roles and worked
as a management consultant at Booz Allen & Hamilton and Arthur
Andersen & Company. Mr. Johnson received his BA, MBA and JD from
Duke University.
About Sears Holdings
Based in Hoffman Estates, Illinois, Sears Holdings Corporation
(NASDAQ: SHLD) - http://www.searsholdings.com/-- parent of Kmart
and Sears, Roebuck and Co., is a broadline retailer with
approximately 3,800 full-line and specialty retail stores in the
United States and Canada.
* * *
As reported in the Troubled Company Reporter on Jan. 28, 2008,
Fitch Ratings has affirmed its ratings of Sears Holdings
Corporation, including its Long-term IDR 'BB'; Senior notes 'BB';
and Secured bank facility 'BBB-'. The Rating Outlook is revised
to Negative from Stable.
SEARS HOLDINGS: CEO's Planned Departure Won't Affect S&P's Ratings
------------------------------------------------------------------
Sears Holdings Corp.'s (BB/Stable/--) announcement that Aylwin
Lewis (currently CEO and president) will leave the company has no
immediate impact on Sears' credit rating or outlook. W. Bruce
Johnson (currently executive vice president, supply chain and
operations) has been appointed interim CEO and president. Led by
Edward Lampert, chairman of Sears and CEO of ESL Investments Inc.,
which owns approximately 42% of Sears' common stock (as of Feb. 3,
2007), a search has begun for a permanent CEO.
Since its formation in 2005, Hoffman Estates, Illinois-based Sears
Holdings, which is the combination of Sears, Roebuck and Co. and
Kmart, has made progress in cutting costs, but has not been able
to show improvement in sales. Recently, the company said that it
would reorganize into five business units. S&P continues to
believe that top-line growth will be very challenging, despite the
reorganization and change in management.
SMURFIT-STONE: Incurs $103 Million Net Loss in Year Ended Dec. 31
-----------------------------------------------------------------
Smurfit-Stone Container Corporation reported fourth quarter 2007
net income of $44 million, as compared with fourth quarter 2007
net income of $25 million. Net sales for the fourth quarter 2007
were $1.84 billion, as compared with net sale for the fourth
quarter of 2006 of $1.82 billion.
For the year ended Dec. 31, 2007, the company had a net loss of
$103 million on net sales of $7.42 billion, as compared with a net
loss of $59 million on net sales of $7.16 billion for the year
ended Dec. 31, 2006.
Sales were $1.84 billion for the fourth quarter 2007 compared to
$1.82 billion in the prior year quarter. Full year 2007 sales
were $7.42 billion representing a 3.7% increase over 2006 sales of
$7.16 billion.
The company's balance sheet showed $7.38 billion in total assets,
$5.53 billion in total liabilities, and $1.85 billion in total
stockholders' equity as of Dec. 31, 2007.
As of Dec. 31, 2007, the company had $1.00 billion total current
assets and $989 million total current liabilities.
Solid Operating Performance
Some of the operational highlights for the period include:
-- Exceeded 2007 cumulative strategic initiatives benefit
target of $420 million;
-- Average prices improved sequentially 5.7% and 2.4%
respectively, for domestic linerboard and boxes;
-- Record low year-end containerboard inventory levels;
-- Capital investments of $116 million in fourth quarter
2007 and $384 million in 2007;
-- 2 box plant closures in fourth quarter 2007, 12 in 2007,
and 28 since 2005; and
-- Headcount reductions were 200 in the fourth quarter 2007,
1,750 in 2007, and 5,350 since 2005.
Improved Financial Flexibility
Financial highlights for the period include:
-- Reduced debt $47 million in fourth quarter 2007 and
$275 million in 2007;
-- $344 million revolving credit availability at year end
2007;
-- Reduced interest expense and extended bond maturities in
2007; and
-- Credit rating upgraded by S&P in fourth quarter 2007.
A full-text copy of the company's fourth quarter and full year
2007 results is available for free at:
http://ResearchArchives.com/t/s?2778
Transformation Strategy
Commenting on the company's results, Patrick J. Moore, chairman
and CEO, said, "I am pleased to report Smurfit-Stone's year-over-
year adjusted earnings improved both in the fourth quarter and
full year 2007. The successful implementation of our recent price
increases, improving business mix, and savings from operational
improvements drove higher profits, despite continued inflationary
cost pressures. We reduced debt significantly during the year,
strengthening our balance sheet and enhancing our financial
flexibility. At the same time, we invested capital to establish
one of the most modern converting operations in North America. As
we continue to execute our strategy, I am confident our efforts
will drive improved financial performance in the future."
Other Management Comment
Commenting on operations, Steven J. Klinger, president and COO,
said, "We executed well throughout 2007 and achieved $438 million
in cumulative savings from our strategic initiatives program. Our
recent $40 per ton containerboard and box price initiatives were
successfully completed by January 1. Fourth quarter per-day box
shipments were up sequentially as expected but were down 8 percent
from the prior year, 6 percent due to box plant closures and
continued efforts to improve margins by exiting unprofitable
accounts. At the same time, strong containerboard export demand
contributed to lower containerboard inventories. Inventory levels
were down both sequentially and year-over-year, ending 2007 at
record low levels. Mill production was down sequentially in the
fourth quarter due to higher scheduled maintenance downtime.
Operating profits declined compared to the third quarter due to
lower mill production, seasonally higher energy usage, and higher
fiber cost. As we transform our operations for long-term success,
we invested to modernize our operations and have closed higher
cost facilities. Despite transition costs during this period of
change, we are improving productivity and our competitive position
in the marketplace."
Commenting on the company's financial position, Charles A.
Hinrichs, senior vice president and CFO, said, "We significantly
improved Smurfit-Stone's financial flexibility in 2007. We
divested non-core operations and applied those proceeds to debt
reduction. Liquidity remains excellent. During the year, we
refinanced our highest coupon bond, which reduced interest expense
and extended bond maturities. As a result, we have no significant
bond maturities until 2012. Recognizing the progress we have
made, S&P upgraded Smurfit-Stone's corporate credit rating in the
fourth quarter 2007."
Outlook
Higher average prices and incremental benefits from the company's
strategic initiatives program should drive higher year-over-year
adjusted net income in the first quarter and full year 2008,
despite a slowing US economy. Seasonal factors will drive
sequentially lower first quarter profits due to higher energy
usage and timing issues contributing to additional employee
benefit costs.
Commenting on the company's long-term outlook, Mr. Moore said,
"Smurfit-Stone is a different company since the inception of our
transformation program. Our operations are more cost effective,
our mills are more productive, and we are building one of the most
modern converting operations in North America. These efforts are
establishing a platform for long-term profitability and increased
shareholder value in the future."
About Smurfit-Stone Container
Headquartered in Chicago, Illinois, Smurfit-Stone Container
Corporation (Nasdaq: SSCC) -- http://www.smurfit-stone.com/-- is
a publicly traded holding company that operates through a wholly
owned subsidiary company, Smurfit-Stone Container Enterprises Inc.
The company is an integrated producer of containerboard and
corrugated containers (paper-based industrial packaging) and is a
large collector, marketer, and exporter of recycled fiber.
Smurfit-Stone operates approximately 170 facilities and employs
approximately 22,000 people.
* * *
As reported in the Troubled Company Reporter on Nov. 2, 2007,
Standard & Poor's Ratings Services raised its corporate credit
rating on Smurfit-Stone Container Corp. and its subsidiaries to
'B+' from 'B'. The outlook is stable. At the same time, S&P
raised the senior secured ratings of the company's subsidiaries to
'BB' from 'BB-' and senior unsecured debt ratings to 'B-' from
'CCC+'.
SOFA EXPRESS: Gets Final OK to Access Wells Fargo's DIP Financing
-----------------------------------------------------------------
The United States Bankruptcy Court for the Middle District of
Tennessee approved, on an final basis, the request of Sofa
Express Inc. to obtain DIP financing of up to $2 million from
Wells Fargo Retail Finance LLC, as Agent, for itself and the other
Lenders.
As reported in the Troubled Company Reporter on Dec. 18, 2007,
prior to Dec. 6, 2007, the Debtor secured Revolving Credit Loans
and Letter of Credit facilities from the Pre-Petition Lenders.
As of Dec. 6, 2007, the Debtor was indebted to the Pre-Petition
Lenders in the amount of $10,347,713 in Revolving Credit Loans and
$710,000 in Letters of Credit, plus interest accrued and accruing,
costs, fees, and professional fees and expenses, and other pre-
petition obligations.
The Pre-Petition obligations are secured by substantially all of
the Debtor's real and personal property including accounts,
inventory, equipment, goods, motor vehicles, fixtures, and other
pre-petition collateral. In addition, the Pre-Petition Lenders
hold a lien on all amounts on deposit in the Debtor's banking,
checking, and other deposit accounts which constitute the Lenders'
cash collateral within the meaning of Section 363 of the
Bankruptcy Code.
As security for the DIP Credit Facility, the DIP Lenders are
granted valid, binding, enforceable and perfected liens in all
of the Debtor's real and personal property, all proceeds from the
sale, disposition, or assignment of any leasehold interest, and
all other collateral in which the Debtor has any interest both
prior to or subsequent to bankruptcy filing, and the products and
proceeds thereof.
At such time as the conditions precedent to the DIP Credit
Facility have been satisfied:
i) the Debtor shall utilize the proceeds of the first
borrowings under the DIP Credit Facility to repay in full
the Pre-Petition Obligations; and
ii) all outstanding letter of credit issued.
The Creditors Committee or any party in interest shall have 120
calendar days from Dec. 13, 2007, to file an objection or commence
an adversary proceeding with respect to the Pre-Petition Agent's
or Pre-petition Lenders' claims or security interest, payments
made to the Pre-Petition Agent or Pre-Petition Lenders, or any
other claims or causes or actions.
The liens to be created and granted to the post-petition lenders
in the collateral shall be senior and superior to any liens of the
Klaussner Secured Parties existing as of bankruptcy filing.
As adequate protection for the diminution arising out of the
Debtor's use, sale or disposition of the Pre-Petition collateral
including Cash Collateral, the DIP Lenders are granted a
replacement lien in substantially all of the Debtor's collateral.
The DIP Lenders are also granted superpriority claim over any and
all administrative expenses, as provided in Section 364(c)(1) of
the Bankruptcy Code.
Headquartered in Groveport, Ohio, Sofa Express Inc. is a furniture
retailer. The company filed for Chapter 11 protection on Dec. 6,
2007 (Bankr. M.D. Tenn. Case No. 07-09024). Dennis J. Connolly,
Esq. and Jason W. Watson,Esq. at Alston & Bird LLP represents the
Debtor as lead counsel. The Debtor selected BMC Group Inc. as
noticing and claims agent. The U.S. Trustee for Region 8
appointed seven creditors to serve on an Official Committee of
Unsecured Creditors in this case. Platzer Swergold Karlin Levine
Goldberg & Jaslow LLP represents the Committee in this case. When
the Debtor filed for bankruptcy, it listed estimated assets of
between $10 million to $50 million, and estimated debts of between
$50 million and $100 million.
SOFA EXPRESS: Wants Court to Set March 31 as Claims Bar Date
------------------------------------------------------------
SOFA Express Inc. asks the United States Bankruptcy Court for the
Middle District of Tennessee to establish March 31, 2008, as
deadline for creditors to file proofs of claim.
The Debtor also asks the Court to set June 3, 2008, as deadline
for all governmental unit.
The Debtor tells the Court that it needs more time to complete and
correct information regarding the nature, amount and status of all
asserted claims againts the Debtor to accurately liquidate its
assets and make payments to creditors.
All proofs of claim must be filed at:
SOFA Express Inc.
c/o BMC Group Inc.
P.O. Box 1042
El Segundo, CA 90245-1042
Objections to approval must be filed before Feb. 5, 2008.
Headquartered in Groveport, Ohio, Sofa Express Inc. is a furniture
retailer. The company filed for Chapter 11 protection on Dec. 6,
2007 (Bankr. M.D. Tenn. Case No. 07-09024). Dennis J. Connolly,
Esq. and Jason W. Watson,Esq. at Alston & Bird LLP represents the
Debtor as lead counsel. The Debtor selected BMC Group Inc. as
noticing and claims agent. The U.S. Trustee for Region 8
appointed seven creditors to serve on an Official Committee of
Unsecured Creditors in this case. Platzer Swergold Karlin Levine
Goldberg & Jaslow LLP represents the Committee in this case. When
the Debtor filed for bankruptcy, it listed estimated assets of
between $10 million to $50 million, and estimated debts of between
$50 million and $100 million.
SOUTHAVEN POWER: Court Okays Bidding Procedure for Sale of Assets
-----------------------------------------------------------------
The United States Bankruptcy Court for the Western District of
North Carolina approved Southaven Power LLC's proposed bidding
procedure for the sale of its assets, subject to better and higher
offer.
The Court approved Kelson Energy III LLC as the "stalking horse"
biddder in accordance with its offer to purchase the assets under
the asset purchase agreement dated Jan. 11, 2008; however, Kelson
Engery will not be entitled to any break up.
Under the agreement, Kelson Energy will provide to the Debtor a
good-faith deposit of $30 million to secure its obligations and
that deposit will be held in an interest-bearing escrow account.
The Debtor agreed to pay Tennessee Valley Authority a break-up
fee of $2.5 million. As reported in the Troubled Company Reporter
on Dec. 12, 2007, the Debtor and Tennessee Valley entered into an
asset purchase agreement dated Nov. 30, 2007, for the sale of the
Debtor's assets for a base purchase price of $260 million.
Sales Protocol
Interested party must be deliver a good faith deposit in an amount
equal to 10% of the bidder's gross purchase price no later than
11:00 a.m., on March 19, 2008.
The Debtor will conduct an auction on March 31, 2008, at 9:00
a.m., at the Offices of Latham & Watkins LLP at 885 Third Avenue
in New York.
If there is an auction in accordance with the bidding procedure,
the Court will set a sale hearing on April 2, 2008, 9:30 a.m., to
consider approval of the Debtor's asset. If no auction, the
hearing will be set on March 26, 2008 at 9:30 a.m.
Objections to approve the sale must be served no later than 4:00
p.m., on March 19, 2008.
About Southaven Power LLC
Headquartered in Charlotte, North Carolina, Southaven Power LLC
operates an 810-megawatt, natural gas-fired electric power plant
located in Southaven, Mississippi. The company filed for chapter
11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141).
Mark A. Broude, Esq., at Latham & Watkins LLP represents the
Debtor in its restructuring efforts, and Hillary B. Crabtree,
Esq., at Moore & Van Allen, PLLC, represents the Debtor in
litigation against PG&E Energy Trading-Power L.P, now known as
NEGT Energy Trading - Power L.P. No official committee of
unsecured creditors has been appointed in the Debtor's case. When
the Debtor filed for protection from its creditors, it estimated
assets and debts of more than $100 million.
SOUTHAVEN POWER: Exclusive Plan Filing Period Extended to April 14
------------------------------------------------------------------
The Hon. George R. Hodges of the United States Bankruptcy Court
for the Western District of North Carolina Southaven Powers LLC
further extended Southaven Power LLC's exclusive periods to:
a) file a Chapter 11 plan until April 14, 2008; and
b) solicit acceptances of that plan until June 16, 2008.
The Debtor's exclusive period, as reported in the Troubled Company
Reporter on Dec. 28, 2007, to file a plan expired on Jan. 15,
2007,
As previously reported, the Debtor is waiting for the Court to
approve the sale of certain of its assets to Tennessee Valley
Authority for $260 million. A sale hearing has been set for March
26, 2008.
Other Assets
The Debtor said that it holds a claim against PG&E Energy Trading-
Power L.P. and it parent company, PG&E National Energy Group Inc.
The Debtor further says that the claim has been liquidated on a
final basis by the Court for $395,513,731 against PG&E Energy and
$176,209,004 against PG&E National.
On Nov. 20, 2007, the Court issued an order allowing a $91,727,510
PG&E Energy claim against the Debtor.
According to the Debtor, it received interim distribution in the
aggregate amount of $87,625,058 to date and has not received any
further distribution from PG&E Energy.
About Southaven Power LLC
Headquartered in Charlotte, North Carolina, Southaven Power LLC
operates an 810-megawatt, natural gas-fired electric power plant
located in Southaven, Mississippi. The company filed for chapter
11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141).
Mark A. Broude, Esq., at Latham & Watkins LLP represents the
Debtor in its restructuring efforts, and Hillary B. Crabtree,
Esq., at Moore & Van Allen, PLLC, represents the Debtor in
litigation against PG&E Energy Trading-Power L.P, now known as
NEGT Energy Trading - Power L.P. No official committee of
unsecured creditors has been appointed in the Debtor's case. When
the Debtor filed for protection from its creditors, it estimated
assets and debts of more than $100 million.
SPORTSTUFF INC: Section 341(a) Creditors' Meeting Set for Feb. 1
----------------------------------------------------------------
The United States Trustee for Region 13 will convene a meeting of
SportsStuff Inc.'s creditors at 10:00 a.m., on Feb. 1, 2008, at
the U.S. Trustee Meeting Room, Roman L. Hruska Courthouse, 111
South 18th Plaza, in Omaha, Nebraska.
This is the first meeting of creditors required under Section
341(a) of the Bankruptcy Code in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Omaha, Nebraska, SportsStuff Inc. --
http://www.sportsstuff.com/-- offers sports accessories. The
company filed for Chapter 11 protection on Dec. 31, 2007 (Bank. D.
Neb. Case No. 07-82643). Robert V. Ginn, Esq., at Blackwell
Sanders Peper Martin LLP, represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed assets and debts between $1 million and
$100 million.
ST PAUL HOUSING: S&P Alters Outlook to Positive; Holds BB+ Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its rating outlook on
St. Paul Housing and Redevelopment Authority, Minnessota and
Washington County Housing and Redevelopment Authority,
Minnessota's various bonds, issued for HealthEast Care System,
Minnessota, to positive from stable, reflecting HealthEast's
ability to continue to outperform its budgets on a yearly basis
while investing in its facilities. At the same time, Standard &
Poor's affirmed its 'BB+' long-term rating on St. Paul Port
Authority's debt and its 'BB' rating on HealthEast's series 2005-
3A lease bonds.
"The positive outlook on HealthEast's debt reflects our
expectation that as management continues to invest in its campuses
and other quality initiatives, it will not allow the system to
veer from the 2008 budget," said Standard & Poor's credit analyst
Brian Williamson. "While we expect cash to dip with capital
expenditures, there will be concern for the rating if the dip is
any greater than anticipated or if HealthEast decides to issue any
new debt."
More specifically, factors supporting the rating include
HealthEast's fiscal 2007 operating margin of 1.09%, which was 68%
stronger than budget; stable liquidity of 69 days for fiscal 2007
while still investing in its facilities and other quality
initiatives; solid business position, with a leading 39.6% market
share in the competitive St. Paul/Minneapolis, Minnessota
marketplace; and management team that continues to take the
appropriate measures to improve the system's financial profile and
presence in the market.
Credit concerns for HealthEast consist of a balance sheet that is
challenged by high leverage, a low cash-to-debt ratio, and the
need to continue to spend capital on projects.
The revised rating outlook affects about $302.5 million in rated
debt.
STACEY HENRIKSON: Case Summary & 30 Largest Unsecured Creditors
---------------------------------------------------------------
Debtors: Stacey Marie Henrikson
fka Stacey Marie Firth
James T. Henrikson
3000 North SR 903
Cle Elum, WA 98922
Bankruptcy Case No.: 08-00280
Chapter 11 Petition Date: January 28, 2008
Court: Eastern District of Washington (Spokane/Yakima)
Judge: Frank L. Kurtz
Debtors' Counsel: Nancy L. Isserlis, Esq.
Winston and Cashatt PS
601 West Riverside Avenue
Suite 1900
Spokane, WA 99201
Tel: (509) 838-6131
Fax: (509) 838-1416
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtors' list of their 30 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Internal Revenue Service $1,098,585
Central Insolvency Operations
P.O. Box 21126
Philadelphia, PA 19114-0326
State of Oregon CSED $24,035
550 Justice Building
1162 Court Street Northeast
Salem, OR 97310-4095
Ford Motor Credit Corp $17,338
12610 East Maribeau Parkway Secured Value: $21,225
Spokane Valley, WA 99216-1450
Capital One Auto Finance $11,592
Secured Value: $39,450
AllianceOne Inc $10,752
Credit Bureau of Union Wallowa $5,205
Les Schwab $5,156
Columbia Credits Inc. $4,266
Cascade Credit Consulting Inc $2,352
Stuart Allan & Associates $2,309
Merchants Credit & Collections $1,921
Credit Associates LLC $1,492
Evergreen Financial $1,189
Professional Credit Services Inc $830
Amerishield Corp $654
Asset Acceptance LLC $533
DSHS/DCS Seattle $478
West Asset Management $442
Renton Collections $392
Accounts Receivable $255
CA EM Phys St. Elizabeth Comm $224
Washington Collectors $123
Valley Empire Collections $189
Armada Corp $140
Pacific Coast Credit $126
Quick Collect Inc. $104
Check Assist $96
NCIAMG Inc $78
Commercial Collections $28
Capital One Bank $12
STRUCTURED FINANCE: Moody's Cuts Rating on $15 Million Notes
------------------------------------------------------------
Moody's Investors Service placed these notes issued by Structured
Finance Advisors ABS CDO III, Ltd. on review for possible
downgrade:
Class Description: $50,000,000 Class B Second Priority Senior
Secured Floating Rate Notes due 2037
-- Prior Rating: Aa3
-- Current Rating: Aa3, on review for possible downgrade
In addition, Moody's also downgraded and left on review for
possible downgrade these notes:
Class Description: $15,000,000 Class C Mezzanine Secured Floating
Rate Notes due 2037
-- Prior Rating: Baa3
-- Current Rating: B2, on review for possible downgrade
Moody's also downgraded these notes:
Class Description: $12,500,000 Preference Shares ($12,500,000
aggregate liquidation preference)
-- Prior Rating: B3
-- Current Rating: Ca
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's
underlying collateral pool, which consists primarily of structured
finance securities. The transaction's overcollateralization
ratios are also below the covenant levels.
TEKNI-PLEX INC: Moody's Junks Ratings on $150 Mil. Senior Notes
---------------------------------------------------------------
Moody's Investors Service downgraded certain debt ratings of
Tekni-Plex, Inc. and revised its Probability of Default Rating to
Caa3/LD, which reflects the default of the company's 12-3/4% sr.
subordinated notes due 2010. The outlook is stable. The ratings
are detailed below.
Moody's had previously lowered Tekni-Plex's ratings on Dec. 21,
2007. This rating changes are in response to the company's
default (post the 30-day grace period) and reflect Moody's
estimates of the probability of default for its other debt as well
as these instruments' ultimate recovery.
Moody's took these rating actions:
-- $150 million 10.87% sr. secured notes due 2012, to Caa1
(LGD2, 16%) from B3
-- $275 million 12-3/4% sr. subordinated notes due 2010, to C
(LGD5, 85%) from Ca
-- $40 million 12-3/4% sr. subordinated notes due 2010, to C
(LGD5, 85%) from Ca
-- Affirmed $275 million 8.75% sr. secured second lien notes due
2013, Caa3 (LGD3, 46%)
-- Affirmed Caa3 Corporate Family Rating
-- Probability of Default Rating to Caa3/LD from Caa3 (to
reflect the actual defaulted status of the 12-3/4% sr.
subordinated notes due 2010 following the expiration of the
30-day grace period for the missed interest payment)
On Dec. 17, 2007, the company announced that it had failed to make
the $20.5 million interest payment due on its 12-3/4% senior
subordinated notes due 2010. As the company did not make the
interest payment by the end of the 30-day grace period on Jan. 17,
2008, Tekni-Plex is in default according to the terms of the
subordinated notes indenture. The company has entered into a
forbearance agreement with a majority of the noteholders of its
12-3/4% senior subordinated notes due 2010; the forbearance
agreement runs through Feb. 14, 2008. The company had previously
obtained a waiver from lenders for its $75 million asset based
revolving credit facility (not rated by Moody's) which provides
full access to the facility through Feb. 14, 2008. In addition,
the company has announced the appointment of a restructuring
officer to help implement a series of initiatives aimed at
maintaining near-term liquidity and improving financial
performance. Previously, on Nov. 14, 2007, the company announced
that it had engaged Rothschild Inc. as a financial advisor to
consider various strategic alternatives including divestitures,
debt refinancings, and restructurings.
The company's continued negative operating performance, primarily
driven by poor results in the tubing segment, has further strained
already weak credit metrics. For the twelve months ended
Sept. 30, 2007, including Moody's standard analytical adjustments,
total adjusted debt to EBITDA has risen to over 11.0 times, EBIT
to gross interest has declined to well below 1.0 time and free
cash flow to debt has declined to the negative low single-digit
range.
Tekni-Plex is a global manufacturer of packaging, packaging
products and materials as well as tubing products. Operating in
two main segments, packaging and tubing products, the company
primarily serves the food, healthcare, and consumer goods markets.
The packaging segment produces egg cartons, foam food trays,
blister films, closure liners, aerosol packaging, and foam plates.
The tubing segment produces garden & irrigation hoses, pool &
vacuum hoses, and medical tubing. Products that do not fall
within these two categories are classified as other, including
recycled polyethylene terephthalate, medical grade PVC, and other
specialty resins. For the twelve months ended Sept. 30, 2007 the
company reported revenues of approximately $773 million.
TLC VISION: Moody's Revises Outlook from Stable to Negative
-----------------------------------------------------------
Moody's Investors Service lowered TLC Vision Corporation's
Speculative Grade Liquidity rating to SGL-4 from SGL-2 reflecting
Moody's expectation of weaker than expected financial performance
and the resulting pressure on financial covenant compliance.
Concurrently, the company's ratings outlook was changed to
negative from stable. TLC Vision's other ratings were affirmed.
The downgrade of TLC Vision's speculative grade liquidity rating
to SGL-4 from SGL-2 reflects a weak liquidity profile comprised of
Moody's expectation that the company may have an issue with its
financial covenant compliance for the next twelve months ending
Dec. 31, 2008 which could result in no effective availability
under the $25 million revolver and stable cash flow generation.
Sidney Matti, Analyst, stated that, "We will monitor the liquidity
position of the company over the near term in light of Moody's
expectation for possible non-compliance with the financial
covenants as well as the slowdown of consumer spending."
The revision of the company's rating outlook to negative from
stable reflects the company's negative variance under original
expectations for operating performance which were set when the
ratings were first assigned in June 2007. The weakening of
financial metrics heightens Moody's concern regarding TLC Vision's
revenue growth due to a slowdown in consumer spending. Through
the twelve months ended Sept. 30, 2007, margins remain pressured
as ongoing realignment efforts gain traction. Financial leverage
approaching 6 times and EBITA coverage of interest expense less
than one are at the maximum tolerance point for the B1 corporate
family rating. However given the company's adequate expected cash
flow generation, there is some tolerance to absorb the liquidity
squeeze. Absent very near term improvement in liquidity, the long
term ratings could be downgraded. Additionally, any further
tightening of credit metrics or prolonged capture of cost savings
could result in downgrades.
These ratings were downgraded:
-- Speculative Grade Liquidity rating to SGL-4 from SGL-2; and
-- Ratings outlook revised to negative from stable.
Ratings unaffected by this actions are:
-- B1 Corporate Family Rating;
-- B2 Probability of Default Rating;
-- B1 (LGD3/31%) rating on the $25 million Senior Secured
Revolver; and
-- B1 (LGD3/31%) rating on the $85 million Senior Secured Term
Loan.
Headquartered in Mississauga, Ontario, Canada, TLC Vision
Corporation is a diversified eye care services company with a
majority of the company's revenues generated from laser refractive
surgery, which involves an excimer laser to treat common
refractive vision disorders such as myopia (nearsightedness),
hyperopia (farsightedness) and astigmatism. For the twelve months
ended Sept. 30, 2007, the company generated approximately
$299 million in revenues.
TOUSA INC: Inks Deal with Senior Noteholders, Files for Chapter 11
------------------------------------------------------------------
TOUSA, Inc. yesterday said that it has received support from
holders of more than 50% of its Senior Noteholders on a proposed
term sheet for restructuring its equity and all of its unsecured
debt.
To implement the proposed restructuring TOUSA, Inc. and certain
subsidiaries filed voluntary petitions for relief under Chapter 11
of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the
Southern District of Florida.
The filing includes TOUSA Homes, Inc., Newmark Homes LP and
entities that represent all of their brands -- Engle Homes,
Newmark Homes, Fedrick, Harris Estate Homes, and Trophy Homes.
The agreement with the senior noteholders is subject to conditions
and is also subject to a "fiduciary out" clause that can be
exercised by both the Company and the noteholders under certain
circumstances.
Universal Land Title, Inc., Preferred Home Mortgage Company and
Alliance Insurance and Information Services are not included in
the filing and will not be impacted. These financial affiliates
will continue to offer and fund loans, provide title insurance and
offer homeowners the financial and insurance services needed to
close escrow on home purchases. Customers will see no
interruption in the services provided by TOUSA's financial
affiliates.
The company's proposed restructuring is the result of the dramatic
downturn in the U.S. housing market, which accelerated over the
last several months due to a number of factors, including severe
liquidity challenges in the credit and mortgage markets,
diminished consumer confidence, increased home inventories and
foreclosures, and downward pressure on home prices. All of these
factors have contributed to lower gross sales and higher
cancellation rates.
"This action is necessary to reflect the realities of today's
homebuilding market. Our core operations are solid, and our
market position suggests a strong future for our Company," said
Antonio B. Mon, TOUSA's President and Chief Executive Officer.
"We are focused on restructuring our balance sheet and we expect
business to continue as usual. Most importantly, there should not
be any interruption in the construction of homes and our customers
should not be affected."
Citigroup Global Markets Inc. has agreed to provide the company
with up to $150 million in debtor-in-possession financing. If
approved by the Court, the Company will have access to the funds
to implement its restructuring plan and pay normal operating
expenses, including employee wages, construction costs, and
payments to suppliers. The financing will be senior to existing
debt and requires Bankruptcy Court approval.
The proposed restructuring agreement with the Senior Noteholders
contemplates, among other things, that the Senior Noteholders will
receive substantially all of the common stock of the reorganized
Company, as well as an interest in, and entitlement to proceeds
received by, a litigation trust that will be established pursuant
to the Company's plan of reorganization. Holders of general
unsecured claims will also receive their pro rata share of the
common stock of the reorganized Company and an interest in the
litigation trust. Subject to further negotiation, holders of the
Company's subordinated notes may receive a proportionate share of
proceeds generated by the litigation trust and may receive
warrants to acquire a specific percentage of common stock in the
reorganized Company.
At the date of filing, TOUSA had approximately 2,500 homes in
backlog. TOUSA anticipates delivering all of its homes in backlog
and will continue to actively take new orders, construct new
homes, and provide financial services to its customers. The
company will seek the Court's immediate approval to continue
paying employee wages, benefits and commissions.
The company is seeking court authorization to establish procedures
to pay valid lien claims in the ordinary course of business and to
sell homes free and clear of all liens, with such liens to attach
to the proceeds of the sales.
"We are committed to maintaining our operations uninterrupted,
including all construction and sales activities while continuing
to provide our customers with the high levels of service and
quality that have come to be associated with our brands," Mr. Mon
said.
To that end, the company is seeking Court authority to continue
all of its customer service programs. The company has contracted
with the Administrator of its current HomeBuilder's Limited
Warranty program to provide at no cost to the customer a ten year
transferable supplementary warranty to those TOUSA homebuyers with
contracts of sale currently in force as well as those customers
who sign a contract of sale between now and April 30, 2008.
The new program is insured by one of the member companies of
Zurich North America, one of the largest insurance organizations
in the United States and rated "A/positive" (Excellent) by A.M.
Best and company, the leading independent insurance Company rating
service. In the event that TOUSA fails to fulfill its obligations
to "eligible" homebuyers under its existing program, the insurer
will perform according to the terms and conditions contained
within the supplemental document.
"We decided to take decisive action to ensure TOUSA is around for
the long-run," Mr. Mon said. "While making this decision was not
an easy one, Chapter 11 is a tool that enables us to restructure
our balance sheet, reduce our debt and position us so that we can
continue to build and deliver the highest-quality homes through
our Engle Homes, Newmark Homes, Fedrick, Harris Estate Homes, and
Trophy Homes brands."
TOUSA, Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- is a
leading homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title, Inc.
TOUSA INC: Case Summary & 49 Largest Unsecured Creditors
--------------------------------------------------------
Lead Debtor: TOUSA, Inc.
fka Technical Olympic U.S.A., Inc.
dba Technical U.S.A., Inc.
dba Engle Homes
dba Newmark Homes, L.P.
dba TOUSA Homes, Inc
dba Newmark Homes Corp.
4000 Hollywood, Boulevard 500N
Hollywood, FL 33021
Bankruptcy Case No.: 08-10928
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
TOUSA Homes Florida, L.P. 08-10929
TOUSA Homes, Inc. 08-10930
Newmark Homes, L.L.C. 08-10931
L.B./T.E. #1, L.L.C. 08-10932
Lorton South Condominium, L.L.C. 08-10933
Engle Homes Commercial Construction, LLC 08-10934
McKay Landing, L.L.C. 08-10935
TOUSA, L.L.C. 08-10936
TOUSA Homes Investment #2, L.L.C. 08-10937
Newmark Homes Purchasing, L.P. 08-10938
TOUSA Mid-Atlantic Investment, L.L.C. 08-10939
Engle/Gilligan, L.L.C. 08-10940
Preferred Builders Realty, Inc. 08-10941
Newmark Homes, L.P. 08-10942
TOUSA Investment #2, Inc. 08-10943
Reflection Key, L.L.C. 08-10944
TOUSA Homes, L.P. 08-10945
TOUSA Realty, Inc. 08-10946
Engle/James, L.L.C. 08-10947
TOUSA/West Holdings, Inc. 08-10948
TOUSA Homes Mid-Atlantic Holding, L.L.C. 08-10949
Silverlake Interests, L.L.C. 08-10950
TOUSA Homes Investment #2, Inc. 08-10951
TOUSA Funding, L.L.C. 08-10952
TOI, L.L.C. 08-10953
TOUSA Homes Nevada, L.L.C. 08-10954
TOUSA Homes Investment #1, Inc. 08-10955
TOUSA Homes Arizona, L.L.C. 08-10956
TOUSA Delaware, Inc. 08-10957
TOUSA Homes Colorado, L.L.C. 08-10958
TOUSA Associates Services Co. 08-10959
Engle Homes Residential Construction, LLC 08-10960
Engle Homes Delaware, Inc. 08-10961
Engle Sierra Verde P4, L.L.C. 08-10962
TOUSA Homes Mid-Atlantic, L.L.C. 08-10963
Engle Sierra Verde P5, L.L.C. 08-10964
Newmark Homes Business Trust 08-10965
Type of Business: Formerly Technical Olympic U.S.A., Inc., the
Debtor designs, builds and markets detached
single-family residences, town homes and
condominiums. It conducts homebuilding
operations through its consolidated subsidiaries
and unconsolidated joint ventures in various
metropolitan markets in 10 states, located in
four geographic regions, which are also its
segments: Florida, the Mid-Atlantic, Texas and
the West. It markets its homes to a diverse
group of homebuyers, including first-time
homebuyers, move-up homebuyers, homebuyers who
are relocating to a new city or state, buyers of
second or vacation homes, active-adult
homebuyers and homebuyers with grown children
who want a smaller home (empty-nesters). It
markets its homes under various brand names,
including Engle Homes, Newmark Homes and Trophy
Homes. The Transeastern Joint Venture markets
homes under the Transeastern Homes brand. See
http://www.tousa.com/
Chapter 11 Petition Date: January 29, 2008
Court: Southern District of Florida (Fort Lauderdale)
Judge: John K. Olson
Debtors' Counsel: M. Natasha Labovitz, Esq.
Brian S. Lennon, Esq.
Richard M. Cieri, Esq.
Paul M. Basta, Esq.
Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, NY 10022-4611
Tel: (212) 446-4800
Fax: (212) 446-4900
-- and --
Paul Steven Singerman, Esq.
Berger Singerman
200 South Biscayne Boulevard, Suite 1000
Miami, FL 33131
Tel: (305) 755-9500
Fax: (305) 714-4340
Debtors' Investment Banker and Financial Advisor:
Lazard Freres & Co. LLC
Debtors' Independent Auditor and Tax Services Provider:
Ernst & Young LLP
Debtors: Notice, Claims & Balloting Agent:
Kurtzman Carson Consultants, LLC
TOUSA, Inc.'s Financial Condition as of September 30, 2007:
Total Assets: $2,276,567,000
Total Debts: $1,767,589,000
Debtors' Consolidated List of 49 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Wilmington Trust Co. Wilmington Trust Co., $300,000,000
Attention: Suzanne MacDonald, Indenture Trustee for
Corporate Trust Administrator the 9% Senior Notes
Rodney Square North due 2010
1100 North Market Street
Wilmington, DE 19890-0001
Tel: (302) 636-6530
Fax: (302) 636-6414
Wilmington Trust Co., $200,000,000
Indenture Trustee for
the 8 1/4% Senior
Notes due 2011
H.S.B.C. Bank, U.S.A., Trustee for the $200,000,000
National Association 7 1/2% Senior
Corporate Trust and Loan Subordinated Notes
Agency due 2015
Attention: Robert Conrad
10 East 40th Street,
14th Floor
New York, NY 10016
Tel: (212) 525-1314
Fax: (212) 525-1366
Trustee for the $185,000,000
7 1/2% Senior
Subordinated Notes
due 2011
Trustee for the $125,000,000
10 3/8% Senior
Subordinated Notes
due 2012
Trustee for the $20,000,000
13 1/4% Senior
Subordinated P.I.K.
Notes due 2015
Wespac Construction, Inc. A/P vendor $4,598,840
9440 North 26th Street,
Suite 100
Phoenix, AZ 85028
Earth & Sun Adobe, Inc. A/P vendor $2,576,297
1518 E Indigo St
Mesa, AZ 85203
Tel: (602) 329-9994
M.R. Tanner Development & A/P vendor $1,170,511
Construction, Inc.
1327 West San Pedro
Gilbert, AZ 85233
B.B.P. Construction Co. A/P vendor $968,059
7777 North 70th Avenue
Glendale, AZ 85303
Aspen Block, L.L.C. A/P vendor $765,732
6115 South Kyrene Road,
Suite 101
Tempe, AZ 85283
Tel: (480) 894-1381
Fax: (480) 894-1340
Arrow Masonry Co., Inc. A/P vendor $734,470
435 South Hamilton Court
Gilbert, AZ 85233
Tel: (480) 895-6168
Fax: (480) 895-5058
Construction 70, Inc. A/P vendor $722,397
P.O. Box 62345
Phoenix, AZ 85082
Robert Kieffer, Litigant $632,599
Attention: David W. Black,
Esq.
Frank, Weinberg & Black,
P.L.C.
7805 Southwest Sixth Court
Plantation, FL 33324
Tel: (954) 474-8000
Fax: (954) 474-9850
Desert Systems Landscape A/P vendor $622,594
4240 East Elwood Street
Phoenix, AZ 85040
Tel: (602) 412-5900
Fax: (602) 412-5950
S.C. Design, Inc. A/P vendor $465,421
707 Broadway, Suite 1100
San Diego, CA 92101
Tel: (619) 232-2500
Michael J. Valente Contracting A/P vendor $431,009
3635 South 43rd Avenue
Phoenix, AZ 85009
Tel: (602) 278-3696
Fax: (602) 278-3718
Province Community A/P vendor $224,300
Association, Inc.
7740 North 16th Street,
Suite 300
Phoenix, AZ 85020
Knochel Bros, Inc. A/P vendor $172,302
1441 East Alameda Road
Phoenix, AZ 85024
Kelco Contracting, L.L.C. A/P vendor $166,928
936 East Javelina Street,
Suite 1
Mesa, AZ 85204
Tel: (602) 926-6000
Arizona Public Service Co. A/P vendor $142,000
P.O. Box 2907
Phoenix, AZ 85062
SelectBuild Arizona, A/P vendor $138,020
L.L.C.-Frame
7777 North 70th Avenue
Glendale, AZ 85303
Tel: (623) 487-4886
Fax: (623) 487-4887
Cissell Electric, Inc. A/P vendor $122,316
1260 North Arizona Avenue,
Suite C
Chandler, AZ 85225
Tel: (480) 917-3600
Fax: (480) 917-3629
Riggs Plumbing, L.L.C. A/P vendor $121,651
4863 East Ingram
Mesa, AZ 85205
Tel: (480) 827-4799
The Landscape Broker, Inc. A/P vendor $97,163
3632 North Bishop Lane
Scottsdale, AZ 85251
Harvard Water Co., L.L.C. A/P vendor $90,756
17700 North Pacesetter Way
Scottsdale, AZ 85255
Tel: (480) 348-1118
S.C.P. Construction, L.L.C. A/P vendor $85,439
5340 West Luke
Glendale, AZ 85301
Tel: (623) 931-9131
Fax: (623) 435-1413
S.B.S. Construction Holdings, A/P vendor $84,170
L.L.C.
1444 North 26th Ave
Phoenix, AZ 85009
Tel: (602) 352-2965
Markham Contracting Co. A/P vendor $78,466
22820 North 19th Avenue
Phoenix, AZ 85027
Marley Park Phase I, L.L.C. A/P vendor $76,051
7600 East Doubletree Ranch,
Suite 300
Scottsdale, AZ 85258
Pipeline Dynamics, Inc. A/P vendor $75,744
9034 North 23rd Avenue,
Suite #10
Phoenix, AZ 85021
Torrent Resources, Inc. A/P vendor $69,840
1509 East Elwood Street
Phoenix, AZ 85040
Tel: (602) 268-0785
Fax: (602) 268-0820
Sharp Drywall, Inc. A/P vendor $66,233
445 North Austin Drive
Chandler, AZ 85226
Tel: (480) 940-1770
Fax: (480) 705-9146
Paddock Pools Construction Co. A/P vendor $65,811
Attention:: Accounting
P.O. Box 8849
Scottsdale, AZ 85252
Tel: (480) 947-7261
Fax: (480) 970-7482
Maricopa County Planning & A/P vendor $65,275
Development Department
411 North Central Avenue,
3rd Floor
Phoenix, AZ 85004
Chas. Roberts Air A/P vendor $65,217
9828 North 19th Avenue
Phoenix, AZ 85021
Tel: (602) 943-7291
Fax: (602) 997-0068
Design Drywall West, Inc. A/P vendor $59,902
405 South Clark Drive
Tempe, AZ 85201
Tel: (480) 951-3486
Tyers Contracting A/P vendor $58,506
24215 North 14th Street
Phoenix, AZ 85024
Del Martenson Development A/P vendor $57,302
Corp.
8628 North Dysart Road,
Suite 100
El Mirage, AZ 85335
Tel: (623) 487-1629
Fax: (623) 487-7347
American Woodmark Corp. A/P vendor $55,213
3312 East Broadway Road
Phoenix, AZ 85040
Tel: (602) 437-5380
Fax: (602) 438-1767
Imperial Tile Imports A/P vendor $54,595
1846 East Mcdowell Road
Phoenix, AZ 85006
Tel: (602) 254- 8406
Fax: (602) 252-5406
Desert Vista, Inc. A/P vendor $52,164
23021 North 15th Avenue,
Suite 106
Phoenix, AZ 85027
Tel: (623) 582-1176
Fax: (623) 582-1348
Rummel Construction, Inc. A/P vendor $50,581
7520 East Adobe Drive
Scottsdale, AZ 85255
Tel: (480) 222-9922
Fax: (480) 222-9923
Wright Engineers of Arizona, A/P vendor $50,297
Inc.
4545 West Wendler Drive,
Suite 121
Tempe, AZ 85282
Tel: (480) 483-6111
Fax: (480) 483-6112
Arapahoe County Treasure A/P vendor $50,150
P.O. Box 5715334,
South Prince Street
Littleton, CO 80166
Tel: (303) 795-4550
Mesa Fully Formed, Inc. A/P vendor $49,960
1111 South Sirrine Street
Mesa, AZ 85210
Tel: (480) 844-1801
SelectBuild Arizona, L.L.C.- A/P vendor $49,013
Window
7777 North 70th Avenue
Glendale, AZ 85303
Tel: (623) 487-47886
Fax: (623) 487-4887
Geotek, Inc. A/P vendor $48,361
16445 North 91st Street,
Suite 101
Scottsdale, AZ 85260
Adair Plumbing, L.L.C. A/P vendor $44,782
2340 West Main Street
Mesa, AZ 85201
Tel: (480) 827-1162
Fax: (480) 890-2951
Mitchell Electric Co., Inc. A/P vendor $41,620
7138 North 110th Avenue
Glendale, AZ 85307
Tel: (602) 997-7511
Fax: (623) 877-7530
Artistic Stairs, Ltd. A/P vendor $40,931
4116 East Superior,
Suite 7
Phoenix, AZ 85040
Tel: (602) 437-8343
L.&M. Laminates & Marble, Inc. A/P vendor $39,708
813 East University Drive
Phoenix, AZ 85034
Tel: (602) 254-5629
Fax: (602) 252-0531
Reston Town Center Property A/P vendor $39,083
P.O. Box 24124
Newark, NJ 07101
TOUSA INC: Bankruptcy Filing Prompts Fitch's 'D' Rating
-------------------------------------------------------
Fitch Ratings has downgraded TOUSA, Inc.'s Issuer Default Rating
to 'D' from 'C' following yesterday's announcement that the
company filed for Chapter 11 bankruptcy protection.
These ratings have been affirmed:
-- Secured revolving credit facility at 'CCC/RR3';
-- First lien secured term loan at 'CCC/RR3';
-- Second lien secured term loan at 'C/RR6';
-- Senior unsecured notes at 'C/RR6';
-- Senior subordinated notes at 'C/RR6';
-- Preferred stock at 'C/RR6'.
Fitch's Recovery Rating of '3' on TOUSA's secured revolving credit
facility ($150 million outstanding and $213.9 million of letters
of credit outstanding as of Sept. 30, 2007) and $200 million
secured first lien term loan indicate good (50%-70%) recovery
prospects for holders of this debt issue. TOUSA's exposure to
performance/surety bonds and the possibility that part of these
contingent liabilities would have a claim against the company's
assets were considered in determining the recovery for the first
lien debt holders. The 'RR6' on TOUSA's second lien term loan,
senior unsecured notes, senior subordinated notes and preferred
stock issuance indicates poor (0%-10%) recovery prospects. Fitch
applied a liquidation value analysis for these recovery ratings.
TOUSA, Inc. today filed for Chapter 11 bankruptcy protection.
Citigroup will provide TOUSA with $150 million in debtor-in-
possession financing during the bankruptcy reorganization. TOUSA
will have access to the funds to implement its restructuring plan
and pay normal operating expenses, including employee wages,
construction costs, and payments to suppliers . The financing will
be senior to existing debt and requires Bankruptcy court approval.
At the date of filing, TOUSA had approximately 2,500 homes in
backlog.
TOUSA INC: Bankruptcy Filing Spurs Moody's Default Rating
---------------------------------------------------------
Moody's Investors Service lowered the probability of default
rating of Tousa, Inc. to D from C following its filing for
protection under Chapter 11 of the US Bankruptcy Code. Subsequent
to this rating action, Moody's will withdraw all of Tousa's
ratings.
These specific ratings were taken:
-- Corporate family rating of Ca left unchanged
-- Probability of default rating lowered to D from C
-- Rating on the $200 million first lien senior secured term
loan left unchanged at Caa1 (LGD2, 19%)
-- Rating on the $300 million second lien senior secured term
loan left unchanged at Ca (LGD4, 52%)
-- Rating on the $550 million of senior unsecured notes left
unchanged at C (LGD5, 72%)
-- Rating on the $515 million of senior subordinated notes
left unchanged at C (LGD6, 91%)
Moody's intends to withdraw all of these ratings shortly.
Headquartered in Hollywood, Florida, Technical Olympic USA, Inc.
builds and sells single family homes largely for the move-up
homebuyer. It also operates captive mortgage origination and
title insurance service companies. It is 67%-owned by Technical
Olympic S.A. Homebuilding revenues and EBITDA for the nine-month
period ended Sept. 30, 2007 were approximately $1.6 billion and
$144 million, respectively.
TOUSA INC: Wilmington Says It Has No Credit Exposure
----------------------------------------------------
News reports that list Wilmington Trust Corporation among the
largest unsecured creditors of TOUSA, Inc. are incorrect. Neither
Wilmington Trust Corporation nor its principal banking subsidiary,
Wilmington Trust Company, have any credit exposure whatsoever to
TOUSA, which filed for bankruptcy protection yesterday in the U.S.
Bankruptcy Court for the Southern District of Florida.
TOUSA's bankruptcy filing clearly lists Wilmington Trust as
indenture trustee. In that capacity, Wilmington Trust provides
trust and administrative services for some of TOUSA's creditors.
These services, which are specified in documents that govern the
trust, do not include lending.
"TOUSA's bankruptcy filing does not affect our balance sheet or
bottom line, and it poses absolutely no credit risk to us," said
Ted T. Cecala, Wilmington Trust's chairman and chief executive
officer.
About Wilmington Trust
Wilmington Trust Corporation (NYSE:WL) is a financial services
holding company that provides Regional Banking services throughout
the mid-Atlantic region, Wealth Advisory Services for high-net-
worth clients in 36 countries, and Corporate Client Services for
institutional clients in 86 countries. Its wholly owned bank
subsidiary, Wilmington Trust Company, which was founded in 1903,
is one of the largest personal trust providers in the United
States and the leading retail and commercial bank in Delaware.
Wilmington Trust Corporation and its affiliates have offices in
California, Connecticut, Delaware, Florida, Georgia, Maryland,
Massachusetts, Minnesota, Nevada, New Jersey, New York,
Pennsylvania, South Carolina, Vermont, the Cayman Islands, the
Channel Islands, London, Dublin, Frankfurt, and Luxembourg.
About TOUSA Inc.
TOUSA, Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- is a
leading homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title, Inc.
TYSON FOODS: Earns $34 Million in Quarter Ended December 29
-----------------------------------------------------------
Tyson Foods, Inc. reported net income of $34.0 million on
$6.7 billion in sales for the first fiscal quarter ended Dec. 29,
2007, compared to net income of $57.0 million on $6.5 billion in
sales in the same quarter last year. In the first quarter of
fiscal 2008, the company recorded an $18 million non-operating
gain on the sale of an investment. Additionally, Tyson recorded
$6 million of severance charges related to the FAST initiative.
"Given all we've faced, we delivered a solid first quarter," said
Richard L. Bond, Tyson Foods president and chief executive
officer. "Sales were up $200 million. Our Pork segment delivered
one of its best quarters ever with strong volume and operating
income nearly double compared to the first quarter of fiscal 2007.
We also achieved normalized earnings of nearly 5% in the Prepared
Foods segment. The Chicken segment struggled with more than $100
million in additional grain costs. The Beef segment continues to
face a very difficult operating environment, which caused us to
make the hard decision to cease slaughter operations at our beef
plant in Emporia, Kansas. There continues to be far more beef
slaughter capacity than available cattle, and this is especially
true for Emporia, as cattle production has moved from eastern to
western Kansas.
"In November, we projected an additional $300 million in grain
costs for fiscal 2008," Mr. Bond said. "We now think this year-
over-year increase will exceed half a billion dollars. Because of
these unanticipated and extraordinarily high corn and soybean meal
costs, we have no choice but to raise prices substantially.
"The continued escalation of grain prices, driven largely by
government mandates for corn-based ethanol, has caused a domino
effect for other inputs. Cooking oil, flour and other feed
ingredients are all on the rise. For the foreseeable future,
consumers will pay more and more for food, especially protein,
because grain represents a proportionally higher percentage of
input costs compared to other foods.
"The commodity markets affecting our business are extremely
volatile and fluctuating tremendously on a daily basis. For this
reason, we have decided to temporarily withdraw our previously
issued earnings guidance. In this erratic and unpredictable
operating environment, it is virtually impossible to make
meaningful earnings forecast assumptions.
"We are facing unparalleled market dynamics that make our work
very challenging," Bond said. "We continue to believe our
strategies are sound, and we'd like to acknowledge Tyson team
members for their efforts in executing our business plans."
Balance Sheet
As of Dec. 29, 2007, the company's balance sheet showed total
assets of $10.2 billion and total liabilities of $5.4 billion,
resulting in a $4.7 billion stockholders' equity. Equity at Sept.
29, 2007, was $4.7 billion.
About Tyson Foods
Based in Springdale, Arkansas, Tyson Foods, Inc. (NYSE:TSN) --
http://www.tysonfoods.com/-- is a processor and marketer of
chicken, beef, and pork.
Tyson's U.S. beef plants are located in Amarillo, Texas; Dakota
City, Nebraska; Denison, Iowa; Finney County, Kansas; Joslin,
Illinois, Lexington, Nebraska and Pasco, Washington. The company
also has a beef complex in Canada, and is involved in a vertically
integrated beef operation in Argentina.
* * *
Tyson Foods Inc. continues to carry Moody's Ba1 corporate family
rating and Ba2 probability of default rating. The outlook is
negative.
VICTOR PLASTICS: Wants to Hire Ravich Meyer as Bankruptcy Counsel
-----------------------------------------------------------------
Victor Plastics, Inc. seeks authority from the U.S. Bankruptcy
Court for the District of Minnesota to employ Ravich Meyer Kirkman
McGrath & Nauman P.A., as its general bankruptcy counsel.
Documents submitted to the Court did not disclose the firm's
specific services to be rendered to the Debtor.
Michael L. Meyer, Esq., a shareholder at Ravich Meyer, tells the
Court that the firm's professionals bill:
Designation Hourly Rate
----------- -----------
Michael L. Meyer, Esq. $375
Michael F. McGrath, Esq. $320
Will Tansey, Esq. $225
Barbara A. Waggie $120
Mr. Meyer assures the Court that the firm is disinterested as that
term is defined in Section 101(14) of the U.S. Bankruptcy Code.
Mr. Meyer can be contacted at:
Michael L. Meyer, Esq.
Ravich Meyer Kirkman McGrath & Nauman P.A.
4545 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Tel: (612) 332-8511
Fax: (612) 332-8302
http://www.ravichmeyer.com/
Based in North Liberty, Iowa, Victor Plastics, Inc. --
http://www.victorplastics.com/-- is a custom molder of
thermoplastics and engineering resins. The Debtor filed for
Chapter 11 protection on Jan. 15, 2008 (Bankr. D. Minn. Case No.
08-40171). Michael L. Meyer, Esq., at Ravich Meyer Kirkman
McGrath & Nauman P.A., represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed total assets of $44,658,000, and total liabilities of
$41,366,000.
VICTOR PLASTICS: Taps Morris-Anderson as Consultants
----------------------------------------------------
Victor Plastics Inc. seeks permission from the U.S. Bankruptcy
Court for the District of Minnesota to employ Morris-Anderson &
Associates, Ltd., as its consultant.
Morris-Anderson will:
a) review and analyze the Debtors' business operations and
financial projections;
b) operate, sell or liquidate the Debtors' assets as
appropriate; and
c) any other duties that are appropriate for the case including
claims management services.
Timothy P. Czmiel, a consulting manager at Morris-Anderson, tells
the Court that the firm's professionals bill $250 to $400 per
hour. The Debtor also paid the firm a retainer of $125,000.
Mr. Czmiel assures the Court that the firm is disinterested as
that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.
Based in North Liberty, Iowa, Victor Plastics, Inc. --
http://www.victorplastics.com/-- is a custom molder of
thermoplastics and engineering resins. The Debtor filed for
Chapter 11 protection on Jan. 15, 2008 (Bankr. D. Minn. Case No.
08-40171). Michael L. Meyer, Esq., at Ravich Meyer Kirkman
McGrath & Nauman P.A., represents the Debtor in its restructuring
efforts. When the Debtor filed for protection from its creditors,
it listed total assets of $44,658,000, and total liabilities of
$41,366,000.
WELLCARE HEALTH: Moody's Cuts Senior Debt Rating to Ba2
-------------------------------------------------------
Moody's Investors Service has downgraded the senior debt rating of
WellCare Health Plans, Inc. to Ba2 from Ba1 following the
announcement that WellCare's board of directors has accepted the
resignations of the company's top three executives. The ratings
remain on review for possible further downgrade.
Moody's had placed the ratings on review for possible downgrade on
Oct. 26, 2007 as a result of an investigation by federal and State
of Florida agencies, which led to the issuance of a search warrant
at the company's Tampa headquarters. At that time, the rating
agency said that although details of the investigation had not
been disclosed, it was concerned with the potential financial and
operational impact to the company should there be a prolonged
investigation or findings of wrongdoing by the company or its
management team.
Despite the appointment of two experienced health care executives
to run WellCare, Moody's said that the resignations of Todd Farha,
Chairman and Chief Executive; Paul Behrens, Chief Financial
Officer; and Thaddeus Bereday, General Counsel; are a significant
loss of senior executives closely associated with the firm's
successful track record, and raises uncertainty with respect to
the strategic direction of the company. The rating agency added
that no further details regarding the nature of the investigation
have been disclosed and the resignations do not appear to have
brought resolution to the situation.
Moody's stated that its ongoing review will focus on the potential
impact of the investigation to WellCare's operations including the
financial impact from possible fines and litigation, the
disruption incurred in responding to the investigation, the impact
to the company's Medicaid and Medicare contracts and membership,
and the transition to the new management team.
WellCare offers both Medicaid and Medicare plans under contracts
with individual states and the Center for Medicaid & Medicare
Services. The company currently has Medicaid managed care
operations in Florida, New York, Ohio, Missouri, Georgia and
Illinois. These products account for 88% of WellCare's membership
and approximately 50% of its premium revenue with the Florida and
Georgia contracts being the largest. Its Medicare products are
offered in all 50 states. The loss of any one of these contracts
could have a considerable impact on the revenues and earnings of
WellCare. However, Moody's stated that despite the ongoing
investigation, WellCare has received renewal of its federal
Medicare Advantage contracts in six states and permission to
expand into new counties. Additionally, the ratings agency noted
that the most current CMS data indicates that WellCare Medicare
Advantage and Part D enrollment has increased during the open
enrolment period which began shortly after the raid of the
company's headquarters.
These ratings were downgraded and remain on review for possible
downgrade:
-- WellCare Health Plans, Inc.: senior secured debt rating to
Ba2 from Ba1;
-- WellCare of Florida, Inc.: insurance financial strength
rating to Baa3 from Baa2.
WellCare Health Plans, Inc. is headquartered in Tampa, Florida.
For the first nine months of 2007, the company reported
approximately $4.0 billion in total revenue. As of Sept. 30, 2007
shareholder's equity was $771 million and total medical membership
was approximately 1.4 million members.
Moody's insurance financial strength ratings are opinions of the
ability of insurance companies to repay punctually senior
policyholder claims and obligations.
WHOLE FOODS: Moody's Withdraws Low-B Ratings For Business Reasons
-----------------------------------------------------------------
Moody's Investors Service withdrawn the ratings of Whole Foods
Market, Inc. for business reasons. Moody's added that the ratings
were withdrawn because this issuer has no rated debt outstanding.
These ratings of Whole Foods Market, Inc. have been withdrawn:
-- Corporate Family Rating of Ba1
-- Probability of Default Rating of Ba1
-- Issuer Rating of Ba2
Whole Foods Market, Inc. is the largest retailer of natural and
organic foods and products in the US.
WILLIAMS PARTNERS: Moody's Lifts Senior Unsecured Rating to Ba2
---------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Williams
Partners L.P. and its affiliate, Williams Partners Finance
Corporation. Moody's upgraded WPZ's Corporate Family Rating and
its senior unsecured rating to Ba2 from Ba3. This action
concludes the rating review begun on Nov. 2, 2007 following WPZ's
announcement that it intended to acquire the Wamsutter natural gas
gathering and processing assets from The Williams Companies, Inc.
(Williams, Baa3 senior unsecured). The outlook is stable.
The ratings upgrade reflects WPZ's greater scale and increased
geographic diversification following the Wamsutter acquisition,
declining leverage from the recent equity offering, and
improvements in Williams' credit profile. WPZ's ratings are
tempered by the inherent price and volume risk in gathering and
processing natural gas as well as event risk surrounding future
dropdowns and possible third party acquisitions. WPZ's
$750 million senior unsecured notes are rated Ba2, the same as the
CFR, as all of the debt in the capital structure is unsecured.
WPZ has grown significantly since its IPO in August 2005.
Including the recent $750 million Wamsutter transaction, WPZ has
made $2.4 billion of acquisitions from Williams in four separate
transactions since mid-2006. EBITDA has grown as well, increasing
from $28 million in 2005 to an estimated $210 million in 2007.
Distributions from Wamsutter should generate approximately
$70 million of annual cash flow. WPZ's assets are fairly
diversified geographically, including both onshore and offshore
assets. The Wamsutter acquisition decreases WPZ's concentration
risk as over 77% of net revenues came from its Four Corners assets
in the San Juan Basin of New Mexico. The Wyoming assets also have
organic growth opportunities resulting from active drilling
programs by producers in the area, so Wamsutter should become a
larger contributor to WPZ over time as its gathering and
processing volumes increase.
WPZ has relatively conservative financial policies, although
leverage increased in 2006 following the company's Four Corners
acquisition, with debt/EBITDA rising to about 4.1x. WPZ funded
that transaction with nearly 50% debt, which is at the high end of
its target to fund acquisitions with 40-50% debt. For the more
recent $750 million Wamsutter transaction, WPZ used one-third
debt. The remainder came from $333 million raised in the public
equity markets and $167 million from a combination of units issued
to Williams and its 2% general partner interest. Moody's
estimates that, pro forma for Wamsutter, leverage should drop
marginally below the company's target leverage level of 4x
debt/EBITDA.
Williams Partners L.P., headquartered in Tulsa, Oklahoma, is an
MLP engaged in midstream natural gas gathering and processing, and
natural gas liquids fractionating and storage.
WIN WIN GAMING: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Win Win Gaming, Inc.
8687 West Sahara, Suite 201
Las Vegas, NV 89117
Bankruptcy Case No.: 08-10701
Type of Business: The Debtor is a multimedia developer and
publisher of sports, lottery and other games.
It has two business segments: Wireless Game and
Lottery Services. The Wireless Game business
segment involves developing and publishing
mobile games through its subsidiaries, Pixiem,
Inc. and Shanghai E-BEAR Digital Mobile
Software, Inc. The Lottery Services business
segment involves providing, through its wholly
owned China subsidiary, Win Win Consulting
(Shanghai) Co., Ltd., consulting services to the
Shanghai Welfare Lottery Issuing Center in
connection with the sales, marketing and
operation of an instant ticket lottery in
Shanghai. See http://www.winwininc.com/
Chapter 11 Petition Date: January 29, 2008
Court: District of Nevada (Las Vegas)
Judge: Linda B. Riegle
Debtor's Counsel: Nancy L. Allf, Esq.
Gonzalez, Saggio & Harlan, L.L.P.
411 East Bonneville, Suite 100
Las Vegas, NV 89101
Tel: (702) 366-1866
Fax: (702) 366-1945
Total Assets: $10,645,156
Total Debts: $6,577,719
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
David Coulter $400,000
Attention: Mark Adams
Samuels, Green, Steel &
Adams, L.L.P.
Irvine, CA 92612-2433
John Rogers $168,356
101 Second Street, Suite 1100
San Francisco, CA 94105
Sande Stewart $150,000
5525 Oakdale Avenue, Suite 260
Woodland Hills, CA 91364
Patrick Rogers salary and $147,904
vacation
Thelen, Reid, Brown, Raysman & $110,035
Steiner
The All England Lawn Tennis $100,000
Club
United States Treasury $96,442
Asher & Co., Ltd. $84,289
Neil Beller, Esq. $75,000
Silverman Heller Associates $54,435
C-Valley, Inc. $51,500
Wells Fargo Bank $51,298
First Insurance Funding Corp. $51,236
E.S.P.N. Enterprises, Inc. $48,187
Shields Law Office $46,849
Simon & Partners, L.L.P. $40,900
Mr. Mark Galvin consulting $33,285
services
Yamaha $30,000
Gregory DeWitt $26,500
Gyoungsu Do Salary owed $26,403
* Fitch Lifts 237 and Holds 24 Ratings on Tobacco Settlement Bonds
------------------------------------------------------------------
Fitch Ratings has upgraded 237 and affirmed 24 outstanding Tobacco
Settlement asset-backed bonds as listed below. These actions
complete Fitch's review of its tobacco ABS ratings that began with
the placement of the bonds on Rating Watch Positive in September
2007. The RWP actions followed Fitch's upgrade of the corporate
rating of the domestic tobacco industry to 'BBB' from 'BBB-' with
a Stable Outlook on Aug. 29, 2007. Fitch's rating of the most
senior tranches of tobacco settlement bonds is influenced by
Fitch's corporate rating of the tobacco industry, with a maximum
attainable rating of one notch above the tobacco industry rating.
As such, Fitch's maximum rating for tobacco settlement bonds
upgraded to 'BBB+' from 'BBB'. Ratings assigned by Fitch to
tobacco ABS bonds are the lower of the maximum rating and the
rating based on Fitch's cash-flow stresses.
The corporate rating of the domestic tobacco industry incorporates
the creditworthiness of the domestic tobacco subsidiaries on a
stand-alone basis, without reliance on parental financial support.
The recent corporate rating actions reflect the operational and
financial improvements of the major industry participants over the
past two years and the continued manageability of litigation risk.
Fitch's assessment of the domestic tobacco industry centers on
class action cases with the greatest near-to-intermediate term
risk. Beyond the legal issues, there are several continuing
negative pressures on the tobacco industry including extensive
smoking bans which diminish demand and rising excise taxes that
can reduce pricing flexibility. Despite these industry factors,
the tobacco businesses generate substantial free cash flow.
In addition, Fitch has incorporated revised cash flow stresses, as
detailed in its criteria report 'Rating U.S. Tobacco Settlement
Asset-Backed Bonds' published on Oct. 5, 2007. Fitch also
included qualitative assessments regarding where each ABS tranche
was positioned within the capital structure and projected maturity
versus legal final maturity. As a result of these analytical
considerations, ratings on certain bonds were upgraded while those
on other bonds were affirmed at the current rating.
Fitch upgrades these tobacco settlement asset-backed bonds:
Inland Empire Tobacco Securitization Authority tobacco settlement
asset-backed bonds Series 2007 Inland Empire Tobacco
Securitization Corporation (Riverside County, California)
-- $32,500,000.00 Series 2007A Senior Current Interest Bonds,
due June 1, 2021 from 'BBB'; to 'BBB+';
-- $55,150,000.00 Series 2007A Senior Current Interest Bonds,
due June 1, 2021 from 'BBB'; to 'BBB+';
-- $53,757,702.60 Series 2007B Senior Convertible Turbo Term
Bonds, due June 1, 2026 from 'BBB'; to 'BBB+';
-- $18,948,552.00 Series 2007E Subordinate Turbo Capital
Appreciation Term Bonds, due June 1, 2057 from 'BB' to
'BB+'.
California County Tobacco Securitization Agency (Golden Gate
Tobacco Funding Corporation), tobacco settlement asset-backed
bonds, series 2007 (Marin County)
-- $8,830,000 Series 2007A Current Interest Turbo Bonds, due
May 15, 2021 from 'BBB' to 'BBB+';
-- $6,123,570 Series 2007B Convertible Turbo Bonds, due May
15, 2028 from 'BBB' to 'BBB+';
-- $9,280,000 Series 2007A Current Interest Turbo Bonds, due
May 15, 2036 from 'BBB'; to 'BBB+';
-- $17,275,000 Series 2007A Current Interest Turbo Bonds, due
May 15, 2047 from 'BBB'; to 'BBB+';
-- $2,288,202 Series 2007 C Subordinate Turbo Capital
Appreciation Bonds, due May 15, 2057 from 'BBB-' to 'BBB';
-- $2,187,675 Series 2007 D Subordinate Turbo Capital
Appreciation Bonds, due May 15, 2057 from 'BB' to 'BB+';
-- $1,928,680 Series 2007 E Subordinate Turbo Capital
Appreciation Bonds, due May 15, 2057, 'B' to 'BB-';
Silicon Valley Tobacco Securitization Authority tobacco settlement
asset-backed bonds, series 2007
(Santa Clara County, California): Series 2007 turbo capital
appreciation term bonds
-- 43,604,065.50 series 2007A, due June 1, 2036 from 'BBB' to
'BBB+';
-- $11,339,136.60 series 2007A, due June 1, 2041 from 'BBB'
to 'BBB+';
-- $13,617,538.40 series 2007A, due June 1, 2047 from 'BBB'
to 'BBB+';
-- $ 4,407,579.55 series 2007B, due June 1, 2047 from 'BBB-'
to 'BBB';
-- $20,160,692.00 series 2007C, due June 1, 2056 from 'BB' to
'BB+';
-- $8,901,000.00 series 2007D, due June 1, 2056 from 'B' to
'B+';
Golden State Tobacco Securitization Corporation tobacco settlement
asset-backed bonds, series 2007 (California) Series 2007A-1 senior
current interest serial bonds:
-- $27,335,000 due June 1, 2008 from 'BBB' to 'BBB+';
-- $30,730,000 due June 1, 2009 from 'BBB' to 'BBB+';
-- $34,080,000 due June 1, 2010 from 'BBB' to 'BBB+';
-- $19,920,000 due June 1, 2011 from 'BBB' to 'BBB+';
-- $15,605,000 due June 1, 2011 from 'BBB' to 'BBB+';
-- $18,710,000 due June 1, 2012 from 'BBB' to 'BBB+';
-- $20,470,000 due June 1, 2012 from 'BBB to 'BBB+';
-- $6,395,000 due June 1, 2013 from 'BBB' to 'BBB+';
-- $11,655,000 due June 1, 2013 from 'BBB' to 'BBB+';
-- $20,570,000 due June 1, 2014 from 'BBB' to 'BBB+';
-- $23,190,000 due June 1, 2015 from 'BBB' to 'BBB+';
-- $28,875,000 due June 1, 2016 from 'BBB' to 'BBB+';
-- $5,140,000 due June 1, 2017 from 'BBB' to 'BBB+';
-- $27,255,000 due June 1, 2017 from 'BBB' to 'BBB+';
Series 2007A-1 senior current interest turbo term bonds:
-- $863,100,000 due 2027 from 'BBB' to 'BBB+';
-- $610,525,000 due 2033 from 'BBB' to 'BBB+';
-- $1,250,000,000 due 2047 from 'BBB' to 'BBB+';
-- $693,575,000 due 2047 from 'BBB' to 'BBB+';
Series 2007A-2 senior convertible turbo term bonds:
-- $389,192,591.40 due June 1, 2037 from 'BBB' to 'BBB+';
Chautauqua Tobacco Asset Securitization Corporation (New York),
tobacco settlement revenue bonds, series 2000
-- $1,450,000 turbo term bonds due July 1, 2012 from 'BBB' to
'BBB+';
-- $1,100,000 turbo term bonds due July 1, 2016 from 'BBB' to
'BBB+';
-- $4,820,000 turbo term bonds due July 1, 2024 from 'BBB' to
'BBB+';
-- $22,160,000 turbo term bonds due July 1, 2040 from 'BBB'
to 'BBB+';
New York Counties Tobacco Trust I (New York), tobacco settlement
pass-through bonds, series 2000
-- $910,000 serial bonds due June 1, 2008 from 'BBB' to
'BBB+';
-- $1,020,000 serial bonds due June 1, 2009 from 'BBB' to
'BBB+';
-- $1,150,000 serial bonds due June 1, 2010 from 'BBB' to
'BBB+';
-- $1,310,000 serial bonds due June 1, 2011 from 'BBB' to
'BBB+';
-- $1,450,000 serial bonds due June 1, 2012 from 'BBB' to
'BBB+';
-- $1,720,000 serial bonds due June 1, 2013 from 'BBB' to
'BBB+';
-- $2,020,000 serial bonds due June 1, 2014 from 'BBB' to
'BBB+';
-- $2,200,000 serial bonds due June 1, 2015 from 'BBB' to
'BBB+';
-- $14,890,000 turbo term bonds due June 1, 2019 from 'BBB'
to 'BBB+';
-- $39,710,000 flexible amortization term bonds due June 1,
2028 from 'BBB' to 'BBB+';
-- $60,450,000 flexible amortization term bonds due June 1,
2035 from 'BBB' to 'BBB+';
-- $71,840,000 flexible amortization term bonds due June 1,
2042 from 'BBB' to 'BBB+';
Niagara Tobacco Asset Securitization Corporation (New York),
tobacco settlement asset-backed bonds, series 2000
-- $535,000 serial bonds due May 15, 2016 from 'BBB' to
'BBB+';
-- $65,000 serial bonds due May 15, 2016 from 'BBB' to
'BBB+';
-- $600,000 serial bonds due May 15, 2017 from 'BBB' to
'BBB+';
-- $70,000 serial bonds due May 15, 2017 from 'BBB' to
'BBB+';
-- $635,000 serial bonds due May 15, 2018 from 'BBB' to
'BBB+';
-- $530,000 serial bonds due May 15, 2018 from 'BBB' to
'BBB+';
-- $260,000 serial bonds due May 15, 2019 from 'BBB' to
'BBB+';
-- $820,000 serial bonds due May 15, 2019 from 'BBB' to
'BBB+';
-- $105,000 serial bonds due May 15, 2019 from 'BBB' to
'BBB+';
-- $780,000 serial bonds due May 15, 2020 from 'BBB' to
'BBB+';
-- $490,000 serial bonds due May 15, 2020 from 'BBB' to
'BBB+';
-- $485,000 serial bonds due May 15, 2021 from 'BBB' to
'BBB+';
-- $875,000 serial bonds due May 15, 2021 from 'BBB' to
'BBB+';
-- $210,000 serial bonds due May 15, 2022 from 'BBB' to
'BBB+';
-- $1,175,000 serial bonds due May 15, 2022 from 'BBB' to
'BBB+';
-- $11,995,000 turbo term bonds due May 15, 2029 from 'BBB'
to 'BBB+';
-- $10,575,000 turbo term bonds due May 15, 2034 from 'BBB'
to 'BBB+';
-- $14,945,000 turbo term bonds due May 15, 2040 from 'BBB'
to 'BBB+';
Rensselaer Tobacco Asset Securitization Corporation (New York),
tobacco settlement asset-backed bonds, series 2001
-- $160,000 serial bonds due June 1, 2008 from 'BBB' to
'BBB+';
-- $200,000 serial bonds due June 1, 2009 from 'BBB' to
'BBB+';
-- $215,000 serial bonds due June 1, 2010 from 'BBB' to
'BBB+';
-- $245,000 serial bonds due June 1, 2011 from 'BBB' to
'BBB+';
-- $270,000 serial bonds due June 1, 2012 from 'BBB' to
'BBB+';
-- $295,000 serial bonds due June 1, 2013 from 'BBB' to
'BBB+';
-- $310,000 serial bonds due June 1, 2014 from 'BBB' to
'BBB+';
-- $340,000 serial bonds due June 1, 2015 from 'BBB' to
'BBB+';
-- $385,000 serial bonds due June 1, 2016 from 'BBB' to
'BBB+';
-- $5,235,000 super sinker term bonds due June 1, 2025 from
'BBB' to 'BBB+';
-- $10,890,000 super sinker term bonds due June 1, 2035 from
'BBB 'to 'BBB+';
-- $13,355,000 super sinker term bonds due June 1, 2043 from
'BBB' to 'BBB+';
Ulster Tobacco Asset Securitization Corporation (New York),
tobacco settlement asset-backed bonds, series 2001
-- $11,765,000 current interest term bonds due June 1, 2030
from 'BBB' to 'BBB+';
-- $10,190,000 current interest term bonds due June 1, 2040
from 'BBB' to 'BBB+';
-- $4,610,000 convertible capital appreciation bonds due
June 1, 2025 from 'BBB' to 'BBB+';
-- $4,765,000 convertible capital appreciation bonds due
June 1, 2040 from 'BBB' to 'BBB+';
Badger Tobacco Asset Securitization Corporation (Wisconsin),
series 2002
-- $31,220,000 serial bonds due June 1, 2008 from 'BBB' to
'BBB+';
-- $33,565,000 serial bonds due June 1, 2009 from 'BBB' to
'BBB+';
-- $35,070,000 serial bonds due June 1, 2010 from 'BBB' to
'BBB+';
-- $32,770,000 serial bonds due June 1, 2011 from 'BBB' to
'BBB+';
-- $34,040,000 serial bonds due June 1, 2012 from 'BBB' to
'BBB+';
-- $209,260,000 fixed amortization bonds due June 1, 2017
from 'BBB' to 'BBB+';
-- $562,130,000 turbo term bonds due June 1, 2027 from 'BBB'
to 'BBB+';
-- $100,000,000 turbo term bonds due June 1, 2028 from 'BBB'
to 'BBB+';
-- $414,470,000 turbo term bonds due June 1, 2032 from 'BBB'
to 'BBB+'.
The California County Tobacco Securitization Agency (Alameda
County Tobacco Asset Securitization Corporation), series 2002
-- $2,985,000 serial bonds due June 1, 2008 from 'BBB' to
'BBB+';
-- $3,020,000 serial bonds due June 1, 2009 from 'BBB' to
'BBB+';
-- $3,070,000 serial bonds due June 1, 2010 from 'BBB' to
'BBB+';
-- $3,130,000 serial bonds due June 1, 2011 from 'BBB' to
'BBB+';
-- $2,905,000 serial bonds due June 1, 2012 from 'BBB' to
'BBB+';
-- $5,605,000 turbo term bonds due June 1, 2019 from 'BBB' to
'BBB+';
-- $51,485,000 turbo term bonds due June 1, 2029 from 'BBB'
to 'BBB+';
-- $45,170,000 turbo term bonds due June 1, 2035 from 'BBB'
to 'BBB+';
-- $76,250,000 turbo term bonds due June 1, 2042 from 'BBB'
to 'BBB+.
The California County Tobacco Securitization Agency (Fresno County
Tobacco Funding Corporation), subordinate series 2006
-- $9,756,936.00 subordinate series 2006C turbo capital
appreciation bonds due June 1, 2055 from 'BB-' to 'BB';
The California County Tobacco Securitization Agency (Kern County
Tobacco Funding Corporation), series 2002
-- $40,960,000 turbo term bonds 2006A due June 1, 2043 from
'BBB' to 'BBB+';
-- $27,875,000 turbo term bonds 2006B due June 1, 2029 from
'BBB' to 'BBB+';
-- $29,010,000 turbo term bonds 2006B due June 1, 2037 from
'BBB' to 'BBB+';
-- $ 4,920,000 turbo term bonds 2006C due June 1, 2015 from
'BBB' to 'BBB+'.
California County Tobacco Securitization Agency (Los Angeles
County Tobacco Securitization Corporation), series 2006
-- $60,279,685 convertible turbo bonds series 2006A due
June 1, 2021 from 'BBB' to 'BBB+';
-- $46,370,435 convertible turbo bonds series 2006A due
June 1, 2028 from 'BBB' to 'BBB+';
-- $62,196,244 convertible turbo bonds series 2006A due
June 1, 2036 from 'BBB' to 'BBB+';
-- $53,157,077 convertible turbo bonds series 2006A due
June 1, 2041 from 'BBB' to 'BBB+';
-- $72,159,811 convertible turbo bonds series 2006A due
June 1, 2046 from 'BBB' to 'BBB+';
-- $13,586,212 turbo capital appreciation bonds series 2006B
due June 1, 2046 from 'BBB-' to 'BBB';
-- $12,077,640 turbo capital appreciation bonds series 2006C
due June 1, 2046 from 'BB' to 'BB+'.
California County Tobacco Securitization Agency (Merced County
Tobacco Funding Corporation), series 2005
-- $2,200,000 series 2005B turbo term bonds due June 1, 2018
from 'BBB' to 'BBB+';
-- $6,515,000 series 2005A turbo term bonds due June 1, 2026
from 'BBB' to 'BBB+';
-- $15,160,000 series 2005A turbo term bonds due June 1, 2038
from 'BBB' to 'BBB+';
-- $15,815,000 series 2005A turbo term bonds due June 1, 2045
from 'BBB' to 'BBB+.
California County Tobacco Securitization Agency (Stanislaus County
Tobacco Funding Corporation), series 2002
-- $4,565,000 turbo term bonds due June 1, 2019 from 'BBB' to
'BBB+';
-- $24,490,000 turbo term bonds due June 1, 2033 from 'BBB'
to 'BBB+';
-- $34,725,000 turbo term bonds due June 1, 2043 from 'BBB'
to 'BBB+'.
California County Tobacco Securitization Agency (Stanislaus County
Tobacco Funding Corporation), series 2006
-- $9,446,325 subordinate series 2006C due June 1, 2055 from
'BB' to 'BB+'.
California Statewide Financing Authority, series 2002
-- $905,000 series 2002A serial bonds due May 1, 2008 from
'BBB' to 'BBB+';
-- $860,000 series 2002A serial bonds due May 1, 2009 from
'BBB' to 'BBB+';
-- $820,000 series 2002A serial bonds due May 1, 2010 from
'BBB' to 'BBB+';
-- $785,000 series 2002A serial bonds due May 1, 2011 from
'BBB' to 'BBB+';
-- $1,040,000 series 2002A serial bonds due May 1, 2012 from
'BBB' to 'BBB+';
-- $1,020,000 series 2002A serial bonds due May 1, 2013 from
'BBB' to 'BBB+';
-- $955,000 series 2002A serial bonds due May 1, 2014 from
'BBB' to 'BBB+';
-- $935,000 series 2002A serial bonds due May 1, 2015 from
'BBB' to 'BBB+';
-- $930,000 series 2002A serial bonds due May 1, 2016 from
'BBB' to 'BBB+';
-- $930,000 series 2002A serial bonds due May 1, 2017 from
'BBB' to 'BBB+';
-- $28,045,000 series 2002A turbo term bonds due May 1 2029
from 'BBB' to 'BBB+';
-- $27,540,000 series 2002A turbo term bonds due May 1 2037
from 'BBB' to 'BBB+';
-- $33,095,000 series 2002A turbo term bonds due May 1, 2043
from 'BBB' to 'BBB+';
-- $895,000 series 2002B serial bonds due May 1, 2008 from
'BBB' to 'BBB+';
-- $850,000 series 2002B serial bonds due May 1, 2009 from
'BBB' to 'BBB+';
-- $810,000 series 2002B serial bonds due May 1, 2010 from
'BBB' to 'BBB+';
-- $775,000 series 2002B serial bonds due May 1, 2011 from
'BBB' to 'BBB+';
-- $1,030,000 series 2002B serial bonds due May 1, 2012 from
'BBB' to 'BBB+';
-- $1,010,000 series 2002B serial bonds due May 1, 2013 from
'BBB' to 'BBB+';
-- $945,000 series 2002B serial bonds due May 1, 2014 from
'BBB' to 'BBB+';
-- $925,000 series 2002B serial bonds due May 1, 2015 from
'BBB' to 'BBB+';
-- $920,000 series 2002B serial bonds due May 1, 2016 from
'BBB' to 'BBB+';
-- $920,000 series 2002B serial bonds due May 1, 2017 from
'BBB' to 'BBB+';
-- $27,765,000 series 2002B turbo term bonds due May 1, 2029
from 'BBB' to 'BBB+';
-- $27,265,000 series 2002B turbo term bonds due May 1, 2037
from 'BBB' to 'BBB+';
-- $32,765,000 series 2002B turbo term bonds due May 1, 2043
from 'BBB' to 'BBB+'.
California Statewide Financing Authority, Pooled Tobacco
Securitization Program, series 2006
-- $23,149,900 series 2006C turbo capital appreciation bonds
due June 1, 2055 from 'BB' to 'BB+'.
The Children's Trust Fund (Puerto Rico), series 2002
-- $11,460,000 serial bonds due May 15, 2008 from 'BBB' to
'BBB+';
-- $5,000,000 serial bonds due May 15, 2009-1 from 'BBB' to
'BBB+';
-- $6,975,000 serial bonds due May 15, 2009-2 from 'BBB' to
'BBB+';
-- $11,315,000 serial bonds due May 15, 2010 from 'BBB' to
'BBB+';
-- $4,000,000 serial bonds due May 15, 2011-1 from 'BBB' to
'BBB+';
-- $8,135,000 serial bonds due May 15, 2011-2 from 'BBB' to
'BBB+';
-- $13,805,000 serial bonds due May 15, 2012 from 'BBB' to
'BBB+';
-- $15,505,000 serial bonds due May 15, 2013 from 'BBB' to
'BBB+';
-- $17,265,000 serial bonds due May 15, 2014 from 'BBB' to
'BBB+';
-- $423,290,000 turbo term bonds due May 15, 2033 from 'BBB'
to 'BBB+';
-- $310,380,000 turbo term bonds due May 15, 2039 from 'BBB'
to 'BBB+';
-- $296,255,000 turbo term bonds due May 15, 2043 from 'BBB'
to 'BBB+'.
The Children's Trust Fund (Puerto Rico), series 2005
-- $74,523,431 series 2005A capital appreciation bonds due
May 15, 2050 from 'BBB-' to 'BBB';
-- $33,686,016 series 2005B capital appreciation bonds due
May 15, 2055 from 'BB' to 'BBB-'.
City of San Diego Tobacco Settlement Revenue Funding Corporation,
series 2006
-- $105,400,000 series 2006 turbo term bonds due June 1,
2032 from 'BBB' to 'BBB+'.
District of Columbia Tobacco Settlement Financing Corporation,
series 2001
-- $5,800,000 serial bonds due May 15, 2008 from 'BBB' to
'BBB+';
-- $6,285,000 serial bonds due May 15, 2009 from 'BBB' to
'BBB+';
-- $6,840,000 serial bonds due May 15, 2010 from 'BBB' to
'BBB+';
-- $7,140,000 serial bonds due May 15, 2011 from 'BBB' to
'BBB+';
-- $7,145,000 serial bonds due May 15, 2012 from 'BBB' to
'BBB+';
-- $8,030,000 serial bonds due May 15, 2013 from 'BBB' to
'BBB+';
-- $8,360,000 serial bonds due May 15, 2014 from 'BBB' to
'BBB+';
-- $114,855,000 turbo term bonds due May 15, 2024 from 'BBB'
to 'BBB+';
-- $169,110,000 turbo term bonds due May 15, 2033 from 'BBB'
to 'BBB+';
-- $187,540,000 turbo term bonds due May 15, 2040 from 'BBB'
to 'BBB+'.
Erie Tobacco Asset Securitization Corporation (New York), series
2005
-- $30,330,000 series 2005A current interest bonds due
June 1, 2031 from 'BBB' to 'BBB+';
-- $74,685,000 series 2005A current interest bonds due
June 1, 2038 from 'BBB' to 'BBB+';
-- $111,480,000 series 2005A current interest bonds due
June 1, 2045 from 'BBB' to 'BBB+';
-- $9,163,000 series 2005B first subordinate capital
appreciation bonds due June 1, 2047 from 'BBB-' to 'BBB';
-- $12,565,080 series 2005C second subordinate capital
appreciation bonds due June 1, 2050 from 'BB' to 'BBB-';
-- $69,470,000 series 2005E current interest bonds due
June 1, 2028 from 'BBB' to 'BBB+';
Nassau County Tobacco Settlement Corporation (New York), series
2006:
-- $42,645,000 series 2006A-1 taxable senior current interest
bonds due June 1, 2021 from 'BBB' to 'BBB+';
-- $37,905,609 series 2006A-2 senior convertible bonds due
June 1, 2026 from 'BBB' to 'BBB+';
-- $97,005,000 series 2006A-3 senior current interest bonds
due June 1, 2035 from 'BBB' to 'BBB+';
-- $194,535,000 series 2006A-3 senior current interest bonds
due June 1, 2046 from 'BBB' to 'BBB+';
-- $37,604,290 series 2006D third subordinate capital
appreciation bonds due June 1, 2060 from 'BB' to 'BB+';
Northern Tobacco Securitization Corporation (Alaska), series 2006:
-- $117,510,000 series 2006A senior current interest turbo
term bonds due June 1, 2023 from 'BBB' to 'BBB+';
-- $70,105,000 series 2006A senior current interest turbo
term bonds due June 1, 2032 from 'BBB' to 'BBB+';
-- $212,270,000 series 2006A senior current interest turbo
term bonds due June 1, 2046 from 'BBB' to 'BBB+';
New York Counties Tobacco Trust II (New York), series 2001
-- $975,000 serial bonds due June 1, 2008 from 'BBB' to
'BBB+';
-- $1,210,000 serial bonds due June 1, 2009 from 'BBB' to
'BBB+';
-- $1,325,000 serial bonds due June 1, 2010 from 'BBB' to
'BBB+';
-- $1,495,000 serial bonds due June 1, 2011 from 'BBB' to
'BBB+';
-- $1,665,000 serial bonds due June 1, 2012 from 'BBB' to
'BBB+';
-- $1,825,000 serial bonds due June 1, 2013 from 'BBB' to
'BBB+';
-- $1,940,000 serial bonds due June 1, 2014 from 'BBB' to
'BBB+';
-- $2,120,000 serial bonds due June 1, 2015 from 'BBB' to
'BBB+';
-- $2,425,000 serial bonds due June 1, 2016 from 'BBB' to
'BBB+';
-- $32,955,000 super sinker term bonds due June 1, 2025 from
'BBB' to 'BBB+';
-- $68,005,000 super sinker term bonds due June 1, 2035 from
'BBB' to 'BBB+';
-- $82,795,000 super sinker term bonds due June 1, 2043 from
'BBB' to 'BBB+'.
New York Counties Tobacco Trust III (New York), Tobacco Settlement
Pass-Through Bonds, series 2003:
-- $16,360,000 turbo term bonds due June 1, 2027 from 'BBB'
to 'BBB+';
-- $15,175,000 turbo term bonds due June 1, 2033 from 'BBB'
to 'BBB+';
-- $40,390,000 turbo term bonds due June 1, 2043 from 'BBB'
to 'BBB+'.
New York Counties Tobacco Trust IV (New York), Tobacco Settlement
Pass-Through Bonds, series 2005:
-- $6,710,000 series 2005A turbo term bonds due June 1, 2021
from 'BBB' to 'BBB+';
-- $4,520,000 series 2005A turbo term bonds due June 1, 2026
from 'BBB' to 'BBB+';
-- $16,585,000 series 2005A turbo term bonds due June 1, 2038
from 'BBB' to 'BBB+';
-- $84,975,000 series 2005A turbo term bonds due June 1, 2042
from 'BBB' to 'BBB+';
-- $83,875,000 series 2005A turbo term bonds due June 1, 2045
from 'BBB' to 'BBB+';
-- $52,450,000 series 2005B taxable turbo term bonds due
June 1, 2027 from 'BBB' to 'BBB+';
-- $124,400,000 series 2005C taxable turbo term bonds due
June 1, 2041 from 'BBB' to 'BBB+';
-- $10,277,849 series 2005D first subordinate turbo capital
appreciation bonds due June 1, 2050 from 'BBB-'to 'BBB';
-- $14,073,539 series 2005E second subordinate turbo Capital
appreciation bonds due June 1, 2055 from 'BB' to 'BB+';
-- $124,400,000 series 2010A turbo term bonds due June 1,
2041 from 'BBB' to 'BBB+'.
Rockland Tobacco Asset Securitization Corporation (New York),
series 2005:
-- $13,084,280 series 2005A first subordinate capital
appreciation bonds due Aug. 1, 2045 from 'BBB-' to 'BBB';
-- $2,860,940 series 2005B second subordinate capital
appreciation bonds due Aug. 1, 2050 from 'BB' to 'BB+'.
Tobacco Settlement Financing Corporation (Louisiana), series 2001:
-- $142,015,000 series 2001A taxable turbo term bonds due
May 15, 2025 from 'BBB' to 'BBB+';
-- $230,390,000 series 2001B tax-exempt turbo term bonds due
May 15, 2030 from 'BBB' to 'BBB+';
-- $689,405,000 series 2001B tax-exempt turbo term bonds due
May 15, 2039 from 'BBB' to 'BBB+'.
Tobacco Settlement Financing Corporation (Rhode Island), series
2002:
-- $109,770,000 series 2002A tax-exempt turbo term bonds due
June 1, 2023 from 'BBB' to 'BBB+';
-- $168,260,000 series 2002A tax-exempt turbo term bonds due
June 1, 2032 from 'BBB' to 'BBB+';
-- $371,700,000 series 2002A tax-exempt turbo term bonds due
June 1, 2042 from 'BBB' to 'BBB+';
-- $19,645,000 series 2002B taxable turbo term bonds due
June 1, 2012 from 'BBB' to 'BBB+'.
Tobacco Settlement Revenue Management Authority (South Carolina),
series 2001:
-- $62,370,000 series 2001A taxable turbo term bonds due
May 15, 2016 from 'BBB' to 'BBB+';
-- $225,880,000 series 2001B tax-exempt turbo term bonds due
May 15, 2022 from 'BBB' to 'BBB+';
-- $347,625,000 series 2001B tax-exempt turbo term bonds due
May 15, 2028 from 'BBB' to 'BBB+';
-- $161,385,000 series 2001B tax-exempt turbo term bonds due
May 15, 2030 from 'BBB' to 'BBB+'.
Tobacco Settlement Asset Securitization Corporation (TSASC) 1999
Indenture, (New York City), series 2006-1:
-- $284,070,000 turbo term bonds due June 1, 2022 from 'BBB'
to 'BBB+';
-- $137,765,000 turbo term bonds due June 1, 2026 from 'BBB'
to 'BBB+';
-- $372,650,000 turbo term bonds due June 1, 2034 from 'BBB'
to 'BBB+';
-- $599,025,000 turbo term bonds due June 1, 2042 from 'BBB'
to 'BBB+'.
Westchester Tobacco Asset Securitization Corporation (New York),
series 2005:
-- $27,500,000 turbo term bonds due June 1, 2021 from 'BBB'
to 'BBB+';
-- $24,100,000 turbo term bonds due June 1, 2026 from 'BBB'
to 'BBB+';
-- $81,200,000 turbo term bonds due June 1, 2038 from 'BBB'
to 'BBB+';
-- $81,700,000 turbo term bonds due June 1, 2045 from 'BBB'
to 'BBB+'.
Fitch affirms these tobacco settlement asset-backed bonds:
Inland Empire Tobacco Securitization Authority tobacco settlement
asset-backed bonds Series 2007 Inland Empire Tobacco
Securitization Corporation) (Riverside County, California)
-- $53,541,801.45 Series 2007C-1 Subordinate Turbo Capital
Appreciation Term Bonds, due June 1, 2036 at 'BBB';
-- $29,652,581.40 Series 2007C-2 Subordinate Turbo Capital
Appreciation Term Bonds, due June 1, 2047 at 'BBB';
-- $23,457,163.80 Series 2007D Subordinate Turbo Capital
Appreciation Term Bonds, due June 1, 2057 at 'BBB-'
Alameda County Tobacco Asset Securitization Corporation, series
2006
-- $38,683,877.20 capital appreciation bonds 2006A due
June 1, 2050 at 'BBB-';
-- $12,790,902.40 capital appreciation bonds 2006B due
June 1, 2050 at 'BB'.
The California County Tobacco Securitization Agency (Fresno County
Tobacco Funding Corporation), subordinate series 2006
-- $16,605,906.60 subordinate series 2006A turbo capital
appreciation bonds due June 1, 2046 at 'BBB';
-- $2,889,808.80 subordinate series 2006B turbo capital
appreciation bonds due June 1, 2046 at 'BBB-'.
California County Tobacco Securitization Agency (Stanislaus County
Tobacco Funding Corporation), series 2006
-- $20,965,835 subordinate series 2006A due June 1, 2046 at
'BBB';
-- $2,827,546 subordinate series 2006B due June 1, 2046 at
'BBB-'
California Statewide Financing Authority, Pooled Tobacco
Securitization Program, series 2006
-- $29,064,420 series 2006A turbo capital appreciation bonds
due June 1, 2046 at 'BBB';
-- $6,752,856 series 2006B turbo capital appreciation bonds
due June 1, 2046 at 'BBB-';
District of Columbia Tobacco Settlement Financing Corporation,
series 2006
-- $145,481,196 series 2006A turbo capital appreciation bonds
due June 15, 2046 at 'BBB';
-- $14,251,650 series 2006B turbo capital appreciation bonds
due June 15, 2046 at 'BBB-';
-- $55,868,400 series 2006C turbo capital appreciation bonds
due June 15, 2055 at 'BB'.
Nassau County Tobacco Settlement Corporation (New York), series
2006:
-- $10,670,013 series 2006B first subordinate capital
appreciation bonds due June 1, 2046 at 'BBB';
-- $9,867,332 series 2006C second subordinate capital
appreciation bonds due June 1, 2046 at 'BBB-'.
Northern Tobacco Securitization Corporation (Alaska), series 2006:
-- $8,668,052 series 2006B first subordinate turbo capital
appreciation bonds due June 1, 2046 at 'BBB'
-- $3,434,807 series 2006C second subordinate turbo capital
appreciation bonds due June 1, 2046 at 'BBB-'.
New York Counties Tobacco Trust V (New York), Tobacco Settlement
Pass-Through Bonds, series 2005:
-- $50,605,433 series 2005 S1 turbo capital appreciation
bonds due June 1, 2038 at 'BBB;
-- $43,529,858 series 2005 S2 turbo capital appreciation
bonds due June 1, 2050 at 'BBB-';
-- $25,917,083 series 2005 S3 turbo capital appreciation
bonds due June 1, 2055 at 'BB'.
Tobacco Settlement Financing Corporation (US Virgin Islands),
series 2006:
-- $4,764,709 series 2006A subordinate turbo capital
appreciation bonds due May 15, 2035 at 'BBB'
-- $512,471 series 2006B subordinate turbo capital
appreciation bonds due May 15, 2035 at 'BBB-'.
-- $867,690 series 2006C subordinate turbo capital
appreciation bonds due May 15, 2035 at 'BB'.
* Fitch Says CMBS Servicer Will Undergo First Time Testing
----------------------------------------------------------
For the first time since the inception of the U.S. CMBS market,
CMBS servicer capabilities will undergo rigorous testing this
year, according to Fitch Ratings. Fitch believes that highly
rated commercial mortgage servicers will be better able to
withstand a volatile market. While servicers faced and overcame
challenges which occurred in recent years, including Sept. 11 and
various natural disasters, this is the first significant capital
markets driven stress which servicers have undergone. The limited
liquidity available will affect all sectors of commercial mortgage
servicing including primary, master and special servicing.
In fourth quarter-2007, as new deal issuance slowed and commercial
real estate CDO issuance virtually stopped, media attention and
speculation caused investors to more closely scrutinize their
structured finance bond portfolios. Servicers, whose focus had
been on managing the flow of new transactions into their
portfolios, often including complicated multi-note loans and
insurance issues, now faced an additional new set of challenges
and operational risks, including:
-- Increased inquiries from investors, including those who
had never interacted with CMBS servicers prior to these
events;
-- Fewer securitizations creating increased bidding
competition in an already competitive market; and
-- Potential for the need of additional staff, redeployment
of staff or creation of specialized groups to address
shifting areas of concern.
On the flip side, because of the credit crunch, fewer loans are
defeasing or pre-paying. Therefore, master servicing portfolios
have remained relatively constant as loan inflows and outflows
decreased. Master servicers are focusing on the maturity risk
associated with the 1998 - 2000 vintages as planned but are now
managing these refinancing challenges in a less liquid market.
CMBS master servicers are not the only ones facing increasing
operational challenges. Over the past few years, CMBS special
servicers have been able to reap the benefits of a strong real
estate capital market. Since real estate fundamentals remained
strong, the volume of specially serviced assets remained stable,
or in many cases, has decreased over the past two years. When
assets did transfer to special servicing, the vast amount of real
estate capital available in the market helped asset managers
dispose of assets quickly, often at better than expected prices.
So how could decreased liquidity in the market affect CMBS special
servicing?
"Due to the current liquidity environment, it will no longer be as
easy to dispose of real estate owned assets," said Managing
Director Stephanie Petosa. "Although there is still capital in
the real estate market, the profile of the buyers has changed and
individual real estate investors are less likely to be able to
purchase property because their financing options are limited."
Therefore, successful buyers of REO are more likely to be
institutional investors or opportunistic real estate funds, which
have the ability to buy property free and clear without seeking
financing.
Consequently, special servicers may end up holding assets for
longer periods of time, increasing losses to the trust due to the
cost of maintaining the properties and the potential for declining
real estate values. If the credit crunch continues for an
extended period, special servicers will likely see an increase in
loan defaults at maturity; some servicers have already noted a
delay in borrower refinance timing. An increase in loan transfers
may tax the resources of special servicers, therefore, the
surveillance function of the special servicer is more important
than ever. Special servicers who closely monitor watch lists with
the named master servicers regarding the potential pipeline of
specially serviced assets should be better prepared to handle the
increased workload.
Since the inception of CMBS in the early 1990's a servicers
capability to withstand material adversity had not been
significantly challenged due to a strong, robust commercial real
estate market. With the current situation in the real estate
structured finance market, it appears that the challenges faced by
servicers will continue to increase. Although delinquencies
remain low, currently at 31 basis points, Fitch expects
delinquency activity to double in the next year.
Through its CMBS surveillance and servicer rating processes, Fitch
plans to enhance its scrutiny of servicer performance, through
scheduled, frequent interaction with its rated servicers,
including quarterly calls with active master and special servicers
to discuss market trends, operational challenges and other
servicer issues. Fitch will then share this information with the
overall CMBS community by publishing press releases and special
reports. "In the current environment, servicer ratings are more
important than ever," said Senior Director Rich Carlson. Fitch is
positioned to remain the industry leader in this area.
* S&P Cuts Ratings on 29 Class Certificates from 10 Series
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on 29
classes of mortgage pass-through certificates from 10 series
issued by seven issuers. S&P removed three of the lowered ratings
from CreditWatch negative. In addition, S&P removed the rating on
class II-B from Credit Suisse First Boston Mortgage Securities
Corp.'s series 2002-9 from CreditWatch negative. Concurrently,
eight ratings from three Impac CMB Trust transactions remain on
CreditWatch with negative implications. Lastly, S&P affirmed its
ratings on 109 other certificates from various transactions.
The lowered ratings reflect current or projected credit
enhancements levels that were not sufficient to support the
certificates at the previous rating levels as of the December 2007
remittance period. Based on the current collateral performance of
these transactions, future credit enhancement is projected to be
significantly lower than the original credit support. All of
these transactions have been reviewed within the past 12 months
and continue to perform adversely.
As of the December 2007 remittance period total delinquencies for
these transactions ranged from 0% (Impac CMB Trust Series 2004-8
structure group 3 and Impac CMB Trust Series 2004-10 structure
group 4) to 26.02% (Impac CMB Trust Series 2004-10 structure group
1) with severe delinquencies (90-plus days, foreclosures, and
REOs) ranging from 0% (Impac CMB Trust Series 2004-8 structure
group 3 and Impac CMB Trust Series 2004-10 structure group 4) to
22.47% (Credit Suisse First Boston Mortgage Securities Corp.'s
series 2002-9 structure Group 2). Cumulative losses for these
transactions ranged from 0% (structure groups from 3 transactions)
to 0.64% (Credit Suisse First Boston Mortgage Securities Corp.'s
series 2002-9 structure group 1) of the original pool balances.
These deals have all been seasoned between 36 (four transactions)
and 72 months (Impac Secured Assets Corp. 2001-8).
The eight Impac CMB Trust ratings remaining on CreditWatch are all
currently rated 'AAA/Watch Neg.' Additional credit support is
provided for the structure groups that these classes fall under in
the form of bond insurance. The bond insurance provider for these
transactions is Financial Guaranty Insurance Corporation. It
should also be noted that the financial strength rating for FGIC
was placed on CreditWatch on Dec. 19, 2007. These classes were
initially placed on CreditWatch on Dec. 20, 2007.
The affirmations reflect sufficient credit support percentages to
support the current ratings as of the December 2007 remittance
period.
The underlying collateral for all of the affected transactions in
this review consists of Alternative-A mortgage loans.
Ratings Lowered
Credit Suisse First Boston Mortgage Securities Corp.
Rating
------
Series Class To From
------ ----- -- ----
2002-9 I-B-1 A AA
2004-AR1 C-B-5 CCC B
2004-AR2 C-B-5 CCC B
Citigroup Mortgage Loan Trust Inc.
Rating
------
Series Class To From
------ ----- -- ----
2004-HYB4 1-B1 A AA
2004-HYB4 1-B2 BB A
2004-HYB4 1-B3 B BBB
2004-HYB4 1-B4 CCC BB
2004-HYB4 1-B5 CCC B
2004-HYB4 2-B4 B BB
2004-HYB4 2-B5 CCC B
FNBA Mortgage Loan Trust 2004-AR1
Rating
------
Series Class To From
------ ----- -- ----
2004-AR1 M-1 A AA
2004-AR1 M-2 BB A
2004-AR1 M-3 CCC B
HarborView Mortgage Loan Trust 2004-11
Rating
------
Series Class To From
------ ----- -- ----
2004-11 B-5 CCC B
Homestar Mortgage Acceptance Corp.
Rating
------
Series Class To From
------ ----- -- ----
2004-2 M-3 BBB+ A-
2004-2 M-4 BB BBB+
Impac Secured Assets Corp.
Rating
------
Series Class To From
------ ----- -- ----
2004-4 M-5 BBB A
Impac CMB Trust
Rating
------
Series Class To From
------ ----- -- ----
2004-11 2-M-3 A- AA-
2004-11 2-M-4 BB+ A+
2004-11 2-M-5 B A
2004-11 2-M-6 CCC A-
2004-11 2-B CCC BBB+
Washington Mutual MSC Mortgage Pass-Through Certificates
Series 2004-RA1 Trust
Rating
------
Series Class To From
------ ----- -- ----
2004-RA1 C-B-1 A AA
2004-RA1 C-B-2 BB A
2004-RA1 C-B-3 B BBB
2004-RA1 C-B-4 CCC B
Ratings Lowered and Removed From CreditWatch Negative
Credit Suisse First Boston Mortgage Securities Corp.
Rating
------
Series Class To From
------ ----- -- ----
2002-9 I-B-2 BB BBB/Watch Neg
Homestar Mortgage Acceptance Corp.
Rating
------
Series Class To From
------ ----- -- ----
2004-2 M-5 CCC BB/Watch Neg
Impac Secured Assets Corp.
Rating
------
Series Class To From
------ ----- -- ----
2004-4 B B BBB/Watch Neg
Rating Removed From CreditWatch Negative
Credit Suisse First Boston Mortgage Securities Corp.
Rating
------
Series Class To From
------ ----- -- ----
2002-9 II-B B B/Watch Neg
Ratings Remaining on CreditWatch Negative
Impac CMB Trust
Series Class Rating
------ ----- ------
2004-8 1-A1, 2-A1, 2-A2 AAA/Watch Neg
2004-10 1-A1, 1-A2, 2-A AAA/Watch Neg
2004-11 1-a1, 1-a2 aaa/watch neg
Ratings Affirmed
Citigroup Mortgage Loan Trust Inc.
Series Class Rating
------ ----- ------
2004-HYB4 H-AI, H-AII, A-A, A-X AAA
2004-HYB4 1-M AA+
2004-HYB4 2-B1 AA
2004-HYB4 2-B2 A
2004-HYB4 2-B3 BBB
Credit Suisse First Boston Mortgage Securities Corp.
Series Class Rating
------ ----- ------
2002-9 I-A-1, I-A-2, I-A-3, I-X, I-P AAA
2002-9 II-M-1 AAA
2002-9 II-M-2 A
2004-AR1 I-A-1, II-A-1, III-A-1, IV-A-1 AAA
2004-AR1 V-A-1, VI-A-1, VI-A-2, VI-A-4 AAA
2004-AR1 VI-M-1 AA+
2004-AR1 C-B-1 AA
2004-AR1 VI-M-2, C-B-2 A
2004-AR1 C-B-3 BBB
2004-AR1 C-B-4 BB
2004-AR2 I-A-1, II-A-1, III-A-1, IV-A-1 AAA
2004-AR2 V-A-1, VI-A-1, VI-A-3, VI-A-4 AAA
2004-AR2 VI-M-1 AA+
2004-AR2 C-B-1 AA
2004-AR2 VI-M-2 A+
2004-AR2 VI-M-3, C-B-2 A
2004-AR2 C-B-3 BBB
2004-AR2 C-B-4 BB
FNBA Mortgage Loan Trust 2004-AR1
Series Class Rating
------ ----- ------
2004-AR1 A-1, A-2, A-3 AAA
HarborView Mortgage Loan Trust 2004-11
Series Class Rating
------ ----- ------
2004-11 1-A, 2-A1A, 2-A1B, 2-A2A, 2-A2B AAA
2004-11 2-A3, 3-A1A, 3-A1B, 3-A2A, 3-A2B AAA
2004-11 3-A3, 3-A4, X-1, X-2, X-3, X-B AAA
2004-11 B-1 AA
2004-11 B-2 A
2004-11 B-3 BBB
2004-11 B-4 BB
Homestar Mortgage Acceptance Corp.
Series Class Rating
------ ----- ------
2004-2 AV-1, AV-2 AAA
2004-2 M-1 AA
2004-2 M-2 A
Impac Secured Assets Corp.
Series Class Rating
------ ----- ------
2001-8 A-6, A-7, A-IO, A-PO, M-1 AAA
2001-8 M-2 AA
2001-8 M-3 BBB
2004-4 1-A-2, 1-A-3, 2-A-1, 2-A-2 AAA
2004-4 M-1, M-2 AA+
2004-4 M-3 AA
2004-4 M-4 AA-
2004-8 3-A AAA
2004-8 3-M-1 AA
2004-8 3-M-2 A
2004-8 3-B BBB
2004-10 3-A-1, 3-A-2, 4-A-1 AAA
2004-10 3-M-1 AA+
2004-10 3-M-2, 3-M-3, 3-M-4 AA
2004-10 3-M-5 A
2004-11 2-A-1, 2-A-2 AAA
2004-11 2-M-1 AA+
2004-11 2-M-2 AA
Washington Mutual MSC Mortgage Pass-Through Certificates
Series 2004-RA1 Trust
Series Class Rating
------ ----- ------
2004-RA1 I-A, II-A, I-X, II-X, I-P, II-P AAA
2004-RA1 R AAA
* S&P Takes Rating Actions on Various U.S. Synthetic CDOs
---------------------------------------------------------
Standard & Poor's Ratings Services took these rating actions on
various U.S. synthetic collateralized debt obligation
transactions:
-- S&P lowered nine ratings. Of these, S&P removed six from
CreditWatch negative and left one on CreditWatch negative.
-- S&P raised 10 ratings and removed four from CreditWatch
negative and two from CreditWatch positive.
-- S&P affirmed four ratings and removed them from CreditWatch
negative.
S&P reviewed the ratings on the classes that were previously
placed on CreditWatch negative to determine the appropriate rating
action. If the synthetic rated overcollateralization (SROC) ratio
was lower than 100% at the current date and at a 90-day-forward
projected date, S&P lowered the rating on the tranche. If the
SROC ratio was lower than 100% at the current date at the lower
rating level and above 100% at a 90-day-forward projected date,
S&P lowered the rating on the tranche and left it on CreditWatch
negative. Amendments were made to the underlying portfolios of
the eight upgraded tranches with ratings that were not previously
on CreditWatch positive, which brought the ratings back to their
original levels. S&P affirmed the ratings on the classes that had
an SROC ratio above 100% at the current rating level.
Ratings List
Calibre 2004-XI Ltd.
Rating
------
Class To From
----- -- ----
Single tranche AA+p AAAp/Watch Neg
Infiniti SPC Ltd.
Series CPORTS 2006-2
Rating
------
Class To From
----- -- ----
B-1 BBB A-/Watch Neg
B-2 BBB A-/Watch Neg
Iridal Public Ltd. Co.
Series 5
Rating
------
Class To From
----- -- ----
Cr link note BBB- BBB-/Watch Neg
Morgan Stanley Aces SPC
Series 2006-13
Rating
------
Class To From
----- -- ----
II BBB- BBB/Watch Neg
Morgan Stanley Aces SPC
Series 2006-20
Rating
------
Class To From
----- -- ----
IA AAA AA
II BBB BBB-
Morgan Stanley Aces SPC
Series 2007-13
Rating
------
Class To From
----- -- ----
IA AAA AA+/Watch Neg
IIA AAA AA+/Watch Neg
IIB AAA AA+/Watch Neg
IIIA AA A+
IIIB AA A+
IV BB B+/Watch Neg
Rutland Rated Investments
Series Delancey 2006-3(29)
Rating
------
Class To From
----- -- ----
A1-L AAA AAA/Watch Neg
Solar V CDO SPC
Series 2007-1
Rating
------
Class To From
----- -- ----
A AA AA/Watch Neg
STARTS (Ireland) PLC
Series 2007-22
Rating
------
Class To From
----- -- ----
Notes AA/Watch Neg AA+/Watch Neg
Strata 2005-19, Limited Floating Rate Notes
Rating
------
Class To From
----- -- ----
FRN BB+ BBB-/Watch Neg
STRATA Trust Series 2006-17
Rating
------
Class To From
----- -- ----
Notes AA AA-/Watch Pos
Sunset Park CDO Ltd. SPC
Series 2004-1
Rating
------
Class To From
----- -- ----
C AAA AA+/Watch Pos
TIERS Georgia Credit Linked Trust Series 2007-21
Rating
------
Class To From
----- -- ----
A BBB+ AA-
B BBB+ AA-
Tribune Ltd.
Series 19
Rating
------
Class To From
----- -- ----
D2 BBB+ A-/Watch Neg
Tribune Ltd.
Series 51
Rating
------
Class To From
----- -- ----
Notes AA AA/Watch Neg
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
Jan. 31, 2008
BEARD AUDIO CONFERENCES
Partnerships in Bankruptcy: Unwinding the Deal
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
Feb. 7, 2008
TURNAROUND MANAGEMENT ASSOCIATION
PowerPlay
Philips Arena, Atlanta, Georgia
Contact: 678-795-8103 or http://www.turnaround.org/
Feb. 7, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Breakfast Event
Carnelian Room, San Francisco, California
Contact: 510-346-6000 ext 226 or
http://www.turnaround.org/
Feb. 7, 2008
TURNAROUND MANAGEMENT ASSOCIATION
PowerPlay
Philips Arena, Atlanta, Georgia
Contact: 678-795-8103 or http://www.turnaround.org/
Feb. 14-16, 2008
AMERICAN BANKRUPTCY INSTITUTE
13th Annual Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, Colorado
Contact: 1-703-739-0800; http://www.abiworld.org/
Feb. 20, 2008
TURNAROUND MANAGEMENT ASSOCIATION
13 Week Cash Flow
Courtyard Marriott, Dania Beach, Florida
Contact: http://www.turnaround.org/
Feb. 20, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Member Appreciation FREE Happy Hour
Islamorada Fish Company, Dania, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
Feb. 22, 2008
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
Fairmont Miramar, Santa Monica, California
Contact: http://www.abiworld.org/
Feb. 23-26, 2008
NORTON INSTITUTES ON BANKRUPTCY LAW
Bankruptcy Litigation Seminar I
Park City, Utah
Contact: http://www.nortoninstitutes.org/
Feb. 25, 2008
FINANCIAL RESEARCH ASSOCIATES LLC
Financial Services Mergers & Acquisitions Deals Forum
Harvard Club, New York, New York
Contact: http://www.frallc.com/
Feb. 26, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Member Appreciation FREE Happy Hour
One Eyed Jacks, Orlando, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
Feb. 26, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Retail Panel
Citrus Club, Orlando, Florida
Contact: http://www.turnaround.org/
Feb. 27-28, 2008
EUROMONEY INSTITUTIONAL INVESTOR
6th Annual Distressed Investing Forum
Union League Club, New York, New York
Contact: http://www.euromoneyplc.com/
Feb. 27 - Mar. 1, 2008
TURNAROUND MANAGEMENT ASSOCIATION
CTP Courses
Holland & Knight, Atlanta, Georgia
Contact: http://www.turnaround.org/
Mar. 6-8, 2008
ALI-ABA
Fundamentals of Bankruptcy Law
Mandalay Bay Resort, Las Vegas, Nevada
Contact: http://www.ali-aba.org/
Mar. 8-10, 2008
AMERICAN BANKRUPTCY INSTITUTE
Conrad Duberstein Moot Court Competition
St. John's University School of Law, New York
Contact: http://www.abiworld.org/
Mar. 19, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Rick Cieri of Kirkland & Ellis
Jamie Sprayregan of Goldman Sachs
Bankers Club of Miami, Florida
Contact: 561-882-1331 or
http://www.turnaround.org/
Mar. 25, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Dearfoam Slipper Turnaround
Centre Club, Tampa, Florida
Contact: 561-882-1331 or http://www.turnaround.org/
Mar. 25-29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Spring Conference
Ritz Carlton Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
Mar. 27-30, 2008
NORTON INSTITUTES ON BANKRUPTCY LAW
Bankruptcy Litigation Seminar II
Las Vegas, Nevada
Contact: http://www.nortoninstitutes.org/
Apr. 3, 2008
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
Annual Spring Luncheon
Renaissance Hotel, Washington, District of Columbia
Contact: 703-449-1316 or http://www.iwirc.org/
Apr. 3, 2008
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners - East
The Renaissance, Washington, District of Columbia
Contact: http://www.abiworld.org/
Apr. 3-6, 2008
AMERICAN BANKRUPTCY INSTITUTE
26th Annual Spring Meeting
The Renaissance, Washington, District of Columbia
Contact: http://www.abiworld.org/
Apr. 7-8, 2008
PRACTISING LAW INSTITUTE
30th Annual Current Developments in
Bankruptcy & Reorganization
PLI Center New York, New York
Contact: http://www.pli.edu/
Apr. 10, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Assignment for Benefit of Creditors
University Club, Jacksonville, Florida
Contact: http://www.turnaround.org/
Apr. 25-27, 2008
NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES
NABT Spring Seminar
Eldorado Hotel & Spa, Santa Fe, New Mexico
Contact: http://www.nabt.com/
Apr. 29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Why Prospects Become Clients
Citrus Club, Orlando, Florida
Contact: http://www.turnaround.org/
May 1-2, 2008
TURNAROUND MANAGEMENT ASSOCIATION
2nd Annual Credit & Bankruptcy Symposium
Foxwoods Resort Casino, Ledyard, Connecticut
Contact: http://www.turnaround.org/
May 1-2, 2008
AMERICAN BANKRUPTCY INSTITUTE
Debt Symposium
Hilton Garden Inn, Champagne/Urbana, Illinois
Contact: 1-703-739-0800; http://www.abiworld.org/
May 9, 2008
AMERICAN BANKRUPTCY INSTITUTE
Nuts and Bolts for Young Practitioners - NYC
Alexander Hamilton U.S. Custom House, New York
Contact: 1-703-739-0800; http://www.abiworld.org/
May 12, 2008
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Millennium Broadway Hotel & Conference Center,
New York
Contact: 1-703-739-0800; http://www.abiworld.org/
May 12-13, 2008
PRACTISING LAW INSTITUTE
30th Annual Current Developments in
Bankruptcy & Reorganization
PLI Center San Francisco, California
Contact: http://www.pli.edu/
May 13-16, 2008
AMERICAN BANKRUPTCY INSTITUTE
Litigation Skills Symposium
Tulane University, New Orleans, Louisiana
Contact: 1-703-739-0800; http://www.abiworld.org/
May 18-20, 2008
INTERNATIONAL BAR ASSOCIATION
14th Annual Global Insolvency & Restructuring Conference
Stockholm, Sweden
Contact: http://www.ibanet.org/
May 21, 2008
TURNAROUND MANAGEMENT ASSOCIATION
What Happened to My Money -
The Restructuring of a Loan Servicer
Marriott North, Fort Lauderdale, Florida
Contact: http://www.turnaround.org/
June 4-7, 2008
ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
24th Annual Bankruptcy & Restructuring Conference
J.W. Marriott Spa and Resort, Las Vegas, Nevada
Contact: http://www.airacira.org/
June 12-14, 2008
AMERICAN BANKRUPTCY INSTITUTE
15th Annual Central States Bankruptcy Workshop
Grand Traverse Resort and Spa, Traverse City, Michigan
Contact: http://www.abiworld.org/
June 19-21, 2008
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities, and Bankruptcy
Omni Hotel, San Francisco, California
Contact: http://www.ali-aba.org/
June 24, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Fraud Panel
Citrus Club, Orlando, Florida
Contact: http://http://www.turnaround.org/
June 26-29, 2008
NORTON INSTITUTES ON BANKRUPTCY LAW
Western Mountains Bankruptcy Law Seminar
Jackson Hole, Wyoming
Contact: http://www.nortoninstitutes.org/
July 10, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Cynthia Jackson of Smith Hulsey & Busey
University Club, Jacksonville, Florida
Contact: http://http://www.turnaround.org/
July 10-13, 2008
AMERICAN BANKRUPTCY INSTITUTE
16th Annual Northeast Bankruptcy Conference
Ocean Edge Resort
Brewster, Massachussets
Contact: http://www.abiworld.org/events
July 29, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Employment Issues Following Hurricanes & Disasters
Centre Club, Tampa, Florida
Contact: http://http://www.turnaround.org/
July 31 - Aug. 2, 2008
AMERICAN BANKRUPTCY INSTITUTE
4th Annual Mid-Atlantic Bankruptcy Workshop
Hyatt Regency Chesapeake Bay
Cambridge, Maryland
Contact: http://www.abiworld.org/
Aug. 16-19, 2008
AMERICAN BANKRUPTCY INSTITUTE
13th Annual Southeast Bankruptcy Workshop
Ritz-Carlton, Amelia Island, Florida
Contact: http://www.abiworld.org/
Aug. 20-24, 2008
NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES
NABT Convention
Captain Cook, Anchorage, Alaska
Contact: http://www.nabt.com/
Aug. 26, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Do's and Don'ts of Investing in a Turnaround
Citrus Club, Orlando, Florida
Contact: http://www.turnaround.org/
Sept. 4-5, 2008
AMERICAN BANKRUPTCY INSTITUTE
Complex Financial Restructuring Program
Four Seasons, Las Vegas, Nevada
Contact: http://www.abiworld.org/
Sept. 4-6, 2008
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
Four Seasons, Las Vegas, Nevada
Contact: http://www.abiworld.org/
Sept. 17, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Real Estate / Condo Restructuring Panel
Marriott North, Fort Lauderdale, Florida
Contact: http://www.turnaround.org/
Sept. 24-26, 2008
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
IWIRC 15th Annual Fall Conference
Scottsdale, Arizona
Contact: http://www.ncbj.org/
Sept. 24-27, 2008
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
National Conference of Bankruptcy Judges
Desert Ridge Marriott, Scottsdale, Arizona
Contact: http://www.iwirc.org/
Sept. 30, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Private Equity Panel
Centre Club, Tampa, Florida
Contact: http://www.turnaround.org/
Oct. 9, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Luncheon - Chapter 11
University Club, Jacksonville, Florida
Contact: http://www.turnaround.org/
Oct. 28, 2008
TURNAROUND MANAGEMENT ASSOCIATION
State of the Capital Markets
Citrus Club, Orlando, Florida
Contact: http://www.turnaround.org/
Oct. 28-31, 2008
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott New Orleans, Louisiana
Contact: 312-578-6900; http://www.turnaround.org/
Nov. 19, 2008
TURNAROUND MANAGEMENT ASSOCIATION
Interaction Between Professionals in a
Restructuring/Bankruptcy
Bankers Club, Miami, Florida
Contact: 312-578-6900; http://www.turnaround.org/
Dec. 3-5, 2008
AMERICAN BANKRUPTCY INSTITUTE
20th Annual Winter Leadership Conference
Westin La Paloma Resort & Spa
Tucson, Arizona
Contact: http://www.abiworld.org/
May 7-10, 2009
AMERICAN BANKRUPTCY INSTITUTE
27th Annual Spring Meeting
Gaylord National Resort & Convention Center
National Harbor, Maryland
Contact: http://www.abiworld.org/
June 11-13, 2009
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort and Spa
Traverse City, Michigan
Contact: http://www.abiworld.org/
June 21-24, 2009
INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY &
BANKRUPTCY PROFESSIONALS
8th International World Congress TBA
Contact: http://www.insol.org/
July 16-19, 2009
AMERICAN BANKRUPTCY INSTITUTE
Northeast Bankruptcy Conference
Mt. Washington Inn
Bretton Woods, New Hampshire
Contact: http://www.abiworld.org/
Sept. 10-12, 2009
AMERICAN BANKRUPTCY INSTITUTE
17th Annual Southwest Bankruptcy Conference
Hyatt Regency Lake Tahoe, Incline Village, Nevada
Contact: http://www.abiworld.org/
Oct. 5-9, 2009
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
Marriott Desert Ridge, Phoenix, Arizona
Contact: 312-578-6900; http://www.turnaround.org/
Dec. 3-5, 2009
AMERICAN BANKRUPTCY INSTITUTE
21st Annual Winter Leadership Conference
La Quinta Resort & Spa, La Quinta, California
Contact: 1-703-739-0800; http://www.abiworld.org/
Oct. 4-8, 2010
TURNAROUND MANAGEMENT ASSOCIATION
TMA Annual Convention
JW Marriott Grande Lakes, Orlando, Florida
Contact: http://www.turnaround.org/
BEARD AUDIO CONFERENCES
2006 BACPA Library
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com;
http://researcharchives.com/t/s?20fa
BEARD AUDIO CONFERENCES
BAPCPA One Year On: Lessons Learned and Outlook
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Calpine's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Carve-Out Agreements for Unsecured Creditors
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changes to Cross-Border Insolvencies
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Changing Roles & Responsibilities of Creditors' Committees
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Chinas New Enterprise Bankruptcy Law
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Clash of the Titans -- Bankruptcy vs. IP Rights
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Coming Changes in Small Business Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Corporate Bankruptcy Bootcamp: Fundamentals of BAPCPA
Proceedings
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Dana's Chapter 11 Filing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Deepening Insolvency Widening Controversy: Current Risks,
Latest Decisions
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Diagnosing Problems in Troubled Companies
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Claims Trading
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Market Opportunities
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Distressed Real Estate under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Employee Benefits and Executive Compensation under the New
Code Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Equitable Subordination and Recharacterization
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Fundamentals of Corporate Bankruptcy and Restructuring
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Handling Complex Chapter 11
Restructuring Issues
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Healthcare Bankruptcy Reforms
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
High-Yield Opportunities in Distressed Investing
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Homestead Exemptions under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Hospitals in Crisis: The Insolvency Crisis Plaguing
Hospitals Across the U.S.
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
IP Rights In Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
KERPs and Bonuses under BAPCPA
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Non-Traditional Lenders and the Impact of Loan-to-Own
Strategies on the Restructuring Process
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Partnerships in Bankruptcy: Unwinding The Deal
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Privacy Rights, Protections & Pitfalls in Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Real Estate Bankruptcy
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Reverse Mergersthe New IPO?
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Second Lien Financings and Intercreditor Agreements
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Surviving the Digital Deluge: Best Practices in E-Discovery
and Records Management for Bankruptcy Practitioners
and Litigators
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Technology as a Competitive Advantage For Todays Legal
Processes Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
The Battle of Green & Red: Effect of Bankruptcy
on Obligations to Clean Up Contaminated Property
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
The Subprime Sector Meltdown:
Legal Developments and Latest Opportunities
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Twenty-Day Claims
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Using Virtual Data Rooms to Expedite M&A and
Insolvency Proceedings
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
Validating Distressed Security Portfolios: Year-End Price
Validation and Risk Assessment
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
BEARD AUDIO CONFERENCES
When Tenants File -- A Landlord's BAPCPA Survival Guide
Audio Conference Recording
Contact: 240-629-3300;
http://www.beardaudioconferences.com/
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com/
On Thursdays, the TCR delivers a list of recently filed chapter 11
cases involving less than $1,000,000 in assets and liabilities
delivered to nation's bankruptcy courts. The list includes links
to freely downloadable images of these small-dollar petitions in
Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy,
Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva,
Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez,
Tara Marie A. Martin, Joseph Medel C. Martirez, Philline P.
Reluya, and Peter A. Chapman, Editors.
Copyright 2007. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 240/629-3300.
*** End of Transmission ***